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Appeal No. 105 of 1953.
Appeal by Special Leave granted by this Court 's Order dated the 24th September, 1951 from the Judgment and Decree dated the 2nd day of September, 1949 of the High Court of Judicature at Bombay in Appeal No. 274 of 1948 from Original Decree arising out of the Decree dated the 30th day of July, 1946 of the Court of Civil Judge, Senior Division at Hubli in Special Suit No. 56 of 1944.
K. R. Bengeri and Sardar Bahadur for the appellant.
section B. Jathar and I. N. Shroff for respondents Nos. 3, 4 and 5.
December 10.
The Judgment of the Court was delivered by MEHR CHAND MAHAJAN C. J.
This appeal raises a question of importance "whether a widow can exercise a power of adoption conferred on her or possessed by her at any time during her life irrespective of any devolution of property or changes in the family or other circumstances and even after a grandson has come on the scene but has subsequently died without leaving a widow or a son".
The situation in which this question arises can properly be appreciated by reference to the following genealogy: 1137 Dyamappa I I I Kalasappa I I Krishtarao Radhabai=Gangabai (deft.2) (Deft.1) (Senior widow) (Junior window) | Gurunath | (Appellsnt adopted | by Gsngsbai on | | 18 11 53) | | | Dattatraya (son) (died 1913) | | =Sundarabai (died after | | her husband in 1913) Kamalabai Yamunabai (Resp.1) (Resp.2) | | | | | | | Kalasappa Jagannath (predeceased (died 1914) Dattatraya) Girimaji | Hanamanta | | | | | | Malhar Ganesh (Resp.3) (Resp.5) Venkatesh Hanamant (Resp.4) (Resp.6) 1138 Gurunath, the plaintiff, claims that he was adopted in 1943 by Gangabai, widow of Krishtarao.
Krishtarao died in 1890, leaving him surviving two widows Radhabai and Gangabai and a son Dattatraya.
Dattatraya died in 1913 leaving him surviving a widow Sundarabai and a son Jagannath.
Sundarabai died shortly after Dattatraya while Jagannath died in the year 1914.
After an interval of about 30 years since his death, it is alleged that Gangabai who survived both her son, and grandson adopted the plaintiff, and thus raised the problem which we are called upon to solve.
On the 15th of March, 1944 the appellant instituted the suit out of which this appeal arises in forma pauperis on the allegation that he was the adopted son of Krishtarao and adopted to him by Gangabai, his junior widow, and as such was entitled to the possession of his adoptive father 's properties comprised in the suit.
He also claimed a declaration regarding the amount of compensation money payable to the plaintiff 's family for the land acquired by Hubli Municipality.
The defendants who are the sons and grandsons of the first cousin of Krishtarao disputed the plaintiff 's adoption on the ground that Gangabai 's power to adopt was extinguished when Dattatraya died in 1913, leaving behind him a widow Sundarabai and a son Jagannath who could continue the family line.
Gangabai in her written statement supported the plaintiff 's claim and asserted that the senior widow Radhabai had given consent to her adopting the plain tiff.
The trial judge upheld the defendants ' contention and dismissed the plaintiff 's suit.
The factum of the plaintiff 's adoption was however upheld, and it was further held that Radhabai did not give her consent to the adoption.
On appeal this decision was affirmed by the High Court and it was held that Gangabai 's power to adopt came to an end at the time when her son died leaving a son and a widow to continue the family line.
No finding was given on the question whether Radhabai had given her consent to the adop tion.
That perhaps would have been the simplest way to end the dispute.
Against the decision of the High 1139 Court this appeal in forma pauperis is now before us by special leave.
The only question canvassed in the appeal is in respect to the validity of the plaintiff 's adoption.
It was contended that Hindu Shastric Law itself sets no limit to the exercise of the widow 's power of adoption once she has acquired that power or is possessed of it, and that being so, the power can be exercised by her during her life time when necessity arises for the exercise of it for the purpose of continuing the line of her husband.
On the other hand, it was argued that though Hindu Shastric Law itself sets no limit to the exercise of the power, yet it has long been judicially recognised that the power is not an unlimited and absolute one, and that it comes to an end when another heir has come on the scene and he has passed on to another the duty of continuing the line.
The question at what point of time the widow 's duty of continuing the line of the husband comes to an end has been the subject matter of a number of decisions of Indian High Courts and of the Privy Council and the point for our consideration is whether the limits laid down in these decisions have been arbitrarily fixed and are not based on sound principles and should be reviewed by us.
A brief reference to the different decisions of the Privy Council is necessary for a proper appreciation of the state of law on this subject at the present moment.
The two leading cases on this point are the decisions of the Privy Council arising out of the adoption made by Shrimati Chundrabullee and decided in 1876 and 1878.
The judgment in the first of these cases, i.e. in Bhoobun Moyee vs Ram Kishore(1) was delivered by Lord Kingsdown.
What happened there was that one Gour Kishore died leaving a son Bhowanee and a widow, Chundrabullee, to whom he gave authority to adopt in the event of his son 's death.
Bhowanee married and died at the age of 24 without issue, but leaving him surviving his widow Bhoobun (1) (1965] 10 M.I.A. 279. 146 1140 Moyee.
Chundrabullee then adopted Ram Kishore.
Ram Kishore brought a suit against Bhoobun Moyee for the recovery of the estate.
The Privy Council held that the claim of Ram Kishore failed on the ground that even if he had been in existence at the death of Bhowanee he could not displace the widow of the latter.
It was further held "that at the time when Chundrabullee professed to exercise her power of adoption, the power was incapable of execution on the ground that Bhowanee had married and left a widow as his heir".
The following quotation from the judgment of Lord Kingsdown may be cited as indicating the reasons for the decisions: "In this case, Bhowanee Kishore had lived to an age which enabled him to perform and it is to be presumed that he had performed all the religious services which a son could perform for a father.
He had succeeded to the ancestral property as heir; he bad full power of disposition over it; he might have alienated it; he might have adopted a son to succeed to it if he had no male issue of his body.
He could have defeated every intention which his father entertained with respect to the property.
On the death of Bhowanee Kishore, his wife succeeded as heir to him and would have equally succeeded in that character in exclusion of his brothers, if he had any.
She took a vested estate, as his widow, in the whole of his property.
It would be singular if a brother of Bhowanee Kishore, made such by adoption, could take from his widow the whole of his property, when a natural born brother could have taken no part.
If Ram Kishore is to take any of the ancestral property, he must take all he takes by substitution for the natural born son, and not jointly with him. .
The question is whether the estate of his son being unlimited, and that son having married and left a widow his heir, and that heir having acquired a vested estate in her husband 's property as widow, a new heir can be substituted by adoption who is to defeat that estate, and take as an adopted son what a legitimate son of Gour Kishore would not have taken.
1141 This seems contrary to all reason and to all the principles of Hindoo law, as far as we can collect them. .
If Bhowanee Kishore had died unmarried, his mother, Chundrabullee Debia, would have been his heir, and the question of adoption would have stood on quite different grounds.
By exercising the power of adoption, she would have divested no estate but her own, and this would have brought the case within the ordinary rule; but no case has been produced, no decision has been cited from the Text books, and no principle has been stated to show that by the mere gift of a power of adoption to a widow, the estate of the heir of a deceased son vested in possession, can be defeated,.
and divested".
In the result the suit of Ram Kishore was dismissed.
After the deaths of Bhoobun Moyee and Chundrabullee, Ram Kishore got possession of the property under a deed of relinquishment executed in 1869 in his favour by Chundrabullee, who herself had entered into possession of the property as mother and next heir of Bhowanee Kishore after the death of Bboobun Moyee in 1867.
If Ram Kishore 's adoption was good he was undoubtedly the next heir to the property.
A distant collateral however claimed the estate on the ground that his adoption was invalid.
The Privy Council then held that "upon the vesting of the estate in the widow of Bhowanee, the power of adoption of Chudrabullee was at an end and incapable of execution" and that Ram Kishore had therefore no title.
This was the decision in Padma Coomari vs Court of Wards(1) wherein a second effort to maintain the validity of his adoption by Chundrabullee was made but without success.
The High Court in its judgment in Padma Coomari 's case(1) remarked that the decision in Bhoobun Moyee vs Ram Kishore(2) did not decide that Chundrabullee could not adopt on the extinction of the issue either of natural born son or of the first to be adopted son, and that if Chundrabullee had on the death of Bhoobun Moyee made the adoption and so divested her own estate,, there would be (1) [1881] L.R. 8 I.A, 229.
(2) [1865] 10 M.I.A. 279, 1142 nothing in the judgment of the Privy Council and nothing in the law to prevent her doing that which her husband authorised her to do, and which would certainly be for his spiritual benefit, and for that of his ancestors and even of Bhowanee Kishore.
The learned Judges of the High Court proceeded then to observe as follows: "With all respect, therefore, we imagine that Lord Kingsdown must have said by inadvertence, in reference to the idea of adopting a son to the great grandfather of the last taker, that at that time 'all the spiritual purposes of a son, according to the largest construction of them, would have been satisfied '; and again, Bhowanee Kishore had lived to an age which enabled him to perform, and it is to be presumed that he had performed, all the religious services which a son could perform for a father.
There is really no time at which the performance of these services is finally completed, or at which the necessity for them comes to an end".
To this Sir Richard Couch, who delivered the judgment of the Privy Council, gave a very emphatic answer in these terms: "The substitution of a new heir for the widow was no doubt the question to be decided, and such.
substitution might have been disallowed, the adoption being held valid for all other purposes, which is the view that the lower Courts have taken of the judgment, but their Lordships do not think that this was intended.
They consider the decision to be that, upon the vesting of the estate in the widow of Bhowanee, the power of adoption was at an end, and incapable of execution.
And if the question had come before them without any previous decision upon it, they would have been of that opinion.
The adoption intended by the deed of permission was for the succession to the zemindary and other property, as well as the performance of religious services; and the vesting of the estate in the widow, if not in Bhowanee himself, as the son and heir of his father, was a proper limit to the exercise of the power".
The question of limitations upon the power of the 1143 widow to adopt thus stated in the Chundrabulle series of decisions was again affirmed by the Judicial Committee in Thayammal and Kuttiswami Aiyan vs Venkatarama Aiyan(1) decided in 1887 and in Tarachurn vs Suresh Chunder(2) decided in 1889.
In the year 1902 this question came up for consideration before the Full Bench of the Bombay High Court in Ramkrishna Ramchandra vs Shamrao(3).
There a grandmother succeeded to her grandson who died unmarried andit was held that her power to make an adoption hadcome to an end and that the adoption was invalid.
Chandavarkar, J., who delivered the judgment of the Full Bench, enunciated the principle in these words: "Where a Hindu dies leaving a widow and a son, and that son dies leaving a natural born or adopted son or leaving no son but his own widow to continue the line by means of adoption, the power of the former widow is extinguished and can never afterwards be revived".
This principle was approved and applied by the Judicial Committee in Madana Mohana vs Purushothama Deo(4) in these words: "Their Lordships are in agreement with the principle laid down in the judgment of the Full Court of Bombay as delivered by the learned judge, and they are of opinion that, on the facts of the present case, the principle must be taken as applying so as to have brought the authority to adopt conferred on Adikonda 's widow to an end when Brojo, the son she originally adopted, died after attaining full legal capacity to continue the line either by the birth of a natural born son or by the adoption to him of a son by his own widow".
The next and the most important decision of the Judicial Committee in regard to this matter was given in the year 1933 in Amarendra Mansingh vs Sanatan(5) where there was a departure from or at least a reorientation of the old doctrine, and stress was laid on the spiritual rather than on the temporal aspect (1) (1887] L.R. 14 I.A. 67.
(3) Bom.
(2) [1889] L.R. 16 I.A. 166.
(4) [1918] L.R. 45 I.A. 150.
(5) [1933] L R. 60 I.A. 242.
1144 of adoption, linking it up with the vesting and divesting of the estate.
There a Hindu governed by the Benaras school was survived by an infant son and a widow, to whom he had given authority to adopt in the event of the son dying.
The son succeeded to his father 's impartible zamindari but died unmarried at the age of 20 years and 6 months.
By a custom of the family which excluded females from inheritance the estate did not go to his mother but became vested in a distant collateral.
A week after the son 's death she made an adoption.
It was held that the adoption was valid and it divested the estate vested by inheritance in the collateral.
All the previous decisions were reviewed in this case by Sir George Lowndes who delivered the judgment of the Board.
At page 248 of the report it is said as follows: "In their Lordships ' opinion, it is clear that the foundation of the Brahminical doctrine of adoption is the duty which every Hindu owes to his ancestors to provide for the continuance of the line and the solemnization of the necessary rites.
And it may well be that if this duty has been passed on to a new generation, capable itself of the continuance, the father 's duty has been performed and the means provided by him for its fulfilment spent: the "debt" be owed is discharged, and it is upon the new generation that the duty is now cast and the burden of the "debt" is now laid.
It can, they think, hardly be doubted that in this doctrine the devolution of property, though recognised as the inherent right of the son, is altogether a secondary consideration. . that the validity of an adoption is to be determined by spiritual rather than temporal considerations; that the substitution of a son of the deceased for spiritual reasons is the essence of the thing, and the consequent devolution of property a mere accessory to it.
Having regard to this well established doctrine as to the religious efficacy of sonship, their Lordships feel that great caution should be observed in shutting the door upon any authorised adoption by the widow of a sonless man, The Hindu law itself sets no limit 1145 to the exercise of the power during the lifetime of the widow and the validity of successive adoptions in continuance of the line is now well recognised.
Nor do the authoritative texts appear to limit the exercise of the power by any considerations of property.
But that there must be some limit to its exercise, or at all events some conditions in which it would be either contrary to the spirit of the Hindu doctrine to admit its continuance, or inequitable in the face of other rights to allow it to take effect, has long been recognised both by the Courts in India and by this Board, and it is upon the difficult question of where the line should be drawn, and upon what principle, that the argument in the present case has mainly turned".
In another part of the judgment their Lordships observed as follows: "It being clear upon the decisions above referred to that the interposition of a grandson, or the son 's widow, brings the mother 's power of adoption to an end, but that the mere birth of a son does not do so, and that this is not based upon a question of vesting or divesting of property, their Lordships think that the true reason must be that where the duty of providing for the continuance of the line for spiritual purposes which was upon the father, and was laid by him conditionally upon the mother, has been assumed by the son and by him passed on to a grandson or to the son 's widow, the mother 's power is gone.
But if the son die himself sonless and unmarried, the duty will still be upon the mother, and the power in her which was necessarily suspended during the son 's lifetime will revive".
The learned counsel for the appellant placed reliance upon the last sentence in the passage in the Privy Council judgment quoted above and contended that if the power of the widow which remained suspended during the lifetime of the son could revive on the son dying sonless and unmarried, logically the power must also revive when the son and his widow and the grandson and his widow all died out.
Reliance was also placed on the passage already cited in which 1146 their Lordships laid emphasis on the proposition that the substitution of a son of the deceased for spiritual reasons is the essence of the thing, and the consequent devolution of property a mere accessory to it and it was contended that the grounds on which an outside limit was laid on the exercise of the widow 's power in the Chundrabullee series of decisions no longer survived, in view of the ratio in Amarendra 's decision and that it having been held that the power of adoption did not depend on and was not linked with the devolution of property or with the question of vesting or divesting of property and could be exercised whenever necessity for continuing the line arose, it should be held that when the son and his widow were dead and the grandson to whom he handed the torch for continuing the line also died, the power of Gangabai to make the adoption revived and thus the adoption was valid.
This argument, in our opinion, is not well founded as it is based on an incorrect apprehension of the true basis of the rule enunciated in this judgment, the rule being that "where the duty of providing for the continuance of the line for spiritual purposes which was upon the father and was laid by him conditionally upon the mother, has been assumed by the son and by him passed on to the grandson or to the son 's widow, the mother 's power is gone".
In the words of Chandavarkar, J. affirmed by the Judicial Committee in Madana Mohana vs Purushothama Deo(1) "the power having once been extinguished it cannot afterwards be revived".
In other words the true rule is this: "When a son dies before attaining full legal competence and does not leave either a widow or a son or an adopted son then the power of the mother which was in abeyance during his lifetime revives but the moment he hands over that torch to another, the mother can no longer take it".
The contention of the learned counsel therefore that even if the second generation dies without taking steps to continue the line the grandmother still (1) [1918] L R. 45 I.A. 156.
1147 retains her authority and is still under a duty to continue the line cannot be sustained.
The three propositions that the Privy Council laid down in Amarendra 's case therefore cannot now be questioned.
These propositions may be summed up in these terms: (1) That the interposition of a grandson, or the son 's widow, competent to continue the line by adoption brings the mother 's power of adoption to an end; (2) that the power to adopt does not depend upon any question of vesting or divesting of property; and (3) that a mother 's authority to adopt is not extinguished by the mere fact that her son had attained ceremonial competence.
The rule enunciated in Amarendra 's case was subsequently applied in Vijaysingji vs Shivsangji(1) and was again restated and reaffirmed as a sound rule enunciating the limitations on the widow 's power to adopt in Anant Bhikappa Patil vs Shankar Ramchandra Patil(2).
One of the propositions enunciated in this decision was not accepted by this court in Shrinivas Krishnarao Kango vs Narayan Devji Kango(3), but that apart no doubt was cast in this decision on the above rule.
The result of these series of decisions is, that now for about three quarters of a century the rule that "the power of a widow to adopt comes to an end by the interposition of a grandson or the son 's widow competent to adopt" has become a part of Hindu Law.
though the reasons for limiting the power may not be traceable to any Shastric text; and may have been differently stated in the several judgments.
It is well known that in the absence of any clear Shastric text the courts have authority to decide cases on principles of justice, equity and good conscience and it is not possible to bold that the reasons stated in support of the rule are not consistent with these principles.
During the arguments no substantial grounds have (1) [1935] L.R 62 I.A. 161.
(2) [1943] L.R. 70 I.A. 232.
(3) ; 147 1148 been suggested for holding that the rule is either in equitable or unjust or is repugnant to or inconsistent with any doctrine or theory of Hindu Law of adoption.
In this situation we are bound to hold that it is too late in the day to say that there are no limitations of any kind on the widow 's power to adopt excepting those that limit the power of her husband to adopt, i.e. that she cannot adopt in the presence of a son, grandson or great grandson.
Hindu Law generally and in particular in matters of inheritance, alienation and adoption gives to the widow powers of a limited character and there is nothing in the limitations laid down by the course of decisions above referred to repugnant to that law.
For the reasons given above, we are unable to depart from the rule that a widow 's power to make an adoption comes to an end by the interposition of a grandson or the son 's widow competent to continue the line by adoption.
The learned counsel for the appellant placed considerable reliance on two decisions of the Indian High Courts in support of his contention and suggested that the rule laid down in Amarendra 's case had no application to the situation that has arisen in the present case and that on the death of the grandson the widow 's power to adopt which was in abeyance during his life revived.
Reference in this connection was made to the decision of the Nagpur High Court in Bapuji vs Gangaram(1).
There a Hindu died leaving a widow and his son and the son died leaving a widow only who re married.
It was held that the power of the mother revived on the re marriage of the son 's widow.
Reliance for this proposition curiously enough was placed on the decision of the Judicial Committee in Amarendra 's case as appears from the following quotation from that judgment: "If the observation quoted from Amarendra Mansingh vs Sanatan Singh(2) be understood as limited to the case where the widow D or the grandson E stands between (is interposed) the grand widow C and her power, everything is clear except for the (1) (1941) I.L.R. Nagpur 178.
(2) Pat.
642, 658.
1149 words "and can never be revived" quoted from Ramkrishna vs Shamrao(1).
Strictly the above is the true meaning of their Lordships ' words.
That amounts to nothing more than this: that while D or E is alive and competent to adopt his or her existence prevents any adoption being made by C.
That leaves at large what happens when the "interposition" is ended.
Logic says that as the death of the son removes his "inter position" whereupon C 's power revives so the death of D removes her interposition and so C 's power revives".
In our judgment there is not only an obvious fallacy in this reasoning but it is based on a wrong apprehension of the true reasons stated for the rule in Amarendra 's case.
The reason for the rule in Amarendra 's case was "where the duty of providing for the continuance of the line for spiritual purposes which was upon the father, and was laid by him conditionally upon the mother, has been assumed by the son and by him passed on to a grandson or to the son 's widow, the mother 's power is gone".
If that is the true reason, obviously the duty having come to an end cannot be revived on logical grounds.
We are therefore clearly of opinion that the ratio of the decision in Bapuji vs Gangaram(2) was erroneous.
The second decision to which reference was made is a decision of the Lucknow Court reported in Prem Jagat Kuer vs Harihar Bakhsh Singh(3).
The learned Judges in that case followed the decision of the Nagpur High Court above quoted, and further added (though under some misapprehension) that this decision had been approved by their Lordships of the Privy Council.
As a matter of fact, there was another decision reported in the same report on a different question that had been upheld by the Privy Council and not the decision above referred to.
The authority of this later decision therefore is considerably shaken by this error and even otherwise the decision gives no independent reasons of its own apart from those contained in the Nagpur case.
(1) Bom.
(2) (3) Luck.
1. 1150 For the reasons given above, this appeal fails and is dismissed, but in the circumstances of the case we will make no order as to costs.
Appeal dismissed.
| An industrial dispute arose between the appellant and its workmen as to 'whether the employers were required to pay wages for the festival holidays allowed to their workmen in a year.
The appellant contested the workmen 's claim mainly on the grounds that neither in law nor in practice was there any provision for festival holidays with wages, that the appellant was already paying wages for three holidays allowed to the workmen under the U.P. Industrial Establishment (National Holidays) Act, 1961 and that in the entire region in which this mill is situated, no textile mill pays wages for festival holidays.
The mill was stated to be an uneconomic unit and, therefore, not in a position to b@r an extra burden.
The workmen, on the other band, in their separate written statements, filed through three Unions.
pleaded that the grant of holidays without wages was illegal and against social justice.
In their rejoinder the appellant pleaded that the holidays mentioned by the Unions were (,ranted because the workmen had demanded the same and those holidays were substituted by other days in lieu of holidays and as they were paid for the days on which they worked on account of those holidays there was no loss of wages caused to them.
The Tribunal by its award made the appellant liable to pay to their daily rated and piece rated workmen for 17 festival holidays, besides three national holidays, plus arrears, on the ground that the Secretary of,the appellant mill admitted that the festival holidays were paid holidays in the sense that workers were allowed to work on their unpaid rest days in substitution of the said festival holidays.
The appellant being aggrieved by the award presented a writ petition before the High Court which was dismissed by a single Judge.
Special leave to a Divisional Bench of the High Court was dismissed in Iimine, but the Bench certified the case to be fit for appeal to this Court.
The appellant was held entitled ' to certificate either under cl.
(a) or cl.
(b) of article 133(1) of the Constitution on the ground that value of the subject matter of dispute or claim The respondent in the Supreme Court objected to the competence of the certificate on the ground that though the judgment of the Division Bench was one of affirmance the certificate did not disclose on its face the existence 'of any substantial question of law.
This objection was upheld but as the case was considered fit for special leave, on oral request special leave was granted on the condition that the appellant would file a formal application for special leave accompanied by an application for condoning the delay 911 Allowing the appeal on the merits, HELD : By reading the statement of the Secretary of the appellant along with the pleadings as disclosed in the respective statement of cases of the parties, it is not possible to bold that the appellant had admitted that the 17 festival holidays were being given by them as paid holidays dispensing with the enquiry into the question referred for adjustment to the Industrial Tribunal.
Even the workmen did not plead that the festival holidays were treated as paid holidays.
The Secretary 's statement that no festival holidays were paid in the sense that the workers were allowed to work on unpaid rest days in substitution of the said festival holidays.
This statement clearly explains that sense in which the Secretary meant to say that the festival holidays were paid.
The facts contained in the explanation lead to the only conclusion that festival holidays are not paid as the festival holidays are.
This statement read with the detailed explanation could not logically serve as a ground for ignoring the unequivocal denial in the written state ment.
The industrial Tribunal, was therefore, wrong in holding that the statement made by the Secretary was an admission on behalf of the appellant.
The learned single Judge also missed the real point and held that the Secretary 's statement constituted an admission and all 'facts evidence was therefore, excluded.
The Division Bench fell into the, same error in summarily dismissing the appeal in limine.
(920 A EJ (ii) The U.P. Industrial Establishments (National Holidays) Act, 1961 and rules provide for paid National Holidays but that Act dotes not deal with festival holidays.
In determining the number of paid festival holidays per year, certain facts, like custom, practice and uniformity in the industry without prejudicially affecting efficiency and increased produCtion are some of the relevant factors to be taken into account.
The question affects national economy and does not remain confined only to the establishment concerned but has its impact on other concerns as well.
This aspect has been completely ignored by the, Industrial Tribunal.
Further the Tribunal proceeded solely on the basis of misreading of the Secretary 's statement.
thereby ignoring the plea taken by the appellant.
There is.
thus the manifest error of law apparent on the fact of the record which resulted in grave failure of justice, because evidence on the only material point was illegally shut out.
[921 A] The District Board (afterwards Zila Parishad Allahabad vs Syed Tahir Hussain & ors C.A. No. 57 8 of 1963 decided oh July 23, 1965, Shiri Durga Prasad & Anr.
vs The Banaras Bank Ltd., [1964] 1 S.C.R.475.preferred to.
|
Appeal No. 225 of 1965.
Appeal by special leave from the judgment and order dated September 6, 1962 of the Madhya Pradesh High Court in Misc.
Civil Case No. 108 of 1958.
I.N. Shroff, for the appellant.
S.T. Desai, section N. Andley, Rameshwar Nath, P. L. Vohra, and Mahinder Narain, for the respondent.
225 The Judgment of the Court was dilevered by Sikri, J.
This appeal by special leave is directed against the judgment of the High Court of Madhya Pradesh in a reference made to it under section 46 of the Gwalior War Profits Tax Ordinance, Samvat 2001 hereinafter called the Ordinance.
Three questions were referred to the High Court by the War Profits Tax Commissioner, but we are only concerned with question No. 1, which reads as follows: "Whether the dividend income of Rs. 11,09,332/received from the Binod Mills was chargeable under the War Profits Tax?" When the reference was first heard by the High Court three contentions were raised by M/s Binodram Balchand of Ujjain, respondents before us, hereinafter referred to as the assessees.
They were: "(1) The assessees did not deal in shares and their holdings in the Binod Mills Limited were purely in the nature of investments, having no connections with their business as defined in Section 2(5) read with Rule 1 of Schedule 1, of the Gwalior War Profits Tax Ordinance.
The business of the secretaries, treasurers and agents of the Binod Mills Limited, which was carried on by them did not require any holding of the shares of the company and was not dependent on their investment in the said company.
(2)The dividend income accrued or arose from the profits of the Binod Mills Limited, and as the Ordinance applied to the business carried on by this company, the dividends were excluded under the explanation to Rule 3(1) of Schedule 1.
(3)The dividend income should be considered as income of the full accounting period, i.e., from Diwali of 1943 to Diwali of 1944 and should be apportioned on that basis".
The High Court by its judgment dated April 19, 1957, accepted the first contention of the assessees and accordingly answered the question in their favour.
It did not deal with contentions Nos. 2 and 3.
The Commissioner appealed to this Court and this Court by its judgment dated December 20, 1961, set aside the judgment of the High Court and answered the first contention in relation to question No. I against the assessees and remanded the case to the High Court for the consideration of the other two contentions with reference to that question.
The High Court on remand accepted the second contention of the assessees and answered question No. 1, set out above, in favour of the assessees.
The Commissioner having obtained special leave, the appeal is now before us for disposal.
226 A few facts may be given in order to appreciate the point that has. been argued before us.
The assessees were, at the relevant time, the Managing Agents of the Binod Mills Ltd., Ujjain, which was a private limited company carrying on the business of manufacturing and selling textile goods in 1944.
The Ruler of the Gwalior State promulgated the Gwalior War Profits Tax Ordinance, Samvat 2001, for the purpose of imposing tax on excess profits arising out of certain businesses.
The Ordinance came into force on July 1, 1944, and applied originally to the counting period falling within the period commencing on July 1, 1944, and ending on June 30, 1945.
By virtue of a notification the period was extended to June 30, 1946.
The assessees carried on the Managing Agency business during the aforesaid period in Gwalior State and being liable to be assessed to war profits submitted a return for the period commencing from July 1, 1944, to October 16, 1944.
It appears that Rs. 11,09,332/ was received by the assessees on July 5, 1944, on account of dividend on shares of the Binod Mills for the year 1943.
The assessees inter alia contended before the War Profits Tax Officer that this sum was not liable to be charged.
The War Profits Tax Officer, however, by order dated July 9, 1951, in.; clouded this sum of Rs. 11,09,132/ in the taxable income and his view was upheld in appeal by the Appellate Assistant Commissioner and the Commissioner.
As stated above, the Commissioner, at the instance of the assessees, referred three questions, including the one with which we are concerned, to the High Court.
It appears that before the High Court the learned counsel for the Commissioner did not seriously dispute the contention of the assessees that the dividend income which the assessees had received was exempted by the Explanation to r. 3 of Schedule 1 of the Ordinance.
The rule as it existed originally was as follows: "3(1) Income received from investments shall be included in the profits of a business liable to the War Profits Tax, unless it is proved to satisfaction of the War Profits Tax Officer that the investments have no connec tion whatever with the business.
(2)In the case of business which consists wholly or mainly in the dealing in or handling of investments, income received from investments shall be deemed to be profits of that business, and in the case of a business, a specific part only of which consists in dealing in investments, the income received from investments held for the purposes of that part of the business shall be deemed to be profits of that part of the business".
227 By section 2 of the Gwalior War Profits Tax (Amendment) Ordi nance, Samvat 2002 hereinafter referred to as, Ordinance 2002, r. 3 of the First Schedule to the Ordinance was amended as follows: "In rule 3(2) of the First Schedule to Ordinance the following shall be added, namely: Explanation "The income from investments to be included in the profits of the business under the provisions of this rule shall be computed exclusive of all income received by way of dividends or distribution of profits from a company carrying on a business to the whole of which the Section of the Ordinance imposing the War Profits Tax applies", This Ordinance was promulgated on February 28, 1946.
Another Ordinance called the Gwalior War Profits Tax (Amendment) Ordinance, Samvat 2004 hereinafter referred to as Ordinance 2004 was promulgated on September 6, 1947.
This Ordinance amended the Explanation to sub rule (2) of rule 3 of Schedule 1 as follows "In the explanation of sub rule (2) of Rule 3 of Schedule 1 of the Gwalior War Profits Tax Ordinance, Samvat 2001 a comma is added after the words "from a company carrying on a business" and before the words "to the whole of which" and shall be always deemed to be there from the date from which the said Ordinance came into force".
The High Court felt no difficulty in holding that the expla nation applied, and that on its plain terms the dividend income which the assessees received from the profits of Binod Mills Ltd. was not liable to be included in the taxable income.
The High Court observed: "The language of the explanation is very plain, and it means that if income is received by way of dividends or profits from a company carrying on a business, to the whole of which the section of the Ordinance imposing the War Profits Tax applies, then the income has to be excluded in the assessment to War Profits Tax of the assessee receiving that income.
The object of the explanation is clearly to avoid double taxation.
Here it is not disputed that the dividend income which the assessee received was from the profits of the Binod Mills Limited and the Mills were subject to the burden of the War Profits Tax under the Ordinance.
That being so, the explanation in terms applies to the case, and the assessee is entitled to claim that the dividend income of Rs. 11,09,332/ received from Binod Mills could not 228 be included in the computation of its profits for the purposes of War Profits Tax and was consequently not chargeable under the War Profits Tax Ordinance.
Learned Advocate General appearing for the State did not dispute this position".
Mr. Shroff, the learned counsel for the Commissioner, contends, first, that the explanation was not in existence at the relevant time, and, therefore, cannot be taken into consideration; secondly, that the explanation is an explanation to r. 3(2) and not to r. 3(1) and, therefore, cannot be used to explain r. 3(1).
Mr. Shroff complains that the High Court was wrong in thinking that the explanation formed part of Ordinance 2001, as it was originally promulgated.
The High Court seems to have been under this impression because in the order refusing leave to appeal to this Court the High Court observed: "There was no omission at all on our part to consider the question whether the explanation was prospective or not.
Indeed, this question was never raised by the learned Advocate General, appearing for the Department and it was rightly not raised as the Explanation was not added subsequent to the promulgation of the Ordinance and the very basis of the assessment of the income of the assessee was that rule 3 of Schedule 1 of the Ordinance together with the Explanation applied to the income received by the assessee during the period from 1st July 1944 to 16th October 1944".
It seems that Ordinance 2002 and Ordinance 2004 were not placed before the High Court and for this reason it assumed that the explanation was not added subsequent to the promulgation of the Ordinance.
But even if it was added subsequently, in our opinion, the explanation applies to the computation of the profits of the chargeable accounting period July 1, 1944 to October 16, 1944.
If we read Ordinance 2002 and Ordinance 2004 together the legislative intention to make the explanation retrospective becomes clear.
Apart from Ordinance 2004, it would have been very arguable that the explanation inserted by Ordinance 2002 was retrospective because it dealt with the computation of profits and would apply to all computation of profits made by the Taxing authorities after February 28, 1946.
But we need not go into this question because Ordinance 2004 expressly assumes that the explanation was in existence from the date when the Ordinance came into force and no other meaning can be given to section 2 of Ordinance 2004 because by deeming that the comma shall be deemed to be there from the date from which the Ordinance came into force it expressly assumes that the explanation was also in force from that date.
Accordingly we are not inclined to 229 accept the first contention of Mr. Shroff and we must hold that the explanation applies to the computation of profits of the chargeable accounting period July 1, 1944 to October 16, 1944.
Regarding the second contention, Mr. Shroff says that Ordi nance 2002 expressly provides that the explanation shall be added in r. 3(2) of the First Schedule to the Ordinance.
He further says that this explanation is referred in Ordinance 2004 as "explanation of sub rule (2) of rule 3 of Schedule 1".
There is no doubt that Ordinance 2002 did purport to add this explanation to r. 3(2) but it seems to us that if we look at the language of the explanation it was meant to be an explanation not only to r. 3(2) but to r. 3(1) also.
First, the words "the income from investments to be included in the profits of the business under the provisions of this rule" are comprehensive and include income from investments both under r. 3(1) and r. 3(2).
Secondly, there is no reason why any distinction should have been made between investments mentioned in r. 3(1) and investments mentioned in r. 3(2).
Rule 3(1) is general and deals with all investments from profits of all businesses and would include investments mentioned in r. 3(2).
Rule 3(2) deals with investments of a certain business, i.e., business which consists wholly or mainly in the dealing in or holding of investments.
We have not been able to appreciate why, if Mr. Shroff is right, was it necessary to distinguish between income from investments mentioned in r. 3(1) and income from investments mentioned in r. 3(2).
At any rate, the language of the explanation is quite clear and it seems to us that by the words "in rule 3(2) of the First Schedule to the Ordinance, the following shall be added" what was really meant was to add the explanation below r. 3(2).
In the result we agree with the High Court that the answer to the question referred should be in the negative.
The appeal accordingly fails and is dismissed with costs.
Appeal dismissed.
| The appellants through their karta had an open mutual and current account with the respondent bank.
They borrowed from the bank and also paid monies into it.
On March 1, 1947 a sum of Rs. 15,956/7 was due to the bankfrom the appellants.
In order to pay off that amount a mortgage deedwas executed by the appellants in favour of the bank.
Under that deedfurther amounts up to a limit of Rs. 16,000 could be advanced to the appellants against the security mentioned therein.
According to the bank, under the said provision of the deed a further sum of Rs. 10,000 was advanced to the appellants on March19, 1947.On April 9, 1953 the bank filed a suit for the recovery ofsums due to it from the appellants and the suit was claimed to be withinthe period of limitation on the allegation that on November 24, 1949, the appellants had repaid a sum of Rs. 100 to the bank.
The appellants denied that they had borrowed Rs. 10,000 as alleged or that they had repaid Rs. 100.
The trial court decreed the suit of the bank and the High Court upheld the decree.
The appellants then came to this Court by special leave.
The questions that fell for determination were (i) whether by producing a copy of the entry relating to the loan of Rs. 10,000 in these account books the bank had proved the said loan, (ii) whether the suit was within time.
HELD : (i) In view of section 34 of the Evidence Act the appellants could not be saddled with liability for the sum of Rs. 10,000 said to have been advanced to them on March 19.
1947 on the basis of a mere entry in the account.
Section 34 says that such entry alone shall not be suffi cient evidence and so some independent evidence had to be given by the bank to show that this sum was advanced.
Such evidence not having been given the claim could not be upheld.
[903 C] (ii)Section 4 of the Bankers ' Books Evidence Act (18 of 1891) certainly gives a special privilege to banks and allows certified copies of their accounts to be produced by them and those certified copies become prima facie evidence of the existence of the original entries in the accounts and are admitted as evidence of matters, transactions, and accounts therein.
But such admission is only where and to the extent as the original entry itself would be admissible by law and not further or otherwise.
Original entries alone under section 34 of the Evidence Act would not be sufficient to charge any person with liability and as such, copies produced under section 4 of the Bankers ' Books Evidence Act could not charge any person with liability.
[902 C E] (iii)The suit was clearly within time insofar as the liability for sale under the mortgage deed was concerned as it was filed within 12 years of the execution of the mortgage as allowed by article 138 of the Limitation Act of 1908.
[903 G] 899 As to the personal liability under the deed that was beyond time as the suit was filed more than six years after the execution of the mortgage allowed by article 116.
The entry of the payment of Rs. 100 in the accounts also did, not help the bank in this behalf.
That entry was of no value under section 19 or section 20 of the Limitation Act for neither a writing signed by the appellants nor an acknowledgement of payment in the handwriting of the appellants or in a writing signed by them had been proved.
Nor did article 85 help the bank in fixing personal, responsibility on the appellants as the time of three years allowed by that Article had ended before the filing of the suit.
[903 G H]
|
Petition No. 13688 of 1983 etc.
Under Article 32 of the Constitution of India) T.U. Mehta and S.M. Ashri for the Petitioners.
Dr. Y.S. Chitale, G.L. Sanghi, V.C. Mahajan, R.B. Datar, Miss Bina Tamta, S.K. Mehta, M.K. Dua, Aman Vachhar, H.S. Parihar, Vipin Chandra, G.D. Gupta, M.L. Kaicker and V.B. Saharya for the Respondents.
Bye law No. 3(1) reads as follows: "3(1).
No person shall keep or ply for the hire a cycle rickshaw in Delhi unless he himself is the owner thereof and holds a licence granted in that behalf by the Commissioner on payment of the fee that may, from time to time, be fixed under sub section (2) of section 430.
Provided that no person will be granted more than one such licence.
No person shall drive a cycle rickshaw for hire unless he holds a driving licence granted in that behalf by the Com missioner on payment of the fee that may, from time to time be fixed under sub section (2) of section 430.
" The petitioners are owners of cycle rickshaws.
Some of them own two or more cycle rickshaws which are hired out by them to rickshaw pullers under a contract under which the rickshaw pullers have to pay some amount to the owners of the cycle rickshaws at the end of the day out of their earnings during the day.
In order to eliminate the exploita tion of rickshaw pullers by the owners of the cycle rick shaws the Delhi Municipal Corporation amended the Cycle Rickshaw Bye laws, 1960 by introducing bye law No.3.
Under that bye law only the owner of the cycle rickshaw can obtain a licence to keep a cycle rickshaw or to ply 908 for hire and only one such licence would be issued to a person.
By necessary implication it excludes persons who own a number of cycle rickshaws from applying for licences and prohibits the hiring out of the cycle rickshaw by the owner in favour of a rickshaw puller against payment of considera tion.
The contention of the petitioners is mainly dependent upon section 48 1(I)L(5) of the Act which reads thus: "481(1).
Subject to the provisions of this Act the Corpora tion may, in addition to any bye laws which it is empowered to make by any other provision of this Act, make bye laws to provide for all or any of the following matters.
namely: . . . . . . . . .
L. Bye laws relating to miscellaneous matters . . . . . . . . . . (5).
the rendering necessary of licences (a) for the proprietors or drivers of hackney carriages; cycle rickshaws, thelas and rehires kept or plying for hire or used for hawking articles; . . . . . . . . . " It is argued on behalf of the petitioners that the above provision in the Act does not permit the Corporation to make a bye law which prohibits the issue of licences to the owners of cycle rickshaws who are not themselves rickshaw pullers.
It is also urged that the bye law is violative of Article 19(1)(g) of the Constitution.
The respondentCorpora tion contends that the impugned bye law No. 3 is within the scope of the authority conferred on it by the Act to make the bye law in question and that it is not opposed to Arti cle 19(1)(g).
The constitutional validity of a similar provision in the Punjab Cycle Rickshaws (Regulation of Licence) Act, 1976 (Punjab Act 41 of 1975) came up for consideration before this Court in Azad Rickshaw Pullers Union (Regd) Ch, Town Hail, Amritsar & Ors., etc.
vs State of Punjab & Others, ; In the course of its judgment the Court approved a scheme flamed for providing financial assistance to the richshaw pullers for acquiring cycle rickshaws.
The 909 provision of the Act which was impugned in that petition was, however, left untouched.
On the same date this Court pronounced another judgment in Nanhu & Ors., etc.
vs Delhi Administration & Ors., ; in which the very same bye law with which we are concerned in these cases came up for consideration.
That case was disposed of by this Court by a short order which reads thus: "We have disposed of today applications from cycle rickshaw pliers of Amritsar Municipality where a scheme has been worked out to help them become owners of cycle rickshaws.
A similar scheme, says the Solicitor General appearing for the Delhi Administration, will be extended to the Delhi territo ry.
We, therefore, annex a copy of the judgment in Writ Petitions Nos.
839 of 1979 and 563 of 1979 Azad Rickshaw Pullers Union, Amritsar and others vs State of Punjab & Others and Nanak Chand and Others vs State of Punjab and Others, respectively to this judgment.
There is another problem which arises in these two cases and that is that the Delhi Administration has put a ceiling on the total number of cycle rickshaws permissible to be plied within its territory perhaps we do not know for certain this number may not accommodate all the applicants for cycle rickshaws plying licencees.
We are told that apart from the applicants in this Court under Article 32 of the Constitution, there are numerous petitioners who have ap proached the High Court of Delhi under Article 226 of the Constitution and yet others who have filed suits in civil courts for the same relief.
All that we can do is to accept the suggestion made by the learned Solicitor General that the Delhi Administration will effectively publicize and notify applications for licencees for plying of cycle rick shaws and all those who apply will be considered on their merits including length of service as cycle rickshaw pliers.
The criteria that the Delhi Administration will adopt must be reasonable and relevant; otherwise it will be open to the aggrieved parties to challenge the selection.
Likewise we do not want to fetter the rights of parties aggrieved if the ceiling upon the total number of rickshaws permissible within the Delhi territory is arbitrary.
On the basis of reasOnable criteria the Delhi Administra 910 tion will direct the concerned Municipal authorities to grant licences for plying rickshaws and if the applicants so chosen are not owners themselves all the facilities we have indicated in the Amritsar order will be extended to such cycle rickshaw pliers fixing reasonable time limits.
With these directions we dispose of the applications.
Until fresh licences are issued by the Delhi Administration and the Municipal authorities the present petitioners will be al lowed to ply their cycle rickshaws.
" It is clear from the above order that this Court did not say anything about the constitutional validity of bye law No. 3.
We, however, find on a consideration of the language of clause (5) in section 481(1)L of the Act that the bye law falls within the scope of the power conferred on the Corpo ration to frame bye laws for the issue of licences in re spect of cycle rickshaws which are kept or used for plying in the Delhi Municipal Corporation area.
While framing bye laws under the above statutory provision it is permissible for the Corporation to restrict the issue of licences only to the owners of the rickshaws who themselves act as rick shaw pullers.
This is apparently done to prevent exploita tion of the rickshaw pullers by the owners of the cycle rickshaws.
A licensing authority may impose any condition while issuing a licence which is in the interest of the general public unless it is either expressly or by necessary implication prohibited from imposing such a condition by the law which confers the power of licensing.
The restriction imposed by the Corporation in the present case is according to us in the interest of the general public.
In Man Singh and Others vs State of Punjab and Others, the petitioners contended that the provision in the Punjab Cycle Rickshaw (Regulation of Licence) Act, 1976 was viola tive of Articles 19(1)(g) and 21 of the Constitution as also Articles 14 and 16 of the Constitution.
This Court negativ ing the said contention observed thus: "In the instant case, section 3 of the Punjab Act has the effect of making it possible for the rickshaw puller to ply the rickshaw as owner of the vehicle and thereby to be the full owner of the income earned by him.
No longer will he be obliged to part with an appreciable portion of that income in favour of another who owns the vehicle.
The Punjab Act is beneficial legislation bringing directly home to the rick shaw puller the entire fruit of his dally toil.
The enact ment is intended as a social welfare measure against the exploitation of the poor and unemployed by rapacious 911 cycle rickshaw owners who by reason of their superior finan cial resources fatten their wealth from the sweated toil of rickshaw pullers.
Even if we look at the impugned legisla tion from the point of view of its impact on the fundamental right of rickshaw owners who give them on hire to rickshaw pullers for plying, it is plain that the legislation consti tutes a reasonable restriction on the right of such rickshaw owners to carry on the business of hiring out cycle rick shaws inasmuch as the exercise of the right is excluded by legislation designed for the economic and social welfare of rickshaw pullers, who constitute a significant sector of the people, a sector so pressed by poverty and straightened by the economic misery of their situation that the guarantee of their full day 's wages to them seems amply justified.
" We do not, therefore, find any ground to set aside the bye law in question either on the ground that it is outside the scope of section 48 1 of the Act or on the ground that it is opposed to the provisions of the Constitution.
The above contentions, therefore, fail.
During the pendency of these proceedings the Court issued notices to the Punjab National Bank, the Bank of Baroda and the State Bank of India and also the Credit Guarantee Corporation of India (Small Loans) to ascertain whether the banks are willing to extend financial assistance to the rickshaw pullers to acquire the ownership of cycle rickshaws and to ply them within the Corporation area and also to ascertain whether the Credit Guarantee Corporation of India Small (Loans) would guarantee the loans advanced to the rickshaw pullers.
The learned counsel for these banks and the Credit Guarantee Corporation of India (Small Loans) have submitted that the banks are willing to advance upto Rs.2,000 by way of loan at reasonable rate of interest to the rickshaw pullers on the security of the cycle rickshaws owned by them in order to assist the rickshaw pullers to acquire the cycle rickshaws.
The banks have put forward before the Court two schemes: (1) the scheme for finance to cycle rickshaw pullers, and (2) Self employment programme for urban poor (SEPUP) under which it is possible for them to give financial assistance to the rickshaw pullers.
The Credit Guarantee Corporation of India (Small Loans) is agreeable to guarantee the repayment of loans advanced to the rickshaw pullers.
The Corporation authorities are agree able to issue necessary eligibility certificates to the rickshaw pullers to obtain the loan.
912 In view of the above submissions, we direct the several branches of the Punjab National Bank, the Bank of Baroda and the State Bank of India operating in Delhi to give financial assistance to rickshaw pullers who wish to own cycle rick shaws and ply them under licences issued by the Corporation subject to their producing the necessary eligibility certif icate issued by the Corporation and satisfying the other terms of the Schemes referred to above.
We also direct the Delhi Administration to comply with the directions issued by this Court in Nanhu & Others (supra).
In the course of the argument the learned counsel for the petitioners incidentally made a complaint about the seizure of cycle rickshaws by the Corporation officers without issuing an acknowledgment to the owners whenever they found that the cycle rickshaws were being used on the roads contrary to the rules.
The learned counsel for the Corporation stated that whenever the cycle rickshaws are seized written acknowledgments will be issued to the owner if he is found near the cycle rickshaw at the time of its seizure.
We record the above statement made on behalf of the Corporation.
These petitions are accordingly disposed of.
No costs.
S.R. Petitions disposed of.
| The assessee, in CA 1546 of 1974, M/s British India Corporation Ltd. claimed capital Reserve, Stocks and Stores Reserves, Bad and doubtful debts Reserves, Obsolescence reserve, Loans and Insurance reserve, investment reserve and forfeited moneys reserves as "standard deduction" as defined in section 2(a) of the in the computation of its profits under the relevant Income Tax Act.
The claim having been disallowed, the question has been referred to this Court by the Tribunal.
In Civil Appeal No. 1599/74 the Saran Engineering Company Ltd. claimed similar deductions in respect of capital reserve, Rehabilitation Reserve, Stores Reserve forfeited moneys Reserve and Bad and doubtful debts reserve.
The Income Tax Officer rejected the claim.
On appeal the Appellate Assistant Commissioner allowed the claim in part.
The Tribunal however allowed the assessee 's claim in full in further appeal while rejecting the Revenue 's appeal against A.A.C 's order.
At the instance of the Revenue, the Tribunal referred the matter to the High Court.
The High Court answered the reference partly in favour of the Revenue by negativing the claim as to forfeited moneys reserve and 399 restricting the quantum of amount allowed by the AAC regarding capital reserve, as the assessee did not seek a reference against it.
Hence the appeal by Revenue by Special Leave.
In the Special Leave Petition No. SLP (C) 4815A/77 the High Court 's rejection order of the revenue 's request under section 256(2) for calling for a case against the Tribunal 's findings regarding the Gratuity Reserve, Reserve for Sepcial Survey, Reserve for contingencies, fleet Replacement reserve, Reserve for exempted Profits under section 84 of the Income Tax Act, Reserve for Investment depreciation and Dividend Equalisation Reserve but allowing only in relation to the Reserve for special Survey come to be considered.
Allowing the two civil appeals in part and dismissing the Special Leave Petition, the Court ^ HELD: 1.
In the facts and circumstances of the case, except the obsolescence Reserve and the forfeited moneys reserve, all the Reserves, namely, capital Reserve, Stocks and Stores Reserve, Bad and doubtful debts reserves, Loans and Insurance Reserve, Investment reserve, and rehabilitation reserve are to be included in the computation of capital according to the provisions in the Second Schedule to the . 2.
Where the liability has actually arisen or anticipated legitimately by the assessee though the quantum of the liability has not been determined, to meet such present liability cannot be treated as "reserve".
A fund, however, created for payment of a liability which had not already arisen or fallen due but orly a provision with regard to the sum that might become liable to be paid is "other reserve within the meaning of rule (1) of second schedule and should be taken into account in computing the capital of the company for the purpose of the Companies (Profit) Surtax Act, 1964.
Except the item relating to Reserve for special survey, it is not necessary to call for any statement of the case in respect of other items in SLP (C) 4815A/77.
[406G H; 407A] Commissioner of Income Tax, Kanpur vs The Elgin Mills Ltd., Kanpur, [1986] 3 SCR P. 408, followed.
|
Civil Appeal No. 79 (NT) 1974.
From the Judgment and Order dated 29.2.1972 of the Madras High Court in Tax Case No. 209 of 1966.
S.C. Manchanda and Miss A. Subhashini for the Appellant.
T.A. Ramachandran and Mrs. Janki Ramachandran for the Respondent.
The Judgment of the Court was delivered by TULZAPURKAR, J.
The question raised for our determination in this appeal is whether on the facts and in the circumstances of the case the amount of Rs. 3 lakhs transferred by the deceased to his three grand nephews in equal shares was includible in the estate of the deceased that passed on his death? Substantially the answer thereto depends upon whether sec.10 of the is attracted to the case or not.
The facts giving rise to the question may briefly be stated.
The deceased, Sri Bankatlal Lahoti was a partner in the firm of M/s Dayaram Surajmal, which carried on business as a Bankers.
With a view to give Rs.1 lakh each to his three minor grand nephews (three grand sons of his deceased brother) the deceased on 4th October 1952 issued a cheque for Rs.3 lakhs in favour of the firm; this amount was debited in the account of the deceased in the firm and credited in the accounts of the three minors in equal proportion.
The said sum thus transferred to the three nephews continued to stand in their respective accounts in the books of the firm till its dissolution on 4th July 1960, whereafter some assets were allotted to each one of them in lieu of the amounts standing to their credit.
The deceased died on 21st February 1956.
After the death of the deceased, his widow Smt.
Godavari Bai as the accountable person filed an account of the 353 assessee 's estate declaring the value thereof at Rs.2,60,702.
This did not include the sum of Rs.3 lakhs transferred by the deceased to the three grand nephews on 4th October 1952.
The assessee contended that these transfers were not gifts but amounted to transfer of actionable claims made in conformity with s.130 of the Transfer of Property Act by effecting entries in the books of account.
Alternatively it was contended that the transfer amounted to a novation which did not require an instrument signed by the transferor.
The Deputy Controller negatived both the contentions; the first on the ground that there was no valid transfer of actionable claims because it was not effected by an instrument in writing signed by the transferor as required by s.130 of the Transfer of Property Act while the alternative contention on the ground that the transaction did not amount to a novation inasmuch as there was no substitution of one debt for another.
In this view of the matter the Deputy Controller held that the sum of Rs.3 lakhs was includible in the estate of the deceased that passed on his death.
In the appeal preferred by the assessee the self same contentions were urged on her behalf before the Appellate Controller of Estate Duty while the Deputy Controller justified the assessment on the additional ground that the sum of Rs.3 lakhs was also includible in the Estate of the deceased that passed on his death under s.10 of the .
The Appellate Controller rejected the assessee 's contentions and accepted those of the Deputy Controller and confirmed the inclusion of the amount in the estate of the deceased.
In the further appeal preferred to the Appellate Tribunal since it was admitted on behalf of the assessee that apart from the cheque issued by the deceased in favour of M/s Dayaram Surajmal and the entries made in the books of that firm debiting the deceased 's account and crediting the accounts of the donees there was no other document to evidence the transfer the Tribunal presumed that the tansfer was effected as a result of oral instructions which must have been given by the deceased to the firm.
Counsel for the assessee, however, urged that notwithstanding the absence of an instrument in writing signed by the assessee the transfer was valid under s.130 of the Transfer of Property Act and in that behalf reliance was placed on Ramaswamy Chettiar and Ors.
vs K.S.M. Manickam Chettiar and Ors., and Seetharama Ayyar and Anr.v.
Narayanaswami Pillai and Anr.
47 Indian Cases 749 but the Tribunal did not accept the 354 contention and held that the plain reading of s.130 showed that the transfer of an actionable claim became complete and effectual only upon the execution of an instrument in writing signed by the transferor or by his duly authorised agent; that the cheque issued by the deceased in favour of the firm only authorised the firm to pay to itself the sum of Rs.3 lakhs from out of the amount lying at the credit of the deceased but it did not by itself authorise the firm to transfer this amount to anyone else and that such a transfer could be authorised by a separate letter of instructions from the deceased but no such instrument obtained and the oral instructions given could not take the place of such an instrument in writing and therefore the transfer of Rs.3 lakhs done in favour of the donees was not in accordance with the requirements of section 130.
The alternative contention that the transfer was in the nature of a novation was also rejected on the ground that the donees were not indebted to the firm nor was the deceased indebted to the donees and therefore, the entries made in the account books of the firm could not be understood as a substitution of one debtor in the place of another.
The Tribunal also held that this amount of Rs.3 lakhs was includible in the estate of the deceased under s.10 of the even if it were assumed that the transfer became complete and effective on the date of the transfer inasmuch as on the facts it could not be said that the donees retained possession and enjoyment of the gifted amounts to the entire exclusion of the donor or of any benefit to him and that this position continued to exist till the death of the deceased.
At the instance of the assessee the Tribunal referred the following question of law to the High Court for its opinion: "Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the amount of Rs.3 lakhs transferred by the assessee to his grand nephews was includible in the estate of the deceased that passed on his death.
" On a consideration of the entire material on record the High Court took the view that the entries made in the books of the firm by debiting the account of the deceased in the sum of 355 Rs.3 lakhs and crediting the said amount in equal proportion in the three accounts of the donees (grand nephews) might or might not constitute a valid gift of money but proceeding on the basis that it was gratuitous transfer of an actionable claim the interposition of a cheque issued by the deceased in favour of the firm made all the differene inasmuch as the transfer of an actionable claim represented by a negotiable instrument like a cheque was governed by s.137 in preference to s.130 of the Transfer of Property Act and that the cheque together with the oral instructions (which even the Tribunal presumed were given by the deceased) would constitute the firm, a trustee or an agent holding the moneys for the benefit of the minors and as such the transfer to the minors was valid, complete and effectual.
After coming to this conclusion the High Court proceeded to consider the question whether to this transaction of gift of an actionable claim s.10 of the Act was applicable or not and relying upon the decision in the leading case of Munro vs Commissioner of Stamp Duties, ; as well as its two earlier decisions in Controller of Estate Duty vs C.R. Ramachandra Gounder, and Controller of Estate Duty vs N.R. Ramarathanam, the High Court held that the donor had been completely excluded from the subject matter of the gift and as such s.10 was not applicable.
In other words differing from the view taken by the Tribunal, the High Court held that the transaction involved in the case was a gratuitous transfer of an actionable claim and that there was in law a valid, complete and effectual gift thereof in favour of the three minor grand nephews and since s.10 was not attracted the sum of Rs.3 lakhs was not includible in the value of the estate of the deceased that passed on his death.
It, therefore, answered the question in the negative in favour of the assessee.
The Revenue has come up in appeal.
Counsel for the Revenue did not assail the High Court conclusion in regard to their being a valid gift of the actionable claim in favour of the minors resulting from the issuance of the cheque accompanied by oral instructions and followed by the making of the requisite debit and credit entries in the firm 's books but vehemently criticised the view that s.10 was inapplicable to this transaction of gift.
He urged that possession and enjoyment of the subject matter of the gift was neither assumed by the donees nor retained by 356 them to the entire exclusion of the donor inasmuch as the donor as a partner of the firm had control over the said sum of Rs.3 lakhs which continued to lie with the firm for being used as the firm 's property and this position continued to obtain till the death of the deceased and in fact till the dissoiution and as such s.10 was clearly attracted.
Strong reliance was placed by counsel for the revenue on the ratio of the Privy Council decision in Chicks vs Commissioner of Stamp Duties of New South Wales, 37 I.T.R. E.D. 89 which was followed by this Court in George Da Costa vs Controller of Estate Duty, Mysore, and Controller of Estate Duty, Madras vs Smt.
Parvati Ammal, as also two decisions of the Gujarat High Court in a Shantaben section Kapadia vs Controller of Estate Duty, Gujarat, and in Controller of Estate Duty, Gujarat vs Chandravadan Amratlal Bhatt, On the other hand counsel for the assessee supported the view of the High Court by placing reliance on the decision in Munro 's case (supra) which had been followed by this Court in C.R. Ramachandra Gounder 's, N.R. Ramarathanam 's case Controller of Estate Duty vs R.V. Vishwanathan & Ors., and Controller of Estate duty vs Kamlavati, Having regard to the rival contentions urged before us it is clear that the answer to the question raised in this appeal depends upon a proper analysis of s.10 of the Act and whether the instant case falls within the doctrine enunciated in Munro 's case (supra) or within the ratio of Chicks ' case (supra)? Relevant portion of s.10 of the Act runs thus "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. ." The object under lying a provision like s.10 of the Act was explained by Issacs J. in the case of John Lang vs Thomas Prout Webb, ; decided by the High Court of Australia in the following words : 357 "The owner of property desiring to make a gift of it to another may do so in any manner known to the law.
Apparent gifts may be genuine or colourable, and experience has shown that frequently the process of ascertaining their genuineness is attended with delay, expense and uncertainty all of which are extremely embarrassing from a public revenue standpoint.
With a view to avoiding this inconvenience, the legislature has fixed two standards, both of them consistent with actual genuineness, but prima facie indicating a colourable attempt to escape probate duty.
One is the standard of time.
A gift, however, real and bona fide, if made within twelve months before the donor 's death is for the purpose of duty regarded as not made.
The other is conduct which first sight and in the absence of explanation is inconsistent with the gift.
The prima facie view is made by the legislature conclusive.
If the presies to the transaction choose to act so as to begin apparent conflict with its purport, they are to be held to their conduct.
The validity of the transaction itself is left untouched, because it concerns themselves alone.
But they are not to embarrass the public treasury by equivocal acts.
" The conditions specified in s.10 will have to be understood by keeping in view the aforesaid object with which the section has been enacted.
In George Da Costa vs Controller of Estate Duty, Mysore (supra) this Court has analysed the conditions on the fulfilment of which the section gets attracted, thus: "The crux of the section lies in two parts; (1) the donee must bona fide have assumed possession and enjoyment of the property, which is the subject matter of the gift, to the exclusion of the donor, immediately upon the gift and (2) the donee must have retained such possession and enjoyment of the property to the entire exclusion of the donor or of 358 any benefit to him by contract or otherwise.
As a matter of construction we are of opinion that both these conditions are cumulative.
Unless each of these conditions is satisfied, the property would be liable to estate duty under s.10 of the Act.
" The second part of the section, as observed in the afore said decision, has two limbs the deceased must be entirely excluded (i) from the property, and (ii) from any benefit by contract or otherwise and that the word 'otherwise should be construed ejusdem generis and should be interpreted to mean some kind of legal obligation or some transaction enforceable in law or in equity which, though not in the form of a contract, may confer a benefit on the donor.
Therefore, the question that arises for our determination in this appeal is whether the aforementioned two cumulative conditions requisite for attracting s.10 are satisfied in this case or not? Whether immediately upon the gift the donees had bona fide assumed possession and enjoyment of the property, which was the subject matter of the gift, to the exclusion of the donor and whether they had retained such possession and enjoyment thereof to the entire exclusion of the donor or of any benefit to him by contract or otherwise? The question whether gifted property should be regarded as a part of the estate of the deceased donor passing on his death for the purpose of s.10 of the Act would depend upon as to what precisely is the subject matter of the gift and whether the gift is of absolute nature or whether it is subject to certain rights.
If the gift is made without any reservation or qualification, that is to say, where the gift carries fullest right known to law of exclusive possession and enjoyment, any subsequent enjoyment of the benefit of that property by way of possession or otherwise by the donor would bring the gift within the purview of s.10; but where the gift is subject to some reservation or qualification, that is to say, if the subject matter of the gift is property shorn of certain rights and the possession or enjoyment of some benefit in that property by the donor is referable those rights i.e.rights shorn of which the property is gifted, then in that case the subject matter of the gift will not be deemed to pass on the death of the deceased donor.
In other words if the 359 deceased donor limits the interest he is parting with and possesses or enjoys some benefit in the property not on account of the interest parted with but because of the interest still retained by him, the interest parted with will not be deemed to be a part of the estate of the deceased donor passing on his death for the purpose of s.10 of the Act.
It is these aspects which mark the distinction between the two leading cases, namely Chick 's case and Munro 's case (supra).
As we shall indicate presently Chick 's case falls within the first category while Munro 's case falls within the other category.
In Chick 's case the question arose under s.102 of the New South Wales Stamp Duties Act, 1920 56 which was similar to s.10 of our Act and the facts were these: In 1934 a father transferred by way of gift to one of his sons a pastoral property, the gift having been made without reservation or qualification or condition.
In 1935, some 17 months after the gift, the father, donee son and another son entered into an agreement to carry on in partnership the business of graziers and stock dealers.
The agreement provided, inter alia that the father should be the manager of the business and that his decision should be final and conclusive in connection with all matters relating to its conduct that the capital of the business should consist of the livestock and plant then owned by the respective partners that the business should be conducted on the respective holdings of the partner and such holdings should be used for the purposes of the partnership only that all lands held by any of the partners at the date of the agreement should remain the sole property of such partner and should not on any consideration be taken into account as or deemed to be an asset of the partnership and any such partner should have the sole and free right to deal with it as he might think fit.
Each of the three partners owned property, that of the donee son being that which had been gifted to him by his father in 1934, and each partner brought into partnership livestock and plant, and their three properties were thenceforth used for the depasturing of the partnership stock and this arrangement continued up to the death of the father in 1952.
The Privy Council held that the value of the property given to the son in 1934 was to be included in computing the value of the father 's estate for the purpose of death duty.
While it was not disputed that the son had assumed bona fide possession and enjoyment of the property immediately upon the 360 gift to the entire exclusion of the father he had not, on the facts, thenceforth retained it to the father entire exclusion, for under the partnership agreement and what ever force and effect might be given to that part of it which gave a partner the sole and free right to deal with his own property, the partners and each of them were in possession and enjoyment of the property so long as the partnership subsisted.
The Judicial Committee observed that where the question was whether the donor had been entirely excluded from the subject matter of the gift, that was the single fact to be determined, and, if he had not been so excluded the eye need look no further to see whether his non exclusion had been advantageous or otherwise to the donee.
In its opinion it was irrelevant that the father gave (if he did give) full consideration for his right as a member of the partnership to possession and enjoyment of the property that he had given to his son.
Inter alia two or three points emerge clearly from the decision that need to be emphasised: (a) there was initially an outright gift of the property not of the property shorn of any rights, (b) the deceased donor was not in fact excluded from the property, but as a partner enjoyed rights over it and (c) that it was immaterial that the donor gave full consideration for enjoying his rights over the property as a partner.
It was these aspects that brought the gifted property within the mischief of the taxing statute.
The other decisions of this Court on which Counsel for the revenue has relied are clearly cases falling within this category and hence the ratio of chick 's case was correctly applied in each of them.
On the other hand in Munro 's case the facts were these M, who was the owner of 35,000 acres of land in New South Wales on which he carried on the business of a grazier, verbally agreed with his six children in 1909 that thereafter the business should be carried on by him and them as partners under a partnership at will and the business was to be managed solely by M and each partner was to receive a specified share of profits.
In 1913, by six registered transfers M transferred by way of gift all his right title and interest in the portions of his land to each of his four sons and to trustees for each of his two daughters and their children.
The evidence showed that the transfers were taken subject to the partnership agreement and on understanding that any partner could withdraw and work his land separately.
In 1919 M and his 361 children entered into a formal partnership agreement, which provided that during the life time of M no partner should withdraw from the partnership.
On the death of M in 1929 the land transferred in 1913 was included in assessing his estate to death duties under the Stamp Duties Act, 1920 1931 (N.W.W.), on the ground that they were gifts dutiable under s.102(2a) of that Act.
The Privy Council held that the property comprised in the transfers was the land separated from the rights therein belonging to the partnership and was excluded by the terms of s.102, sub s 2(a), from being dutiable, because the donees had assumed and retained possession thereof, and any benefit remaining in the donor was referable to the partnership agreement of 1909 and not to the gifts.
It was urged that the transfer deeds did not mention the rights of the partnership and therefore under s.42 of the Real Property Act, 1900 (N.S.W.) the transfers gave a title free from those rights but the Judicial Committee negatived the contention on the ground that substance of the transactions and not the forms employed had to be ascertained and so ascertained the substance showed that the transfers were shorn of rights in favour of the partnership and the benefit remaining in the donor was referable to such rights of the partnership subject to which the gifts had been made.
Thus this decision clearly enunciates the principle that if the subject matter of the gift is property shorn of certain rights and if the possession or enjoyment of some benefit in that property by the donor is referable to those rights, i.e. rights shorn of which the property is gifted then the subject matter of the gift will not be deemed to pass on the death of the deceased donor.
The ratio of this decision has been followed and applied by this Court in Ramachandra Gounder 's case, N.R. Ramarathanam 's case, R.V. Vishwanathan 's case and Kamlavati 's case (supra).
Having regard to the undisputed facts and facts found by the High Court it seems to us clear that the instant case falls within the principle enunciated in Munro 's case.
Admittedly the deceased donor was a partner in the banking firm of M/s Dayaram Surajmal, whereas the minor donees were never admitted to the benefits of the partnership firm.
An extract of account filed by the assessee before the High Court brought out the procedure followed for effecting the transaction in question the deceased had his account comprising his capital contribution and advances made by him to the firm; he 362 drew a cheque for Rs.3 lakhs against his account with the firm which was made out in the name of the firm as a result whereof the firm could pay itself but the account of the deceased was debited with the sum of Rs.3 lakhs and on the same day simultaneously three accounts of the minor donees with the said firm were credited with the sum of Rs.1 lakh each.
The Tribunal as well as the High Court found as a fact that when the cheque was issued oral instructions must be presumed to have been given by the deceased to the firm for crediting the three accounts of the three minors without which the firm could not make such credit entries.
From these facts the High Court rightly inferred that "in effect the cheque was issued in favour of the firm, but for the benefit of the minors" and that "in such a situation the firm shall be treated as a trustee or an agent holding the money for the benefit of the minors." Clearly, in this view of the matter, the transaction in question amounted to a gratuitous transfer of an actionable claim to which s.137 in preference to s.130 of the Transfer of Property Act applied and there was a valid gift thereof to the minor donees.
Further undisputed facts were that the amount of Rs.3 lakhs did not go out of the firm but on being transferred from the account of the deceased to the accounts of the minor donees continued to remain with the firm for being used for the firm 's business; in fact the partnership continued to have the benefit thereof even after the death of the donor till the firm was dissolved.
Obviously the substance of the transaction was that the gift was of an actionable claim of the value of Rs.3 lakhs out of the donor 's right, title and interest as a whole in the firm and as such was shorn of certain rights in favour of the partnership and therefore, the possession or enjoyment of the benefit retained by the donor as a partner of the firm must be regarded as referable to partnership rights and had nothing to with the gifted property.
In our view the transaction in question, therefore, clearly fell within the ratio of the decision in Munro 's case and the High Court was right in coming to the conclusion that to such transaction s.10 was inapplicable.
We would like to point out that the facts of the instant case are almost similar to the facts that obtained in Controller of Estate Duty vs Jai Gopal Mehra, a companion matter that was decided and disposed of by this Court by a common judgment in Kamlavati 's case (supra) where it was held 363 that the transaction of gift was one to which s.10 was inapplicable.
In the result the appeal is dismissed with no order as to costs.
M.L.A. Appeal dismissed.
| The petitioners, who were Railway employees, were either dismissed or removed from service without holding any en quiry for striking work, paralysing railway services, as sualting and intimidating loyal workers and superior offi cers, etc.
The writ petitions flied in the High Courts challenging the orders of dismissal or removal stood trans ferred to this Court, heard along with other writ petitions and civil appeals and by judgment dated 11th July, 1985 dismissed.
The, petitioners sought review of the said judgment alleging that during the course of arguments, parties had proceeded on the assumption that the Court would decide only the seven questions framed by the then Hon 'ble the Chief Justice, and the individual petitions on merits would he dealt with either by the Division Benches of this Court or by the respective High Courts, that the parties addressed their arguments and submissions only on those general ques tions, that written submissions were made only in transfer case No. 55 of 1982 amongst all the railway matters, that none of the petitioners had been given any opportunity to argue their cases on merits, that the judgment under review dismissed all the transferred cases and thus all these petitions stand decided on merits also, that this has caused serious prejudice to their cases and, therefore, in the interest of justice, another opportunity should he given to argue the petitions on merits.
Dismissing the Review Petitions, HELD: Per P.N. Bhagwati, C.J., V.D. Tulzapurkar, R.S. Pathak and D.P. Madon, JJ.
899 The Review Petitions are dismissed as there is no sub stance in the grounds urged.
Per M.P. Thakkar, J. dissenting.
There is good ground to entertain the Review Peti tions and issue notice to the other side for hearing.
[904E] 2.
There is substance in the grounds because no notices have been issued on the Review Petitions and the averments have not been controverted by the other side.
In the majori ty judgment also it has not been stated that the averments are factually untrue.
[901D E] 3.
That the matter of Narpat Singh was not argued on its individual merits is correct.
Unless the factual averments made in Para 9 of the Review Petition are shown to be un true, these may be considered adequate to vitiate the im pugned order on the ground that it manifests non application of mind and is built on 'no evidence '.
[902C] 4.
In the majority judgment the proposition.
of law has been enunciated that the pleasure under Article 310(1) can be exercised even by an authority specified in the Act or rules made under the proviso to Article 309.
[902D E] 5.
The power under Article 310(1) is exercisable even by the President or Governor, not on his personal satisfaction, but with the aid and on the advice of the Council of Minis ters.
Can the same power be exercised by a Divisional Me chanical Engineer or any other lower functionary acting on his own, there being no question of his acting with the aid or advice of the Council of Ministers? Can the D.M.E. who does not even act in the name of the President, surrogate for the President? It is certainly an important Constitu tional issue which requires to be examined, but has not been examined from this perspective though the point was debated.
[903B D] 6.
Will it not tantamount to speaking in two voices to hold that principles of Natural Justice need not be complied with even in regard to the quantum of punishment to be inflicted on a workman, even though the law declared so far demands that even a black marketeer cannot be black listed without observing the principles of Natural Justice? Is a workman who 'sweats ' for the Nation not entitled to the same treatment as a black marketeer, who 'bleeds ' the Nation? [903D E] 900 7.
The workers certainly have a right to struggle and strive for economic justice in a country the Constitution of which in the Preamble, proclaims it to be a "Sovereign SOCIALIST Secular Democratic Republic".
Going on strike in the course of such a struggle cannot be characterized as holding the country to ransom and be frowned upon.
Nor can they be condemned as seekers of private gain for endeavour ing to remove their economic distress and plight to bring about a just society.
And it cannot be said on that account that it is not "reasonably practicable" to hold the enquiry in the case of any workman if there is a country wide gener al strike by workers.
[904B 904D] 8.
Article 311(2)(b) was surely not designed by the Founding Fathers in order to enable 'breaking ' of a strike called in support of workers ' demands for socio economic justice.
The issue therefore deserves to be examined in the light of this perspective.
[904D]
|
ns Nos. 285 and 314 of 1970.
Under Article 32 of the Constitution of India for enforcement of the Fundamental Rights.
K.K. Venugopal, and R. Gopalakrishnan, for the petitioner (in W.P. No. 285 of 1970).
433 M.Natesan, R. Gopalakrishnan, for the petitioner (in W.P. No. 314 of 1970).
S.Govind Swaminathan, Advocate General for the State of Tamil Nadu, A. V. Rangam and section Mohan, for respondents Nos. 1 to 5 (in W.P. No. 285 of 1970) and the respondents (in W.P. No. 314 of 1970).
M. K. Ramamurthi and Vineet Kumar, for the interveners.
The Judgment of the Court was delivered by Hegde, J.
In these two petitions under article 32 of the Con stitution the petitioners who unsuccessfully sought admission to certain Medical Colleges in the State of Tamil Nadu have asked for a writ of mandamus to direct the State of Tamil Nadu to allot to each, one of them a seat in one of the Government Medical Colleges in that State and for consequential orders.
In the State of Tamil Nadu, there are eight Medical Colleges out of which three are situate in the city of Madras, one in Madurai, one in Chingleput, one in Coimbatore, one in Thanjavur and one in Tirunelveli.
The total seats available in Madras Colleges are 500.
The sanctioned strength of seats in Madurai, Chingleput, Coimbatore, Thanjavur and Tirunelveli are 200, 50, 100, 200 and 75 respectively.
Thus the total number of medical seats available in the Government Colleges for 1st year of M.B.B.S., course in the State of Tamil Nadu are 1125.
We understand that for these seats nearly 7,000 students applied for admission.
In the previous years except in the year 1967 68, selection of candidates for admission to the 1st year M.B.B.S. course was done on State wise basis.
In the year 1967 68, the seats were distributed on district wise basis but that scheme was held to be invalid by this Court in Minor P. Rajendran vs State of Madras and Ors.(1) Thereafter the selection was again made on State wise basis in the years 1968 69 and 1969 70 but in the current year that system was given up and selection was directed to be made on the basis of what is known as unitwise basis.
Under the present scheme the Medical Colleges in the city of Madras were constituted as one unit and each one of the other Medical Colleges in the mofussil was constituted as a unit.
Thus six units were created in the State.
In respect of each one of the units a separate selection committee was constituted.
The intending applicants were asked to apply to any one of the committees but they were advised to apply to the committee nearest to their place of residence as far as possible.
They were told that if they applied to more than one committee their applications will be forwarded by the Government to only one of the committees.
(1)[1968] 2 section C. R. 786.
434 A few seats out of the 1125 seats were reserved for certain special categories of students.
As there is no dispute about those seats we shall not refer to them hereafter.
Out of the remaining seats 41 per cent seats were reserved for students coming from socially and educationally backward classes Scheduled Castes & Scheduled Tribes.
The rest of them were placed in the general pool.
In the State of Tamil Nadu actual marks are not being given in the Pre University examination.
The papers were valued on the basis of grades.
There are all together four grades i.e. Grades A to D. For the purpose of selection to first year M.B.B.S., course only marks obtained in the optional subjects were taken into consideration.
Selection to the seats with which we are concerned in these petitions is confined to students who have taken in their Pre University examination Physics, Chemistry and Biology as their optional subjects though each of these subjects carried a maximum of 100 marks thus a total of 300 marks, for the purpose of selection to the first year M.B.B.S. course the procedure prescribed was to take the minimum marks provided for the grade secured by the applicant in Chemistry and.
Physics and add them together and thereafter divide the 'total by two and to that add the minimum marks provided for the grade secured by the applicant in Biology.
Thus the total marks in the optional subjects was reduced from 300 to 200.
All the applicants in the general pool who secured 1 10 or more marks calculated on the basis of the formulae referred to earlier were called for interview by the selection committees.
Selection committees were authorised to give a maximum of 75 marks at the interview.
The selection committees were asked to award these marks on the basis of following tests.
(1) Sports or National Cadet Corps activities; (2) Extra Curricular special services; (3) General physical condition and endurance , (4) General ability, and (5) Aptitude.
The selection committees were directed to prepare a gradation list on the basis of the total marks obtained by each applicant and submit the same to the Government.
The petitioners before us appear to have had brilliant academic career.
The facts mentioned by the petitioners in this regard were not controverted by the respondents.
The petitioner in Petition No. 285 of 1970 came out within first three ranks in the 10th and 11 th standards and in the final examination he secured 451 marks out of the total, of 700.
He Stood third in his school.
43 5 Du ring his school career he had taken keen interest in extracurricular activities.
He was a N.C.C. Cadet and passed creditably the 'A ' certificate examination.
He had also obtained certificate in boxing.
He had joined the correspondence course conducted by the Voice Prophecy Institute, New Delhi and obtained a certificate in Health and Hygiene.
After having passed his Anglo Indian High School examination creditably he joined Madurai college, in the Pre University course taking Physics, Chemistry and Biology as his science subjects.
In that course he secured first class with Grade D plus in Physics and Chemistry and A plus in Biology.
He stood fourth in his college.
The grade D plus represents 85 to 99 per cent marks and A plus 65 to 75 per cent marks.
The petitioner in Petition No. 314 of 1970 passed her Pre University examination in March, 1970 from the Scott Christian College, Nagercoil which college stands affiliated to Madurai University.
She secured first class with grade 'D ' (75 to 85 per cent marks) in Physics; grade D plus (85 to 99 per cent) in Chemistry and D (75 to 85) per cent in Biology.
The petitioner also had a brilliant career throughout in, the High School classes as well as in the college class.
She secured a merit card for the highest distinction consecutively for the years 1965 66, 1966 67 and 1967 68 in Standards 8 to 10 of St. Joseph 's Convent, Nager coil.
In the S.S.L.C. examination held in March, 1969 she secured 456 marks out of 600.
She obtained distinction in extracurricular activities both in school and college.
She had been a girl guide.
She took keen interest in games and sports particularly in net ball, throw ball and tenniquoit.
She was a member of the Representative team.
She also passed with merit the pianoforte playing Grade 1 examination conducted by the Trinity College of Music, London.
The petitioners before this Court challenged the validity of the selections made on various grounds.
They contended that the unitwise selection contravenes articles 14 and 15 of the Constitution inasmuch as the same places the applicants of some of the units in a better position than those who applied to other units.
It was alleged that the ratio between applicants and number of seats in the Coimbatore unit was 1 : 13; in Tirunelveli 1 : 10; in Chingleput 1 : 6; in the Madras 1 : 5 1/2 ; in Thanjavur 1 : 6 and in Madurai 1 : 71.
It was further alleged that several applicants who secured lesser marks than the petitioners before this Court were selected merely because their applications came to be considered in other units.
It was also alleged that this unitwise scheme was merely intended as a device to get over the decision of this Court in Rajendran 's case().
It was next contended on behalf of the petitioners that the interview held was a farce.
(1)[1968] 2 section C. R. 786.
436 Each applicant was interviewed hardly for three minutes.
During that interview irrelevant questions were put to them.
The interview marks were manipulated so as to pull up under serving applicants and downgrade those who had secured excellent marks in their Pre University examination.
It was said that a perusal of the marks list would show that the whole selection was a manipulation.
The applicants who had failed more than once and ultimately secured bare second class were selected while the first rate applicants who had secured first class with high marks were rejected.
It was urged on their behalf that even the students who get the minimum marks could be pulled up by the selection committee by plumping 70 or more out of 75 interview marks whereas the students who have secured 170 marks the highest marks that could have been secured under the admission rules in Pre University examination could be pulled down by giving less than 10 marks out of 75 marks.
The petitioners ' complaint is that after the interview the selection committee carried the marks given by them to Madras and there the Government has manipulated the marks in such a way as to 'select their favourites and reject such of them in whom the Government was not interested.
It was also urged that no guidelines.were provided for awarding marks at the interview and therefore the power conferred on the selection committee is an arbitrary power which is capable of being misused and in fact has been misused.
It was contended that the list of backward classes provided to the committee was solely made on the basis of caste and as such that list did not conform to the requirements of article 15(4) of the Constitution.
The petitioners also urged that the reservation made for backward classes is disproportionately high and further the division of backward classes into backward classes and more backward classes was impermissible under law.
We shall first take up the plea regarding the division of medical seats on unitwise basis.
It is admitted that the minimum marks required for being selected in some unit is less than in the other units.
Hence prima facie the scheme in question results in discrimination against some of the applicants.
In Rajendran 's case(1) this Court ruled that the district wise distribution of available seats is violative of article 15 of the Constitution '.
But it was Contended on behalf of the State that the unitwise distribution of seats was adopted for administrative convenience.
It was said that it was not possible for one selection committee to interview all the applicants.
Therefore several committees had to be constituted.
In the past when applicants were interviewed by several committees there were complaints that the standard adopted by one committee differed from that adopted by others and therefore the applicants ' ability was not tested by a uniform standard.
Further (1) ; 43 7 it was said that when selections were made by several committees there was delay in preparing a consolidated list.
We are unable to accept these grounds as being real grounds for classification.
The grievance when selections were made by several committees in a State wise selection the standard adopted by various committees differed, would continue even when selections are made by several committees in a unitwise selection.
Whether the selection is made by selection committees on State wise basis or unitwise basis, the standard adopted by various committees is bound to vary.
Hence in principle it makes no difference.
Now coming to the question of delay, we see no reason why there should be any delay in preparing a consolidated list.
At any rate the delay caused is not likely to be such as to justify departure from the principle of selection on the basis of merit on a Statewise basis.
Before a clasification can be justified, it must be based on an objective criteria and further it must have reasonable nexus with the object intended to be achieved.
The object intended to be achieved in the present case is to select the best candidates for being admitted to Medical Colleges.
That object cannot be satisfactorily achieved by the method adopted.
The complaint of the petitioners is that unitwise distribution of seats is but a different manifestation of the districtwise distribution sought in 1967 68 has some force though on the material on record we will not be justified in saying that the unitwise distribution was done for collateral purposes.
Suffice it to say that the unitwise distribution of seats is violative of articles 14 and 15 of the Constitution.
The fact that an applicant is free to apply to any one unit does not take the scheme outside the mischief of articles 14 and 15.
It may be remembered that the students were advised as far as possible to apply to the unit nearest to their place of residence.
Earmarking 75 marks out of 275 marks for interview as inter view marks prima facie appears to be excessive.
It is not denied that the interview lasted hardly, for three minutes for each candidate.
In the course of three minutes interview it is hardly possible to assess the capability of a candidate.
In most cases the first impression need not necessarily be the best impression.
But under the existing conditions in this country we are unable to accede to the contention of the petitioners that the system of interview, as in vogue in this country is so defective as to make it useless.
It is true that various researches conducted in other countries particularly in U.S.A. show that there is possibility of serious errors creeping in interviews made on haphazard basis.
C. W. Valentine on "Psychology and its Bearing on Education" ' refers to the marks given to the same set of persons interviewed 438 by two different competent Boards and this is what is stated in his book : "The members of each board awarded a mark to each candidate and then he was discussed and an average mark agreed on.
When the orders of merit for the two boards were compared it was found that the man placed first by Board A was put 13th by Board B when the main placed 1st by Board B was 11th with Board A." Even when the, interviews are conducted by impartial and competent persons on scientific lines very many uncertain factors like the initial nervousness on the part of some candidates, the mood in which the interviewer happens to be and the odd questions that may be put to the persons interviewed may all go to ,affect the result of the interview.
But as observed by this Court in R. Chitralekha and Anr.
vs State of Mysore and Ors(1).
"In the field of education there are divergent views as regards the mode of testing the capacity and calibre of students in the matter of admissions to colleges.
Orthodox educationists stand by the marks obtained by a student in the annual examination.
The modem trend of opinion insists upon other additional tests, such as interview, performance in extracurricular activities, personality test, psychiatric tests etc.
Obviously we are not in a position to judge which method is pre ferable or which test is the correct one.
If there can be manipulation or dishonesty in allotting marks at interviews, there can equally be manipulation in the matter of awarding marks in the written examination.
In the ultimate analysis, whatever method is adopted its success depends on th e moral standards of the members constituting the selection committee and their sense of objectivity and devotion to duty.
This criti cism is more a reflection on the examiners than on the system itself.
The scheme, of selection, however, perfect it may be, on paper, may be abused in practice. 'Mat it is capable of abused is not a ground for quashing it.
So long as the order lays down relevant objective criteria and entrusts the business of selection to qualified persons, this Court cannot obviously have any say in the matter.
" While we do feel that the marks allotted for interview ' are on the high side and it may be appropriate for the Government to (1) ; 439 re examine the question, we are unable to uphold the contention that it was not within the power of the Government to provide such high marks for interview or that there was any arbitrary exercise of power.
It was urged on behalf of the petitioners that the interview marks were, allotted on collateral considerations.
We are told that the selection committees were tools in the hands of the Government and the Government manipulated the marks in such a way as to facilitate the selection of those students in whom the members of the party in power were interested.
These allegations were denied by the respondents.
While, elaborating their arguments on their plea of mala fides the learned Counsel for the petitioners invited our attention to the marks lists which according to them clearly showed that the marks given at the interview are by and large in inverse proportion to the marks obtained by the candidates at the University examination.
We were also told that the marks lists on their face show that the interview marks were manipulated.
It was said that marks were so given as to see that certain candidates got at least the minimum required for selection.
While there is some basis for these criticisms there is not sufficient material before us from which we could conclude that there was any manipulation in preparing the gradation list.
It is true that numerous students whose performance in the University examination was none too satisfactory nor their past records creditable had secured very high marks at the interview.
It is also true that a large number of students who had secured very high marks in the University examination and whose performance in the earlier classes was very good had secured very low marks at the interview.
This circumstance is undoubtedly disturbing but the courts cannot uphold the plea of mala fides on the basis of mere probabilities.
We cannot believe that any responsible Government would stoop to manipulating marks.
The selection committees consisted of eminent persons.
Most of them are medical practitioners occupying responsible positions ' in life.
It would be a bad day for this country if such persons take to manipulation of marks.
Hence we cannot accept the contention that the interview marks were manipulated either by the Government or by the selection committees.
It was next urged that no objective criterion was fixed for interview.
We are unable to accept this contention as well.
I The selectors were asked to interview candidates on the basis of the five criteria prescribed to which we have made reference earlier.
Those tests are sufficiently objective in character.
Similar tests were held to be objective by this Court in Chitralekha 's case(1).
It cannot be denied that extra curricular activities like sports, N.C.C., special services, general physical condition and endurance and general ability are objective tests.
The aptitude (1) (1964)6 S.C.R 368.
440 referred to in the rule, in our opinion, is aptitude for medical profession.
It was next contended that separate marks had not been allotted for each one of the tests enumerated in the rule.
A total of 75 interview marks were placed at the disposal of the selection committee and from out of those the committee could award marks according to its sweet will and pleasure.
Such a power it was said is an arbitrary power.
We were told that the entire 75 marks could have been given to a candidate even if he satisfied only one out of the five criterion prescribed.
It is true that the rule did not prescribe separate marks for separate heads.
But that in our opinion did not permit the selection committee to allot marks as it pleased.
Each one of the tests prescribed had its own importance.
As observed at footnote 20 at p. 485 of American Jurisprudence Vol.
15 that the interviewers need not record precise questions and answers when oral tests are used to appraise personality traits; it is sufficient if the examiner 's findings are recorded on the appraisal sheet according to the personal qualifications itemised for measure.
A contention similar to those advanced by the petitioners came up for consideration before the Mysore High Court in D. G. Viswanath vs Chief Secretary of Mysore and Ors.
Therein the court observed thus : "It is true that Annexure IV does not specifically mention the marks allotted for each head.
But from that circumstance it cannot be held that the Government had conferred an unguided power on the Committees.
In the absence of specific allocation of marks for each head, it must be presumed that the Government considered that each of the heads mentioned in Annexure IV as being equal in importance to any other.
In other words, we have to infer that the intention of the Government was that each one of those heads should carry 1/5th of the "Interview" marks.
" We may note that the committee had not divided the interview marks under various heads nor were the marks given on itemised basis.
The marks list produced before us shows that the marks were given in a lump.
This is clearly illegal.
The interview held was also vitiated for the reason that the selection committee took into consideration irrelevant matters and at the same time failed to take into consideration matters required to 'be taken into consideration.
In the counter affidavit filed by the Chairman of the selection committee it was averred that in allotting interview marks the committee took into consideration A.I.R. 1964 Mys.132.
441 qualities such as pleasant personality, quick thinking etc.
One of the extra curricular activities that the committee was required to take into% consideration was N.C.C. training.
That was clearly an objective test but from the counter affidavit filed, it appears that the committee did not think that it was sufficient if an applicant had good record as a cadet, but according to it, he must also know why he joined the N.C.C. and what role N.C.C. plays in the National life.
These, in our opinion, are irrelevant considerations.
Again the test like the physical condition and endurance can be best judged by a competent medical practitioner after a careful medical examination.
It was in the very nature of things not possible for the selection committee though composed of eminent doctors to find out the physical condition and endurance by a mere look at the candidate.
It is clear from the affidavit filed on behalf of the selection committees that at the time of interview much attention had not been given to the general ability which test include past performance of the applicants and the varied interest taken by them.
From the facts placed before us it is clear that the candidates were not interviewed in accordance with the rules governing the interview.
It was next urged that the classification of backward classes by the Government into backward classes and more backward classes was illegal and in support of that contention our attention was invited to the decision of this Court in M. R. Balaji and Ors.
vs State of Mysore().
It is unnecessary to go into that question because for the purpose of the present selection the backward classes were not sub divided into backward classes and more backward classes.
What had happened is that the list of backward classes supplied to the selection committee showed that some of the communities are more backward than others but that list was prepared for the purpose of fee concession.
For the purpose of the present selection all the classes shown therein were treated as backward classes.
There is no basis for the contention that the reservation made for backward classes is excessive.
We were dot told why it is, excessive.
Undoubtedly we should not forget that it is against the immediate interest of the Nation to exclude from the portals of our medical colleges qualified and competent students but then the immediate advantages of the Nation have to be harmonised with, its long range interests.
It cannot be denied that unaided many sections of the people in this country cannot compete with the advanced sections of the Nation.
Advantages secured due to, historical reasons should not be considered as fundamental rights.
Nation 's interest will be best served taking a long range view if the backward classes are helped to march forward and take their (1)(1963) Supp.
1 section C. R. 438.
442 place in line with the advanced sections of the people.
That is ,why in Balaji 's case (1) this Court held that the total of reservations for backward classes, scheduled castes and scheduled tribes should not ordinarily exceed 50% of the avail able seats.
In the present case it is 41 %.
On the material before us we are unable to hold that the said reservation is excessive.
Considerable arguments were advanced assailing the enumera tion of backward classes.
It was said that the concerned list included only castes and not classes.
The petitioners ' case is that every one of the classes mentioned therein is in reality a. caste.
Hence that list cannot be sustained.
In Balaji 's case(1) this Court held that though caste is a relevant factor in ascertaining a ,class for the purpose of article 15(4), a class cannot be constituted solely on the basis of caste.
Gajendragadkar J. (as he then was) speaking for the Court observed : "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 become socially backward.
They do not enjoy a status in society I 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.
" In Chiterlekha 's case(2), this Court reiterated that the caste is a relevant circumstance in ascertaining the backwardness of a class.
Further it was observed therein : "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 affording 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 had on that account, if it can ascer tain the backwardness of a group of persons on the basis of other relevant criteria.
" The same view was, expressed by this court in State of Andhra Pradesh and anr.
vs P. Sagar(3).
There in it was observed (1) (1963) Supp. 1 section C. R. 438.
(2) ; (3) 443 "In the context in which it occurs 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.
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.
" A caste has always been recognised as a class.
In construing the expression "classes of His Majesty 's subjects" found in section 153 A of the Indian Penal Code) Wassoodew J. observed in Narayan Vasudev vs Emperor(1).
"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 original 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 : "We tried to avoid caste but we find it difficult to ignore caste in the present prevailing conditions.
We wish it were easy to dissociate caste from social backwardness at the present juncture.
In modem times any body 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.
" In Paragraph II 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 denominational differences." (1) A. I. R.1940 Bom.
444 The validity of the impugned list of backward classes came up for consideration before this Court in Rajendran 's case(1) and this is what this Court observed therein "The contention is that the list of socially and educationally backward classes for whom reservation is made under r. 5 is nothing but a list of certain castes.
There.fore, reservation in favour of certain castes based only on caste considerations violates article 1 5 ( 1 ), which prohibits discrimination on the ground of caste only.
Now if the reservation in question had been based 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 forgotten 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) " Rajendran 's case(1) is an authority for the proposition that the classification of backward classes on the basis of castes is within the purview of article 15(4) if those castes are shown to be socially and educationally backward.
No further material has been placed before us to show that the reservation for backward classes with which we are herein concerned is not in accordance with article 15(4).
There is no gain saying the fact the 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 unable 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 back ward 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 modem 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 are really socially and educationally backward should be allowed to have the benefit of reservation.
Reservation of seats should not be allowed to become a vested interest.
The fact that candidate,, of backward classes have secured about 50% 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 the Government 's decision in this regard is open to judicial review.
(1) ; 445 For the reasons mentioned above we are of opinion that the selections impugned in these petitions cannot be held to have been made validly inasmuch as the seats were distributed on unitwise basis and further that the interviews were not held in accordance with the rules.
But despite coming to that conclusion we are unable to set 'aside the selections already made.
The selected candidates have not been made parties to these petitions.
They have already joined the course and are undergoing training.
Their selection cannot be set aside without giving them an opportunity to put forward their case.
It is true that the petitioners had filed applications to premit them to have recourse to O. 1, r. 8.
C.P.C. for the representation of the persons interested in opposing these applications but no order has been passed on those applications and it is now too late to have recourse to that procedure even if that procedure is, permissible under law.
We are told by the learned Advocate General of Tamil Nadu that 24 seats still remain to be filled up.
He has assured us on behalf of the State that those seats will be filled up in accordance with the orders of this Court.
There are about 80 persons, who we are told are in the waiting list.
Some of the unsuccessful applicants had moved the High Court of Madras for relief similar to that sought by the petitioners herein.
But it appears their writ petitions have been dismissed.
Some out of them have intervened in these petitions.
Other non selected candidates have evinced no interest in chal lenging the selections made.
Under the circumstances, it is reasonable to assume that they have abandoned their claim and it is too late for them to press their claim.
Under these circumstances, after discussion with the Counsel for the parties we have come to the conclusion that these petitions should be allowed subject to the following conditions : The State of Tamil Nadu shall immediately constitute a sepa rate expert committee consisting of eminent medical practitioners (excluding all those who were members of the previous committees) for selection to the 24 unfilled seats.
The selection shall be made on Statewise basis.
The committee shall interview only the candidates who are show in the waiting list, the persons who unsuccessfully moved the High Court of Madras and the two petitioners before this Court.
They shall allot separate marks under the five heads mentioned in the rule.
The committee shall take into consideration only matters laid down in the rule, exclude from consideration all irrelevant matters and thereafter prepare a gradation list to fill up the 24 seats mentioned earlier.
It is ordered accordingly.
We think this is a fit case where the petitioners should get their costs from the State of Tamil Nadu.
| In 1970 71, selection of candidates to various medical colleges in the State of Tamil Nadu was done on the 'unit wise ' basis.
Under that scheme the medical colleges in the city of Madras were constituted as ,one unit and each of the other medical colleges in the mofussil was constituted as a unit.
In respect of each one of the units, a separate selection committee was constituted.
The intending applicants were asked to apply to any one of the committees but were advised to apply to the committee nearest to their place of residence and, if they applied to more than one committee, their applications were to be forwarded by the Government to only one of the committees.
A few seats were reserved to certain special categories of students and out of the remaining seats, 41 per cent were reserved for students coming from socially and educationally backward classes, scheduled castes and scheduled tribes, and the rest were placed in the general pool.
All the applicants in the general pool who secured 110 or more marks ,out of 200, calculated according to a certain formula, were called for interview and selection committees were authorised to give in addition, a maximum of 75 marks at the interview.
The award of these marks was on the basis of the following five criteria, namely, (a) Sports or NCC activities ' (b) extra curricular special services, (c) general physical condition and endurance; (d) general ability, and (e) aptitude.
The gradation list prepared by the selection committee was to be submitted to the Government.
The petitioners, who unsuccessfully sought admission to the medical colleges in the State, challenged the validity of the selections made.
They contended that : (1) The unitwise selection contravened articles 14 and 15 of the Constitution because, (a) the applicants of 'some of the units were in a better position than those who applied to other units, since the ratio between the applicants and the number of seats in each unit varied, and several applicants who secured lesser marks than the petitioners were selected merely because their applications came to be considered in ,other units, and (b) the scheme was merely intended as a device to get over the decision of this Court in Rajendran vs State of Madras, ; ; (2) the interview was a farce because it Was held for only three minutes and no guidelines we 're provided for the award of marks at the interview and earmarking for interview marks 75 out of the total of 275 was excessive; (3) the interview marks were manipulated both by the selection committee and the Government in order to pull up undeserving :applicants; (4) the list of backward classes was solely made on the basis 431 of caste and therefore did not conform to article 15(4) of the Constitution; (5) the reservation made for backward classes was disproportionately high; and (6) the division of backward classes into backward classes and more backward classes was impermissible under law.
HELD : (1) (a) The object intended to be achieved in the present case, is to select the best candidates for being admitted to medical colleges.
This object cannot be satisfactorily achieved by the method adopted.
It is admitted that the minimum marks required for being selected in some units is less than in other units.
Hence prima facie the scheme in question results in discrimination.
The plea of delay in selection on State wise basis is neither real nor substantial.
[436 F G; 437 C D] (b)The unitwise distribution of seats appears to be a different manifestation of the district wise distribution which was struck down by this Court in Rajendran 's case,.
[437 D E] (2)In the course of three minutes interview, it is hardly possible to the capability of a candidate since,the first impression need not necessarily be the best impression.
But it cannot be held that the system of interview is so defective as to make it useless, or that the Government has no power to provide such high marks for interview or that there was an arbitrary exercise of the power.
[437 G H; 438 H; 439 A] It is true that the rule did not prescribe separate marks for the separate heads, but it must be presumed that the Government considered that each of the heads mentioned as being of equal importance and that the intention was that each of those heads 'should carry 115 of the interview marks.
[440 B G] Since the marks list, as prepared in the present case, shows that the marks were given in a lump it was clearly illegal.
[440 F G] Chitralekha vs State of Mysore ; , followed.
Viswasnath vs Chief Secretary, Mysore, A.I.R., 1964 Mys.
132, approved.
The tests relating to the various matters for allotting interview marks.
are objective tests.
The aptitude referred to in the rule is aptitude for the medical profession; but in this case certain irrelevant matters were taken into consideration and relevant matters were omitted.
[439 H; 440 A, 441 A B, C D] (3)There is no material for concluding that there was any manipulation of marks.
Numerous students whose performance in the university examination was none too satisfactory nor their past records creditable have secured very high marks at the interview, and a large number of students whose performance in the University examination was very good, secured very low marks at the interview.
This circumstance is undoubtedly disturbing but the courts cannot uphold the plea of mala fides on the basis of mere probabilities [439 C F] (4)The list of backward classes appears to include castes and not classes.
But caste is a relevant circumstance in ascertaining backwardness of a class and a classification of backward classes on the basis of caste is within the purview of article 15(4) of the Constitution, if those castes are shown to be socially and educationally backward.
But the Government could not proceed on the basis once a class is considered as a backward class it should continue to be a backward class for all time, because, once a class reaches a certain stage of progress competi 432 tion is necessary for its future progress.
The Government should, therefore, always keep under review the question of 'reservation of seats and only those classes which are really socially and educationally backward should be allowed to have the benefit of reservation.
Reservation of seats should not be allowed to become a vested interest, and the fact that, in the present case, the candidate of backward classes had secured 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.
The Government 's decision in this regard is open to judicial review.
[442 B C, 444 E H] Balaji vs State of Mysore, [1963] Supp. 1 S.C.R. 438, Chitralekha vs State of Mysore ; , State of Andhra Pradesh vs Sagar, , Minor P. Rajendran vs State of Madras, ; , Narayan Vasudev vs Emperor, A.I.R. 1940 Bom.
379 and Backward Classes Commission 's Report, referred to.
(5)There is no basis for, the contention that reservation made for backward classes is excessive.
While it is against the immediate interest of the Nation to exclude from the portals of our medical colleges qualified and competent students, immediate advantages of the Nation have to be harmonised with the Nation 's long range interest.
The best way of serving the Nation 's interest would to help the backward classes to march forward and take their place in line with the advanced sections of the people.
In Balaji 's case it was held that the total, reservation for backward classes, scheduled castes and scheduled tribes should not ordinarily exceed 50 per cent of the available seats.
Since in the present case it was only 41 per cent, it could not be held that the reservation was excessive.
[441 E H; 442 A B] (6)For the purpose of selection there is no classification of backward classes as backward and more backward.
The list sent to the selection committee was that prepared for the purpose of fee concession.
[441 F] In the present case, however, the impugned selections already made could not be set aside because the selected candidates had already joined the course and are undergoing training and they had not been made parties to the petitions.
Since there are 24 seats yet to be filled up, the State shall immediately constitute a separate expert committee consisting of eminent medical practitioners (excluding all those who were members of previous committees) for selection to these unfilled seats.
The selection should be made on State wise basis.
The committee should interview only those candidates who are shown in the waiting list and persons who unsuccessfully moved the High Court and the petitioners before this Court.
in preparing the gradation list, the committee should allot separate marks under the five heads mentioned in the rule and the committee should take into consideration only matters laid down in the rule excluding from consideration all irrelevant matters.
[445 B H]
|
Appeal No. 1934 of 1978.
From the Judgment and Order dated 21.12.1977 of the Allaha bad 11 High Court in Civil Misc.
Writ Petition No. 227 of 1977.
Ms. Rachna Gupta for the Appellant.
S.C. Manchanda and K.P. Bhatnagar for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
The Income tax Act, 1961 replaced the Indian Income tax Act, 1922 w.e.f. 1.4.1962.
The repeal of the earlier Act necessitated the enactment of transitional provisions to facilitate the change over.
Perhaps the sim plest course would have been to provide that the new Act would apply to all proceedings for the assessment year 1962 63 and thereafter.
The legislature, however, evolved a more complicated procedure.
While section 297(1) of the new Act declared that the Indian Income tax Act, 1922 stood repealed by the new Act, sub section (2) of the above sec tion made detailed and meticulous provisions in clauses (a) to (m) as to whether the new Act or the old Act will govern in the various situations dealt with therein.
These provi sions have led to a lot of litigation and the controversy in this appeal also arises out of one such provision.
We are concerned here with the scope of proceedings for reassess ment in respect of assessment years prior to 1962 63 and the answer to the question before us turns on the provisions of the following two sections of the 1961 Act: Section 297 "297(1) xxx xxx xxx (2) Notwithstanding the repeal of the Indian Income tax Act, 1922 (11 of 1922) (hereinafter referred to as 'the repealed Act ') xxx xxx xxx xxx (d) where in respect of any assessment year after the year ending on the 31st day of March 1940 (i) a notice under section 34 of the re pealed Act had been issued before the com mencement of this Act, the proceedings in pursuance of such notice may be continued and disposed of as if this Act had not been passed; 12 (ii) any income chargeable to tax had es caped assessment within the meaning of that expression in section 147 and no proceedings under section 34 of the repealed Act in re spect of any such income are pending at the commencement of this Act, a notice under section 148 may, subject to the provisions contained in section 149 or section 150 be issued with respect to that assessment year and all the provisions of this Act shall apply accordingly.
" Section 150 "150(1) Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time for the purpose of making an assessment or reassessment or recom putation in consequence or, or to give effect to, any finding or direction contained in an order passed by any authority in any proceed ing under this Act by way of appeal, reference or revision." (underlining ours) We may proceed now to set out how the question arises in the present case: The appeal arises out of an order of the High Court in a writ petition filed by one Mahadeo Prasad Bais (since deceased, represented by his legal representa tives) challenging reassessment proceedings initiated against him for the assessment years 1953 54 to 1963 64.
The appeal is, however, restricted to the assessment years 1953 54 to 1961 62.
Upto assessment year 1948 49, the appel lant was being assessed as the Karta of a Hindu Undivided Family consisting of himself, his mother, his wife and three sons.
For the assessment year 1949 50 and subsequent years upto 1961 62 he had filed a return in his individual capaci ty on the footing that there had been a total partition of the family within the meaning of Section 25A of the Indian Income tax Act, 1922 and that he was assessable in respect of the income from the properties of the family allotted to him at the partition.
In the alternative, he claimed partial partition of some of the joint family properties.f Both these claims were initially negatived and the entire income was assessed in the hands of the Hindu Undivided Family.
The returns filed by the appellant in his individual capacity were finalised by holding that there was no income assessa ble in his individual capacity.
The Hindu Undivided Family went up in appeals and ultimately the Tribunal accepted the claim of partial partition in respect of some of the proper ties with effect from different dates.
This conclusion of the Tribunal was also affirmed by the High Court in the decision reported as Mahadeo Prasad Bais vs Income tax Officer, which related .
13 to the assessment years 1956 57 to 1958 59.
Consequent on these decisions of the Tribunal and the High Court, the income from some of the erstwhile family properties stood excluded from the assessment of the Hindu Undivided Family and became liable to be included in the hands of the present appellant.
The assessment for 1949 50 and subsequent years upto 1961 62 on the family had been completed and the ap peals and reference disposed of under the Indian Income tax Act, 1922.
The original assessments made on the appellant as an individual for the assessment years 1953 54 to 1961 62 had been completed under the Indian Income tax Act, 1922.
In these assessments no income from the erstwhile joint family properties had been included as the officer was of the view, as in 1949 50, that it was assessable in the hands of the family.
There were no proceedings initiated or pending under Section 34 of the 1922 Act in respect of these assessment years as on 1.4.1962.
Quite sometime after the High Court had decided the reference for 1949 50 in the case of the family, the Income tax Officer thought of steps to include the income assessable in the hands of the appellant conse quent on the decisions of the Tribunal and the High Court which he had failed 10 assess earlier.
He, therefore, served on the appellant on 19.3.1977 notices for reassessment, as required by section 297(2)(d)(ii), under section 148 of the 1961 Act.
The appellant resisted these proceedings, inter alia, on the ground that the notices were barred by limita tion.
The department, however, contended that, though nor mally reassessment proceedings had to be initiated within a period of four, eight or sixteen years as the case may be, under the then provisions of Section 149 of the 1961 Act, the reassessment proceedings in this case were saved by the provisions of Section 150(1) of the 1961 Act set out earli er.
This contention of the department has been accepted by the High Court in the decision under appeal before us which is reported in The issue involved in this appeal is basically a short one turning on the language of section 150(1).
Before con sidering the interpretation of this section, we may, howev er, point out that, on this question, there appears to be a conflict of judicial opinion between the several High Courts.
The Allahabad High Court, in the decision presently under appeal (1980)125 I.T.R. 49 and the Calcutta High Court in I.T.O. vs Eastern Coal Co. Ltd., have taken the view that a reassessment in such circumstances is saved by the provisions of Section 150(1) of the 1961 Act.
An earlier Allahabad decision in C.I.T. vs Kamalapat Moti lal, (1977)110 I.T.R. 769 and an earlier Bombay decision in Ambaji Traders vs 1.T.O., (1976)105 I.T.R. 273 took a simi lar view on the analogous provision contained in section 153(3) of the 1961 Act but a contrary view was taken by the latter 14 High Court in the latter case reported as CIT vs
T.P. Asrani, Both sets of decisions have placed reliance on certain observations of this Court in differing contexts.
But it will be best to have a look at the statuto ry provisions first, in the context of the facts of the present case.
To start with, there is no dispute that reassessment proceedings were rightly initiated under section 148 of the Act.
It is also common ground that on the language of sec tion 148, as it stood at the relevant time, no notice under section 148 could have been issued in March 1977 for the assessment years in question.
The Revenue can successfully support the validity of this notice only by reference to section 150 (1).
Two questions then arise: (i) Are the provisions of section 150 (1) attracted ? (ii) If yes, do they save the impugned proceedings ? The answer to the first question is furnished by section 297 (2) (d) (ii), the very clause which authorises the issue of the notice of reassess ment under section 148.
It permits the issue of the notice under section 148, "subject to the provisions contained in section 149 or section 150".
Though the words "subject to" may be appropriate in the context of section 149 and section 150 (2) (which place restrictions on the issue of the notice u/s 148), they are somewhat inappropriate a propos section 150 (1) which relaxes the conditions for issue.
But there is no doubt that the statute clearly intends that the benefit of enlargement of the time limited under section 149 should be available in respect of the notice issued under section 148 read with section 297 (2) (d) (ii).
The answer to the second question is furnished by section 150 (1).itself.
It removes the bar of time when the reassessment proceedings are initiated in consequence of or to give effect to a finding contained in an order passed by any authority in any proceeding by way of appeal, reference or revision.
There is no difficulty here for the orders of the Tribunal and the High Court for the several years between 1949 50 and 1961 62 were passed in proceedings by way of appeals and reference and there is no dispute that the reassessment proceedings have been initiat ed to give effect to findings in such orders.
There is, however, a catch in applying the terms of section 150(1) ' to this case.
There is no doubt that the whole idea of the sub section was to lift the embargo placed on initiation of reassessment proceedings and to remove the time limit where the notice of reassessment is issued with a view to give effect to a direction or finding contained in an appellate order or an order passed on revision or on reference.
Unfor tunately, however, in expressing its above intention, the legislature has worded the exemption from time limit so as to cover only cases where the finding or direction is con tained in an order passed by any such authority in any such proceeding "under this Act" i.e. the 1961 Act.
In the present case the assessments for 1949 50 and subsequent years in the case of the family were made under the old Act and were the subject matters of appeal to the 15 Appellate Assistant Commissioner and Tribunal and of refer ence to the High Court under the provisions of the 1922 Act.
In other words, the finding in consequence of which the assessments presently under consideration are being sought to be reopened is a finding contained in orders passed not 'under this Act ' but in orders passed under the 1922 Act.
Literally applied, therefore, the language of section 150 (1) does not help the department to overcome the bar of limitation otherwise imposed by Section 149.
Pressing for the literal construction of the sub sec tion, it is contended for the appellant that there are good reasons why this construction should be accepted: (1) To accept the contention of the depart ment would mean the virtual deletion of the words "under this Act" from section 150 (1); (2) It seems clear that the above words have not been inadvertantly used in the statute.
If one turns 10 s.153 (3), which is an extension of section 150 (1 ) removing the time ban for the completion of reassessments initiated for the same purpose, the legislature goes further than section 150 (1) and makes specific refer ence to particular provisions of the new Act; (3) The provisions of section 150 (1) will not become redundant if read in the manner con tended for by the assessee.
While no doubt the proceedings are initiated, in all cases cov ered by section 297 (2) (d) (ii), under the new Act, the orders, for giving effect to a finding or direction in which such proceedings are initiated, may belong to either category they may be orders passed under the old Act or they may be orders passed under the new Act.
The terms of section 150 (1) will be effective in the latter category of cases; and (4) The provisions contained in Ss. 150 (1) and 153 (3) are provisions exempting the applicability of a normal rule of limitation otherwise applicable to actions for reassess ment and such provisions should be construed strictly.
On the other hand, it is contended for the department that the object of the provision being very obvious, namely, that where reassessment proceedings are initiated to give effect to orders on appeal, reference or 16 revision, there should be no time limit tying down the hands of the Revenue as such orders are seldom likely to be passed within the limits of time mentioned in section 149, we should give effect to the clear intention of the legislature and should not frustrate its object.
It is, therefore, necessary to examine the provisions of section 297 (2) (d) (ii) and section 150 (1) a little more closely and examine which of the two interpretations is preferable.
Taking up the appellant 's interpretation first, it has no doubt the attractiveness of simplicity.
It is a strict and literal interpretation of section 150 (1).
This apart, learned counsel drew our attention to the fact that the decided cases have referred to certain decisions of this Court in this context.
We do not, however, think that the decisions of this Court in Jain vs Mahendra, and Govinddas vs I.T.O, (1976)103 ITR 123 cited by appellant 's counsel arc of any assistance to them.
In the former case, a notice u/s 34 had been issued before 1.4.1962 but it had been quashed as without jurisdiction as it was barred by time.
The question was whether the proceedings initiated by the notice can be said to have been pending as on 1.4.1962.
The Court answered the question in the affirma tive.
It held that, for purposes of section 297 (2) (d) (ii), all that had to be seen was whether proceedings under section 34 of the 1922 Act were factually pending on 1.4.1962.
That the notice issued before that date was barred by time and was held so later was immaterial.
The notice had in fact been quashed by the High Court in a writ only much later, on 6.3.1963, and so proceedings under section 34 were pending as on 1.4.1962.
We are unable to see how this decision is of any help here.
In the second case, the claim by the assessee, a Hindu undivided family, that there had been a partial parti tion on 15.11.1955 (as a result of which the share income from two firms had ceased to be the income of the family from that date) was accepted by the Income tax Officer.
Subsequently, the assessments of the two firms for the assessment years 1950 51 to 1956 57 had been reopened and reassessments were made on them enhancing their income.
Consequently action was also taken to reopen the assessments of the family (which, for the relevant previous years had a share in the firms ' income).
These assessments were initiat ed under the new Act in accordance with the provisions of section 297 (2) (d) (ii).
The assessee had no grievance thus far.
But, while completing the reassessment, the officer, in addition to reassessing the family, also took advantage of the provisions enacted in Ss. 171(6) and (7) of the 1961 Act which had no counter part in the 1922 Act and passed orders apportioning the tax assessed on the family amongst its members.
This was objected to by the assessee.
The department, referring to the language of section 297 (2) (d) (ii) "that all the provisions of this Act shall apply ac cordingly", contended that the I.T.O. could legitimately invoke the provisions of Ss. 171 (6) and (7) as well while 17 making the reassessments.
This contention was negatived.
The Court observed: "These words merely refer to the machinery provided in the new Act for the assessment of the escaped income.
They do not import any substantive provisions of the new Act which create rights or liabilities.
The word "ac cordingly" in the context means nothing more than "for the purpose of assessment" and it clearly suggests that the provisions of the new Act which are made applicable are those relating to the machinery of assessment.
" It will be at once clear that this line of approach can have no validity in the context of section 297 (2) (d) (ii).
Here there is no need to guess or speculate on which provi sions of the new Act are to apply.
The section itself, in so many words, provides that Ss. 148, 149 and 150 will apply to the initiation of a reassessment proceeding under section 297 (2) (d) (ii) and this cannot be negatived by the last few words of that clause.
On the contrary, as pointed out earlier, they place it beyond all doubt that the provisions of the 1961 Act have to be applied to the reassessment on the basis that Ss. 148 to 150 apply.
This case also does not, there fore, advance the case of the assessees.
It is next contended by the appellant 's counsel that the very issue before us had been considered in the decision of this Court in Seth Gujarmal Modi vs CIT, and this concludes the issue in his favour.
The second headnote at page 261 seems to bear out this contention.
It reads: " . .
Since the Appellate Assistant Com missioner 's order was not passed under the 1961 Act, the department could not take any support from section 150 (1) of the Act." A perusal of the decision shows, indeed, that this was the ground on which a separate contention urged on behalf of the department on the basis of section 150 (1) was repelled.
It is no doubt seen from the facts of the case that it was a case of reassessment under section 297 (2) (d) (i) of the Act and the Court specifically held that reassessment pro ceedings should have been initiated under section 34 of the 1922 Act and not under section 148 of the 1961 Act.
In view of this conclusion no question of drawing any support from section 150 (1) could at all arise.
Still an argument was addressed and was repelled on the basis of the words "under this 18 Act" used in section 150 (1) thus upholding the literal construction argument now addressed on behalf of the asses see.
We shall consider this decision later after considering the department 's contentions.
As against the above contentions, Sri Manchanda submits that the provisions of section 150 (1) should be applied not blindly but with necessary modifications to suit the situa tion.
In support of this plea, he relies strongly on the last few words of section 297 (2) (d) (ii).
It is urged that the expression :"all the provisions of this Act shall apply accordingly" should be so construed as to enable the Revenue to invoke reassessment proceedings on the footing that the orders on appeal or reference were ones passed "under this Act" within the meaning of section 150 (1).
Sri Manchanda cited two decisions in support of his contention.
In Third I.T.O. vs Damodar Bhat, the question was whether proceedings under section 226 (3) of the new Act would apply with respect to a tax liability incurred under the 1922 Act.
The answer to this question, in the affirmative, turned on the language of section 297 (2) (j).
which provided that any tax or other dues payable under the 1922 Act may, notwithstanding the repeal of the 1922 Act, be recovered under the Act.
The contrary interpretation accepted by the High Court in that case would have had the effect of nulli fying the provisions of section 297 (2)(j).
Again, in Jain Bros. v,.
Union of India; , , it was held that penalty could be imposed under section 271 (1) of the 1961 Act in respect of returns filed before 1.4.1962 and assessments completed after 1.4.1962 but under the 1922 Act.
This was because of section 297 (2) (g), the special transitory provision in this behalf, which provided that "any proceeding for the initiation of a penalty in respect of any assessment for the year ending on the 31st day of March 1962 or any earlier year, which is completed on or after the 1st day of April, 1962, may be initiated and any such penalty may be imposed under this Act.
" Here again section 297 (2) (g) had been enacted to provide for the exact situation in question and to have held to the contrary would have rendered the provisions of section 297 (2) (g) meaningless and redundant.
The position is no doubt a little different here.
The provisions of section 150 (1) have been specially made applicable and operative in respect of the notice under section 148 issued in pursuance of section 297 (2) (d)(ii) and, as pointed out earlier, the application of the provisions of section 297 (2)(d)(ii) gives rise to two sets of situations to one of which the language of section 150(1) would squarely apply and so the interpretation sought for by the appellant does not render the words of section 150 (1) redundant.
Despite this point of difference in the two situations, we think that the principle of the above decisions that the mutatis mutandis rule should be invoked in interpreting 19 section 297 (2) has application here also.
Not to do so would no doubt not make section 150(1) redundant but it will bring about an unintended and inequitable situation.
It is clear that section 150 (1) will operate to lift the time bar in cases where the reassessment is initiated under section 148 to give effect to an order passed under the 1961 Act.
Equal ly, where assessments had been reopened under section 34 of the 1922 Act before 1.4.1962 to give effect to orders passed under the 1922 Act and are continued after that date by virtue of section 297 (2) (d) (i), the provisions of the second proviso to section 34 (3) of that Act would preclude the operation of the normal rule of limitation for reassess ments.
In this situation, it will be a great anomaly to reach the conclusion that the time limit will operate in cases where proceedings under section 148 are initiated to give effect to an order on appeal, revision and reference merely because such order is one passed under the 1922 Act.
Neither reason nor rhyme can explain how the statue could have intended such anomaly or why it should be so interpret ed as to result in a discriminatory treatment only to this class of cases.
An interpretation which will result in such anomaly or absurdity should be avoided.
It is also necessary to remember that section 297 (2) is a provision enacted with a view to provide for continuity of proceedings in the context of repeal of one Act by a fresh one broadly containing analogous provisions and the transitory provisions should, as far as possible, be construed so as to effect such conti nuity and not so as to create a lacuna.
For these reasons we think that it will be appropriate to so read the words of section 297 (2)(d)(ii) as to permit the applicability of section 150 (or section 153) with the necessary modifica tions.
To paraphrase, the last words of section 297(2)(d)(ii) should be read to mean that where the proceedings initiated under section 148, subject to the relaxations and limitation of Ss. 149 and 150, all the provisions of the Act shall apply accordingly: that is to say, in the same manner as they would apply in case of proceedings normally initiated under these provisions.
Since reassessment proceedings so initiat ed to give effect to orders on appeal, revision or reference will not be subject to a time limit, the proceedings like wise initiated under section 297(2)(d)(ii) read with section 148 will also not be subject to any limitations save to the extent mentioned in section 150(2).
We would like to add that, even if section 150(1) is to be read literally and considered as posing a hurdle as contended for by the appellant, we think this result can be overcome by a liberal interpretation of section 297(2)(k).
This clause reads: "any agreement entered into, appointment made, approval given, recognition granted, direc tion, instruction, notification, 20 order, or rule issued under any provision of the repealed Act shall, so far as it is not inconsistent with the corresponding provision of this Act, be deemed to have been entered into, made, granted, given or issued under the corresponding provision aforesaid and shall continue in force accordingly;" This is principally a provision intended to save admin istrative steps taken under the 1922 Act by deeming them to be steps taken under the 1961 Act.
Strictly construed, the words "order issued" also would seem, prima facie, to carry only a similar connotation.
But we see no objection, for our present purposes, in the way of our construing these words liberally and consequently deeming the orders passed and issued by the Tribunal and the High Court in this case for the assessment year 1949 50 and subsequent assessment years as orders passed or issued under the corresponding provi sions of the new Act.
Once this deeming is made, there is no difficulty in the way of accepting the Revenue 's contention.
We think that the circumstances justify a slight straining of the language of this clause and applying it so interpret ed to the problem before us so as to avoid a meaningless anomaly.
Thus construed, the statute can be said not to have misfired in its application to the situation in the present case.
We should, before we conclude, refer to the decision of this Court in the Gujar Mat Modi case.
As we have pointed out earlier, the principal conclusion reached in that case was that proceedings under section 148 could not have been initiated as the case fell under the provisions of section 297(2)(d)(i).
It was, therefore, unnecessary to deal with the contention based upon section 150.
Moreover, this part of the decision was only based on a prima facie reading of section 150(1) and contains no discussion of the various aspects that need consideration and have been touched upon above.
We do not, therefore, think that the above decision can be treated as conclusive on the issue before us which, for the reasons discussed above, we think, should be an swered differently.
We affirm the conclusion of the High Court and dismiss the appeal.
No costs.
Y.L. Appeal dismissed.
| On a complaint made by the Managing Committee of the 6th respondent Cooperative Housing Society, the third respond ent, Registrar, Cooperative Societies, referred the dispute relating to irregularities in the purchase of building material for construction of flats for members of society by the past Managing Committee, of which the appellant was the President at the relevant time, to arbitration.
The first respondent Arbitrator, gave his ex parte award, on the failure of the appellant and another person to file their reply to the claim of the claimant society, and directed the appellant and the other person to pay the society certain sum with interest thereon.
The appellant challenged the award before second re spondent, the Delhi Cooperative Tribunal, which dismissed the same holding that the Arbitrator 's act of proceeding ex parte was justified and that the appeal had no merit.
The appellant 's writ petition was also dismissed by the High Court.
In the appeal before this Court on behalf of the appel lant it was contended that it was Sec.
59 dealing with surchage which was applicable to the instant case and not Section 60, which pertained to settlement of disputes by arbitration since the dispute in question was one which could not be referred to arbitration in terms of Section 60 of the Act.
On behalf of the contesting respondents it was submitted that it was Section 60, which was applicable and not Section 59.
Dismissing the appeal, this Court, HELD: 1.1 Sub Section (1) of Section 60 of the Delhi Co operative 783 Societies Act, 1972 indicates the true scope of the Section 60, while sub section (2) is merely illustrative, and not exhaustive.
Clause (c) of sub section (1) expressly provides that if any dispute touching the constitution/management or the business of the cooperative society arises between the society or its committee and any past committee.
any offi cer, agent or employee or any past officer of the society, the dispute should be referred to the arbitration.
[787H, 788A B, D] 1.2 In the instant case, the dispute, viz. irregulari ties in the purchase of building material for construction of flats for the members of the Society by the previous Managing Committee, touches the management of the Society and fails within the ambit of Section 60 of the Act.
The third respondent, Registrar, Cooperative, Societies was, therefore, right in referring the dispute to arbitration.
[789D F] Pentakota Srirakulu vs The Cooperative Marketing Society Ltd. ; , followed.
Change Nagar Cooperative House Building Society Ltd. and Anr.
Ashok Ohri, AIR 1976 63 Delhi 239, disapproved.
|
Civil Appeal No. 318 of 1970.
From the Judgment and Decree dated 31 7 1969 of the Orissa High Court in Appeal from Original Decree No. 78/58.
P.K. Chatterjee and Rathin Dass for the Appellant.
G.S. Chatterjee for the Respondent.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by certificate granted under article 133 of the Constitution is directed against a Division Bench judgment dated July 31, 1969 of the Orissa High Court and arises in the following circumstances.
The appellants plaintiffs had instituted a suit under section 62(2) of the Orissa Religious Endowment Act, 1939 (Act No. 4 of 1939) (hereinafter referred to as the 'Act ') (this Act applies only to public endowments) to set aside the order dated 4 8 1950 of the respondent defendant by which the temple of the appellants, whose deity was Radhakanta Deb, was declared to be a public temple and a trust and the endowment was held to be of a public nature and, therefore, was to be governed by the Act.
The Subordinate Judge decreed the appellants plaintiffs suit holding that the deity installed in the temple was a family deity of the Pani family and the endowment being of a private nature, the Act had no application and the Order passed by the respondent regarding the management was set aside.
The Respondent (Commissioner of Hindu Religious Endowments, Orissa) filed an appeal in the High Court against the decision of the 828 Subordinate Judge which was heard by the Division Bench referred to above.
The High Court reversed the decision of the Subordinate Judge and held that the temple and the deity installed therein being a public endowment fell within the four corners of the Act and the respondent was fully entitled to pass orders for its management.
Hence, this appeal by certificate before us.
The sole question that falls for determination in this appeal is as to whether or not the appellant temple was a public endowment as alleged by the respondent or a family deity as alleged by the appellant.
The learned counsel for the appellants, P.K. Chatterjee, has submitted that the approach made by the High Court was wholly incorrect and it has misconstrued the evidence and documents produced in the case to show that the endowment was a private one and the deity installed in the temple was purely a family deity having nothing to do with the public.
The learned counsel for the respondent.
however, supported the judgment of the High Court that the endowment was of a public nature The concept of a private endowment or a private trust is unknown to English law where all trusts are public trusts of a purely charitable and religious nature.
Thus, under the English law what is a public trust is only a form of Charitable Trust.
Dr. Mukherjee in his Tagore Law Lectures on the Hindu Law of Religious and Charitable Trusts (1952 Edition) has pointed out that in English law the Crown is the constitutional protector of all properties subject to charitable trusts as these trusts are essentially matters of public concern.
The learned author has further pointed out that one fundamental distinction between English and Indian law lies in the fact that there can be religious trust of a private character under the Hindu law which is not possible in English law.
It is well settled that under the Hindu law, however, it is not only permissible but also very common to have private endowments which though are meant for charitable purposes yet the dominant intention of the founder is to instal a family deity in the temple and worship the same in order to effectuate the spiritual benefit to the family of the founders and his descendants and to perpetuate the memory of the founder.
In such cases, the property does not vest in God but in the beneficiaries who have installed the deity.
In other words, the beneficiaries in a public trust are the general public or a section of the same and not a determinate body of individuals as a result of which the remedies for enforcement of charitable trust are somewhat different from those which can be availed of by beneficiaries in a private trust.
The members of the public may not be debarred 829 from entering the temple and worshipping the deity but their entry into the temple is not as of right.
This is one of the cardinal tests of a private endowment.
Similarly, even the Mahomedan law recognises the existence of a private trust which is also of a charitable nature and which is generally called Waqf allal Aulad, where the ultimate benefit is reserved to God but the property vests in the beneficiaries and the income from the property is used for the maintenance and support of the family of the founder and his descendants.
In case the family becomes extinct then the Waqf becomes a public waqf, the property vesting in God.
A public Waqf under the Mahomedan law is called Waqf fi sabi lil lah.
The question as to whether the religious endowment is of a private nature or of a public nature has to be decided with reference to the facts proved in each case and it is difficult to lay down any test or tests which may be of universal application.
It is manifest that where the endowment is lost in antiquity or shrouded in mystery, there being no document or revenue entry to prove its origin, the task of the court becomes difficult and it has to rely merely on circumstantial evidence regarding the nature of the user of the temple.
In the instant case, however, as there are two documents which clearly show the nature of the endowment, our task is rendered easier.
It is well settled that the issue whether a religious endowment is a public or a private one must depend on the application of legal concept of a deity and private endowment, as may appear from the facts proved in each case.
The essential distinction between a private and a public endowment is that whereas in the former the beneficiaries are specified individuals, in the latter they are the general public or class of unascertained people.
This doctrine is well known and has been accepted by the Privy Council as also by this Court in a large catena of authorities.
This being the essential distinction between the nature of a public or a private endowment, it follows that one of the crucial tests to determine the nature of the endowment would be to find out if the management of the property dedicated is in the hands of the strangers or members of the public or in the hands of the founders or their descendants.
Other factors that may be considered would be the nature of right of the worshippers, that is to say, whether the right to worship in the temple is exercised as of right and not as a matter of concession.
This will be the strongest possible circumstance to indicate that the endowment was a public one and the beneficiaries; are the worshippers and not particular family.
After all, an idol is a juristic person capable of holding property and the property dedicated to the temple vests in the deity.
If the main worshippers are the members of the public who worship as a matter of right then the real purpose is to confer benefit on God.
830 Some of the circumstances from which a public endowment can be inferred may be whether an endowment is made by a person who has no, issue and who after installing the deity entrusts the management to members of the public or strangers which is a clear proof of the intention to dedicate the temple to public and not to the members of the family.
Where, however, it is proved that the intention of the testator or the founder was to dedicate the temple merely for the benefit of the members of the family or their descendants, the endowment would be of a private nature.
The mere fact that members of the public are allowed to worship by itself would not make an endowment public unless it is proved that the members of the public had a right to worship in the temple.
In Deoki Nandan vs Murlidhar this Court observed as follows: "The distinction between a private and a public trust is that whereas in the former the beneficiaries are specific individuals, in the latter they are the general public or a class thereof.
While in the former the beneficiaries are persons who are ascertained or capable of being ascertained, in the latter they constitute a body which is incapable of ascertainment. .
The cardinal point to be decided is whether it was the intention of the founder that specified individuals are to have the right of worship at the shrine, or the general public or any specified portion thereof.
In accordance with this theory, it has been held that when property is dedicated for the worship of a family idol, it is a private and not a public endowment, as the persons who are entitled to worship at the shrine of the deity can only be the members of the family, and that is an ascertained group of individuals.
But where the beneficiaries are not members of a family or a specified individual, then the endowment can only be regarded as public, intended to benefit the general body of worshippers." (Emphasis supplied) This view was reiterated in a later decision of this Court in Mahant Ram Saroop Dasji vs S.P. Sahi, Special Officer In Charge of the Hindu Religious Trusts & Ors.
where S.K. Das, J. as he then was, speaking for the Court clarified the law thus: 831 "But the most usual and commonest form of a private religious trust is one created for the worship of a family idol in which the public are not interested.
Dealing with the distinction between public and private endowments in Hindu law, Sir Dinshah Mulla has said at p. 529 of his principles of Hindu Law (11th edition) 'Religious endowments are either public or private.
In a public endowment the dedication is for the use or benefit of the public.
When property is set apart for the worship of a family god in which the public are not interested the endowments is a private one '.
" In Narayan Bhagwantrao Gosavi Balajiwale vs Gopal Vinayak Gosavi & Ors.
the same principles were reiterated and it was pointed out that the entries made in the Inam Register showing the nature of the endowment were entitled to great weight and taken with the vastness of the temple, the mode of its construction, the long user by the public as of right and grants by Rulers and other persons were clear pointers to the fact that the endowment was of a public nature.
In the case of Bihar State Board Religious Trust, Patna vs Mahant Sri Biseshwar Das,(2) this Court laid down some important tests to determine the nature of the endowment.
In this connection, the fol lowing observations need specific mention: "Therefore, evidence that sadhus and other persons visiting the temple are given food and shelter is not by itself indicative of the temple being a public temple or its proper ties being subject to a public trust.
Evidence that the mahants used to celebrate Hindu festivals when members of the public used to attend the temple and give offerings and that the public were admitted to the temple for darshan and worship is also not indicative of the temple being one for the benefit of the public.
The fact that members of the public used to come to the temple with out any hindrance also does not necessarily mean that the temple is a public temple, for members of the public do attend private temples.
Yet, the Privy Council held that the general effect of the evidence was that the family had treated the temple as family property and the mere fact of the members of the public having come to the temple and having made offerings and the mela having been held which 832 gave popularity to the temple and increased its esteem in the eyes of the public and the fact that they were never turned away were not enough to hold the temple and the properties as a public trust. .
Thus, the mere fact of the public having been freely admitted to that temple cannot mean that courtbs should readily infer therefrom dedication to the public.
The value of such public user as evidence of dedication depends on the circumstances which give strength to the inference that the user was as of right.
" It may thus be noticed that this Court has invariably held that the mere fact that the members of the public used to visit the temple for the purpose of worship without any hindrance or freely admitted therein would not be a clear indication of the nature of the endowment.
It is manifest that whenever a dedication is made for religious purposes and a deity installed in a temple, the worship of the deity is a necessary concomitant of the installation of the deity, and therefore, the mere factum of worship would not determine the nature of the endowment.
Indeed if it is proved that the worship by the members of the public is as of right that may be a circumstance which may in some cases conclusively establish that the endowment was of a public nature.
In Dhaneshwarbuwa Guru Purshottambuwa Owner of Shri Vithal Rukhamai Sansthan vs The Charity Commissioner State of Bombay all the aforesaid cases were summarised and the principles indicated above were reiterated.
In Gurpur Guni Venkataraya Narashima Prabhu & Ors.
vs B.G. Achia, Assistant Commissioner, Hindu Endowment, Mangalore & Anr.
Krishna Iyer, J., reiterated these very principles in the following words: "The law is now well settled that 'the mere fact of the public having been freely admitted to the temple cannot mean that courts should readily infer therefrom dedication to the public.
The value of such public user as evidence of dedication depends on the circumstances which give strength to the inference that the user was as of right '.
(See Bihar State Board Religious Trust, Patna vs Mahant Sri Biseshwar Das [1971] 3 SCR 680, 689).
" 833 Thus, on a conspectus of the authorities mentioned above, the following tests may be laid down as providing sufficient guidelines to determine on the facts of each case whether an endowment is of a private or of a public nature: (1) Where the origin of the endowment cannot be ascertained, the question whether the user of the temple by members of the public is as of right; (2) The fact that the control and management vests either in a large body of persons or in the members of the public and the founder does not retain any control over the management.
Allied to this may be a circumstance where the evidence shows that there is provision for a scheme to be framed by associating the members of the public at large; (3) Where, however, a document is available to prove the nature and origin of the endowment and the recitals of the document show that the control and management of the temple is retained with the founder or his descendants, and that extensive properties are dedicated for the purpose of the maintenance of the temple belonging to the founder himself, this will be a conclusive proof to show that the endowment was of a private nature.
(4) Where the evidence shows that the founder of the endowment did not make any stipulation for offerings or contributions to be made by members of the public to the temple, this would be an important intrinsic circumstance to indicate the private nature of the endowment.
Fortunately, in this case there are two important documents Ext.
A and Ext.
1 from which the nature of the endowment can be clearly spelt out and we would examine these documents in the light of the tests and the principles enunciated above because after going through the judgment of the High Court we are satisfied that the High Court has not properly construed some of the important features contained in the documents and the evidence and has in fact overlooked certain important aspects which completely negative the fact that the endowment was of a public nature.
A is an ancient document executed as far back as February 18, 1895.
The authenticity and the genuineness of this document is beyond question and the High Court itself has described this document as a document which has created the present endowment.
Even though the document may not be treated as having itself.
834 created the endowment but it gives clear indication that the endowment was created near about the date when this document was executed.
Some of the extracts of this document which are undisputed, in our opinion, clearly and conclusively show that the endowment was of a private nature and the intention of the founder was merely to instal a family deity in the temple.
In order to fortify our conclusions, it may be necessary to give certain important recitals from this document which may be extracted thus: "That I Gopinath Pani, my father Bhagyarathi Pani, Alekha Pani, father of Dinabandhu Pani and father 's brother of Basudeo Pani and Narsinha Pani father of Balabhadra Pani minor, having made the image of our family deity Sri Padhakanta Deb installed it in a temple which was built by them in Depur Sasan in Pipli Division and they endowed the Tanki Bajyapati, Tanki Baheli and Kharida Swata properties given below from the usufruct of which day to day Sibapuja and Janijatra of the deity was managed by them as the Sebait and Marfatdar and we are also managing in the same way.
For the proper management of the deity 's property and the Sebapuja of the deity in future, we lay down the following directions out of our own accord. . 1. we hereby appoint the said Adwait Charan Das Babaji, Sutradhari Gaudeswar Sampraday Baisnab by caste, worship and Sebapuja of the deity by profession as the Tatwabadharak and Sebait and hereby (appoint) him by this trust deed and we become aloof from those duties vesting in him the following properties of the deity. 2.
From this day the said Babaji will manage all the immovable and movable properties of the deity as the Sebait and Tatwabadharak.
He will realise the usufructs of the property and after giving the rent of the lands, he will manage the day to day Bhog and the festivities of the deity well according to the previous customs and rules and in the way we were doing and will keep the surplus amount in the store of the deity.
The day to day Bhoga and the festivities of the deity will be done according to the income of the properties of the deity and will never exceed the said income.
The said Babaji cannot incur any loan on behalf of he deity nor can he sell, mortgage, keep as surety or trust 835 any of the immovable or movable properties nor can he misappropriate any cash kind ornament or utensils of the deity. . 6.
If the said Babaji does anything contrary to the conditions laid down in items 4 & 5 written above he will be removed from his right of Sebaitship and Tatwabadharakship by us or cur heirs who will appoint another fit man in his place and take the charge of all the properties in the store of the deity . 9.
As the properties maintained herein have been endowed to the deity before, we or our successors had or will have no claim on this and any such claim made, shall be void. . 11.
Now or in future the man appointed as Tatwabadharak will work according to rules and directions mentioned herein and for the Sebapuja of the deity the directions and the menus are determined here for all days to come.
All other necessary expenses of the Jatra (festivals) repairing of the temple, utensils and the ornaments of the deity, etc. will be done according to the income. . 14.
Any pious man of our family at present and in future will see whether the work of the deity is being performed according to the direction as aforesaid by the appointed Tatwabadharak and will take proper action as mentioned above.
If in future there be no fit man in our family, any of the Baisnab Sampraday and any Hindu of reputation of the village and of the locality is entitled to take such action, we have no objection to this." (Emphasis supplied) The intention which can be gathered from this document is placed beyond doubt by a later document Ext.
1 which was executed on 17 11 1932 and is in the nature of a settlement Deed, the relevant portions of which may be quoted thus: "Our forefathers for the good of our family by making the family deity Sri Radhakanta Deb Thakur, erecting a 836 temple befitting.
His installation, installing Him therein and endowing the landed properties as described in the schedule below, used to carry out all the Sebapuja work of the deity in orderly manner by meeting the expenses from out of the income and yield of the said properties.
As the said Lalit Charan Das and Raghunath Pani a person of our family together misappropriated by utilising the income and yield of the properties of the deity in illegal expenditures and without carrying on the Sebapuja work in proper manner caused heavy damage to the movable and immovable properties of the deity in different unfair means, we have removed them from Sebapuja work of the deity and also from management and custody of the deity 's properties.
If the work of the deity is carried on for some time more in the manner in which the work is being managed now then the temple established by our forefathers as a mark of pride of our family and all the Debuttor properties of the deity will be destroyed in toto and the noble glory of the forefathers will perish .
We by this deed of trustee order determination appointed you as trustee for the Sebapuja work of our family deity Shri Radhakanta Deb Thakur and for the work of looking after His properties, according to the following conditions and terms, so that from today onwards on the strength of this deed of trustee order determination you from Chela to Bara chela by carrying on the Sebapuja, offerings, religious ceremonies and festivals and by preserving and looking after all the debuttor properties, realise the income and yield therefrom according to convenience. . 10.
If we or any body amongst us misappropriate any money or property by taking secretly from the tenants or borrowers, we and our successors will be liable for punishment according to criminal law and you can realise any compensation you intend to take either mutually or with the help of the court.
We and our sons and grandsons shall be bound and liable to pay. . 22.
But if you might have obtained, any amount on loan against the income of the debuttor property and anything that you might have spent from your own pocket for the improvement of the deity of the muth and to save the property, we will be bound and liable to repay the said 837 amount alongwith just and prescribed rate of interest, and we shall repay.
If we do not repay voluntarily you and your successors will realise from us and from our and from our son 's and grandsons existing and to be acquired movable and immovable properties and from the existing and to be acquired debuttor properties of the deity according to law." (Emphasis supplied) Considering the two documents together the fundamental features, which now from the recitals extracted above, may be summarised as follows: (1) That the deity was installed in the temple purely as a family deity and the dedication WAS made only for a group of individuals who may be connected with the family of the Panis who were the founders of the deity.
This clearly establishes that the intention of the founders was to dedicate their properties and instal the deity in the temple only for purposes of the Pani family, and their descendants.
A perusal of the recitals extracted above would unmistakably show that there can be no two opinions on this question.
(2) Extensive private properties belonging to the Pani family alone were dedicated for the maintenance Of the temple and the deity and there is nothing to show that any contribution was called for from members of the public nor is there any averment in the deed to show that there was any stipulation for taking offerings from the members of the public to worship in the temple.
(3) There was no provision for framing any scheme by associating the members of the public or consulting them.
In fact, Ext.
1 shows that even after the descendants of the founders had fallen on evil days and were not in a position to provide sufficient funds for the maintenance.
Of the temple yet they appointed Udayanath Pattanayak to manage the affairs of the deity and bound themselves personally to reimburse the Manager for any out of pocket expenses incurred in connection with the maintenance of the temple.
This circumstance manifestly proves that the endowment was of a purely private nature right from the time it was created till 1932 when the management 838 was changed and continued to be of the same nature.
Indeed, the personal undertaking contained in Ext.
1 clearly shows that there was never any intention to treat the temple as a public one but the intention was, if at all, to continue it in the name of the family so long as the family continued.
(4) There is no recital in any of the documents to show that the members of the public or the vil lagers of the place where the temple was situated were entitled to worship as of right.
On the other hand, PWs 1 to 6 who were examined by the appellants plaintiffs have categorically stated that members of the public were not allowed to worship in the temple as of right.
In this connection PW 1 stated as follows: "Members of the public have no right to have Darsan of, or to offer bhog to the deity.
The villagers do not make Kirtan before the deity or take any part in any festivity of the deity.
The deity has no Bahari Jatra.
No member of the public made any gift to the deity.
No khairat is ever given.
The properties of the Thakur are all (sic) with rent.
" PW. 5 stated that the disputed deity was installed by the family of the other Panis and not by his ancestors and that the deity was not their family deity and was not dedicated to the public.
As against this oral evidence, the defence examined DW 1, Raghunath Pani, whose evidence has been rejected both by the Trial court and the High Court.
Thus, apart from the unimpeachable documentary evidence discussed above, even the oral evidence to prove that the endowment was of a private nature is clear and has not been rebutted by the defence.
In this state of the evidence we are indeed surprised to find how the High Court could hold that the endowment was of a public nature.
The High Court seems to have been carried away by factors or considerations which are of a very minor nature and by themselves do not prove that the endowment was of a public nature.
For instance, one of the circumstances that weighed with the High Court was that the temple was a massive structure of about 25 yards in height.
That by itself, divorced from other things, could not prove that the temple was a public one.
So far as the oral evidence is concerned.
the High Court observed thus: 839 "Apart from the above features disclosed by the oral evidence which are indicative of the institution having been treated as a public one.
the recitals in some of the clauses of the two documents. (Exts.
A & 1) also unequivocally indicate an intention of dedication in favour of public." These observations are not at all borne out by the evidence of PWs 1 to 5 which is the only oral evidence led in the case, the evidence of DW 1 having been rejected by the trial court as also the High Court.
The High Court took into consideration the fact that certain properties were needed for the maintenance of the temple and Seba puja and other ceremonies were being performed by the Shebaits and Marfatdars.
The High Court overlooked the fact that Shebait or the Marfatdars were appointed by the founders of the endowment and the entire management and control of the temple was retained by the family.
We are unable to agree as to how in these circumstances could it be said that the endowment was of a public nature.
Another circumstance that weighed with the High Court was that bhogs were offered during the day which, according to the High Court, was in consonance with the rules observed by the public.
This circumstance also is not of much consequence because bhogs are offered even in private temples.
The High Court also seems to have relied on clause 15 of Ext.
A to come to its decision that the endowment was of a public nature.
The High Court was of the view that under this clause in certain contingencies any member of the Vaishnav sect or Hindu resident of the village was authorised to exercise the powers and functions mentioned in clause 7 of the deed.
We are, however, unable to agree with the interpretation placed by the High Court on clause 15 of Ext.
A. Clause 15 merely provides that if in future the family becomes extinct and no fit person could be found then any of the Baisnab Sampraday or any reputed Hindu of the village could take action, namely, to perform the work of the deity.
This was a contingent provision and here also the founders did not confer the duty of performing all the work on the members of the public but they chose or selected only a particular person belonging to a particular community which also shows that even if the family was to become extinct, the private nature of the endowment was not to be changed.
Indeed if the intention was to instal the idol in the temple by way of a public endowment, clause 15 would have clearly provided 840 that in cast the family became extinct the members of the public or of the brotherhood or the Government could have taken over the management.
On the other hand, the interpretation of the various clauses of the documents clearly shows that sufficient care has been taken by the Pani family to see that the dedication to the family deity is not changed even if the family becomes extinct.
Having, therefore, carefully perused the oral and the documentary evidence in the case we are satisfied that the conclusions arrived at by the High Court are wrong and are based on misinterpretation of Ext.
A and Ext.
1 and misreading of the oral evidence led in the case, which, as we have shown, runs counter to the conclusions arrived at by the High Court.
For the reasons given above, we allow this appeal, set aside the judgment of the High Court, decree the plaintiffs appellants suit and restore the judgment of the trial court.
In the peculiar circumstances of this case, the appellants will be entitled to costs of the appeal in this Court quantified at Rs. 4,000/ (Rupees four thousand only) S.R. Appeal allowed.
| Dismissing the State appeal on certificate, the Court ^ HELD: (1) The acquisition of land for the Food Corporation of India is not in accordance with law for the reason that compliance with the provisions of Chapter VII of the Land Acquisition Act had not been made.
[717 A B] (2) The Food Corporation of India is a Company within the meaning of the term appearing in clause (e) of section 3 of the Land Acquisition Act, 1894.
Section 3 (e) mentions in unmistakable terms that a company incorporated by an Indian law would be a "Company" for the purposes of the Land Acquisition Act.
The Corporation was admittedly created by section 3 of the Food Corporation Act, 1964.
Sub section (2) of section 3 of the Food Corporation Act, 1964 is an Indian Law and clothes the Corporation with the attributes of a company.
[715A E] (3) A Government department has to be an organisation which is not only completely controlled and financed by the Government but has also no identity of its own.
The money earned by such a department goes to the exchequer of the Government and losses incurred by the department are losses of the Government.
The Corporation, on the other hand, is an autonomous body capable of acquiring, holding and disposing of property and having the power to contract.
It may also sue or be sued by its own name and the Government does not figure in any litigation to which it is a party.
It is true that its original share capital is provided by the Central Government and that 11 out of the 12 members of its Board of Directors are appointed by the Central Government but then these factors may at the most lead to the conclusion that the Corporation is an agency or instrumentality of the Central Government.
[715E H] Even the conclusion, however, that the Corporation is an agency or instrumentality of the Central Government does not lead to the further inference that the Corporation is a Government department.
The reason is that the Food Corporation Act has given the Corporation an individuality apart from that of the Government.
In any case the Corporation cannot be divested of its character as a "Company" within the meaning of the definition in clause (e) of section 3 of the Land Acquisition Act, for it completely fulfils the requirements of that clause.
[716G H, 717A B] Ramana Dayaram Shetty vs The International Authority of India and Ors., , applied.
|
Civil Appeals Nos.
11781180/76.
Appeals by Special Leave from the Judgment and Order dated 22 9 1976 of the Madras High Court in Writ Petition Nos.
3059/ 75, W.A. No. 339/76 and W.P. No. 14 respectively.
Y.S. Chiale, V. Subramanyam and Vineet Kumar for the Appellant in C.A. 1178/76.
K.S. Ramamurthi, M.N. Rangachari, A.R. Ramanathan, K. Thimmalai, Jayaraman, M.M.L. Srivastava and A.T.M.S. Sam path for the Appellant in CAs.
1179 1180/76.
V.P. Raman, Addl.
Gen. (In CAs.
1178 to 1180/76, D.N. Misra, J.B. Dadachanji for Respondent No. 2 in CAs.
1178 & 1180 of 1976 and Respondent 2 in C.A. 1179/76.
K. Parasaran, Adv.
Tamil Nadu, ,A.V. Rangam, T. Sathiadev and (Miss) A. Subhashini for Respondents in CAs.
1179 80 except Transport Corporation.
K. Jayaram, V.T. Gopalan and K. Ram Kumar for the Appli cant and Intervener in C.A. 1178/76.
The Judgment of A.N. Ray C.J., and Krishna Iyer, J. was delivered by Krishna Iyer, J.M.H. Beg, J. gave a separate concurring opinion.
KRISHNA lYER, J. A terse presentation of the twin con tentions canvassed before us, in these appeals by special leave, after discomfiture at two tiers below, highlights the importance of the economic role of the State in undertaking, with legal preferences, strategic services vital to the community.
The keynote thought underlying our decision is that the jural postulates of the old competitive order have to yield place to the new values of developmental jurispru dence.
Public law, in India, responding to the public needs and the State 's functional role mandated by the Constitu tion, has evolved new approaches to old problems and given up dogmas which once prevailed during laissez faire days but now have become obsolete because of the 'welfare ' economy which has been nurtured.
This radical change in jural 394 perspectives has its impact on canons of statutory construc tion and on verdicts about the vires of legislation.
All these generalities acquire appropriate application in the present cases which arise under the (Act IV of 1939) (the Act, or short) from challenges before the High Court without avail, by private operators, of the permit granted to the State Transport Undertaking (STU) by the transport tribunals.
The validity of r. 155A of the Motor Vehicles Rules framed under section 68 of the Act is in issue.
The core of counsel 's submissions is two fold: (1) Is rule 155A, assigning five marks for a State undertaking, not family violative of s 47 of the Act? Does the later amendment to the proviso to section 47 giving preference to State transport systems, other things being equal, impliedly repeal, as contrary to its content, rule 155A which gives better advantage to the favoured category, fulfilling the spirit of the statutory amendment more tellingly ? We will proceed further after stating the circumstances leading up to the writ petition before the High Court and the appeal before us.
The appellants, who have come by special leave to this Court, are private stage carriage operators.
We will relate the facts of one case (Civil Appeal No. 1178 of 1976) the decision in which will settle the fate of the rest, the decisive point of law being identical.
The permit of the appellants but on the route Salem to `rode was to have expired on September 13, 1974 and so he applied for renewal under section 58(2) of the Act.
The respondent State Transport Undertaking objected to the renewal of the permit urging preferential grounds in its own favour.
The State undertak ing 's claim was upheld on the score that it secured higher marks computed with the aid of r. 155 A. Baulked in his application for renewal, the appellant challenged the order before the Appellate Tribunal.
Apprehending an adverse decision on the strength of r. 155 A, he filed a writ peti tion before the High Court praying that a direction be issued to the Appellate Tribunal to dispose of his appeal without relying on r. 155 A.
The plea was negatived by the learned Single Judge and a Division Bench dismissed the appeal therefrom.
Aggrieved by the concurrent findings the appellant has assailed before us the vires of r. 155 A as obnoxious to public interest excluding, in some measure, a fair competition and being contrary to the proviso to.
section 47 (1 ) of the Act.
A meaningful discussion of the points debated at the Bar has to begin with a brief outline of the scheme of the in the branch relating to grant of permits for transport vehicles (Chapter IV).
All transport vehicles, before they can be plied in any public place, require per mits under section 42 and even government vehicles, if put to commercial use, have to possess permits.
Applications are made for stage carriage permits under section 57 and the consid erations germane to their grant are set out in section 47 of the Act.
It is common ground, and decisions are legion in support thereof, that the interest of the public generally is the super consideration decisive of the award ' of permits when there is a plurality of applicants.
He who can serve the public best gets the permit to ply the stage carriage from the quasi judicial authority charged with the responsi bility for choice.
We may read the relevant part of section 47(1) here: 395 (Krishna Iyer, J.) "47.
Procedure of Regional Transport Authority in considering application for stage carriage permit, (1) A Regional Transport Authority shall, in considering an application for a stage car riage permit, have regard to the following matters, namely : (a) the interest of the public generally; X X X X Provided that other conditions being equal, an application for a stage carriage permit from any State Transport Undertaking or a Cooperative Society registered or deemed to have been registered under any enactment in force for the time being shall, as far as may be, be given preference over applications from individual owners.
X X X X" The interest of the public generally, is often times too vague and, generally, the exercise of discretion deserves to be canalised to guide the statutory bodies and to facilitate better appreciation by the applicants of the claims that may ordinarily be considered by transport tribunals.
From this angle, the Tamil Nadu State has framed rules.
expressly subordinated to the paramount factor of public interest which shall weigh with tribunals when adjudging among com peting claimants. 'This Court, in Kumaraswamy(1), summed up the purport of the rule thus: "The system of marks, under the Rules framed under the Act by the Tamil Nadu Govern ment, prescribes the various qualifications for applicants for permits for passenger transport under the .
Rule 155 A crystallises these considerations and describes them as guiding principles for the grant of stage carriage permits.
The rule itself emphasizes what is obvious, that the paramount consideration of the interest of the public, as enshrined in Section 47(1), must be given full weight while awarding per mits.
That means to say that the various factors set out in rule 115 ,4 are subject to section 47(1).
This is clarified by sub rule (4) of Rule 155 A, which runs thus: "After marks have been awarded under sub rule (3), the applicants shall be ranked according to the total marks obtained by them and the applications shall be disposed of in accordance with the provisions of sub section (1 ) of section 47.
" There is no doubt that bus transport is calculated to benefit the public and it is in the fitness of things that the interest of the travelling public is highlighted while evalu ating the relevant worth of the various claim ants.
" Rule 155A(3)D(1) offends against the prescription in the proviso (1) 396 to section 47(1 ) and is void, according to counsel for the appellants.
Before examining this alleged vice, we may as well read sub rule (3) of Rule 155 A to the extent neces sary: "(3) After eliminating in the manner laid down in subrule (2), the applicants who are unsuitable, marks shall be awarded for assessing the different qualifications of the remaining applicants for the grant of permits as follows : (A) Residence Two marks shall be award ed to the applicant who has his principal place of business or permanent residence at either terminus or on the route.
Explanation.
The term 'principal place of business ' shall mean only the registered headquarters of the company and not the resi dence of the Managing Director or any other Director of the Company.
(B) Technical qualification (for Owner or Managing Director).
Two marks shall be awarded to the applicant if the Owner or the Managing Director of the organisation has technical qualification which may be useful to run the transport service efficiently.
(C) Workshop facilities.
Two marks _shall be awarded to the applicant who is in possession of workshop facilities as given in Explanation under item (2)(iv).
(D) (i) Five marks shall be awarded to the applicant falling within the proviso to clause (c) of section 62 A of the Motor Vehi cles Act, 1939, i.e., State Government, Cen tral Government or any Corporation or Company owned by the Central Government or State Government.
(ii) The applicant who operates not more than nine stage carriages excluding spare buses, shall be awarded marks as follows : (1 ) Applicant operating one to three buses 4 marks.
(2) Applicant operating four to six buses 3 marks.
(3) Applicant operating seven to nine buses 2 marks.
Provided that if a new entrant has made an application for a short route other than town service route, no marks shall be awarded to any applicant under clause (B), (C) and (D) (ii).
" The ground of invalidation urged is that there is no justification for grant of 5 marks to an applicant falling within r. 155A (3)(D)(1) solely for the reason that it is owned by the State Government.
Ownership is irrelevant and the sacrifice of public interest at the altar of government interest is contended to be a flagrant partiality shown by the subordinate legislation in the teeth, and transgressing the limits, of the equal consideration implicit in section 47(1 ).
second argument 397 (Krishna Iyer, J.) is that the proviso to section 47(1), as amended by Act 48 of 1974 (Tamil Nadu Amendment Act) gives preference to a State Transport Undertaking, other things being equal, and im pliedly provides against any larger preference being shown to such an undertaking in the guise of rules.
For this reason, the generosity of the rule being contrary to the narrow preference in the proviso to the section (brought in by later amendment), the former cannot co exist with the latter and must be taken as impliedly repealed.
Although this amendment to the Act was later than the promulgation of the rules, the law as it stands today is the basis of our judgment.
Thus the two question formulated right at the beginning of the judgment arise in the setting of facts and law we have broadly described above.
It was urged by Shri Chitale, followed by Shri Rama murthy, in two of the several matters heard together, that Part IVA provided for monopolistic award of permits to the State Transport Undertaking but Part IV put everyone on a competitive basis, regardless of whether one was a State undertaking or not, the most meritorious winning the battle in a free market economy.
If the soul of Part IV were free competition, not 'rigged ' selection, aid in the shape of extra marks given by rules had to be withdrawn and every applicant had to run without anyone being given a handicap in the race.
State undertakings being awarded 5 grace marks for no reason except that they belonged to the State was a gross violation of the spirit and letter of section 4 7 (1 ) which postulated the promotion of public interest as the basic consideration and the selection of the ablest as the criterion for choice.
Both counsel, in their overlapping arguments, stressed that there was a negative mandate in the proviso to section 47(1) not to prefer a State undertaking save where other conditions were equal and if the State undertak ing was unable to attain the condition of equality with another, its claim could not be promoted by the artifice of assignment of marks to a State undertaking qua State under taking.
Public law, in our pie bald economy and pluralist socie ty, responds to societal challenges and constitutional changes.
TO miss the ideological thrust of our Constitution and the economic orientation of our nation while construing legislation relating to public law and scanning them for their validity is to fail in understanding the social phi losophy that puts life and meaning into the provisions of the Act.
The law, being realistic, reckons with the social ist sector covering State and co operative enterprises.
The special status of a government owned transport undertaking in a Welfare State is obvious.
It has large resources to cater to the traffic needs.
It has, within its range of influence and coordination.
many services useful to the travelling public, which may be beyond the reach of private ownership.
Its functional motto is not more profits at any cost but service to citizens first and in a far larger measure than private companies and individuals, although profitability is also a factor even in public utilities.
Its sensitivity to community welfare and en couragement of labour participation, its accountability to the Government, the legislature and the public put it in a category by itself.
It is socially conscious, not profit obsessed.
We are aware of the shortfalls of some public sector undertakings in some respects 398 but it needs little argument to hold that to classify State transport systems on a separate footing is realsic and is ordinarily no sin before the principle of equality before the law.
The legislative body has done, in the given circum stances, what it thought was sound policy and we find no vice in the policy.
To classify what is conceptually and operationally different into a separate category is intelligence, not impertinence.
The judicial art of interpretation and ap praisal is imbued with creativity and realsm, especially where fundamental changes have been wrought by the Constitu tion in our approach to public sector enterprises.
Legal Darwinism, adapting the rule of law to new societal develop ments, so as to survive and serve the social order is neces sary: "That court best serves the law which recognizes that the rules of law which grew up in a remote generation may, in the fullness of experience, be found to serve another genera tion badly, and which discards the old rule when it finds that another rule of law repre sents what should be according to the estab lished and settled judgment of society, and no considerable property rights have become vested in reliance upon the old rule.
It is thus great writers upon the common law have discovered the source and method of its growth, and in its growth found its health and life.
It is not and it should not be station ary.
Change of this character should not be left to the legislature.
If judges have woefully misinterpreted the mores of their day, or if the mores of their day are no longer those of ours, they ought not to tie, in helpless submission, the hands of their successors." (Cardozo: The Nature of the Judicial Proc ess: Yale University Press: pp.
151 152).
This refreshing perspective guides us to look at the submissions advanced.
Both the contentions can be shot down by three considerations.
Firstly, a State enterprise, in a truly Welfare State, is charged with a social consciousness and responsibility for its citizens, an attention to serve them and a willingness to embark on public utility undertak ings better to fulfil people 's demands.
The public sector enterprises are expected to be model employers and model servants, planning their budgets, subjecting themselves to public audit and criticism and inquest by legislative com mittees and the Houses of the legislature.
Profits are their concern but, more importantly, public weal is their commitment.
Such is the philosophy of the State sector in our socialistic pattern of society.
Article 19(6)(ii) and article 38 of the Constitution, section 47 (1 ), especially the proviso, and Charter IVA of the Act (now governed by the impregnable Ninth schedule to the COnstitution) throw light on this policy of the paramount law.
Here, therefore, the rule making authority, having regard to all relevant circum stances, has decided to award to a State Transport Undertak ing 5 marks.
This is not an arbitrary stroke of favouritism because there are many promotional factors bearing on the interest of the travelling public which a State enterprise qua State enterprise will, but a private enterprise qua private enterprise will not, take care of. 399 (Krishna lyer, J.) After all, private enterprise has its primary motivation in profit, although, under State direction, it is becoming socially responsive.
The superiority in many respects (not all respects) of State Transport Undertakings, in the legis lative judgment, has led to r. 155A.
This classification has noetic nexus with and rational relation to the object of augmenting the good of the passenger community.
The theory, rooted in the obsolescent laissez faire economics, that only cold competition among claimants to run businesses brings out the best operator has serious limitations in fields where the focus is on public service, not gains of business.
Public law, adapting itself to this socio economic view, shifts its emphasis.
This is what we have earlier called legal Darwinism.
We, therefore, hold that the assignment of marks under r. 155A is geared to public interest, which is the desideratum of section 47 ( 1 ) of the Act.
We now move on to an examination of the alleged fatal incompatibility between the proviso to section 47(1) and L 155A.
This second submission of counsel is a trifle mystifying.
There cannot be a contradiction without diction.
Unless section 47(1) proviso carries a negative injunction that transport tribunals shall not give any other preferential considera tion than what is stated in it, there cannot be any con flict between it and the impugned rule.
The proviso to the section does nothing of the kind.
It merely takes care of a specific situation.
Where a State Transport Undertaking: and a private operator are equally balanced, the scales may be tilted in favour of the former.
There is no implied inter dict that in other contingencies no preference shah be accorded.
It is not a 'Thus far and no further '.
Indeed, the spirit of this proviso has been carried further by the rule, having regard to the realities of the total transport system plying in the State.
The third consideration which silences the appellant 's charge of violation of section 47 is that the marking formula does not deprive the administrative tribunals of their discretion to choose the best.
The consternation of the private entrepreneurs that by manipulating the marking mechanism the State undertaking, regardless of its demons trable inferiority of public service, will knock off all the permits, paralysing the power of the Tribunal to pick and choose, by the overwhelming and inevitable superiority of marks, is misplaced.
The fear is falsified if we read the rule aright.
It has, written on its face, its own limita tion.
Marks shall guide, not govern the award.
Full discretion, to some extent, canalised by the marking proce dure, still vests in the Transport Authority.
For, the marks, these authorities will remember, sway the exercise of judgment, not supersede it.
It is conceivable that the pecularities of a route, the calamitous performance in an area of a State transport system, the outstanding spe cial facilities of a particular private operator or other like feature may outweigh the mechanics of marks.
After all, many qualifications, advantageous to the travelling public, may be thought of, untouched by the rigid marking moulds.
They are not irrelevant and may still be regarded by the tribunals.
All this leads to the conclusion that marks shape but do not clinch the ultimate selection.
The public is the consumer; its plenary service is the final test.
Therefore, these is 400 nothing in r. 155A deprivatory of the discretion vested by section 47(1).This interpretative footnote must allay the appre hensions voiced by counsel.
Nor are we convinced that there is no possibility of a private operator exceeding the mini mum marks of a State Transport Undertaking.
Moreover, the marking formula lacks flexibility.
Merely because the State Transport Undertaking has no 'residence ' or workshop on the route, although its attention and ability to react are considerable, why should it suffer a marks created handicap ? There is equity in r. 155A, making up, as it does, for the present shortfalls in the marking system visa visa govern ment transport service.
The appeals, for these reasons, must suffer dismissal.
There will be no order as to costs.
BEG, J. I agree with the conclusion reached by my learned brother Krishna Iyer.
As arguments in this batch of cases seem to raise some questions which I, speaking entire ly for myself, consider to be really outside the sphere of the law which we have to interpret and apply, I would like to make some observations on the implications of these questions argued after stating my reasons for agreeing with my learned brother.
Mr. Chitaley 's first argument for some of the appellants raised only what may be described as "normal" legal ques tions of construction or interpretation (there is some difference between these two allied processes as will appear from Crawfords "Statutory Construction", 1940 Edn., Chapter 18, paragraph 157 to 158 pages 240 244), as to whether Rule 155A(3)(D)(i), reproduced in the judgment of my learned brother Krishna Iyer, gives effect to or conflicts with Section 47 of the (hereinaf ter referred to as 'the Act ').
It was urged by the learned Counsel that what can be done only by resorting to Chapter IV A of the Act, by framing a scheme for partial or complete nationalisation of the routes involved, cannot be accom plished by framing a rule only ostensibly purporting to give effect to Section 47(1 ) of the Act or the proviso to it.
In ultimate analysis, the rule of construction relied upon by Mr. Chitaley to make the last mentioned submission is: "Expressio unius est exclusio alterius".
This maxim, which has been described as "a valuable servant but a dan gerous master (per Lopes J., in Court of Appeal in Colgu noun vs Brooks(1) finds expression also in a rule, formu lated in Taylor vs Taylor,(2) applied by the Privy Council in Nazir Ahmad vs King Emperor(3) which, has been repeat edly adopted by this Court.
That rule says that an express ly laid, down mode of doing something necessarily implies a prohibition of doing it in any other way.
The maxim from which the rule in Taylor vs Taylor(supra) is derived and the rule itself were discussed and explained by this Court in the Parbhani Transport Co operative Society Ltd. vs the Regional Transport Authority, Aurangabad & Ors (4) with specific reference to the argument advanced there that, (1) at 65.
(2) at 430.
(3) (1936) L.R. 63 I.A. 372.
(4) ; 401 as Chapter IV A is meant for running its own buses by the State by nationalisation of Motor Vehicle Road Transport Services, it was not open to the State to apply for per mits at all under Chapter IV of the Act which applies to private operators only.
This argument,repelled by this Court there has been put forward before us in a somewhat different and attenuated form by Mr. Chitaley.
Neverthe less, the basic rule of interpretation submitted to us is the same as the one which was relied upon in this Court in the Parbhani Transport Co operative Society 's case (supra) in an attempt to exclude the State Transport Undertaking altogether from entry into what was sought to be made out to be the exclusive preserve of private operators.
Before us, it is contended that exclusion of private operators could only be brought about by resorting to a duly framed scheme, on appropriate grounds given in Section 68C of the Act, but not indirectly by framing the kind of rule which has the effect of excluding private operators from the sphere of open competition which, it is submitted postulates an ini tial equality of positions.
This argument rests, as I will indicate below, on two erroneous assumptions: firstly, that Rule 155A(3)(D)(i) has the effect of excluding private operators; and, secondly, that the proviso to section 47(1) compels the permit issuing authorities to postulate or start by assuming an equality of conditions, as between private operators and a State Transport Undertaking.
Indeed, if they were to start with the assumption of equality they will have to give preference to the State Transport Under taking straightaway because that is what the proviso re quires.
The mainstay of the arguments of learned Counsel for the appellants before us, however, is that Rule 155A(3)(D)(i) really has the effect of excluding the private operators altogether by making it impossible for them to ever obtain preference over the State Transport Undertak ing when it applies for a permit in competition against them.
The reply on behalf of the State is that no exclusion of private operators is either intended or brought about by an application of Rule 155A(3)(D)(i) of the Act.
On the other hand, it is submitted that, as an ordinary operator and a State Transport Undertaking are, in many ways, so unlike each other that, unless five marks were assigned to each application of the State Transport Undertaking, it could not compete at all, on a fair and equal footing, with pri vate operators, who are able to obtain straightaway two marks for residential qualifications, four marks if they are operating not more than three buses, and two marks for workshop facilities.
apparently, the residential qualifica tion has reference to residence within the area in which the motor vehicles are to ply, and marks workshop facilities are granted to operators who are able to show such facili ties on particular routes whereas the State Transport Undertakings, it is pointed out, will neither have a resi dence within such an area nor may be able to show, in a particular case, workshop facilities on particular routes even though they may have better workshop facilities on the whole.
Again, two marks are to be given to private concerns or organisations, plying on particular routes, if their owners or Managing Directors have certain technical qualifications.
It is pointed out that, as State Transport Undertakings do 402 not have individual owners or Managing Directors, for whom these marks could be allotted, even though they may have technically much better qualified personnel to attend to their motor vehicles, the impugned Rule 155A(3)(D)(D could be justified as meant only to place State Transport Under takings on a footing of possible equality with private operators in competing.
for permits to be granted under Section 47(1) read with Section 42(3) of the Act and to do no more.
Furthermore, Rule 155A(3)(D)(i) occurs in a group for marks to be assigned on the basis of the number of vehicles run by the operators.
In any case, it was submit ted that it is a fair provision as a rough guide but is not decisive by any means.
It seems to me that the conten tion advanced on behalf of the State that the impugned part of Rule 155A enables provisions of the proviso to Section 47(1), read with Section 42(3), to be worked a manner in which the statutory provisions were intended to overate and does not really authorise a circumvention or infringement of the provisions of Chapter IV of the Act, is well founded.
The manner in which provisions of Chapter IV of the Act were meant to operate in cases of competition between pri vate operators and State Undertakings was explained in the Parbhani Transport Co operative Society 's case (supra) as follows (at p. 184): "The Government has of course the power to do.
any business it lies and therefore the business Of running stage carriages.
We have earlier drawn attention to the change made in cl.
(a) of section 42(3) by the: amendment of 1956.
Previously, it was not necessary for the Government to obtain permits under section 42(1) for buses that it intended to run as stage carriages.
SinCe the amendment the Government can no longer run transport vehicles for commercial purposes without obtaining permits under section 42(1 ).
Now the plying of buses as, stage carriages is a commercial enterprise and for such buses, therefore, under the sections as they stand, the Government would re quire permits as any one else.
That being so, the sections clearly, contemplate that the Government may apply for and obtain permits for its buses run as stage car riages.
The rule applied in Nazir Ahmad 's case (1936) L.R. 63, I.A. 372, 381) does not permit the ordinary meaning of section 42, sub.
s.(1) and sub.
s.(3), el.
(a) to be cut down because of the provisions of Chapter IVA.
The Act lays down two independent sets of provisions in regard to the.
running of buses by the Government, one under Chapter IV and, the other under Chapter IVA.
Chapter IVA was intended to give the Government, a special advantage.
When the Government chooses to proceed under that chapter, it becomes entitled as a matter of right under section 68F(1 ) to the necessary permits.
Under Chapter IV the Government does not have any such advan tage; it has to compete with other applicants, to secure permits to be able to run its buses.
The powers under the two.
chapters are there fore different.
To such a case the principle of Nazir Ahmad 's case cannot be applied".
403 Both Chapters IV and IVA enable plying of State transport as well as privately owned vehicles on hire on same routes, but the grounds for these combined operations under the two chapters are different.
The governing principle of Section 47(1) is to preserve as free and open a competition as possible in public interest, whereas the reason for allowing private operators upon a nationalised route may be broader one of public policy which may favour a decision against sudden stoppage of privately provided motor trans port, so as to avoid wastage of national wealth, even though it takes the form of investments by individual entrepre neurs, or, its object may even be prevention of undue hard ship to private operators.
Other reasons for permit ting combined services can be.
given.
It is, however, possible only under Chapter IVA to exclude private operators completely.
But, unless any rule relating to provision of motor transport under chapter IV has that effect it cannot be asserted that what can be done only by resorting to Chapter IVA is being attempted under the provisions of Chapter IV.
The rule in Nazir Ahmad 's case (supra) applies only to cases where there is a single specified mode laid down for doing something in exercise of the legal power to do it.
In that event, the specified mode may, negatively, operate as a prohibition against what is not prescribed at all and is outside the statute.
But, it could not apply to a case where two modes of doing the same thing are provided for by a statute itself.
Nor, as I have indicated above, could it be said that what is to be done under Chapter IV and what can be done under a scheme under Chapter IVA are really the same simply because, in a given case, the results of both may appear to be similar or even identical.
Mr. Ramamurthi, appearing on behalf of some of the appellants, embarked on quite an ambitious argument built upon an elaboration of the theme that Chapters IV and IVA belong to two different fields or spheres of action which cannot, so to speak, be allowed to mix, overlap, or collide.
It was contended that the waters of what are, in the eye of law, two different streams of activity. must not be allowed to mingle.
If 1 am not mistaken, even the word "pollute" was used, in the flow of arguments, to describe, possibly in a light vein, the alleged inequity of an invasion by a State Transport Undertaking of the supposedly exclusive preserve of private enterprise.
It was suggested that such a result would involve "pollution" of the domain of open competition, which is forbidden territory for State Under takings introduced as a consequence of another ideology or sphere of action found in Chapter IVA.
It seems to me that to hear such an argument, advanced even in a lighter vein, is really rather surprising in view of the language of the statute and welt known facts to which it is related.
It is quite well known that ours is what is known as a "mixed economy".
The highest norms of our law are embodied in our Constitution.
Article 19(6)(ii) of the Constitution clearly contemplates: "the carrying on by the State, or by a Corporation or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or.
otherwise".
And, in order to fulfil the objectives of the Preamble.
to our Constitution, the Constitu 404 tional mandate, contained in Article 39(c) of the Constitu tion, which the State has to carry out, may make it impera tive upon the State, in appropriate circumstances, either to take over or nationalise motor transport on roads in any region or area completely or to supplement the Transport Services provided by private operators with those provided by the State.
It seems to me that neither Chapter IV nor Chapter IV A can be really put into two separate water tight compartments so as to make it imperative either to exclude State Transport Undertakings from operating under the provi sions of Chapter IV or to exclude private operators when a scheme under Chapter IV A, which may itself provide for only a partial exclusion of such operators, is in force.
In the face of the clear words of proviso to Section 47 (1 ) of the Act, enabling State Transport Undertakings to provide Transport facilities in open competition, and of Section 68(C) in Chapter IV A of the Act, enabling "the exclusion complete or partial" of private operators from particular areas or routes, such an argument cannot be put forward at all before us under some preconceived notions even after these very notions had been rejected by this Court in the Parbhani Transport Co operative Society Ltd 's case (supra).
It is clear that the two chapters of the same Act are both intended to subserve "the interest of the public gener ally" in any area in the country, That is the integrating or governing principle evident from the language of the Act itself in both Chapter IV and Chapter lV A of the Act.
An argument advanced on behalf of the appellant seemed to be that Rule 155A(3)(D)(i) results in defeating the mandate of Section 47(1) of the Act, that the Regional Transport Authority must, as explained repeatedly by this Court, keep "the interest of the public generally" in the fore front.
As already indicated by me, this argument really proceeds on the erroneous assumption that the mere fact that the State Transport Vehicles are given five marks would defeat public interest by excluding consideration of all facts except that the State Undertaking has applied for one or more permits on a particular route.
As my learned brother Krishna Iyer has also pointed out, this is an unwarranted assumption.
Rule 155A gives only guidance, but the totality of factors men tioned in Section 47(1) 'really decide.
It was suggested on behalf of the State Transport Under taking that the obvious capacity of a State Undertaking to provide facilities which are beyond the reach of private operators, that its actions are subjected to such constant, vigilant, and rigorous control on behalf of the public, and that it is bound to be so free from any desire to make profit.s, by sacrificing public interests or convenience of passengers that, even if nothing else was considered, these presumed advantages would justify the award of five marks on each application of the State Undertaking for a permit.
If this line of reasoning was completely accepted and car ried to its logical conclusion, the provision/or giving five marks ,to each application of the State Undertaking would become quite otiose or unnecessary because, in that case, the State Undertaking would, by relying merely on a presumed superiority for purposes of Section 47 (1 ), get a prefer ence automatically.
The proviso to Section 47 (1 ) of the Act would then, apart from making it clear that the State Undertaking can also apply for permits, for which 405 purpose Section 42(3) was enough, serve: no useful purpose.
Indeed, if such a view were to be accepted, the first part of the proviso to Section 47 (1 ) would seem to rest on a false premise because there could be no case in which "other conditions" could ever be "equal" as between a State Transport Undertaking and a private operator.
The State Transport Service would, in that case, always get a prefer ence.
For this reason, I do not think that this line of reasoning could be pushed too far.
It has to be assumed, in view of the opening words of the proviso to section 47 (1 ), that there may be cases in which an application of the basic principle, contained in Section 47 (1) of the Act, may tilt the balance either in favour of the State Undertaking or the private operator.
The proviso applies only where the State Undertaking could ' reasonably be deemed to be in a position of equality as regards comparative advantages offered by it.
As there cannot, between such dis similar operating units, be comparability of conditions or advan tages offered unless some rule is flamed and applied which could make comparison reasonably possible, it seems to me that Rule 155A(3) (D)(i) is justifiable on the ground that it makes what is legally contemplated and permissible also practicable.
The proviso.
to Section 47 (1 ) reads as follows: "Provided that other conditions being equal, an application for a stage carriage permit from any State Transport Undertaking or a co operative Society registered or deemed to have been registered under any enactment in force for the time being shall, as far as may be, be given preference over applications from individual owners.
" An examination of this proviso shows that an.
equality of other conditions is contemplated before any question of giving preference, merely on the ground that the applicant is the State Transport Undertaking or a Cooperative Society, can arise.
If other conditions are equal, then, undoubted ly, the choice as between such equals must, if the proviso is to be given effect, be made in favour of the State Trans port Undertaking or a Cooperative Society automatically.
That is how, in such a case, See.
47(1) itself would be deemed to operate.
The validity of the proviso is not challenged.
Even if Article 14 were available for an attack upon it, as it is not during the current emergency, it is clear that the State Transport Undertaking does stand in a separate category.
Therefore, it could be found entitled, for obviously good and intelligible reasons, to preference over private operators "other conditions being equal".
The narrow ques tion before us.
Thus, appears to me to be nothing more than whether the impugned part of Rule 155A sub serves or vio lates the proviso.
The proviso itself is meant to explain what public interest, as visualised by Section 47(1), re quires.
Hence it appears to me that the validity of the impugned part of Rule 155A could be determined on purely legal grounds as a necessary corollary of the proviso to Section 47(1).
The impugned part of the Rule is there to make the proviso workable and not to defeat its provisions.
406 It is, however, becoming increasingly fashionable to start with some` theory of what is basic to a provision or a chapter or in a statute or even to our Constitution in order to interpret and determine the meaning of a particular provision or rule made to sub serve an assumed "basic" requirement.
I think that this novel method of construc tion puts, if I may say so, the cart before the horse.
It is apt to seriously mislead us unless the tendency to use such a mode of construction is checked or corrected by this Court.
What is basic for a section or a chapter in a stat ute is provided: firstly, by the words used in the statute itself; secondly, by the context in which a provision oc curs, or, in other words, by reading the statute as a whole; thirdly, by the preamble which could supply the "key" to the meaning of the statute in cases of uncertainty or doubt; and, fourthly, where some further aid to construction may still be needed to resolve an uncertainty by the legislative history which discloses the wider context or perspective in which a provision was made to meet a particular need or to satisfy a particular purpose.
The last mentioned method consists of an application of the Mischief Rule laid down in Heydon 's case long ago.
If we start from a theory as to.
what the real purpose or need is or could be, the danger is that we may be inject ing a subjective notion or purpose of our own into what is, after all, a legal question of construction or interpreta tion, according to well recognised principles, although it may be necessary, in exceptional eases, to explain or forti fy the interpretation adopted in the light of so well under stood and.
well known a purpose or theory that we could take judicial notice of it and refer to it.
The exposition of the well known purpose or theoretical foundation must, however, generally, flow from and explain an interpretation adopted, on the strength of legally acceptable and accepted canons of construction, if we are to avoid the danger of an a priori determination of the meaning of a provision based on our own pre conceived notions of an ideological structure or scheme into which the provision to be interpreted is somehow fitted.
The path of judicial certainty and predictability has to be paved with well settled principles of construction and interpretation.
We cannot let it develop into a slippery slope be set with hazardous possibilities.
The science of statutory construc tion and interpretation I think can call it that rests on certain systematised principles and rules of common sense, logic, and reason.
It can not be transformed into a happy hunting ground for whatever may captivate the forensic or judicial fancy or become something akin to poetry without even the attractions of euphony.
For the reasons given above, I find that, on an applica tion of the ordinary and well recognised rules of interpre tation, without resorting to any of the novel methods suggested by some of the arguments of learned Counsel for the appellants, the impugned part of Rule 155A(3) (D)(i) is valid.
I, therefore, concur with nay learned brother Krishna Iyer, and hold that the connected appeals and peti tions before us must be dismissed.
M.R. Appeals dis missed.
| Under item 1 in the Second Schedule to the Andhra Pradesh General Sales Tax Act 1957, manganese ore was liable to be taxed at the point of purchase by the last dealer who bought in the State.
The appellants sell manganese ore to the Mines and Minerals Trading Corporation which exports the ore to buyers in foreign countries.
Their contention before the Sales Tax authorities that the sales of the ore to the MMTC were complete within the State of Andhra Pradesh and that it was the MMTC which was the last purchaser liable to pay sales tax was rejected.
On appeal the High Court held that the appellants ' contracts with the MMTC were integrally connect ed with the contract entered into by the MMTC with the foreign buyer and, as such, the appellants were the last purchasers liable to pay the tax.
The respondent State contended before this Court that since the property in the goods passed from the appellants to the MMTC on board the ship in view of the f.o.b.
charac ter of the contract, it was the appellants who, as the last purchasers, were liable to pay the tax and not the MMTC, Allowing the appeals, HELD: The law is that it has to be found out whether the contracts between the merchants and the Corporation are integrated contracts in the course of export or different contracts.
If they are different, the last purchaser within the State is liable to pay the sales tax.
[446G] (i) The tests for finding out the sale in the course of export are that there must be a single sale which itself causes the export or is in the progress or process of ex port.
There is no room for two or more sales in the course of export.
The only sale which can be said to cause the export is the sale which itself results in the movement of the goods from the exporter to the importer.
[443E F] (ii) State Corporations are often the only authori ties allowed to export goods out of the country.
These corporations enter into contracts with foreign buyers for export and the Corporations in turn give directions to the merchants to place the goods on board a ship.
These direc tions are not in the course of export because the export sale is an independent one between the Corporations and their foreign buyers.
[444D E] (iii) In f.o.b. contracts the sellers ' duty is to place the goods free on board a ship named by the buyer but the mere mention of f.o.b. price or f.o.b. delivery in a contract between the merchants and the trading corporations which export the goods under a separate contract with the foreign buyers to the latter will not make the two contracts either integrated or the contract between the merchants and the Corporation an f o.b. contract.
There cannot be two last purchasers in the sale of the same goods within the same State.
There cannot be two exporters in respect of the same goods.
[444G & 445C] 442 (iv) In string contracts the contracts between the Corporation and the foreign buyers are different and it is the Corporation which enters into independent contracts with foreign buyers on f.o.b. basis.
Under the terms of the contract, the merchants are required to bring the goods f.o.b.
to the ship named by the Corporation.
[444C] Mohd. Serajuddin etc.
vs State of Orissa [1975] Supp.
S.C.R. 169, Coffee Board, Bangalore vs Joint Commercial Tax Officer, Madras ; and M/s. Binani Bros. (P) Ltd. vs Union of India & Ors.
[1974] 1 S.C.C. 459, followed.
National Tractors Hubli vs Commissioner of Commercial Taxes Bangalore , no longer good law.
|
Civil Appeal No. 285 of 1958.
Appeal from the judgment and decree dated September 22, 1955, of the former Nagpur High Court in Mis.
(First) Appeal No. 201 of 1952.
N. C. Chatterjee, D. R. Baxy and Dharam Bhusan, for the appellant.
B. section Sastri and Ganpat Rai, for the respondent.
October 16.
The Judgment of the Court was delivered by RAGHUBAR DAYAL, J.
This appeal, on certificate granted by the High Court at Nagpur, is directed against its order dismissing the appellant 's appeal against the dismissal of his objection, under section 47 of the Code of Civil Procedure, by the III Civil Judge, Class I, Nagpur.
The respondent purchased at auction sale, held by the Revenue Officer for recovery of arrears of land revenue, eight anna share of Ganpatrao in mouza Vadoda, Tehsil and District Nagpur, in the Central Provinces, and obtained formal possession of that share on September 23, 1938.
Ganpatrao relinquished his share in khudkahst lands they were recorded as the occupancy land of his wife and sons.
They surrendered those fields to lambardar Narain, who leased those fields in occupancy right to tho appellant in 1940.
The respondent filed a suit for possession of certain fields including the fields in suits viz., fields khasra Nos. 147 and 154, 126 and based his claim on his proprietary right to recover possession and not on the loss of possession on account of the appellant 's dispossessing him.
The suit was decreed and the decree was upheld by he Nagpur High Court by its order dated April 20, 1951, it being held that the respondent was entitled to the fields in suit which were originally khudkasht fields as part and parcel of the eight anna share of Mahal No. 2 purchased by the respondent.
It so happened that between the closing of the arguments in the appeal before the High Court, some time before March 31, 1951, and the delivery of judgment on April 20, 1951, the Madhya Pradesh Abolition of proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 (M.P. Act No. 1 of 1951), hereinafter called the Act, came into force.
This fact does not appear to have been brought to the notice of the High Court as it did not consider the effect of the Act on the appeal before it.
The respondent decree holder filed execution application for the recovery of costs and delivery of possession on July 23, 1951.
The appellant paid up the costs, but, on August 31, 1951, filed an objection to the application for delivery of possession on the ground that the respondent decree holder had no right to dispossess the appellant judgment debtor, as the respondent had lost his proprietary rights to the fields and the appellant had acquired rights to occupy them subsequent to the confirmation of decree for possession by the High Court.
It was stated that the malguzari proprietary rights of the respondent decree holder, except his rights over home farm fields, ceased to exist on March 31, 1951, by virtue of section 3 of the Act and vested in the State thereafter.
Home farm fields were those fields which were recorded as khudkasht or sir fields in the Jamabandhi of 1948 49.
The fields in suit were not so recorded and were recorded as occupancy fields of appellant,. 127 It was further contended that the State had, after the date of vesting, collected rent from the appellant recognizing the land in suit to be the tenancy land of the appellant.
On September 24, 1951, the appellant filed an application stating further facts in support of his objection.
He stated that the respondent neither claimed, in the ex propriation proceedings before the Compensation Officer, Nagpur, the fields in suit as his khudkasht lands, nor raised any such claim in proceedings for fixation of assessment on his home farm and that the decree holder had not been declared malik makbuza of the land in suit.
He further stated that the respondent had included the rent of the fields in suit in the area of the village for the purpose of claiming compensation and thereby got more compensation on that account and that the fields in suit had been declared malik makbuza of the appellant on July 22, 1952, under section 41 of the Act.
The respondent contended before the Executing Court that the appellant could not raise such objections in the Executing Court and should have raised them in the High Court before it had passed the orders in the appeal.
He further contended that he had not lost his right to possess the fields in suit and that his claim to possession of the fields was not affected by the Act the provisions of which did not apply to the facts of the case.
He also contended the State had absolutely no right to collect any rent for the fields from the appellant and any collection made did not affect the respondent 's rights.
He further contended that the appellant could not take any advantage of his omission to claim the land in suit as his home farm as he could not have moved in the matter without obtaining possession or of a declaration of malik makhbuza under section 41 of the Act during the pendency of the execution application as he had fraudulently suppressed the fact that he had been hold by the 128 High Court not to have been an occupancy tenant of the land in suit and that the respondent had a decree for possession against him.
The State of Madhya Pradesh was served with notice of the objection and filed its statement of facts stating therein that the plots in suit were not shown as home farm by the ex proprietor respondent, that no Jamabhandhis as required by section 2(g) of the Act, were filed in the compensation proceedings and that, consequently, the respondent was not declared mailk makbuza of those plots.
It was also stated that the appellant had been declared malik makbuza of the plots under section 41/56 of the Act on application under section 4(2) of the Madhya Pradesh Agricultural Raiyats and Tenants Acquisition of Privileges) Act, 1950 (M. P. Act XVIII of 1950), and that he has paid land revenue to the State.
The Execution Court dismissed the objection.
It held that the vesting of respondents proprietary rights in the State did not come in his way to take possession of the fields ill execution of the decree, as the Deputy Commissioner could not take possession of the fields in suit under section 7 of the Act as they were occupied lands.
It further held that the land in suit did not form the respondent 's home field that the respondent could not be the malik makbuza of the fields under section 38 (1) of the Act as the fields were not in his possession.
It further held that the declaration of the appellant, who was a trespasser as a malik makbuza, was illegal.
The appellant then went in appeal to the High Court.
The High Court relied on the case reported as Rahmatulla Khan vs Mahabirsingh (1) in which it was held that the definition of a 'home farm ' in section 2, clause (g), of the Act, should be liberally construed and should include the fields of a proprietor who was entitled to get the Revenue papers of 1948 49 corrected as a result of the decree in his favour, (1) I.L.R. 129 even though the fields were not recorded as his khudkasht in the 1948 49 papers, because it was the duty of the Revenue Authorities to make correct entries in the Jamabandis and other village papers.
The High Court, however, pointed out that the decision in Rahmatullah 's Case(1) made out an exception in the definition which is not in it and in effect laid down that the application of the Act depended upon the result of pending litigation, a view which was not accepted in the earlier Full Bench case of Chhote Khan vs Mohammad Obedullakhan (2).
The learned Judges further said: Though we do not agree with the view of Mudholkar, J., the decision ranks as a Division Bench Case and we follow it, though reluctantly. " The learned counsel for the appellant has urged that the respondent is not entitled to execute the decree for possession as he had lost the proprietory right which entitled him to get possession.
It is further urged that the appellant has secured the rights of malik makbuza of the land subsequent to the decree and has thus got a right to remain in possession in spite of the decree.
The learned counsel for the respondent mainly relies on the contention that the Execution Court cannot go behind the decree and therefore must execute it and deliver possession to the respondent.
Before considering the question arising for determination in this appeal, it will be convenient to detail the relevant provisions of the Act and their effect.
The preamble of the Act says that it is expedient to provide for the acquisition of the rights of the proprietors in estates, mahals, alienated villages and alienated lands in Madhya Pradesh and to make provision for other matters connected therewith.
This indicates that the Act purported to deal with the rights of the proprietors and not directly with the rights of other persons in the (1) I.L.R. (2) I.L.R 130 estates, mahals, alienated villages and alienated lands.
The proprietors were intermediaries between the persons actually cultivating the land and the Government.
They realised rent from the former and paid revenue to the latter.
Section 3 is the vesting section and its sub sections (1) and(2) read: (1) Save as otherwise provided in this Act, on and from a date to be specified by a notification by the State Government in this behalf, all proprietary rights in an estate, mahal, alienated village or alienated land, as the case may be, in the area specified in the notification, vesting in a proprietor of such estate, mahal, alienated village, alienated land, or in a person having interest in such proprietary right through the proprietor, shall pass from such proprietor or such other person to and vest in the estate for the purposes of the State free of all encumbrances.
(2) After the issue of a notification under subsection (1), no right shall be acquired in or over the land to which the said notification relates, except by succession or under a grant or contract in writing made or entered into by or on behalf of the State; and no fresh clearings for cultivation or for any other purpose shall be made in such land except in accordance with such rules as may be made by the State Government in this behalf.
" In accordance with the provisions of this section, the proprietary rights in an estate, mahal, alienated village or alienated land in the area specified in the notification vesting in a proprietor of such estate etc., were to pass from such proprietor and vest in the State for purposes of the State free from all encumbrances.
These provisions themselves were sufficient to divest the proprietor of such estate etc., of his proprietary right.
The consequences of such 131 vesting are further specified in section 4.
In view of sub section
(2) of section 3, no right could acquired over the land which had vested in the State except by succession or under a grant or contract in writing made or entered into by or on behalf of the State.
This means that no person could acquire any right over such land under a decree passed in his favour subsequent to the vesting of the estate on the notified date and that therefore the respondent did not acquire the right to possess this land under the decree in his favour.
The relevant portions of sub section
(1) of section 4 are: (1) When the notification under section 3 in respect of any area has been published in the Gazette, then, notwithstanding anything contained in any contract, grant or document or any other law for the time being in force and save as otherwise provided in this Act, the consequence as hereinafter set forth shall, from the beginning of the date specified in such notification (hereinafter referred to as the date of vesting), ensue, namely (a) all rights, title and interest vesting in the proprietor in such area including land (cultivable or barren), shall cease and be vested in the State for purposes of the State free of all encumbrances. . . . . . . . . . . . . . (e) the interest of the proprietor so acquired shall not be liable to attachment or sale in execution of any decree or other process of any court, civil or revenue, and any attachment existing at the date of vesting or any order for attachment passed before such date shall, subject to the provisions of section 73 of the , case to be in force." ' sub sections (2) and (3) of section 4 are as follows: (2) Notwithstanding anything contained in sub section (1), the proprietor shall continue 132 to retain the possession of his homestead, home farm land, and in the Central Provinces also of land brought under cultivation by him after the agricultural year 1948 49 but before .
the date of vesting.
(3) Nothing contained in subsection (1) shall operate as a bar to the recovery by the outgoing proprietor of any sum which becomes due to him before the date of vesting by virtue of his proprietary rights and any such sum shall be recoverable by him by any process of law which but for this Act would be available to him.
" It is to be noted that the consequences mentioned in 8. 4 follow the notification under 8. 3, notwithstanding anything contained in any contract, grant or document or in any other law for the time being in force.
The question is whether the word 'document ' includes a decree of the Court.
We do not see any good reason why a decree of the Court, when it affects the proprietary rights and is in relation to them, should not be included in this expression.
The main object of sections 3 and 4 and in fact, of the Act itself, is that all the bundle of rights which a proprietor possess on account of his proprietorship of the land within the estate etc., should cease, except such rights which are saved to the proprietor under some specific provision of the Act.
Any rights which accrue to the proprietor under a decree by virtue to his proprietary right will not, under the scheme of the Act, prevail over the statutory consequences following the vesting of the proprietary rights in the State and will be lost to the proprietor.
One such right is the right of the proprietor under a decree to obtain possession over certain land.
Such a decree for recovery of possession is the result of the recognition of the proprietor 's right of possession as proprietor over that land as against the claim of the judgment debtor to 133 retain possession of that land.
The proprietary right vests in the State and as a consequence of it the proprietor 's right under the decree to obtain possession also vests in the State, even though tho State gets right to the possession of the land under other provisions of the Act as well.
Section 7 empowers the Deputy Commissioner to take charge, on the date of vesting, of all lands other than occupied lands and homestead of all interest vesting in the State under B. 3.
This means that the Deputy Commissioner could take possession of the land in suit on the date of vesting, i. e., on March 31, 1951, as it was neither the proprietor 's home farm nor occupied land, as defined in cl.
(k) of c. 2, of the appellant who was held by the High Court to be a trespasser vide judgment of the High Court dated April 20, 1951, now reported in Subhan vs Madhorao (1).
`Occupied land ' means, in relation to the Central Provinces, according to sub cl.
(1), land held immediately before the date of vesting in absolute occupancy or village service tenure, or land held as malik makbuza, or land comprised in a home farm.
Occupied land did not include land held by a person as a trespasser.
The provisions of cl.
(e) of sub section
(1) of section 4 indicate that certain decrees against the interest of the proprietor become inexecutable on the vesting of his rights in the State.
There is therefore good reason to hold that decrees in his favour also become inexecutable if they are based on his proprietary right which he possess no more and which has vested in the State.
The Act provided, by sub section
(3) of section 4, that the out going proprietor was free to recover any sum which had become due to him before the date of vesting by virtue of his proprietary rights by any process of law which, but for the Act, would be (1) I.L.R. 134 available to him.
It does not provide for the outgoing proprietor to recover possession of land by any process of law if he had become entitled to the possession of that land before the date of vesting.
The absence of any such provision adds strength to the view that the proprietor 's right to obtain possession of land under a decree in his favour gets lost to him after the date of vesting.
Sub section (2) of section 4 of the Act provides that the proprietor can continue to retain possession of home farm land after the vesting of his proprietary right in the State.
The respondent cannot take advantage of this provision even if the land in suit be held to be home farm.
He was not in possession of the land in suit on the date of vesting and no question of continuing to retain possession arose.
In fact, the fields in suit could not be his home farm and therefore he got no right to retain possession over them.
Clause (g) of section 2 of the Act defines `home farm '.
It reads.
(g)`home farm ' means, (1) in relation to Central Provinces, (ii) land recorded as sir and khudkasht in the name of a proprietor in the annual papers for the year 1948 49, and (ii) land acquired by a proprietor by surrender from tenants after the year 1948 49 till the date of vesting; (2) in relation to merged territories, that part of the land under the personal cultivation of the proprietor on the date of vesting which was similarly under cultivation in the agricultural year 1949 50 and which he is omitted to retain on the termination of proprietary tenure under any instrument having the force of law and applicable to such tenure.
Explanation.
Land under personal cultivation includes land allowed to lie fallow in 135 accordance with the usual agricultural practice but does not include any land in lawful possession of a raiyat or tenant.
. . . . . . . . . . It is significant to note in this completion that sub cl.
(1) refers to land actually recorded as sir and khudkasht in the annual papers of 1948 49 and does not refer in terms to land which was the sir and khudkasht of the proprietor in that year and which ought to have been recorded as such in those papers but had not been so recorded.
Another point to be noted is that though cl.
(ii) refers to land acquired by the proprietor by surrender from tenants between the close of the year 1948 49 and the date of vesting no reference is made in this definition to land the possession of which had been obtained by the proprietor as a result of a decree during that period or to the possession of which the proprietor was held entitled under the decree of the Court passed before the date of vesting.
It is also significant to notice that in sub section (2), the land answering the description of 'home farm ' is described differently.
Only that land comes within the expression `home farm ' ' which had been under the personal cultivation of the proprietor on the date of vesting and which had been similarly under cultivation in the agricultural year 1949 50, and which he is entitled to retain even on the termination of his proprietary tenure under any instrument having the force of law and applicable to that tenure.
Personal cultivation of the proprietor at two relevant dates was the main criterion.
Such cultivation was not made the criterion in the definition in sub cl.
(1) of sub section
It is not necessary, according to that sub clause, that the proprietor be personally cultivating that land.
The only condition requisite for the proprietor having certain land treated as his home farm was the fact that the annual papers of 1948 49 recorded that land as his sir and khudkasht.
The basis was the record and 136 not the fact of actual cultivation or his title to that an land The definition evinces the intention of the Legislature to remove the question of certain land being `home farm ' or not from the sphere of litigation.
Recorded entry was treated to be the basis for adjudging tho land to be `home farm. ' There is no ambiguity about the definition of 'home farm ' and so the question of strict or liberal construction does not arise.
These consideration lead to the conclusion that land cannot come within the definition of `home farm ' which had not been actually recorded as sir and khudkasht in the name of the proprietor in the annual papers for the year 1948 49 or which had not been acquired by the proprietor by surrender from tenants after the years 1948 49 till the date of vesting.
The plots in suit were neither actually recorded as the respondent 's sir and khudkasht in the 1948 49 annual papers nor had been acquired by him by surrender from tenants during the period mentioned in sub cl.(ii) of cl.
(1) of the definition and so could not be the respondent 's home farm.
The decree of the trial Court was passed on July 12, 1944.
As that decree was under appeal in 1948 49, it would not be right to say that the Revenue Authorities were in error in not correcting the entries in the annual papers.
They could Not have corrected them merely on the basis of the decree.
Correction in the entries would have been made if there had been change of possession.
No change of possession took place and therefore no entry could have been made in the annual papers of 1948 49 with respect to the plots in suit to be the khudkasht of the respondent.
In fact, even if the respondent had taken possession over the land in suit by executing the decree passed by the trial Court, an entry of his holding that land as khudkasht could have been made only if he had brought 137 that land under his own personal cultivation and not if he had let out the land to some other person.
This consideration, again, would go against the respondent even if a liberal interpretation was to be given to the definition of `home farm '.
Section 12 requires that every proprietor should file a statement of claim in the specified form and verify that statement in accordance with order VI, rule 15, Code of Civil Procedure.
The respondent filed his compensation statement, Document No. 1, on September 20, 1951, and mentioned in his claim the total gross rental of his proprietary share.
This rental included the recorded rent of the land in suit.
Section 83 provides that every entry in the record of rights, the annual papers and the register of proprietary mutations in the Central Provinces, shall, for purposes of assessment and payment of compensation be presumed to be correct.
This means that for the purpose of settlement of the claim filed by the respondent under section 12, the entry of the appellant 's being an occupancy tenant in the annual papers had to be presumed to be correct and, as a consequence of such a presumption, the land in suit cannot be taken to be the respondent 's khudkasht in 1948 49, and this supports the construction we have placed on the definition of `home farm ' in section 2 (g).
Sub section (1) of section 38 provides that every proprietor who is divested of his proprietary rights in an estate or mahal, shall, with effect from the date of vesting, be a malik makbuza of the home farm land in his possession.
The respondent does not appear to have taken any steps to get himself recognized as a malik makbuza of the land in suit on the ground that it was, his home farm.
In fact, he estates in his reply to the appellant 's objection that he could not have moved in the matter without obtaining possession.
138 Exhibit A 1, dated May 8, 1951, is the statement of fixation of assessment on the home farm of the respondent.
It does not include the land in suit.
Section 45 provides inter alia that any person who, immediately before the date of vesting, was in possession of any holding, as an occupancy tenant, shall be deemed to be a tenant of the State and shall hold the land in the same rights and subject to the same restrictions and liabilities as he was entitled or subject to, immediately before the date of vesting.
Section 41 provides inter alia for occupancy tenants to be declared in the prescribed manner to be malik makbuza of the land comprised in their holding on payment of the amounts mentioned in the section.
The appellant applied for such a declaration on July 22, 1952 and got the declaration i his favour on the basis of the entry in the village papers, though that entry of his being an occupancy tenant was wrong in view of the finding of the High Court.
Exhibit A 4 is the declaration by the Naib Tehsildar, Nagpur, on July 22, 1952, under s.41 of the Act, that 'the appellant was malik makbuza in respect of the land in suit.
Exhibit A 6 is the copy of the Jamabandhi for holding serial No. 121 of mauze Vadoda for the year 1948 49, showing the respondent to be the occupancy tenant of the land in suit.
Section 46 provides that every person deemed or declared to be a malik makbuza under section 33 or section 33 and every other malik makbuza in a mahal, shall be entitled to any right which a tenant has under the village wajibul arz.
The appellant therefore got entitled to such rights of a tenant.
It is clear from the various provisions of the Act already discussed in relation to the facts of this case, that the respondent was not recorded 139 and could not have been recorded to have khudkhast in the land in suit in the papers of 1948 49 and therefore could not have claimed this land as his home farm.
In fact, he did not claim so.
He therefore lost his proprietary rights in this land and they got vested in the State; He therefore had no subsisting right to recover possession of the land in suit, in spite of; the decree in his favour passed on the basis of his being the proprietor of the land in suit, and the appellant being in wrongful possession of that land.
On the other hand, the appellant continued in possession and has, on the basis of the entries in the village papers which had to be presumed correct for the purpose of assessment of compensation secured a declaration of his being malik makbuza of such land from an officer of the State in whom the land in suit now vests.
His right to occupy the land under this right was not adjudicated by the High Court in the judgment leading to the decree ought to be executed.
He can therefore object to the execution of the decree for the delivery of possession as the respondent has no subsisting right and as he has secured from the State a good right to possess it as malik makbuza, even though it be on the basis of a wrong entry in the village papers.
The right to possession vests in the State and under section 7, the Deputy Commissioner formally takes possession of the land, which is not home farm or occupied land within the definition of these expressions in the Act.
If the land in suit be treated to be the appellant 's occupancy tenancy, his right to remain in possession as occupancy tenant continues after the vesting of the land in suit, in the State.
If the land in suit be not taken to be occupancy land of the appellant in view of the finding of the High Court, the Deputy Commissioner would be deemed to have taken possession of the land from the appellant and any subsequent 140 possession of the appellant would be deemed to be possession under the State.
The contention that the Executing Court can not question the decree and has to execute it as it stands, is correct, but this principle has no operation in the facts of the present case.
The objection of the appellant is not with respect to tho invalidity of the decree or with respect to the decree being wrong.
His objection is based on the effect of the provisions of the Act which has deprived the respondent of his proprietary rights, including the right to recover possession over the land in suit and under whose provisions the appellant has obtained the right to remain in possession of it.
In these circumstances, we are of opinion that the Executing Court can refuse to execute the decree holding that it has become inexecutable on account of the change in law and its effect.
Chhote Khan 's Case (1) has net much bearing on the question under consideration in the present case, as it did not deal with the executability of the decree obtained by a proprietor against a trespasser subsequent to the coming into force of the Act.
It dealt with the executability of decrees in favour of the proprietors and passed prior to the enforcement of the Act and held that they had become inexecutable as the effect of sections 3,4,5,7,50 and 60 of the Act was that the rights which were exercisable by the proprietor, lambardar and sadar lambardar by reason of holding that character could no longer be exercised by them and that, even though the cause of action for enforcing those rights arose before the Act came into force, they could not be continued by those persons after the Act came into force as they had ceased to hold that character.
The fact in Rahmatullah 's Case (a) were as follows: The plaintiff sued for possession in respect of 9.18 acres khudkasht lands on the allegation that his predecessor.
in interest, Khubiram, had purchased the defendant 's interest in the village (1) I.L.R. (2) I.L.R, (1955) 983.
141 including khudkasht lands at a revenue auction sale on April 29, 1936.
It was contended that the defendant has no right to remain in possession of the khudkasht lands which along with the, proprietary interest, passed at the revenue sale The defendant contented the suit on the grounds that his khudkasht lands did not pass in the revenue sale, that he had continued all along in possession in respect of the same and had thus acquired the rights of occupancy tenancy which were confirmed in consolidation proceedings.
The suit was decreed in its entirety by the trial Court but the 1st appellate Court confirmed the decree with respect to a portion of khudkasht land which was held to be included in the revenue sale.
By the time the second appeal was heard in the High Court, the Act had come into force.
It was contended on behalf of the defendant judgment debtor that the suit must fail in view of the provisions of the Act as interpreted in Chhote Khan 's Case (1).
In view of the difference of opinion between the learned Judge who heard the second appeal, two questions were referred to a third Judge for opinion and one of the questions was: Does the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) 'Act, 1950 (No. 1 of 1951) bar a suit by an ex proprietor for recovery of khudkasht lands purchased by him before the Act came into force ?" Mudholkar, J., to whom the questions were referred said at p. 996: It is clear from the documents on record that Khubiram had obtained possession of the land in suit after he purchased it along with the village share.
The land was thus khudkasht of Khubiram and accordingly it continued to be khudkasht of the respondent who is a successor in title of Khubiram.
No doubt, this land, though the khudkasht of the 142 respondent, was wrongly recorded as occupancy land of the appellant.
But an erroneous recording of a khudkasht land as an occupancy land would not in law alter the real character of that land.
Thus, despite the wrong entry, the land must be regarded as having always been the khudkasht of the respondent.
If this Court affirms the decree of the two Courts below, the effect of its decision would not be to alter the character of the land and convert a land which is not khudkasht into a khudkasht land.
" Interpreting the definition of `home farm ' in the Act to include such land, which, though not recorded as khudkasht of the proprietor in the annual papers of 1948 49, ought to have been recorded as such, he held that the suit was not barred.
This is not a correct view, for the reasons stated by us earlier.
As we are of opinion that the land in suit could not be the `home farm ' of the respondent as it was not recorded as his khud kasht in the annual papers of 1948 49, the respondent 's proprietary right of this land was lost and got vested in the State on the coming into force of the Act.
On the other hand, we have also held that the appellant obtained a declaration of malik makbuza in his favour from the State, and thus has secured a right to possess it.
In these circumstances, the decree ought to be executed by the respondent has become inexecutable and therefore the order under appeal deserves to be set aside We accordingly allow the appeal and set aside the order of the Court below and Allow the objection of the appellant to the execution of the decree and dismiss the execution application filed by the respondent.
In the circumstances of the case, we make no order as to costs.
Appeal allowed.
| In 1956 a notice was issued to the respondent under section 34(1)(a) of the Indian Income tax Act, calling upon him to make a return on the ground that his income had escaped assessment for the year ending 31st March, 1949 The respondent contended that notice under section 34 of the Act could not be issued to him because of the lapse of eight years from the end of the accounting year.
This contention was not accepted by the Income Tax officer.
The assessee then filed an application under article 226 of the Constitution.
The High Court held on a construction of section 34 of the Act, that the words 'any year ' as used in section 34(1)(a) mean.
not the assessment year but the accounting year.
The Income tax officer appealed The contention was that the words 'any year ' in cl.
(a) refer to the assessment year.
^ Held, that the correct way of interpreting section 34(1)(a) of the Indian Income tax Act, 1922, read with the provisions of the Indian Finance Act, 1948, is that the words 'for any year ' mean for any assessment year and not for any accounting year because the assessment is for the assessment year although of the income which accrued in the previous year (year of account) The Previous year for different heads of income falling under different sections of the Indian Income tax Act may vary but does not give different starting points of limitation for different sources of income.
Panna Lal Nand Lal Bhandari vs Commmissioner of Income Tax, Bombay City, ; , referred to.
C. W. Spencer vs Income tax officer, Madras, , approved.
|
ivil Appeal Nos.1761 62 of 1991 From the Judgment and Order dated 13.8.90 of the Madras High Court in C.M.P. No. 10274 and 10275 of 90. 233 WITH C.A. No. 1763 18 of 1991.
V. Krishnamurthy for the Appellants.
Mrs. N. Chidambaram, K.Parasaran, M.N. Krishnamani, G. Srinivasan, B.Rabu Manohar G.Vijay Anand, V. Balachandran and Ajit K. Sinha for the Respondents.
The following Order of the Court was delivered: Leave granted.
In the State of Tamil Nadu a number of educational institutions were set up for running courses for teachers training.
The respondent Institutions and certain other institutions sought recognition from the Director and the Joint Director of Education of the State of Tamil Nadu for running the teachers training courses.
In some cases the recognition was not a corded as the institutions did not fulfill the conditions required for setting up the Teachers Training Institution while in other cases the application for recognition was pending consideration.
Indisputably none of the respondent Institutions had been accorded recognition but they admitted students to the course of study for conferring the Diploma in Teachers sTraining.
Since, the Education Department of the State Government was not willing to allow the students of such Institutions to appear at the public examination held by the Government, the affected institutions filed writ petitions before the High Court claiming relief for issuance of mandamus directing the Government to recognise the Institutions and also for a direction permitting the students to appear at the public examination with a further direction for declaring the result of the examination.
A learned Single Judge of the High Court referred the matter to Full Bench.
The Full Bench considered the question: "Whether the students of unrecognized Educational Institutions can be permitted to write the public examinations held by the Government." The Full Bench on an elaborate discussion held that in the absence of recognition accorded to an Educational Institution, the students of such Institutions were not entitled to appear at the public examination held by the Government.
In this view of the Full Bench the students were not entitled to any relief but the Full Bench adopted a peculiar course to grant relief.
The Full Bench on account of the "persistent and persuasive stand of the 234 petitioners" issued directions to the State Government and the Education Department on humanitarian ground directing them to hold supplementary examination for enabling the student of the concerned unrecognized Institution to appear at the examination with a condition that the declaration of their result will be subject to the ultimate settlement of the question of recognition.
With these directions the Full Bench disposed of the writ petitions before it by its order dated 24.7.1990.
The writ petitions out of which the present appeals have arisen were filed by the unrecognized Educational Institutions.
These petitions were heard by a Division Bench of the High Court.
The Division Bench following the decision of the Full Bench in Writ Petition No. 2712 of 1990 and other connected matters (fathima Secondary Grade Teachers Training Institute vs Commissioner and Secretary to Government, Education Department), issued similar directions permitting the student to appear at the examination and directing the State Government to arrange for supplementary examination to enable the students to appear at that examination.
These appeals are directed against the order of the Division Bench.
After hearing learned counsel for the parties were are of the opinion that these appeals must succeed.
There is no dispute that the respondent educational Institutions were established for imparting education in Teachers Training Course without obtaining recognition from the Education Department of the State Government.
In the absence of recognition from the Education Department the students pursuing their studies in these Institutions could not appear at the public examination held by the Education Department The Full Bench rightly held that students of unrecognized educational institutions could not be permitted to appear at the public examination held by the Government.
On its own finding, the Full Bench should have refused relief in the petitioners, but it was persuaded to issue directions on humanitarian ground which were in effect destructive of its own findings, and the law laid down by it.
The Full Bench issued directions permitting the students to appear at the examination and directing the appellant authorities to make a special provision for supplementary examination.
These directions in our opinion were unauthorised and wholly unjustified.
The practice of admitting students by unauthorised educational Institutions and then seeking permission for permitting the students to appear at the examination has been looked with disfavour by this Court.
235 In Nageshwaramma vs State of Andhra Pradesh, [1986] Supl.
SCC 166 this Court observed that if permission was granted to the student of an unrecognised Institution to appear at the examination, it would amount, to encouraging and condoning the establishment of unauthorised institutions.
The Court declared that the Jurisdiction of this Court under Article 32 or of the High Court under Article 226 of the Constitution should not be frittered away for such of purpose.
In A.P. Christains Medical Educational Society vs Government of Andhra Pradesh & Anr., ; a similar request made on behalf of the institution and the student for permitting them to appear at the examination even though affiliation had not been granted, was rejected by this court.
The court observed that any direction of the nature sought for permitting the students to appear at the examination without the institution being affiliated or recognised would be in clear transgression of the provision of the Act and the regulations.
The Court cannot be a party to direct the students to disobey the statute as that would be destructive of the rule of law.
The full Bench noted these decisions and observations and yet is granted relief to the students on humanitarian ground Courts can not grant relief to a party on humanitarian grounds contrary to law.
Since the students of unrecognised institutions were legally not entitled to appear at the examination held by the Education Department of the Government, the High Court acted in violation of law in granting permission to such students for appearing at the public examination.
The directions issued by the full Bench are destructive of the rule of law.
Since the Division Bench,issued the impugned orders following the judgment of the Full Bench, the impugned orders are not sustainable in law.
Nalini Chidambaram contended that under Section 9 of the Tamil Nadu Act a minority community is entitled to establish an educational institution without obtaining permission from the Government and the students of such institution are entitled to appear at the public examinations.
We find no merit in the submission.
Under Article 30 of the Constitution minorities based on religion or language, have fundamental freedom to establish educational institutions their own choice, but the State has right to prescribe regulatory provisions for ensuring educational excellence.
Minority institutions which do not seek recognition are free to function according to their own choice, but if such an institution seeks recognition from the State, it has to comply with prescribed conditions for granting recognition, and in that event the minority institution has to follow prescribed syllabus for examination, courses of study and other allied matters.
These conditions are necessary to be followed to ensure efficiency and educational standard in 236 minority institutions.
See: All Bihar Christian Schools Association & Anr.
vs State of Bihar & Ors.
, [1988] 1 S.C.C. 206.
We are, therefore, of the opinion that even if a minority community has fundamental right to establish and administer educational institution, it has no right to insist upon the State to allow students to appear at the public examinations without recognition or without complying with the conditions prescribed for such recognition.
We, accordingly, allow the appeals and set aside the order of the High Court and dismiss the writ petitions filed by the respondents.
There will be no order as to costs.
G.N. Appeals allowed.
| In the appellant State, there were number of educational institutions running teachers straining course.
Recognition was not accorded to some institutions as they did not fulfill the conditions.
In other cases, the recognition was under consideration.
Admittedly, none of the respondent institutions was accorded recognition.
Since the Education Department did not permit their students to appear at the Public Examination, the respondent institutions filed a Writ Petition before the High Court praying for direction to the appellant State to recognise the institutions and also for a direction permitting their students to appear at the Public Examination.
Following the decision of the Full Bench in similar cases, the Division Bench directed the appellant State to arrange for supplementary examination in respect of the students of the respondent institutions.
Against the said Judgment the State has preferred these appeals, by special leave.
Allowing the appeals, this court, HELD: 1.1.
In the absence of recognition from the Education Department the students pursuing their studies in such Institution could not appear at the public examination held by the Education Department.
The Full Bench rightly held that students of unrecognized educational 232 institutions could not be permitted to appear at the public examination held by the Government.
On its own findings,s the Full Bench should have refused relief to the petitioners.
The Full Bench 's directions permitting the student to appear at the examination and directing the appellant authorities to make a special provision for supplementary examination were unauthorized and wholly unjustified.
[234E G] 1.2.
The Court cannot be a party to direct the students in disobey the statue as that would be destructive of the rule of law.
Courts cannot grant relief to a party on humanitarian ground contrary to law.
Since the Division Bench issued the said orders following the Judgment of the Full Bench, the orders are not sustainable in law.
Nageshwaramma vs State of Andhra Pradesh, [1986](Suppl.) SCC 166 and A.P. Christians Medical Educational Society vs Government of Andhra Pradesh & Anr., ; , relied on.
2.1 Under Article 30 of the Constitution minorities based on religion or language, have fundamental freedom to establish educational institutions of their own choice, but the State has the right to prescribe regulatory provisions for ensuring educational excellence.
Minority institutions which do not seek recognition are free to function according to their own choice, but if such an institution seeks recognition from the State it has to comply with the prescribed conditions for granting recognition and in that event the minority institution has to follow the prescribed syllabus for examination, courses of study and other allied matters.
These conditions are necessary to be followed to ensure efficiency and educational standard in minority institutions.
[235C F] 2.2.
Even if a minority community has fundamental right to establish and administer educational institution, it has no right to insist upon the State to allow its students to appear at the public examination without recognition or without complying with the conditions prescribed for such recognition.
[236A B] All Bihar Christian Schools Association & Anr.
vs State of Bihar & Ors.
, ; , relied on.
|
il Appeal Nos.
869/73, 863 64/77, 1460/80, 1281/73, and 1133 34/79.
From the Judgments and Orders dated 22.1.1973, 18.11.1976 10.4.1980, 30.10.72 and 24.10.1978 of the Hyderabad, Ahmedabad, Allahabad, Kerala, Allahabad High Courts in Writ Appeal No. 154/72, Special Civil Application No. 597/69, 598/69 F.A.F.O. No. 235/1972, S.C.A. No. 13707/1972 & Special Appeal No. 3 and 4/1972.
WITH Bombay High Court.
V.C.Mahajan, G.L. Sanghi, N.R. Khaitan, Alok Sharma, Krishan Kumar, Mrs. P. Shroff, Mrs. A.K. Verma, Joel Peres and S.K. Jain for the Appellants in all the appeals.
V.A. Bobde, B.R. Agarwala, Ms. section Manchanda, Dr. D. Chandrachud and P .
Parekh for the Petitioners in Transferred Cases.
G. Ramaswamy, Additional Solicitor General, V.C. Mahajan, Harish Salve, D.N. Misra, Mrs. A.K. Verma, T.C. Sharma and C.V. Subba Rao for the Respondents in all the appeals.
G.Ramaswamy, Additional Solicitor General, V.C. Mahajan, S.S. Shroff, P. Shroff, R. Sasiprabhu, T.C. Sharma, C.V. Subba Rao.
V.B. Desai, Bharat Sangal and Ms. Madhuri Gupta for the Respondents in all the Transfer Cases.
P.H. Parekh and P. Narasimhan for the Intervener.
The Judgment of the Court was delivered by SEN, J.
In all these appeals except the one by special leave, and the connected transferred cases brought by the appellants, each of which is a company incorporated under the engageded in the business of manufacture and sale on a very large scale of textiles PG NO 884 generally and also of rayon yarn and staple fibre, both of which form species of what is known as man made fibre i.e. artificial silk, there is a common question as to the constitutional validity of a fee imposed under r. 21 of the Textiles Committee Rules, 1965 made by the Central Government under section 22 of the , by the Textiles Committee constituted under section 3 of the Act, on the production of rayon yarn and staple fibre i.e. man made fibres manufactured by them.
These appeals are against the various judgments and orders of the High Courts of Allahabad, Andhra Pradesh, Gujarat and Madras upholding the validity of the levy.
The remaining appeal i.e. Civil Appeal No. 1281 of 1973 is preferred by the Textiles Committee against the judgment and order of the Kerala High Court taking the view to the contrary.
The facts in all these cases are more or less similar.
It would suffice for our purposes to notice the salient features thereof.
To illustrate, the appellant company in Civil Appeal No. 869 of 1973, Messrs Sirsilk Ltd., Hyderabad is a manufacturer of rayon yarn and staple fibre and has established its factory at Sirpur Kagaznagar in the State of Andhra Pradesh for the manufacture of the aforesaid man made fibres.
The Chief Inspecting Officer, Textiles Committee by his letter dated May 19, 1965 directed all the textile mills in India including the appellant to send immediately, the monthwise statements of production for March and April l965 and a cheque in payment of the fees due thereon.
However, the Association of Man made Fibre Industry, Bombay of which the appellant is a member by its letter dated May 25, 1985 advised the textile mills to keep the payment of fees in abeyance, as it had made a representation dated May 26, 1965 on behalf of its members to the Ministry of Commerce, Government of India and to the Textiles Commissioner.
Along with its letter, the Association forwarded to all its members a copy of the said representation.
By a further letter dated May 29, 1965, the Association advised all the textile mills including the appellant to send a reply to the letter addressed by the Textiles Committee demanding payment of fees to the effect that the Association had already made a represention to the Ministry of Commerce and to the Textiles Commissioner and as soon as a reply was received by them, they would revert to the subject and take such action as might be necessary in the circumstances.
In the mean while, the Textiles Committee by its letter dated August 10, 1965 made a demand for payment of the fees for the months of March to July 1965.
The appellant in its reply expressed its inability to pay the fees in view of the pending representation made by the Association on their behalf and more so because the Association had advised the members that PG NO 885 the fee would become payable by the textile mills only in connection with the inspection and examination and must be commensurate with the exact quantum of services rendered by the Committee.
The appellant were however informed that one of its members had already remitted the fees.
Consequently, the appellant paid a sum of Rs.40,186.37 p. towards the fee for the period from March 1, 1965 to February 28, 1966.
It however adopted to the stand that the payment of the fee was under a mistake and under misconception as to its legal rights.
It accordingly called upon the Association to take up the matter with the Ministry of Commerce and the Textiles Commissioner and to lodge a strong protest against the illegal exaction of the fee by the Textiles Committee from its members when, in fact, no services of any kind were being rendered.
Thereafter, the Accounts Officer, Textiles Committee by letter dated February 26, 1969 called upon the appellant to remit a sum of RS.33,343.62 p. towards the fee in respect of production of rayon or staple fibre for the period from March 1, 1966 to March 31, 1967.
It was also advised to pay the fee upto April 1968.
In response thereto, the appellant by its letter dated February 27, 1969 stated that the Association had on behalf of its members addressed a letter to the Secretary, Textiles Committee for certain clarifications and on receipt of the reply, the Association would advise its members as to the course of action.
Eventually,.the Secretary, Textiles Committee by a letter dated March 11, 1970, called upon the appellant that it should remit an amount of Rs.35,138.63 p. being the amount of fee outstanding within ten days failing which the said amount would be recovered as arrears of land revenue under section 12(2) of the Act.
Aggrieved, the appellant moved the High Court of Andhra Pradesh under article 226 of the Constitution challenging the validity of the fee and the threatened action for recovery.
A learned Single Judge (Parthasarthi, J.) by his judgment dated January 28, 1972 dismissed the writ petition upholding the validity of the levy of the fee.
On appeal being preferred by the appellant the judgment of the learned Single Judge was upheld by a Division Bench (Gopuirao Ekbote, CJ and Chennakesava Reddy, J.) by its judgment dated January 22 1973.
The High Court of Andhra Pradesh preferred to follow the view expressed by B.N. Lokur, J. of the Allahabad High Court in M/s. Juggilal Kamalapat Cotton Spinning Weaving Mills Co. Ltd. vs The Textiles Committee, Bombay, , and dissented from the view taken by Issac, J. in The Travancore Rayons Ltd. vs The Textile Committee, ILR holding that the Textiles Committee was not entitled to levy any fee under r.4 of the Rules so long as it was not rendering any service by way of inspection or examination of rayon yarn.
PG NO 886 Briefly stated, the facts in transferred cases nos.
351 352 of 1983 are these.
The petitioner in the first case the Century Spg. & Mfg. Co, Ltd., Bombay carry on the business of manufacture of rayon yarn and tyre cord yarn, both of which form species of what is popularly known as `men made rayon ', while the petitioners in the second Messrs Century Enka Limited, Bombay carry on the business of manufacture of nylon filament yarn.
By letter dated May 25, 1968 the Accounts Officer, Textiles Committee, Bombay called upon the petitioner the Century Spg. & Mfg. Co. Ltd. to remit a sum of Rs.5,89,187.46 p. as fees in respect of production of 29,459,373.21 kgs. of rayon yarn for the period from March 1, 1966 to April, 30, 1968.
The petitioners were also called upon to pay the fees for April 1968.
In reply, the petitioners by their letter dated June 18, 1968 stated that the Association of Man made Fibre Industry, Bombay had addressed a letter to the Secretary, Textiles Committee for certain clarifications in the matter and on receipt of the reply the Association would be advising its members further.
Thereupon, further correspondence ensued between the Textiles Committee on the one hand and the Association on the other.
Thereafter, by letter dated February 20, 1969 the Secretary, Textiles Committee intimated the petitioner that it was proposed to initiate immediate action to recover the outstanding fees from the petitioner as arrears of land revenue as contemplated under section 12(2) of the Act.
It was further stated that in order to avoid coercive proceedings the petitioner should pay up the arrears at least upto March 31, 1967 amounting to Rs.3,19,977.11 p.; in any case before March 1, 1969 failing which the Textiles Committee would be constrained to advise the concerned Collector to enforce recovery of the outstanding fees as arrears of land revenue.
The petitioner accordingly moved a petition under article 226 of the Constitution before the High Court of Bombay for quashing the impugned notice of demand dated February 20,1969 complaining that they had at no time made any application for inspection and/or examination of the yarn they manufacture nor did they ever approach the said Committee to inspect and/or examine yarn manufactured by them.
They averred that neither the said Committee nor any one on its behalf had rendered any service whatsoever to them either at their instance or otherwise.
Similarly, the petitioner Century Enka Limited moved a petition under article 226 of the Constitution the High Court of Bombay contending that the Textiles Committee was not entitled to demand or recover a sum of Rs.78,553.15 p. or any other sum by way of fees on the nylon yarn manufactured by them, on the ground that the element of quid pro quo was totally absent inasmuch PG NO 887 as no services at all were rendered by the Committee to them.
These two writ petitions were ordered to be transferred to this Court under article 139 of the Constitution and numbered as transferred cases nos.
351 352 of 1983.
Similar are the facts in other cases.
In transferred case no.354/83 Messrs Nirlon Synthetic Fibres & Chemicals Limited, Bombay carry on the business of manufacture of nylon yarn and apparently paid Rs.8,820.40 p. by way of fees on the nylon yam manufactured by them in compliance with the notice of demand issued by the Accounts Officer, Textiles Committee dated February 20, 1969.
The petitioner in the other case transferred case No. 355/83 Messrs Garwara Nylons Limited, Bombay also carry on the business of manufacture or nylon yarn and paid Rs.51,738.89 p. by way of fee in compliance with the circular issued by the Chief Inspecting Officer, Textiles Committee, Bombay dated May 19, 1965 and assert that the payment of the said amount was under a mistake.
Both these petitioners moved the High Court under article 226 of the Constitution challenging the validity of the levy of the fee and prayed for the issue of a writ in the nature of mandamus directing the Textiles Committee to refund the amounts recovered from them.
Both these writ petitions were also transferred to this Court under article l39 and are numbered as transferred cases nos.
354 355/83.
In Civil Appeals Nos. 863 864/77, the appellant Baroda Rayon Corporation Limited, Gujarat are engaged in the business of manufacture of rayon yarn and paid Rs.55,100 towards the fee in compliance with the notice of demand issued by the Accounts Officer, Textiles Committee dated March 9, 1966 for the period from March 1. 1965 to February 28, 1966.
They were further called upon by the Secretary, Textiles Committee to remit a sum of Rs.39,211.26 p. towards the arrears upto March 31, 1967.
The appellant challenged the recovery of the said amount of Rs.55,100 as well as the threatened demand of a further sum of Rs.39,211.26 p. by the Textiles Committee as being ultra vires by petitions under article 226 of the Constitution before the High Court of Gujarat.
A Division Bench (section Obul Reddy, CJ & N.H. Bhatt, J.) by its judgment dated November 18, 1976 upheld the validity of the fee and accordingly dismissed the writ petitions.
The appellant in Civil Appeal No. 1460/80 Messrs Modipon Limited, Meerut are manufacturers of nylon yarn.
The Accounts Officer, Textiles Committee by his letter dated June 11, 1960 required the company to pay the arrears of fees for the period from March 1965 to May 1968.
The company PG NO 888 brought a suit being Original Suit No. 86/70 in the Court of the II Civil Judge, Meerut for a declaration and perpetual injunction.
In the suit it applied for grant of a temporary injunction under Order XXXIX, r. 1 of the Code of Civil Procedure, 1908 restraining the Textiles Committee from recovering the fees on the ground that the nylon yarn manufactured by them did not fall within the definition of 'textiles ' under section 2(g) of the Act.
The learned Civil Judge by his order dated May 12, 1972 granted ad interim temporary injunction but later vacated the same.
The appellant accordingly went up in appeal to the High Court.
A Division Bench (M.N. Shukla & N.N. Mithal, JJ) by its order dated April 10, 1980 substantially disallowed the application for temporary injunction while making a direction requiring the learned Civil Judge to examine whether the appellant had commenced production since March 1968 and therefore the demand for fee for the period anterior to the commencement of the production could not possibly be sustained.
Appellants in Civil Appeals Nos.
1133 34/79 Messrs. J business of manufacture of rayon yarn under the name and style of J.K. Rayon, and of nylon yarn under the name and style of J.K. Synthetics Limited.
For the period from March 1965 to February 1966 they paid Rs.49,372.65 p.
Thereafter, they fell into arrears.
The two companies filed petitions under article 226 of the Constitution before the High Court of Allahabad contending inter alia that the said payments were made under mistake without realising the implications of the or the Rules, and prayed for the issue of a writ in the nature of mandamus directing the Textiles Committee to refund the amount in question.
As already stated, B.N. Lokur, J. in Juggilal 's case by his judgment dated November 6, 1971 upheld the validity of the levy of the fee and dismissed the writ petitions.
On appeal, a Division Bench (Satish Chandra, CJ and Yashoda Nandan, J.) by its judgment dated October 24, 1978 dismissed the appeal.
In Civil Appeal No. 1281 of 1973 the Textiles Committee has come up in appeal against the judgment of a learned Single Judge of the High Court of Kerala (Isaac, J.) who by his judgment dated March 3, 1972 in Travancore Rayons Ltd. held that the levy of the fee by the Committee was without the authority of law and so long as the Committee was not rendering any service by way of inspection and examination of rayon yarn manufactured by Messrs Travancore Rayon Limited, it was not entitled to recover the same.
PG NO 889 In order to appreciate the rival contentions, it is necessary to set out the background in which the Textiles Committee was constituted, the object and purpose of the as also the relevant provisions of the said Act and the Rules made thereunder.
The history of the legislation has been set out in the counter affidavit filed on behalf of the Textiles Committee and is as follows.
The Second world war gave a completely sheltered market for Indian Textiles and created an unprecedented boom for their products.
They were, however, for a variety of reasons, unable to with stand the severe international competition they had to face in foreign markets with the return of normal conditions after the war.
Alive to the various problems faced by the Textile Industry in general and the Cotton Textile Industry in particular, the Government of India took timely steps to arrest the crisis by adopting various measures to safeguard production and export of cotton textiles and to assure the efficiency of the Cotton Textile Industry.
It was in this context that the Cotton Textiles Fund Ordinance, 1944 ' was promulgated, establishing a `Fund ' for supervising the exports of cloth and yarn and for develop ment of technical education, research and other matters in relation to the Cotton Textile Industry.
The Cotton Textiles Fund Committee which was appointed as the body to perform the various functions imposed under the Ordinance did very useful work during the period from 1945 to 1964 for the improvement of the said industry and so as to enable it to meet the competition of foreign textiles in international market.
The Ordinance, promulgated in 1944 establishing the Cotton Textiles Fund Committee, had provisions to safeguard exports of Cotton Textiles only.
As more and more items of textiles such as wool.
silk, art silk and other man made fibre fabrics and yarn started finding their way into the international market in increasing quantities.
it became necessary for the Government of India to create a homo genous entity to look after and promote the improvement and safeguard for all such textile items.
It was also necessary to take such step in the case of these schemes of the Textile Industry both for improving standards in such industry and because the same were in many ways connected and inter related with the Textile Industry.
Such action and inter relation arose because of the nature of the commodities and because in many cases composite fibres and textiles were produced and many units engaged in production of such synthetics and other materials were also engaged in the Cotton Textile Industry.
Parliament accordingly enacted the (hereinafter referred to as `the Act ') which received the assent of the President on December 3, 1963.
It was PG NO 890 meant to re enact the provisions of the aforesaid Ordinance and to make the same applicable to all textiles including all synthetic fibres i.e. rayon yarn, staple fibre, nylon yarn, man made fibre commonly known as artificial silk.
The avowed object and purpose of the Act, as reflected in the long title, is to provide for the establishment of a Committee for ensuring the.
quality of textiles and textile machinery and for matters connected therewith.
section 2(f) of the Act defines `textile machinery ' to mean the equipment employed directly or indirectly for the processing of textile fibre into yarn and for the manufacture of fabric therefrom by weaving or knitting and to include equipment used either wholly or partly for the finishing, folding or packing of textiles.
section 2(g) defines `textiles '.
This definition as originally enacted read as follows: "2(g).
`Textiles ' means any fabric or cloth or yarn made wholly or in part of cotton, or wool or silk or artificial silk or other fibre.
" By Act No. 51 of 1973, a new definition of `textiles ' was substituted w.e .f.
January 1, 1975 and it reads: "2(.g).
'textiles ' means any fabric or cloth or yarn or garment or and other article made wholly or in part of (i) cotton; or (ii) wool;or (iii) silk;or (iv) artificial silk or other fibre, and includes fibre.
section 3 of the Act provides for establishment of the Textiles Committee by the Central Government.
section 4 deals with the functions of the Committee.
The functions of the Committee as stated in section 4 generally are to ensure by such measures as it thinks fit, standard qualities of textiles both for internal marketing and export purposes and the manufacture and use of standard type of textile machinery.
It reads follows: "4. Functions of the Committee (1).
Subject to the provisions of this Act, the functions of the Committee shall PG NO 891 generally be to ensure by such measures, as it thinks fit, standard qualities of textiles both for internal marketing and export purposes and the manufacture and use of standard type of textile machinery.
(2) without prejudice to the generality of the provisions of sub section (1), the Committee may (a) undertake, assist and encourage, scientific, technological and economic research in textile industry and textile machinery, (b) promote export of textiles and textile machinery and carry on propaganda for that purpose; (c) establish or adopt or recognise standard specifications for (i) textiles, and (ii) packing materials used in the packing of textiles or textile machinery, for the purposes of export and for internal consumption and affix suitable marks on such standardised varieties of textiles and packing materials; (d) specify the type of quality control or inspection which will be applied to textiles or textile machinery; (da) provide for training in the techniques of quality control to be applied to textiles or textile machinery; (e) provide for the inspection and examination of (i) textiles; (ii) textile machinery at any stage of manufacture and also while it is in use at mill heads; (iii) packing materials used in the packing of textiles or textile machinery; (f) establish laboratories and test houses for the testing of textiles; PG NO 892 (g) provide for testing textiles and textile machinery in laboratories and test houses other than those established under clause (f); (h) collect statistic for any of the above mentioned purposes from (i) manufacturers of, and dealers in, textiles; (ii) manufacturers of textile machinery; and (iii) such other persons as may be prescribed; (i) advice on all matters relating to the development of textile industry and the production of textile machinery; (j) provide for such other matters as may be prescribed.
(3) In the discharge of its functions, the Committee shall be bound by such directions as the Central Government may, for reasons to be stated in writing, give to it from time to time.
section 7 of the Act provides for constitution of a Fund called the Textiles Fund.
Fees recovered under the Act form part of this Fund.
The moneys in the Fund are applied for meeting the pay and allowances of the officers and other employees of the Committee and other administrative expenses of the Committee and for carrying out the purposes of the Act.
section 11 confers on the Committee the power of inspection and provides: "(11) Inspection (1) The Committee may, on application made to it or otherwise, direct an officer specially authorised in that behalf to examine the quality of textiles or the suitability of textile machinery for use at the time of manufacture or while in use in a textile mill and submit a report to the Committee.
(2) Subject to any rules made under this Act, such an officer shall have power to (a) inspect any operation carried on in connection with the manufacture of textiles or textile machinery in relation PG NO 893 to which construction particulars, marks or inspection standards have been specified, (b) the samples of any article or of any material or substance used in any article or process in relation to which construction particulars, marks or inspection standards have been specified; (c) exercise such other powers as may be prescribed.
(3) On receipt of the report referred to in sub section (1), the Committee may tender such advice, as it may deem fit to the manufacturer of textiles the manufacturer of textile machinery and the applicant.
" section 12 provides for levy of fees for inspection and examination and reads as follows: "12.
The Committee may levy such fees as may be prescribed (a) for inspection and examination of textiles, (b) for inspection and examination of textile machinery.
(c) for any other services which the Committee may render to the manufacturers of textile and textile machinery: Provided that the Central Government may by notification in the Official Gazette, exempt from the payment of fees, generally or in any particular case.
Any sum payable to the Committee under sub section
(1) may be recovered as an arrear of land revenue." (The section quoted here is as it stood before its amendment by Act 51 of 1973).
section 22(1) confers on the Central Government power to make rules for carrying out the purposes of the Act.
In particular, section 22(2)(e) empower he Central Government to make rules providing "the scale of fees that may be levied for inspection and examination under section 12".
PG NO 894 In exercise of the powers conferred by section 22, the Central Government made the Textiles Committee Rules, 1965.
A levy of fee was introduced for the first time w.e.f. March 1, 1965 by virtue of r. 21 of the Rules.
The Table forming part of r. 21 under which the fee was levied was in these terms: "21.
Fee for inspection, examination and other services rendered by the Committee (1) The Committee may with effect from 1st March, 1965 levy and collect for inspection and examination of textiles and textile machinery specified in col. 2 of the Table below, the fee specified in the corresponding entry in col. 3 of that Table: TABLE: Sl.
Description of textiles Fee No. and textile machinery 1 2 3 1.
Cotton cloth where the average 6 paise for every 100 count of yarn used in the cloth square metres manufactu is less than 355 red.
Cotton cloth where the average 10 paise for every 100 count of yarn used in the cloth square metres manufa is less than 355.
or finer ctured.
Woollen yarn 2 paise per kg.
manufa ctured.
Man made Cellulosic or 2 paise per kg.
manuf non cellulosic filament yarn actured.
Man made cellulosic fibre cut 2 paise per kg.
manuf to staple length actured.
Textile machinery 8 paise per Rs. 100ad valorem on the ex factory price of the machinery manufact ured.
"(2) The Committee may levy and collect, for any other service rendered by it to the manufacturers of textiles and PG NO 895 textile machinery such fee as it may fix with the approval of the Central Government." With effect from the 11th June, 1966, the Table of Fee was revised to reads as under: TABLE Sl.
Description of textiles Fee No. and textile machinery 1 2 3 1.
Cotton cloth where 6 paise for every the average count of metres manufactured.
yarn used in the cloth is less than 35 section 2.
Cotton cloth where 10 paise for every the average count of square metres manu yarn used in the cloth factured.
is 35 or finer.
(a) Woollen yarn 2 paise per kg.
manu (excluding shoddy factured and carpet yarn) (b) Shoody and carpet 1 paise per kg.
manu yarn factured 4.
(a) Man made 2 paise per kg.
manu cellulosic or non factured cellulosic filament yarn (other than nylon filament yarn) (b)Nylon filament yarn 6 paise per kg.
manu factured 5.
(a) Man made 1 paise per kg.
manu cellulosic fibre cut factured to staple length (b) Man made non 2 paise per kg.
manu Cellulosic fibre factured cut to staple length.
Textile machinery 8 paise per Rs. 100 (assembled) ad valorem on the ex factory price of the machinery manu factured PG NO 896 7.
Cotton yarn for 2 paise per kg.
inspected.
export 8.
Natural silk yarn 50 paise per Rs.100 f.o.b.
for fabric for export price of the goods instec ted.
It must be stated here that Act No. 51/73 introduced a new provision section 5A as a result of which a cess has been imposed in place of a fee.
Sub section
(1) provides that there shall be levied and collected as a cess for the purposes of this Act a duty of excise on all textiles and on all textile machinery manufactured in India at such rate, not exceeding 1% ad valorem as the Central Government may, by notification in the Official Gazette, fix.
Proviso thereto interdicts that no such cess shall be levied on textiles manufactured from out of handloom or power loom industry.
Sub section
(2) of section 5A directs that the duty of excise levied under sub section
(1) shall be in addition to any cess or duty leviable on textiles or textile machinery under any other law for the time being in force.
Another change brought about was to delete cl.
(b) of section 12, and cl.
(c) relettered as cl.
(b) and a proviso were inserted, with the word ' special ' inserted in place of the word 'other '.
The new cl.
(b) so inserted is in these terms: (b) for any special service which the Committee may render to the manufacturers or exporters of textiles and textile machinery; Provided that no fees shall be levied in respect of inspection and examination of textiles on which a duty of excise is leviable under this Act: ' All these cases pertain to the period prior to January 1, 1975 i.e. prior to the enactment of Act 51/73.
We are here concerned with the validity of the fee as levied under r. 21 of the Rules and the question is whether the imposition can be justified as a fee.
We have had the benefit of hearing Shri V. M. Tarkunde, learned counsel appearing for the appellant J.K. Cotton Spg.
& Wvg.
Mills Co. Ltd., Shri G.L. Sanghi, learned counsel appearing for the appellant Baroda Rayon Corporation Limited, Shri Vinod Bobde, learned counsel appearing, on behalf of Century Spg. & Mfg. Co. Ltd. and Century Enka Limited, Shri N.K. Khaitan, learned counsel appearing for Sirsilk Limited, Dr. Dhananjaya Chandrachud, learned counsel appearing for Nirlon Synthetics Fibres and Chemicals Ltd. and Garware Nylons Ltd. and Shri Krishna Kumar, learned PG NO 897 counsel for Modipon Limited.
The learned counsel presented their respective points of view with much resource and learning.
On behalf of the appellants and the petitioners, the learned counsel put forth in substance two main contentions, namely: (1) That rayon yarn and nylon yarn manufactured by the writ petitioners before the High Court i.e. appellants and the petitioners before us, are made wholly of filaments and not at all of fibres and therefore are not textiles within the meaning of the definition of `textiles ' as contained in section 2(g) of the Act accordingly are outside the purview of the Act and not liable to payment of any fee in accordance with r. 21 of the Rules as originally framed or as it existed after its amendment w.e.f. June 11, 1966.
And (2) That the Textiles Committee rendered no service to the writ petitioners in respect of their production of rayon yarn and nylon yarn and hence it was not within its competence to levy any fee on them under r. 21 of the Rules.
According to the writ petitioners, in fact they do not need the services of the Committee and the Committee is also not in a position to render any service to them, not having even laid down standard specifications for the manufacture of rayon yarn or nylon yarn.
It was submitted that there was no correlation between the fee charged and the service rendered by the Committee and there is complete absence of the element of quid pro quo, legally essential for levying a fee.
Shri G. Ramaswamy, learned Additional Solicitor General, on the other hand, during his lucid and forceful submissions repelled the arguments.
He submitted that the levy under r. 21 of the Rules was not correlated to the power of inspection which the Textiles Committee had under section 11 of the Act, but was relatable to its power to levy fees under section 12 for the performance of its functions, powers and duties under section 4.
He contended that the avowed object and purpose of the Act as is clear from section 3 was `quality control ' of all textiles, and it would be idle to contend that rayon yarn and nylon yarn which are but species of what is known as man made fibres, otherwise called artificial silk and has a world market, should be outside the purview of the Act.
He cautioned that we have to bear in mind that the Act is not a scientific treatise on organic and inorganic chemistry but is an Act by Parliament for the benefit of the indigenous textile industry so that it may be able to hold its own in a fiercely competitive international market.
He therefore contends that the Act and the words used therein have to be interpreted not on a technological or specialised scientific plane, but in a popular sense as understood by experts in the sphere of the textile industry the commercial world dealing with it.
The learned Additional PG NO 898 Solicitor General questioned the correctness of the decision rendered by the Madhya Pradesh High Court in The Gwalior Rayon Silk Manufacturing (Wvg.) Co. Ltd., Birlagram, Ujjain vs The Textiles Committee, Bombay & Anr., as also its interpretation of the definition of `textiles ' in section 2(g) of the Act prior to its amendment by Act No. 51/73 as not including viscose staple fibre.
According to him, the whole approach of the High Court in Gwalior Rayon 's case in adopting a literal construction of the definition of textiles ' in section 2(g) of the Act prior to its amendment was totally unsupportable.
A literal construction of the definition of `textiles ' in section 2(g) of the Act prior to its amendment, it is said, would lead to a manifest absurdity.
If that view of the Madhya Pradesh High Court were to prevail, it is urged that the whole purpose and object of the Act would be frustrated.
The definition of textiles in section 2(g) prior to its amendment must be given a broad and liberal construction in furtherance of the object and purpose of the Act.
The learned Additional Solicitor General also placed before us a wealth of material showing that a huge infra structure has been built by the Central Government over the years and it has invested crores of rupees to make the establishment of the Textiles Committee under section 3 of the Act meaningful with a view to maintain quality control on all textiles including man made fibres or artificial silk which have a world market.
Finally, the learned Additional Solicitor General strongly relied upon the decision of this Court in Sreeniwasa General Traders & Ors.
vs State of Andhra Pradesh & Ors.
, ; for the submission that the validity of the levy has to be sustained as there is broad co relationship between the imposition of the fee and the nature of the services rendered to the entire textile industry.
We shall deal with the contentions advanced by learned counsel for the appellants and the petitioners in seriatim.
As to the first contention that the rayon yarn and nylon yarn manufactured by the appellants and the petitioners were filaments and not fibres and therefore did not fall within the ambit of the definition of textiles in section 2(g) of the Act prior to its amendment, Shri khaitan who,first argued the case of Sirsilk Limited and more particularly Shri Tarkunde appearing on behalf of J.K. Cotton Spg. & Wvg.
Mills Co. Ltd., followed by Shri Krishna Kumar appearing for Modipon Limited placed strong reliance on scientific and technological material explaining the manufacturing process of rayon yarn and nylon yarn to contradistinguish the same from fibres.
The learned Additional Solicitor General rightly drew our attention to the averments made in paragraph 1 of the writ petitions before the High Court in which each of the appellants and the petitioners has specifically averred that they are manufacturers of rayon, PG NO 899 and submitted that they cannot be heard to say that the product manufactured by them was not rayon made of artificial silk or fibre.
The contention of the learned Additional Solicitor General must prevail.
The averments in paragraph 1 of the writ petitions are more or less the same.
We need only reproduce paragraph 1 of the writ petition filed by Messrs Sirsilk Limited, and it reads: "The petitioners are a Limited Company incorporated under the Indian and are having their Registered office at Himayatnagar, Hyderabad 29.
The Petitioners, inter alia, carry on the business of manufacture of rayon yarn and staple fibre both of which form species of what is popularly known as "man made yarn".
For the purpose of manufacturing the aforesaid yarns, the petitioners have established their factory at Sirpur Kagaznagar.
" To the same effect are the averments made in the writ petitions filed by the appellants M/s. J.K. Cotton Spinning & Weaving Co. Ltd., M/s. Baroda Rayon Corporation Ltd. and M/s. Modipon Ltd. as well as by the petitioners M/s. Century Spinning & Manufacturing Co. Ltd. Century Enka Ltd., M/s. Nirlon Synthetic Fibres & Chemicals Ltd. and M/s. Garware Nylons Ltd. On their own showing, the appellants as well as the petitioners are actually engaged in the manufacture of rayon yarn and nylon yarn both of which they aver are species of what is known as man made fibres .
In view of this undisputed factual position, the contention that rayon yarn and nylon yarn manufactured by them are `filaments ' and not fibre ' or that they are not yarn ' and therefore do not fall within the definition of textiles under section 2(g) of the Act prior to its amendment, cannot be countenanced.
The main thrust of the argument of learned counsel for the appellants and the petitioners that rayon yarn and nylon yarn manufactured by the appellants and the petitioners are not fibres but filaments, stems from the decision of the Madhya Pradesh High Court in The Gwalior Rayon Silk Manufacturing (Wvg.) Co. Ltd., Birlagram, Ujjain vs The Textile Committee, Bombay (supra).
In the decision, the Madhya Pradesh High Court assumes that a fibre in order to answer the description of yarn, in the ordinary commercial sense must be a spun strand meant for use in weaving, knitting or rope making.
It proceeds upon the basis that although viscose staple fibre was manufactured out of fibre but it had to be subjected to various other operations such PG NO 900 as blending, carding, combing or hackling and spinning before fibre could be converted into yarn.
Upon that basis, the Madhya Pradesh High Court held that viscose staple fibre manufactured by the Gwalior Rayon Silk Manufacturing (Wvg.) Co. Ltd. was made wholly of filaments and therefore was not fibre and hence was not yarn and accordingly did not fall within the meaning of the expression textiles as defined in section 2(g) of the Act.
We are afraid, we cannot accept this line of reasoning.
The Madhya Pradesh High Court was clearly wrong in giving to the expression 'textiles ' in section 2(g) of the Act a narrow and restricted meaning.
The reasoning of the Madhya Pradesh High Court is best stated in the words of G.P. Singh, CJ.
speaking for himself and C.P. Sen, J: "According to this definition, textiles meant "any fabric or cloth or yarn made wholly or in part of cotton, or wool or silk, or artificial silk or other fibre".
The use of the word `means ' in the definition gives rise to the inference of its being restrictive and exhaustive.
Further, it is clear that what was embraced by the definition before 1st January 1975 was any fabric or cloth or yarn and not any fibre.
The definition made a distinction between yarn and fibre.
The same distinction appears in Section 2(f) in the definition of `textile machinery ' which expression is defined to mean the equipment employed "for the processing of textile fibre into yarn . ".
The Act does not contain any definition of 'yarn ' and hence it has to be understood in its ordinary sense to mean 'any fibre, or wool, silk, flax, cotton, nylon etc.
spun into strands for weaving, knitting or making thread".
[Webster 's New World Dictionary].
" The learned Chief Justice then added: "A fibre in order to answer the description of `yarn ' in the ordinary commercial sense must be a spun strand meant for use in weaving, knitting or rope making Commr.
of Sales Tax U.P. vs Sarin Textile Mills, ; at p. 1263.
It is true that yarn is manufactured out of fibre but various operations such as blending, carding, combing or hackling and spinning have to be performed for converting fibre into ' yarn (See the New Encyclopaedia Britannica, 15th Edition, Vol. 18, p. 173.)" PG NO 901 There was no explicable reason for the legislature to have excluded rayon yarn and nylon yarn from the purview of the definition of textiles in section 2(g) of the Act prior to its amendment.
The expression `textiles ' has been defined in section 2(g) of the Act in a way as to include not only yarn but also man made fibres or artificial silk.
In the premises, the expression `textiles ' as defined in section 2(g) of the Act has to be given a broad and liberal construction, in furtherance of the purpose and object of the Act.
The Madhya Pradesh High Court was clearly in error in construing the expression `textiles ' as defined in section 2(g) of the Act, prior to its amendment in a narrow and restricted sense.
The particular words used by the legislature i.e. the terms `yarn, man made fibres, otherwise known as artificial silk ' had to be understood according to the common commercial understanding of the terms used, and not in their scientific or technical sense.
The High Court failed to bear in mind that the Act is not a scientific treatise on organic or inorganic chemistry but is an enactment by the Parliament for the benefit of the indigenous textile industry, so that it may be able to hold its own in a fiercely competitive international market.
In these circumstances, the Act and the words used therein have to be interpreted not on a technological or specialised scientific plane but in the popular sense as understood by experts in the sphere of the textile industry and the commercial world dealing with it.
We find no discernible reason for Parliament to have left out man made fibres like viscose staple fit re.
rayon yarn and nylon yarn from the purview of the definition of textiles in section 2(g) of the Act prior to its amendment particularly when synthetic fibres have a world market and India has entered into competitive international trade in all textiles in a large way.
We were referred to several Encyclopaedias, authoritative treatises, text books and hand books viz., Encyclopaedia Britannica, both Micropaedia and the 15th Edn., `Textile Terms and Definitions ', 5th Edn.
published by the Textile Institute, Manchester in 1963, 1968 Book of American Society for Testing and Materials, Part 24, Mercury Dictionary of Textile Terms, Standard Handbook of Textiles by A.J. Hall, Handbook of Textile Fibres, 4th Edn.
by J. Gordon Cook, Manmade Fibres by Mark Atlas and Cernia, Vol. 2, Textile Fibres by Mathews, 6th Edn.
and Survey of Man made Fibre Industry by Dr. A.S. Kapur.
These Encyclopaedias and technological books contain a wealth of information collected by knowledgeable, and distinguished men who have acquired distinction in their own spheres of academic and are made use of not only by our own Courts but by Courts of PG NO 902 other countries where English language is in vogue.
The words `fibre ' and `filament ' are not defined either in the Act or the Rules thereunder.
The meaning assigned to `fibre ' in Webster 's New Twentieth Century Dictionary of English Language, 2nd Edn.
is a "filament and thread like part of a substance as a filament of spun glass, wool, or hornblende".
Even a `filament ', according to this Dictionary, consequently constitutes `fibre '.
`Artificial silk ', according to the Oxford Concise Dictionary, 6th Edn., 1976 means rayon.
In Encyclopaedia Britannica 14th Edn.
Vol. 7, p. 257 under the heading `Fibres, Man made ', the following passage occurs: "Man made fibre consists of two broad grounds, based upon the origin of the fibre forming substance.
The first group, of which rayon and acedate are examples, are produced by modifying natural fibre forming materials such as cellulose.
The second group, frequently called synthetics and including such fibres as nylon and polyester, are produced from synthetic chemicals . . " Again there occurs a passage at p. 260 of the same volume in the following terms: "In man made fibres, the importance of rayon is similar to that of cotton among the natural fibres.
" Under the heading Synthetic fibres" sub heading "Polyamide fibres ' ' at p. 263 it is stated: "Polyamides are polymers, or chain like structure of linked molecular units, containing recurring amide groups as integral parts of the main polymer chains.
Synthetic polyamide fibres form nylon, a major textile fibre.
" In Encyclopaedia Britannica, Vol. 18 under the heading "Development of the textile industry" sub heading production of yarn ', at p. 172, we notice the following passage: "Yarn is a strand composed of fibres, filaments (individual fibres of extreme length), or other materials, either natural or man made, suitable for use in the construction of interlaced fabrics.
such as woven or knitted types.
" PG NO 903 This passage again indicates that in the textile industry `filaments ' are treated as individual fibres of extreme length.
Similarly, in Chamber 's Encyclopaedia, Vol. 5 at p. 613, the term `fibre ' is explained thus: "Fibre, a term used for a thread like element of animal or vegetable tissue . .and any thread or filament used in the manufacture of textile materials.
The range of fibres used for making fabrics was restricted to naturally occurring substances until the introduction of man made fibres.
These include regenerated fibres, such as those made from cellulose, and truly synthetic fibres, such as nylon, Terylene, and Courtelle.
" At p. 616 of the same volume under the heading "Artificial Fibres", it is stated: "Artificial fibres can be divided into two main groups; regenerated and synthetic.
In the first class a further sub division can be made between fibres made from regenerated cellulose, i.e. viscose, acetate and cuprammonium protein such as Fibrolane.
Fibres in the second class are strictly synthetic in the sense that they are built up from simple chemical compounds into the complex molecular structure required.
They are classified according to their chemical composition: polyamides (nylon and perlorn) . .
In Encyclopaedia Britannica, Micropaedia, Vol.
VIII at P. 442 under the heading `rayon ' the following passage occurs: "Rayon, generic term for man made textile fibre produced from the plant substance cellulose.
Developed in an attempt to produce silk chemically, the fibre was originally known by such terms as artificial silk and wood silk, but in 1924 it was given the coined name rayon.
Anitrocellulose type, first produced commercially in France in 1891 in the form of a nitrocellulose fibre, it was later discontinued because of its high flammability.
Rayon is described as a re generated fibre because the cellulose is converted to a liquid compound and then back to cellulose in the form of fibre.
The cellulose, obtained from soft woods or from the short fibres adhering to cotton seeds (linters), is chemically PG NO 904 treated to form a solution that is forced through tiny holes in a nozzle (spinnerets).
This process of forcing a solution through spinneret holes is called spinning; the same term is applied to the production of yarn by twisting together fibres that may be of natural man made origin.
Emerging in the form of filament, a fibre of great length, the rayon is hardened by drying in air or by chemical means.
The filament is sometimes out into shorter pieces having uniform length, called staple, and twisted together to make yarn.
(Emphasis supplied) The passages quoted above clearly show that even in the sphere of textile technology distinction between `fibre ' and `filament ' has reached a vanishing point.
They further show that both nylon and rayon are `artificial silk ' yarn in contra distinction to genuine silk.
We accordingly uphold the view expressed by the High Courts of Allahabad, Andhra Pradesh, Gujarat and Madras and hold that rayon and nylon yarn are not only made of 'other fibre ' but are also yarn of `artificial silk ' within the meaning of section 2(g) of the Act.
The view to the contrary by the Madhya Pradesh High Court does not lay down correct law.
Other considerations lead us to the same conclusion.
The Industries (Development and Regulation) Act, 1951 enacted by Parliament received the assent of the President on October 31, 1951.
In the Statement of Objects and Reasons appended to the Bill which became the Act.
it is stated: "The Bill brings under Central control the development and regulation of a number of important industries, the activities of which affect the country as a whole and the development of which must be governed by economic factors of all India import .
The Bill confers on Government power to make rules for the registration of existing undertakings, for regulating the production and development of the industries in the Schedule and for consultation with Provincial Governments on these matters.
" The First Schedule of this Act sets out the various industries which it declared that it was expedient in the public interest that the Union should take under its control.
(7) of Item No. 19 which bears the heading "Chemicals (other than Fertilisers)" is "man made fibres including regenerated cellulose rayon, nylon and the like." Cl.
(5) of Item No. 23 which bears the heading "Textiles (including those dyed, printed or otherwise processed)" is "made wholly or in part of synthetic, artificial (man made) PG NO 905 fibres, including yarn and hosiery of such fibres." This Parliamentary Act thus treats rayon as well as nylon as textiles made of artificial (man made) fibres.
The Industries (Development and Regulation) Act, 1951, and the , with which we are concerned, may properly be considered to be statutes in pari materia.
According to Sutherland: "Statutes are considered to be in pari materia to pertain to the same subject matter when they relate to the same person or things, or to the same class of persons or thing, or have the same purpose or object (Statutes and Statutory Construction, Vol. 2, p. 535, 3rd Edn. )" The object of either of these two Acts is to protect and to assist in the development of Textile Industry inter alia.
"Assistance in ascertaining the meaning of an enactment may be obtained by comparing is language with that used in earlier statutes relating to the same subject" (Craies on Statute Law, P. 140, 1971 Edn.) Maxwell also in "The Interpretation of Statutes" ( 1976 Edn.
p. 66) states that: "light may be thrown on the meaning of a phrase in a statute by reference to a specific phrase in an earlier statute dealing with the same subject matter.
" The Industries (Development and Regulation) Act, 1951 is an Act earlier in point of time and we see no reason why if a subsequent statute by the same Legislature can be pressed in aid for the purpose of interpretating in the event of any doubt, the provisions of an earlier statute, the earlier statute cannot be made use of for the purpose of construing, in the event of ambiguity, the provisions of a later statute.
For all these reasons the contention that rayon yarn and nylon yarn manufactured by the appellants and the petitioners are made wholly of filaments and not of fibres and therefore did not come within the purview of textiles as defined in section 2(g) of the Act prior to its amendment and therefore they were not liable for payment of the fee levied under r. 21 of the Rules, cannot prevail.
The various activities undertaken by the Textiles Committee for the development of the textile industry and the promotion of textile exports which have expanded considerably, and the duties entrusted to the Committee to ensure the quality of all textiles whether made wholly or partly of cotton wool, silk, artificial fibre or silk, particularly when Indian Textiles by and large and artificial silk or man made fibres like rayon yarn, viscose staple fibres and nylon yarn as well as fabrics made of artificial silk, are facing ever increasing competition in PG NO 906 the international market from other exporting countries like Japan, China etc.
and the production and export of textiles having substantially increased, the legislature thought it necessary to make adequate provision and accordingly created a Textiles Fund under section 7 of the Act to meet the expenditure of the Textiles Committee which necessarily has to be on a larger scale.
At the time when the Textiles Committee was established under section 3, the legislature accordingly provided for the establishment of a Textiles Fund constituted under section 7 of the Act from out of which the expenditure of the Committee has to be defrayed.
Sub section
( 1) of section 7 provides that the Committee shall have a Fund to be called the Textiles Fund and there shall be credited thereto various items specified in cls.
(a) to (d), apart from all the moneys standing to the credit of the Cotton Textiles Fund established under the repealed Ordinance, immediately before the date on which the Textiles Committee came to be established, which by virtue of section 24(2)(a) stood transferred to and formed part of the Textiles Fund, and such sums of money as the Central Government after due appropriation made by Parliament in that behalf, pays to the Committee in each financial year by way of grant, loan or otherwise for purposes of enabling the Committee to discharge its functions under the Act.
There are only two other sources of income.
One of the main sources of revenue, as indicated in cl.
(c), is the income derived from the levy of the fee under r. 21 of the Rules, and the other that indicated in cl.
(d) viz. all moneys received by the Committee by way of grant, gift, donation, contribution, transfer or otherwise.
After the imposition of the duty of excise as a cess by section 5A of the Act introduced by Act No. 51/73, the income derived from such cess becomes another source.
Sub section
(2) of section 7 provides that the moneys in the Fund shall be applied for (a) meeting the pay and allowances of the officers and other employees of the Committee and administrative expenses of the Committee, and (b) carrying out the purposes of the Act.
Sub section
(3) of section 7 provides that all moneys in the Fund shall be deposited in the State Bank of India or be invested in such securities, as may be approved by the Central Government.
From these provisions, it is amply clear that all the income derived from the levy of the fee under r. 21 of the Rules has to be credited to the Textiles Fund and the said income is utilised in defraying the expenditure of the Textiles Committee in carrying on its manifold duties.
No part of the fee levied under r. 21 goes into the Consolidated Fund of India.
It is only by section 5F introduced by Act No. 51/73 which provides that proceeds of the duty of excise collected under section 5A reduced by the cost of collection as determined by the Central Government, shall PG NO 907 first be credited to the Consolidated Fund of India and the Central Government may, after due appropriation made by Parliament by law, pay to the Committee from out of such proceeds, such sums of money as it thinks fit for being utilised for the purposes of the Act.
We are not here concerned with the duty of excise recovered as a cess under section 5A but only with the question whether levy of the fee under r. 21 is sustainable as a fee.
That is to say, whether there is sufficient quid pro quo between the levy of the fee and the services rendered.
It has not been suggested that any part of the fees levied under r. 21 can be diverted to any other purpose.
When the entire proceeds of the fee are utilised in financing the various projects undertaken by the Textiles Committee, as also the inspection of all textiles including man made fibres and textile machinery, the appellants cannot be heard to say that there is no reasonable and sufficient correlation between the levy of the fee and the services rendered.
The learned Additional Solicitor General drew our attention to the various averments made in the counter affidavit filed on behalf of the Textiles Committee as well as the Government of India showing the extent of income from the fee levied under r. 21 and the expenditure of Textiles Committee in each financial year.
From the material on record it is amply clear that the levy of the fee under r. 21 is not commensurate with the expenditure incurred by the Textile Committee.
It is not in dispute that the Textiles Committee has over the years built up a huge infrastructure and the Central Government has spent crores of rupees to make the legislation effective and meaningful and to bring about an overall improvement in the quality and standard of the textiles including man made fibres or artificial silk so that our country may continue to retain its rightful place in the world market in a fiercely competitive international trade.
For a proper appreciation of the point involved, it is necessary to set down the activities of the Committee in discharge of its functions conferred upon it by section 4 of the Act.
The Committee with a view to maintaining and stepping up the export of Indian Textiles, has introduced a number of pre shipment inspection schemes covering a wide range of textiles to ensure that only quality textiles and yarns are exported from India.
Inspection and certification of Art Silk and Wollen Textiles have also been undertaken by the Committee in pursuance of various Export Incentive Schemes introduced by the Government from time to time.
The Committee has set up an Inspectorate with a large technical staff qualified in the various disciplines of textile technology.
The Inspectorate has carried out inspection of various types of textiles large quantities.
Inspection of mill made cotton cloth and mill made cloth yarn has been PG NO 908 made compulsory and export thereof without a certificate issued by the Committee has been banned.
In order to carry out the inspection as expeditiously and smoothly as possible, the Committee besides its head office at Bombay has established its regional offices at fourteen different textile centres, namely, at Ahmedabad, Amritsar, Bangalore, Calcutta, Coimbatore, Indore, Kanpur, Ludhiana, Madras, Madurai, Nagpur, New Delhi, Sholapur and Surat.
Besides these, wherever necessary, the Committee staff are also attached to the textile mills at other places to render immediate service to the mills and exporters on the spot.
The learned Additional Solicitor General placed before us the counter affidavit of Shri C.G. Shivdasani, Acting Secretary of the Textiles Committee.
It is averred under the heading 'Inspection ' that for ensuring standard qualities of textiles and to satisfy that they have the characteristics necessary for satisfactory performance, necessary tests such as identification of fibres, fibre composition, fibre finances, shrinkage, chemical degradation, resistance to milldew and fungus etc.
are carried out quite often by the Committee.
A statement showing the income and expenditure of the Textiles Committee for the period commencing from March l, 1965 and ending with March 31, 1971 as well as the estimated budget for the years 1971 72 to 1973 74 are set out to verify the ratio between the fee collected and the expenditure incurred for achieving the object and purpose of the Act.
The statements are as detailed below: EXPENDITURE AND FEES REALISED DURING THE PERIOD FROM 1.3.1965 T O 31.3.71 Accounting Revenue Capital Market Fees Year Expenditure Expenditure Research Realised on Inspectorate.
on Inspectorate.
March 1965 00.89 lakhs lakhs 0.08 lakhs lakhs 1965 66 17.71" 0.64 " 2.00" 21.90" 1966 67 23.05" 1.28" 2.32" 44.00" 1967 68 24.29" 0.91" 2.05" 30.38" 1968 69 24.73" 0.60" 2.66" 34.79" 1969 70 28.95" 1.87" 3.82" 32.39" 1970 71 34.62" 3.14" 4.55" 29.79" Total: 154.24" 8.44" 17.48" 193.25" PG NO 909 STATEMENT SHOWING THE ESTIMATED REVENUE AND CAPITAL EXPENDITURE AND REVENUE FOR THE YEARS 1971 72 TO 1973 74 Year Estimated Revenue Capital Expenditure Estimated Expenditure on on Inspectorate Fees Inspectorate.
Realisable 1971 72(RE) 37.35 lakhs 22.66 lakhs 53.35 lakhs 1972 73(BE) 43.78" 19.93" 53.76" 1973 74 52.00" 30.00" 55.00" Total 133.13 " 72.59" 162.11" Under the heading `Collection of Fees ', the necessary averments are there showing that the entire amount of fees levied and collected under r. 21 of the Rules is utilised in meeting the expenses of the Committee on account of pay and allowances of the officers and other employees of the Committee and for carrying out the purposes of the Act.
The following is the table showing the fees realisable, fees actually realised and the total expenditure of the Inspectorate during the period from April 1, 1965 to March 31, 1971: Period Fees Fees Total Expenditure on the Realisable Realised Inspectorate, (in lakhs) 1.3.65 to 31.3.71 Rs.290.51 Rs.193.25 Revenue Rs.154.24 Capital Rs.8.44 Total Rs.162.68 (Actuals) 1.4.71 to 31.3.72 Rs.53.35 Rs.31.03 Revenue Rs.37.35 Capital Rs.22.66 Total Rs.60.61 (Revised Estimate) 1.4.72 to 31.3.72 Rs. 53.76 Rs.31.00 Revenue Rs.43.73 (Estimated) Capital Rs.19.93 Total Rs.63.71 (Budget Estimates) Total Rs.397.62 Rs.255.28 Rs.286.40 PG NO 910 On these facts, there is no doubt whatever that the entire proceeds of the amount collected by way of fee under r. 21 of the Rules are spent in carrying on the functions of the Textiles Committee.
It cannot be doubted that the activities of the Committee in furtherance of the object and purpose of the Act are to ensure the quality of all textiles whether made wholly or partly of cotton, wool, silk, artificial fibre or silk.
The functions of the Committee should generally be to ensure standard qualities of textiles for internal as well as external marketing and manufacture and use of standard type of textile machinery.
The grievance of the appellants and the petitioners that there is no inspection of the rayon yarn and nylon yarn manufactured by them at the stage of production is belied by the fact that there is pre shipment inspection of the fabrics manufactured from such fibres for export.
The provision for the levy of fees for inspection and examination of textiles under section 12(1)(a) of the Act or the levy of the fee under r. 21 of the Rules cannot be challenged on the ground that there is no reasonable relationship between the levy of the fee and the services rendered by the Committee to the entire textile industry to which the appellants and the petitioners before us owning large textile mills belong.
When the levy of the fee is for the benefit of the entire textile industry, there is sufficient quid pro quo between the levy recovered from the appellants and the petitioners and the services rendered to the industry as a whole.
In the premises, the principles laid down by this Court in Sreeniwasa General Traders are clearly attracted.
One of us (Sen, J.) speaking for the Court had observed: "The traditional view that there must be actual quid pro quo for a fee has undergone a sea change in the subsequent decisions.
The distinction between a tax and a fee lies primarily in the fact that a tax is levied as part of a common burden, while a fee is for payment of a specific benefit or privilege although the special advantage is secondary to the primary motive of regulation in public interest.
If the element of revenue for general purpose of the State predominates, the levy becomes a tax.
In regard to fees there is, and must always be, correlation between the fee collected and the service intended to be rendered.
In determining whether a livy is a fee, the true test must be whether its primary and essential purpose is to render specific services to a specified area or class; it may be of no consequence that the State may ultimately and indirectly be benefitted by it.
The power of any legislature to levy a fee is conditioned by the fact that it must be by and large PG NO 911 a quid pro quo for the services rendered.
However, correlationship between the levy and the services rendered or expected is one of general character and not of mathematical exactitude.
All that is necessary is that there should be a "reasonable relationship" between the levy of the fee and the services rendered.
If authority is needed for this proposition, it is to be found in the several decisions of this Court drawing a distinction between a `tax ' and a `fee '.
See The Commissioner, Hindu Religious Edowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt ; ; H.H. Sudhundra Thirtha Swamiar vs Commissioner for Hindu Religious and Charitable Endowments, Mysore, [1963] Suppl.
2 SCR 302; The Hingir Rampur Coal Co. Ltd. vs State of Orissa, ; ; H.H. Shri Swamiji of Shri Admar Mutt vs Commissioner Hindu Religious and Charitable Endowments Department, ; ; South Pharmaceuticals and Chemicals, Trichur vs State of Kerala, ; and Municipal Corporation of Delhi vs Mohd. Yasin, [l963] 2 SCR 999.
There is no generic difference between a tax and a free.
Both are compulsory exactions of money by public authorities.
Compulsion lies in the fact that payment is enforceable by law against a person in spite of his unwillingness or want of consent.
A levy in the nature of a fee does not cease to he of that character merely because there is an element of compulsion or coerciveness present in it.
nor is it a postulate of a fee that it must have direct relation to the actual service rendered by the authority to each individual who obtains the benefit of the service.
It is now increasingly realised that merely because the collections for the services rendered or grant of a privilege or licence are taken to the consolidated fund of the State and not separately appropriated towards the expenditure for rendering the service is not by itself decisive.
Presumably, the attention of the Court in the Shirur Mutt case was not drawn to Article 226 of the Constitution.
The Constitution nowhere contemplates it to be an essential element of fee that it should be credited to a separate fund and not to the consolidated fund.
It is also increasingly realised that the element of quid pro quo in the strict sense is not always a sine qua non for a fee.
It is needless to stress that the element of quid pro quo is not necessarily absent in every tax.
" PG NO 912 See also M/s. Amar Nath Om Prakash & Ors.
vs State of Punjab & Ors.
, ; ; City Corporation of Calicut vs Thachambalath Sadalinan & Ors., ; I.T.C. Ltd. & Ors.
vs State of Karnataka & Ors., (per Fazal Ali & Mukharji, JJ) ( 1985) SUPP1.
SCR 476 and Om Parkash Agarwal & Ors.
vs Giri Raj Kishori & Ors., ; Viewed from this perspective, the conclusion is inevitable that the levy of the fee under r. 21 of the Textiles Committee Rules, 1965 by the Textiles Committee under sub section
(1) of section 12 of the is valid and constitutionally permissible.
All the appeals and connected writ petitions filed by the textile mills in India must fail and are dismissed with costs.
Civil appeal No. 1281 of 1973 preferred by the Textile Committee, Bombay against the judgment and order of the Kerala High Court dated March 3, 1979, is however allowed and the writ petition filed by the respondent, M/s. Travancore Rayons Limited is dismissed with costs.
| Seven persons were convicted under sections 307/149, 325/l49, 3231/149 and 148 IPC and sentenced to undergo R.Z. from one year to three years.
The High Court acquitted two of all charges, and five of the offence under section 307/149 while maintaining their conviction and sentence under section 325/149, section 323/149 and section 148.
They were however released on probation of good conduct.
Each one of them was ordered to pay compensation of Rs. 2,500 to Joginder who was seriously injured and whose power of speech was permanently impaired.
Before this Court the appellant contended that the intention of the five accused was obviously to commit murder of Joginder and their acquittal under section 3O7 IPC was perverse.
Disposing of the appeal, it was, HELD: (1) Under section 307 IPC what the Court has to see is whether the act irrespective of its result, was done with the intention or knowledge and under circumstances mentioned in that section.
The intention or knowledge must be such as is necessary to constitute murder.
Without this ingredient being established there can be no offence of"attempt to murder".
Under section 307 the intention precedes the act attributed to accused.
Therefore, the intention is to be gathered from all circumstances, and not merely from the consequences that ensue.
In this case, the respondents had no intention to commit murder.
They had no motive either.
[575F G] PG NO 571 PG NO 572 (2) Many offenders are not dangerous criminals but are weak characters or who have surrendered to temptation or provocation.
In placing such type of offenders on probation the Court encourages their own sense of responsibility for their future and protects them from the stigma and possible contamination of prison.
[576C D] (3) In this case, the High Court has observed that there was no previous history of enmity between the parties and the occurrence was an outcome of a sudden flare up.
The accused had no intention to commit murder of any person.
Therefore, the extension of benefit of the beneficial legislation applicable to first offenders cannot be said to be inappropriate.
l576D E] (4) Section 357 empowers the Court to award compensation to victims while passing judgment of conviction.
This power of Courts to award compensation to victims is not ancillary to other sentences but it is in addition thereto.
This power is intended to do something to reassure the victim that he or she is not forgotten in the criminal justice system.
It is recommended to all Courts to exercise this power liberally so as to meet the ends of justice in a better way.
[577F H] (5) The payment by way of compensation must be reasonable.
What is reasonable may depend upon the facts and circumstances of each case, e.g. the nature of crime, the justness of claim by the victim and the ability of the accused to pay etc.
On these considerations the Court enhanced the compensation to Rs. 50,000.
[578A B]
|
Civil Appeal No. 860 of 1973.
From the judgment and order dated the 1st September, 1972 of the Andhra Pradesh High Court at Hyderabad in R.C. No. 10 of 1971.
AND Civil Appeal No. 1614 (NT) of 1978.
Appeal by Special Leave from the judgment and order dated the 26th July, 1976 of the Calcutta High Court in l.
T. Reference No.454 of 1974.
AND Review Petition No. 57 of 1980.
795 IN Special Leave Petition (Civil) No. 4602 of 1977 From the judgment and order dated the 11th June, 1974 of the Calcutta High Court in I.T. Reference No. 195 of 1969.
AND Tax Reference Case Nos. 2 and 3 of 1977.
Income tax Reference under section 257 of the Income tax Act, 1961 drawn up by the Income tax Appellate Tribunal, Bombay Bench 'B ' in R.A. Nos. 1223 and 1224 (Bom.) of 1972 73 (I.T. A. Nos. 24 and 25 (Bom.) of 1971 72.
AND Tax Reference Case No. S of 1978.
Income Tax Reference under section 257 of the Income Tax Act, 1961 made by the Income Tax Appellate Tribunal, Bombay Bench "D" in R.A. No. 225 (Bom.) of 1977 78 arising out of S.T.A.No. 36 (Bombay) 1 1976 77.
A. Subbarao and Y.V. Anjaneyulu for the appellant in Civil Appeal No. 860/73.
E V.S. Desai, Dr. Debi Pal, Praveen Kumar and Anil Kumar Sharma for the Appellant in C.A. 1614 of 1978 and for the Petitioner in Review Petition No. 57/80.
K.G. Haji and R.J. John for the Appellant in Tax Reference Case Nos. 2 and 3 of 1977.
S.E. Dastur, S.N. Talwar and R.J. John for the Appellant in Tax Reference Case No. 5 of 1978.
S.T. Desai, J. Ramamurthi and Miss A. Subhashini for the Respondent in Civil Appeal No. 860/73.
Miss A. Subhashini for the Respondent in Civil Appeal No.1614 of 1978 S.C. Manehanda and Miss A. Subhashini for the Respondent in Tax Reference Nos. 2 and 3 of 1977.
796 S.C. Manchanda, Anil Dev Singh and Miss A. Subhashini for the Respondent in Tax Reference Case No. 5/1978.
S P. Mehta and K.J. John for the Intervener.
Dr. Debi Paul and K.J. John for the Intervener in Tax Reference Case No. 5/1978.
The following Judgments were delivered: TULZAPUKKAR, J.
In these Civil Appeals and Tax Reference Cases certain common questions of law arise for our determination and hence all these are disposed of by this common judgment.
The common questions raised are whether amounts retained or appropriated or set apart by the concerned assessee company by way of making provision (a) for taxation, (b) for retirement gratuity and (c) for proposed dividends from out of profits and other surpluses could be considered as "other reserves" within the meaning of Rule I of the Second Schedule to the (or Rule 1 of the Second Schedule to the Company 's (Profits) Sur tax Act, 1964) for inclusion in capital computation of the Company for the purpose of levying super profit tax ? The first three matters concerning Vazir Sultan Tobacco Co. Ltd; Hyderabad, Ballarpur lndustries, Ltd; and M/s. Bengal Paper Mills Co. Ltd; Calcutta arise under the while the the Tax Reference Cases concerning M/s. Echjay Industries Pvt. Ltd. and Hyco Products Pvt.
Ltd. Bombay arise under the Companies (Profits) Sur tax Act.1 964.
Since Civil Appeal No. 860 of 1973 (Vazir Sultan Tobacco Company 's case) is comprehensive and comprises all the three items of appropriation it will be sufficient if the facts in this case are set out in detail so as to understand how the questions for determination arise in these matters.
Vazir Sultan Tobacco Co. Ltd. was an assessee under the Super (Profits) Tax Act, 1963.
For the assess ment year 1963 64, for which the relevant accounting period was the year which ended 30th September, 1962, for computing the chargeable profits of that year for the purpose of levy of super profits tax under the Act, the assessee company claimed that the appropriations of a) Rs. 33,68,360 for taxation, (b) Rs. 9,08,106 for retirement gratuity and (c) Rs. 18,41,820 for dividends (all of which items were shown under the heading 'current liabilities and provisions ' in the concerned balance sheet as at 30th Sept. 1962) should be regar 797 ded as "other reserves" within the meaning of Rule 1 of Second A Schedule to the Act and be included while determining its capital.
The Super Profits Tax officer rejected the assessee 's contention as in his opinion all these items were "provisions ' and not "reserves" and as such these had to be ignored or excluded from the capital computation of the assessee company and on that basis he determined the capital, and the standard deduction and levied super profits tax on that portion of the chargeable profits of the previous year which exceeded the standard deduction.
In the appeal preferred by the assessee company against the assessment, the Appellate Commissioner upheld the assessee 's contentions and held that those items were "reserves" and took them into account while computing the capital of the assessee company.
In the further appeal prefer red by the Super Tax officer, the Income Tax Appellate Tribunal accepted the Department 's contention and held that these were not "reserves" within the meaning of Rule I of the Second Schedule to the Act and as such these could not enter into capital computation of the assessee company.
In the Reference that was made under section 256(1) of the Income Tax Act, 1961 read with section 10 of the at the instance of the assessee company the following question of law was referred to the Andhra Pradesh High Court for its opinion: "Whether on the facts and in the circumstances of the case the provisions (a) for taxation Rs. 33,68,360, (b) for retirement gratuity Rs. 9,08,106 and (c) for dividends Rs. 18,41,820, could be treated as 'reserves ' for computing the capital for the purpose of super profits tax under Second Schedule to the for the assessment year 1963 64 ?" F The High Court on a consideration of several authorities answered the question in respect of the three items in favour of the Revenue and against the assessee company and held that the three sums so set apart by the assessee company in its balance sheet were not "reserves" and had to be excluded in the computation of its capital for the purpose of levying super profits tax payable on the chargeable profits tor the relevant accounting year.
It is this view of the High Court that is being challenged by the assessee company in the Civil Appeal No. 86() of 1973 before us.
In Civil Appeal No. 1614/1978 (Ballarpur Industries Ltd ) and Review Petition No. 57 of 1980 (M/s. Bengal Paper Mills Co. Ltd.) 798 We are concerned with only two items of appropriation being (a) provision for taxation and (b) provision for proposed dividend and in each one of these cases the Calcutta High Court had taken the view that these two items do not constitute "reserves" and as such have to be ignored while computing the capital of the assessee company.
In Tax Reference Case Nos. 2 and 3 of 1977 (M/s Echjay Industries Pvt.
Ltd.) a case under , we are concerned with two items of appropriation being (a) provision for taxation (b) provision for proposed dividend for the two assessment years 1969 70 and 1970 71 and in each of the years the Taxing Authorities as also the Income Tax Appellate Tribunal Bombay have taken the view that these appropriations did not constitute "other reserves" within the meaning of Rule I of the Second Schedule to the Companies (Profit) Surtax Act, 1954 and as such were not includible in the capital computation of the assessee company but in view of a divergence of opinion between the different High Courts on the point, the Tribunal has at the instance of the assessee company made a direct Reference to this Court under section 257 of the Income Tax Act, 1961 read with section 18 of the .
In Tax Reference Case No. 5 of 1978 (Hyco Products Pvt.
Ltd.) also a case under the same question pertaining to dividend alone but in a different form arose for consideration before the Taxing Authorities and the Income Tax Appellate Tribunal.
It was not a case of 'proposed dividend ' but the assessee company after transferring Rs. 29,77,000 out of the current year 's profit amounting to Rs. 61,03,382 to General Reserves, paid out of Rs. 3,10,450 as dividend to its share holders from such augmented General Reserves and the question was whether while computing the capital of the assessee company for the purpose of levy of surtax the General Reserves should or should not be reduced by the aforesaid sum of Rs. 3,10,450 ? In other words, the question was whether the amount of Rs. 3,10,450 could not form part of the General Reserves on the relevant date (being 1.1.
1973) for the computation of the capital ? The Taxing Authorities as well as the Appellate Tribunal Bombay held that the said amount of Rs. 3,10,450 had to be ignored for the purpose of computation of capital for surtax purposes because it was not a reserve.
The assessee company has challenged this view of the Tribunal before us in this direct Reference made to this Court under section 257 of the 799 Income Tax Act, 1961 read with section 18 of the Companies ' (Profits) A Surtax Act, 1964.
It may be stated that the scheme and the main provisions of the two concerned enactments are almost identical, the object of both these enactments being the imposition of a special tax on excess profits earned by companies.
Under Section 4 of the 1963 Act, which is the charging provision, there shall be charged on every company for every assessment year commencing on and from 1st April, 1963, a tax, called the super profits tax, in respect of so much of its "chargeable profits" of the previous year as exceed the "standard deduction" at the rate or rates specified in the Third Schedule.
Section 2(5) defines the expression "chargeable profits" to mean the total income of an assessee computed under the Income Tax Act, 1961, for any previous year and adjusted in accordance with the provisions of First Schedule, while Section 2(9) defines the expression "standard deduction" to mean an amount equal to six per cent of the capital of company as computed in accordance with the provisions of the Second Schedule, or an amount of Rs. 50,000 whichever is greater.
In order to D determine "standard deduction" it becomes necessary to compute capital of the company in accordance with the rules laid down in the Second Schedule and rule 1 is relevant for our purposes, the material portion whereof runs as follows: "1.
Subject to the other provisions contained in this Schedule, the capital of a company shall be the sum of the amounts, as on the first day of the previous year relevant to the assessment year, of its paid up share capital and of its reserve, if any, credited under the proviso (b) to Clause (vi b) of sub section (2! of sec.
10 of the Indian Income Tax Act, 1922 or under sub section (3) of sec.
34 of the Income Tax Act, 1961, and of its other reserves in so far as the amounts credited to such other reserves have not been allowed in computing its profits for the purposes of the Indian Income Tax Act, 1922 or the Income Tax Act, 1961 . " It will be clear from the aforesaid provision of rule 1 that before any amount or sum qualifies for inclusion in capital computation of a company two conditions are required to be fulfilled (a) that the amount or sum must be a "reserve" and (b) the same must not have been allowed in computing the company 's profits for the purposes of the 1922 Act or the 1961 Act.
That none of the items 800 of appropriation either for taxation or for retirement gratuity, or for proposed dividend in the concerned assessees ' case had been allowed in computing the assessee 's profits under the 1961 Act has not been disputed; in other words the second condition indicated above has been satisfied.
The question is whether any of these items could be treated as or falls within the expression "other reserves" occurring in the said rule.
The expression 'reserve ' has not been defined in the Act and therefore one would be inclined to resort to its ordinary natural meaning as given in the dictionary but it seems to us that the dictionary meaning, though useful in itself, may not be sufficient, for, the dictionaries do not make any distinction between the two concepts 'reserve ' and 'provision ' while giving their primary meanings whereas in the context of the legislation with which we are concerned in the case a clear distinction between the two is implied.
According to the dictionaries (both oxford and Webster) the applicable primary meaning of the word 'reserve ' is: "tc, keep for future use or enjoyment; to set apart for some purpose or end in view; to keep in store for future or special use; to keep in reserve", while 'provision ' according to Webster means: "something provided for future." In other words according to the dictionary meanings both the words are more or less synonymous and connote the same idea.
Since the rules for computation of capital contained in the Second Schedule to the Act proceed on the basis of the formula of capital plus reserves a formula well known in commercial accountancy, it becomes essential to know the exact connotation of the two concepts 'reserve ' and 'provision ' and the distinction between the two as known in commercial accountancy.
Besides, though the expression 'reserve ' is not defined in the Act, it cannot be forgotten that it occurs in a taxing statute which is applicable to companies only and to no other assessable entities and as such the expression will have to be understood in its ordinary popular sense, that is to say, the sense or meaning that is attributed to it by men of business, trade and commerce and by persons interested in or dealing with companies.
Therefore, the meanings attached to these two words in the provisions of the dealing with preparation of balance sheet and profit and loss account would govern their construction for the purposes of the two taxing enactments.
We might mention here that in C.l.
T. vs Century Spinning and Manufacturing Company (1) this Court after referring to the dictionary 801 meaning of the expression 'reserve ' observed: "what is the true A nature and character of the disputed sum (sum allegedly set apart) must be determined with reference to the substance of the matter" and went on to determine the true nature and character of the disputed sum by relying upon the provisions of the Indian Companies Act 1913, the form and the contents of the balance sheets required to be drawn up and Regulation 99 in Table A of the 1st Schedule.
The distinction between the two concepts of 'reserve ' and 'provision ' is fairly well known in commercial accountancy and the same has been explained by this Court in Metal Box Company of India Ltd. vs Their Workmen (1) thus: "The distinction between a provision and a reserve is in commercial accountancy fairly well known.
Provi sions made against anticipated losses and contingencies are charges against profits and therefore, to be taken into account against gross receipts in the P. and L. account and the balance sheet.
On the other hand, reserves are appropriations of profits, the assets by which they are represented being retained to form part of the capital employed in the business.
Provisions are usually shown in the balance sheet by way of deductions from the assets in respect of which they are made whereas general reserves and reserve funds are shown as part of the proprietor 's interest.
(See Spicer and Pegler 's Book keeping and Accounts, 15th Edition, page 42)".
In other words the broad distinction between the two is that whereas a provision is a charge against the profits to be taken into account against gross receipts in the P and L account, a reserve is an appropriation of profits, the asset or assets by which it is represented being retained to form part of the capital employed in the business.
Bearing in mind the aforesaid broad distinction we will briefly indicate how the two concepts are defined and dealt with by the .
Under section 210 of the it is incumbent upon the Board of Directors of every company to lay before the annual general meeting of its share holders (a) the annual balancesheet and (b) the profits and loss account pertaining to the previous 802 financial year.
Section 211(1) provides that every balance sheet of a company shall give a true and fair view of the state of affairs of the company as at the end of the financial year and shall, subject to the provisions of this section, be in the form set out in of Schedule VI, or near thereto as circumstances admit or in such other from as may be approved by the Central Government either generally or in any particular case, while section 211(2) provides that every profit and loss account of a company shall give a true and fair view of the profit or loss of the company for the financial year and shall, subject as aforesaid, comply with the requirements of of r Schedule VI, so far as they are applicable thereto.
In other words the preparation of balance sheet as well as profit and loss account in the prescribed forms and laying the same before the share holders at the annual general meeting are statutory requirements which the company has to observe.
The Form of balance sheet as given in of Schedule VI contains separate heads of 'reserves and Surpluses ' and 'current liabilities and provisions ' and under the sub head 'reserves ' different kinds of reserves are indicated and under sub head 'provisions ' different types of provisions are indicated; is the interpretation clause setting out the definitions of various expressions occurring in and Il and the expressions 'reserve ', 'provision ' and 'liability ' have been defined in cl. 7 thereof.
Material portion of cl.
(7) of runs as under: "(1) For the purposes of and II of this Sche dule, unless the context otherwise requires: (a) the expression "provision" shall, subject to sub.
(2) of this clause mean any amount written off or retained by way of providing for depreciation, renewals or diminution in value of assets, or retained by way of providing for any known liability of which the amount cannot be determined with substantial accuracy: (b) the expression "reserve" shall not, subject as aforesaid, include any amount written off or retained by way of providing for depreciation, renewals or diminution in value of assets or retained by way of providing for any known liability; (c) x x x x x x x x x 803 and in this sub clause the expression "liability" shall include A all liabilities in respect of expenditure contracted for and all disputed or contingent liabilities.
(2) Where (a) any amount written off or retained by way of providing for depreciation, renewals or diminution in value of assets, not being an amount written off in relation to fixed assets before the commencement of this Act; or (b) any amount retained by way of providing for any known liability, is in excess of the amount which, in the opinion of the directors, is reasonably necessary for the purpose, the excess shall be treated for the purposes of this Schedule as a 'reserve ' and not a 'provision '.
" On a plain reading of cl.
7(1) (a) and (b) and cl.
7(2) above it will appear clear that though the term 'provision ' is defined positively by specifying what it means the definition of 'reserve ' is negative in form and not exhaustive in the sense that it only specifies certain amounts which are not to be included in the term 'reserve '.
In other words the effect of reading the two definitions together is that if any retention or appropriation of a sum falls within the definition of 'provision ' it can never be a reserve but it does not follow that if the retention or appropriation is not a provision it is automatically a reserve and the question will have to be decided having regard to the true nature and character of the sum so retained or appropriated depending on several factors including the intention with which and the purpose for which such retention or appropriation has been made because the substance of the matter is to be regarded and in this context the primary dictionary meaning of the term 'reserve ' may have to be availed of.
But it is clear beyond doubt that if any retention or appreciation of a sum is not a provision, that is to say, if it is not designated to meet depreciation, renewals or diminution in value of assets or any known liability the same is not necessarily a reserve.
We are emphasising this aspect of the matter because during the hearing almost all counsel for the assessees strenuously contended before us that once it was shown or became clear that the retention or appreciation of a sum out of 804 profits and surpluses was for an unknown liability or for a liability which did not exist on the relevant date it must be regarded as a reserve.
The fallacy underlying the contention becomes apparent if the negative and non exhaustive aspects of the definition of reserve are borne in mind.
Having regard to type of definitions of the two concepts which are to be found in cl. 7 of Part.
III the proper approach in our view, would be first to ascertain whether the particular retention or appropriation of a sum falls within the expression 'provision ' and if it does then clearly the concerned sum will have to be excluded from the computation of a capital, but in case the retention or appropriation of the sum is not a provision as defined the question will have to be decided by reference to the true nature and character of the sum so retained or appropriated having regard to several factors as mentioned above and if the concerned sum is in fact a reserve then it will be taken into account for the computation of capital.
Having thus indicated the proper approach to be adopted, we shall proceed to deal with the three items of appropriation being (a) provision for taxation, (b) provision for retirement gratuity and (c) provision for proposed dividends in the case of concerned assessee companies in these Appeals and Tax Reference Cases.
Dealing first with the item of appropriation by way of provision for taxation, which arises in Civil Appeal No. 860/1973 (Vazir Sultan Tobacco Company), Civil Appeal No. 1614 (NT)/ 1978 (Ballarpur Industries Ltd;) Review Petition No. 50/1980 (M/s. Bengal Paper Mills Co. Ltd.) and Tax Reference Cases Nos. 2 & 3/1977 (M/s Echjay Industries Pvt.
Ltd;) the common question is whether the concerned amounts appropriated or set apart by these assessee companies from out of the profits and other surpluses by way of making provision for taxation constitute a provision or a reserve on the relevant date, being the first day of the previous year relevant to the assessment year in question ? Taking Vazir Sultan Tobacco Company 's case as an illustration, for the assessment year 1963 64 the relevant accounting period was the year which ended on September 30, 1962; under Rule I of the Second Schedule to the , the first day of the previous year would be october 1, 1961 and.
therefore, the balance sheet of that company as on September 30, 1961 and the profits and loss account which ended on September 30, 1961 would be relevant.
It cannot be disputed that on the expiry of September 30, 1961, the assessee company incurred the taxation liability in respect of the profits 805 which it had earned during that year, though the exact amount of such liability could not be determined with substantial accuracy at that time and the same would have to be ascertained by reference to rate of taxes applicable to that year.
The liability for taxation having thus arisen on the expiry of the last day of the year, the setting apart of the sum of Rs. 33,68,360 by the Board of Directors will have to be regarded as a provision for a known and existing liability, the quantification whereof bad to be done later.
On principle, therefore, it seems to us clear that the item of Rs. 33,68,360 which had been set apart by the Board of Directors for taxation must be regarded as a provision and cannot be regarded as a reserve.
Similar would be the position in regard to the appropriations for taxation made by the other assessee companies mentioned earlier.
In this context a reference to this Court 's decision in the case of Kesoram Industries and Cotton Mills Ltd. vs Commissioner of Wealth Tax (Central) Calcutta( ') would be useful.
In that case the question was whether a certain amount which had been set apart as provision for payment of income tax and super tax was a "debt owed" within the meaning of section 2(m) of the , as on March 31, 1957 which was the valuation date and as such was deductible in computing the net wealth of the appellant company.
In its balance sheet for the year ending March 31, 1957 the appellant company had shown a certain amount as provision for payment of income tax and super tax in respect of that year of account and this Court took the view that the expression "debt owed" within the meaning of section 2(m) of the could be defined as the liability to pay in presenti or in futuro an ascertainable sum of money and that the liability to pay income tax was a present liability though the tax became payable after it was quantified in accordance with ascertainable data; that there was a perfected debt on the last date of the accounting year and not a contingent liability.
The Court further observed that the rate was always easily ascertainable; that if the Finance Act was passed, it was the rate fixed by that Act; if the Finance Act was not yet passed, it was the rate proposed in the Finance Bill pending before the Parliament or the rate in force in the preceding year whichever was more favourable to the assessee and that all the ingredients of a "debt" were present and it was a present liability of an ascertainable amount and that, therefore, the amount of provision for payment of income tax and super tax in respect of the year of account ending March 31, 1957 was a "debt H 806 owed" within the meaning of section 2(m) on the valuation date, namely March 31, 1957 and was as such deductible in computing the net wealth.
The ratio of this decision clearly suggests that the appropriation of the amounts set apart by the assessee companies before us for taxation would constitute a provision made by them to meet a known and existing liability and as such the concerned amounts would not be includible i n capital computation.
Counsel for the assessee company in Vazir Sultan Tobacco Company 's case, however, attempted to raise a further plea that the provision for taxation in the sum of Rs. 33,68,360 was an excess provision in the sense it was in excess of the amount which was reasonably necessary for the purpose of taxation and, there ore, the excess should be treated as a reserve and not a provision and in this behalf reliance was placed on cl.
(7) (2) of Part III of Schedule VT and three decisions of the Madras High Court Commissioner of Income tax Madras vs Indian Steel Rolling Mills Ltd.(l) of the Himachal Pradesh High Court in Hotz Hotels Pvt. Ltd. vs Commissioner of Income Tax, Haryana, H.P. and Delhi(2) and of Allahabad High Court in Commissioner of Income Tax, Delhi vs Modi Spinning and Weaving Mills(3).
There could be no dispute about the principle that if provision for a known or existing liability is made in excess of the amount that would be reasonably necessary for the purpose 13: the excess shall have to be treated as a reserve and, therefore, would be includible in the capital computation but no such case was made out by the assessee company at any stage of the assessment proceedings either before the Taxing Authorities or even before the Tribunal or the High Court and in the absence of any such plea having been raised at any stage of the proceedings it will not be proper for this Court to allow the assessee company to raise such a plea, which will need investigation into facts, for the first time in its appeal before this Court.
The contention is, therefore, rejected.
Dealing next with the item of appropriation made for retirement gratuity, which arises only in Civil Appeal No. 860/1973 (Vazir Sultan Tobacco Co.) the question is whether the sum of Rs. 9,O8,106 appropriated or set apart by the assessee company from out of its profits and other surpluses by way of providing for retirement gratuity is a provision or a reserve on the relevant date, 807 viz. 1.10.1961 ? Counsel for the assessee compaoy vehemently urged before us that this appropriation had not been allowed as a deduction in the income tax assessment proceedings of the company for the relevant assessment year on the ground that it was in the nature of a reserve and the entire sum, minus the actual payments, was added back to the income and profits of the assessee company and if that be so, in the super profit tax assessment it cannot be treated as a provision and excluded from capital computation.
According to him there could not be two different treatments for the same item in income tax assessment and super profit tax assessment.
He pointed out that this contention was specifically urged in the appeal before the Appellate Assistant Commissioner but was wrongly rejected.
He further submitted that no actuarial valuation had been undertaking but ad hoc amount was appropriate or transferred to gratuity reserve and as such the same should have been treated as a reserve and included in capital computation.
On the other hand, counsel for the Revenue seriously disputed the last submission and contended that it was never the case of the assessee company either before the Taxing Authorities or before the Tribunal or before the High Court that the appropriation was or an ad hoc sum without undertaking any actuarial valuation.
It must be observed that whereas the assessee company did urge a contention before the lower authorities that different treatments for the same item could not be given for purpose of income tax assessment and super profit tax assessment, the assessee company did not clarify by placing material on record as to whether the appropriation of the amount was based on any actuarial valuation or whether it was an appropriation of an ad hoc amount an aspect which, as we shall presently point out, has a vital bearing on the question whether the appropriation could be treated as a provision or a reserve.
In the absence of proper material touching this vital aspect, we are afraid, the issue in question will have to be remanded to the Taxing Authorities through the Tribunal for disposal in the light of the well settled principles in that behalf, which we shall presently indicate.
Ordinarily an appropriation to gratuity reserve will have to be regarded as a provision made for a contingent liability, for, under a scheme framed by a company the liability to pay gratuity to its employees on determination of employment arises only when the employment.
Of the employee is determined by death, incapacity, retirement or resignation an event (cessation of employment) Certain to happen in the service career of every employee; moreover, the amount of gratuity payable is usually dependent on the emp 808 loyee 's wages at the time of determination of his employment and the number of years of service put in by him and the liability accrues and enhances with completion of every year of service; but the company can work out on an actuarial valuation its estimated liability (i.e. discounted present value of the liability under the scheme on a scientific basis) and make a provision for such liability not all at once but spread over a number of years.
It is clear that if by adopting such scientific method any appropriation is made such appropriation will constitute a provision representing fairly accurately a known and existing liability for the year in question; if, however, an ad hoc sum is appropriated without resorting to any scientific basis such appropriation would also be a provision intended to meet a known liability, though a contingent one, for, the expression 'liability ' occurring in cl.
(7) (1) (a) of Part III of the Sixth Schedule to the includes any expenditure contracted for and arising under a contingent liability; but if the sum so appropriated is shown to be in excess of the sum required to meet the estimated liability (discounted present value on a scientific basis) it is only the excess that will have to be regarded as a reserve under cl.
(7) (2) of to the Sixth Schedule.
In the above context we might refer to one English case decided by the House of Lords and two or three decisions of this Court, which seem to lead to aforesaid propositions.
In Southern Railway of Peru Ltd. vs Owen(1) an English Company operating a railway in Peru was, under the laws of that country, liable to pay its employees conpensation on the termination of their services either by dismissal or by notice or on such termination by death or efflux of contractual time.
The compensation so paid was an amount equivalent to one month 's salary at the rate in force at the date of determination for every year of service.
In the computation of taxable income under the Income tax Act 1918, the company claimed 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 the sum 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 as the year had contributed to the aggregate.
The House of Lords rejected the deductions on the ground that in calculating the deductions the company had ignored the factor of discount.
But, their Lordships recognised the principle that the company was entitled to charge, against each year 's receipts, the cost of making the 809 provision for the retirement which would ultimately be payable as the company had the benefit of the employee 's services during that year provided the present value of the future payments could be fairly estimated.
Lord MacDermott observed at page 345 as follows: ". as a general proposition it is, I think right to say that, in computing his taxable profits for a particular year, B a trader, who is under a definite obligation to pay his employees for their services in that year an 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." In Standard Mills Co. Ltd. vs Commissioner of Wealth Tax, Bombay (1) the question for decision was whether an estimated liability under gratuity schemes framed under industrial awards amounted to 'debts ' and could be deducted while computing the net wealth of the assessee company under the Wealth Tax Act.
This Court held in view of the terms of section 2 (m) of that Act, that as the liability lo pay gratuity was not in praesenti but would arise in future on determination of the service, i. e.
On the retirement, death or termination, the estimated liability under the schemes would not be a 'debt ' and, therefore, could not be deducted while computing the net wealth.
The House of Lords decision in the case of Southern Rly.
Of Peru Ltd. (supra) was distinguished by this Court as having no relevance to the question before it on the ground that the House of Lords in that decision was concerned in determining the deductibility of the present value of a liability which may arise in future in the computation of taxable income for the relevant year under the income tax laws.
It will thus appear that this Court was of the view that though such a liability is a contingent liability and, therefore, not a 'debt ' under section 2(m) of the it would be deductible under the Income Tax Act while computing the taxable profits; in other words different considerations would apply to cases arising under the and the Income Tax Act.
In Matal Box Co 's case (supra) this Court was concerned with the nature of liability under a scheme of gratuity in the context of the and the question related to a sum 810 of Rs. 18.38 lakhs being the estimated liability under the two gratuity schemes framed by the company, which was deducted from the gross receipts in the P & L Account, it being contended on behalf of the workmen that such deduction was not justified while determining the 'available surplus ' and the 'allocable surplus ' for payment of bonus to them under the .
The Court rejected the contention and adverting to the decision of House of Lords in the case of Southern Rly.
Of Peru Ltd. (supra) held that an estimated liability under gratuity schemes even if it amounted to a contingent liability and was not a 'debt ' under the Wealth Tax Act, if properly ascertainable and its present value was fairly discounted was deductible from the gross receipts while preparing the P & L Account.
The material portion of the head note appearing at page 54 of the report runs thus: "Contingent liabilities discounted and valued as necessary, can be taken into account as trading expenses if they are sufficiently certain to be capable of valuation and if profits cannot be properly estimated without taking them into consideration.
An estimated liability under a scheme of gratuity if properly ascertainable and its present value is discounted, is deductible from the gross receipts while pre paring the P & L account.
This is recognised in trade circles and there is nothing in the Bonus Act which prohibits such a practice.
Such a provision provides for a known liability of which the amount can be determined with substantial accuracy.
It cannot, therefore, be termed a "reserve".
Therefore, the estimated liability for the year on account of a scheme of gratuity should be allowed to be deducted from the gross profits.
The allowance is not restricted to the actual payment of gratuity during the year.
" At page 62 of the Report this Court observed thus: "Two questions, therefore, arise: (I) whether it is legitimate in such a scheme of gratuity to estimate the liability on an actuarial valuation and deduct such estimated liability in the P & L Alc while working out its net profits; (2) if it is, b whether such appropriation amounts to a reserve or a provision?.
In the case of an assessee maintaining his accounts on mercantile system, a liability already accrued, though to be discharged at a future date, would be a proper deduction while working out the profits and gains of his business, re 811 gard being had to the accepted principle of commercial A practice and accountancy .
It is not as if such deduction is permissible only in case of amounts actually expended or paid.
Just as receipts, though not actual receipts but accrued due, are brought in for income tax assessment, so also liabilities accrued due would be taken into account while working out the profits and gains of the business".
Again at page 64 of the Report this Court observed thus: "In the instant case the question is not whether such estimated liability arising under the gratuity schemes amounts to a debt or not.
The question that concerns us is whether while working out the net profits, a trader can pro vide from his gross receipts his liability to pay a certain sum for every additional year of service which he receives from his employees.
This, in our view, he can do if such liability is properly ascertainable and it is possible to arrive at a proper discounted present value.
Even if the n liability is a contingent liability, provided its discounted present value is ascertainable, it can be taken into account.
Contingent liabilities discounted and valued as necessary can be taken into account as trading expenses if they are sufficiently certain to be capable of valuation and if profits cannot be properly estimated without taking them into account.
" In the case of Workmen of William Jacks .
Co. Ltd. vs Management of Jacks & Co. Ltd. Madras (1) another decision under the Payments of Bonus Act, 1965, this Court, after referring to the distinction pointed out in Metal Box Co 's case between the two concepts 'provision ' and 'reserve ' has observed on page 547 as follows: "The provision for gratuity, furlough salary, passage, service and commission, in the present case was all made in respect of existing and known liabilities though in some cases the amount could not be ascertained with accuracy.
It was not a case where it was an anticipated loss or anticipated expenditure which would arise in future.
Such provision is therefore not a reserve at all and cannot be added back under item 2 (c) of the Second Schedule." 812 In the above case also the Court was concerned with the question whether particular provision made for gratuity, furlough salary, passage, etc.
was a reserve or a provision for the purpose of Second Schedule to the .
At page 546 of the report the Court has categorically observed that all these items, namely, gratuity furlough salary, passage, service, commission, etc.
were clearly in respect of liabilities which had already accrued in the years in which the provision was made and were not in respect of anticipated liabilities which might arise in future and, therefore, the Court held that the said provision was not a reserve but a provision.
From the aforesaid discussion of the case law it seems to us clear that the propositions indicated by us earlier clearly emerge.
Since in the instant case sufficient material throwing light on the above aspects of the question has not been made available, we think, it will be in the interest of justice to remand the case through the Tribunal to the taxing authority to decide the issue whether the con cerned amount (Rs. 9,O8,1061 ) set apart and transferred to gratuity reserve by the assessee company was either a provision or a reserve and if the latter to what extent? The taxing authority will decide the issue in light of the above principles after giving an opportunity to the assessee company to place additional relevant materials before Turning to the last item of appropriation by way of provision for proposed dividends, which arises in all these matters (except in Tax Reference Case No. 511978 of Hyco Products Pvt. Ltd.) the common question is whether the concerned amount appropriated or set apart by the assessee companies from out of the profits and other surpluses by way of making provision for 'proposed dividends ' constituted a provision or a reserve on the relevant date ? It is true that under section 27 of the the Directors can merely recommend that a certain sum be paid as dividend but such recommendation does not result in any obligation or liability; the obligation or liability to pay the dividend arises only when the share holders at the annual general meeting of the company decide to accept the recommendation and pass a resolution for declaration of the dividend.
It is therefore open to the directors to withdraw or modify their recommendation at any time before the shareholders accept the same and it is equally open to the shareholders not to accept the recommendation at all or to declare a dividend of an amount lesser than that recommended by directors.
In Kesoram 813 Industries case (supra) this Court has clarified the aforesaid legal A position by observing at page 772 of the report, thus: "The directors cannot distribute dividends but they can only recommend to the general body of the company the quantum of dividend to be distributed.
Under section 217 of the Indian , there shall be attached to every balance sheet laid before a company in general meeting a report by its board of directors with respect to, interalia, the amount, if any, which it recommends to be paid by way of dividend.
Till the company in its general body meeting accepts the recommendation and declares the dividend, the report of the directors in that regard is only a recommendation which may be withdrawn or modified as the case may be.
As on the valuation date (under the Wealth Tax Act) nothing further happened than a mere recommendation by the directors as to the amount that might be distributed as dividend, it is not possible to hold that there was any debt owed by the assessee to the share holders on the valuation date.
" All that follows from above is that in the instant cases the appropriations of the concerned amounts by the Board of Directors by way of providing for proposed dividend would not constitute 'provisions ' for, the appropriations cannot be said to be by way of providing for any known or existing liability, none having arisen on the date when the directors made the recommendation much less on the relevant date being the first day of the previous year relevant to the assessment year in question.
But as stated earlier this by itself would not automatically convert the appropriation into 'reserves ', regard being had to the negative and non exhaustive character of the definition of 'reserve ' given in cl. 7 (I)(b) of Part III of the Sixth Schedule to the Companies A ct.
The question whether the concerned amounts in fact constituted 'reserves ' or not will have to be decided by having regard to the true nature and character of the sums so appropriated depending on the surrounding circumstances particularly the intention with which and the purpose for which such appropriations had been made.
We have already indicated that according to the dictionaries (both oxford and Webster) the applicable meaning of the word 'reserve ' is: "to keep for future use or enjoyment; to set apart for some purpose or end in view; to keep in store for future or special 814 use; to keep in reserve.
" In other words, the word 'reserve ' as a noun in ordinary parlance would mean "something which is kept for future use or stored up for something or set apart for some purpose".
It cannot be disputed that a reserve may be a general reserve or specific reserve and all that is required is that an amount should be kept apart for some purpose, either general or specific.
Eeven so the question is whether the earmarking of a portion of pro fits by the board of directors of a company avowedly for the purpose of distributing dividend would fall within the expression 'reserve ' occurring in rule T of the Second Schedule to the ? For this purpose certain tests indicated in some decisions of this Court will have to be considered: The first decision of this Court in that behalf is the decision in Century Spinning and Manufacturing Company 's ease (supra).
In that case the material facts were these: For the year ending 31st December, 1946, the profit of the assessee company, whose accounting year was the calendar year, was a certain sum according to the profit and loss account.
After making provision for depreciation and taxation, the balance of Rs. 5,08,637 was carried to the balance sheet.
This sum was not allowed in computing the profits of the assessee for the purposes of income tax.
On 28th February, 1946, the Board of directors recommended out of that amount the sum of Rs. 4,92,426 should be distributed as dividend and the balance of Rs. 16,211 was to be carried forward to the next year 's account.
This recommendation was accepted by the share holders in their meeting on 3rd April, 1946, and the amount was shortly afterwards distributed as dividend.
In computing the capital of the assessee company on 1st April, 1946, under the Business Profits Tax Act, 1947, the assessee claimed that the sum of Rs. 5,08,637 and the profit earned by it during the period 1st January, 1946 to 1st April, 1946, should be treated as "reserves" for the purpose of rule 2(1) of Schedule IT.
The High Court held that the sum of Rs. 5,08,637 must be treated as a reserve for the purpose of rule 2, but the profit made by the assessees during the period 1st January, 1946 to 1st April, 1946 could not be included in the reserves.
On appeal to this Court, it was held that the sum of Rs. 5,08,637 as well as the profits earned by the assessee during the period 1st January, 1946 to 1st April, 1946 did not constitute "reserves" within the meaning of rule 2 (1) of Schedule II.
After noting that the expression 'reserve ' had not been defined in the Business Profits Tax Act, 1947 and after noting dictionary meanings of that expression the Court observed: 815 " What is the true nature and character of the disputed A sum must be determined with reference to the substance of the matter and when this is borne in mind, it follows that the 1st of April, 1946 which is the crucial date, the sum of Rs. 5,08,637 could not be called a reserve for nobody possessed of the requisite authority had indicated on that date the manner of disposal or distination.
On the other hand, B on the 28th February, 1946 the directors clearly earmarked it for distribution as dividend and did not make it a reserve.
Nor did the company in its meeting of 3rd April, 1946 decide that it was a reserve.
It remained on the 1st of April, as a mass of undistributed profits which were available for distribution and not earmarked as "reserve".
On the 1st of January, 1946 the amount was simply brought from the profit and loss account to the next year and nobody with any authority on that date made or declared a reserve.
The reserve may be a general reserve or a specific reserve, but there must be a clear indication to show whether it was a reserve either of the one or the other kind.
The fact that it constituted a mass of undistributed profits on the 1st Jan. 1946 cannot automatically make it a reserve.
On the 1st April, 1946 which is the commencement of the chargeable accounting year, there was merely a recommendation by the directors that the amount in question should be distributed as dividend.
Far from showing that the directors have made the amount in question a reserve it shows that they had decided to earmark it for distribution as dividend.
" The decision clearly lays down that the true nature and character of the appropriation must be determined with reference to the substance of the matter; obviously this means that one must have regard to the intention with which and the purpose for which appropriation has been made, such intention and purpose being gathered from the surrounding circumstances.
In that behalf the following aspects mentioned in the judgment provide some guidelines: (a) a mass of undistributed profits cannot automatically become a reserve and that somebody possessing the requisite authority must clearly indicate that a portion thereof has been earmarked or separated from the general mass of profits with a view to constituting it either a general reserve or a specific reserve, (b) the surrounding circumstances should make it apparent that the amount so ear marked or set apart is in fact a reserve to be utilised in future for a specific purpose and on a specific occasion, and (c) a clear conduct on the 816 part of the directors in setting apart a sum from out of the mass of undistributed profits avowedly for the purpose of distribution as dividend in the same year would run counter to any intention of making that amount a reserve.
It was because these aspects obtained in the case that this Court took the view that neither the sum of Rs. 5,08,637 nor the profits earned by the assessee during the period 1st January, 1946 to 1st April 1946 constituted "reserve" within the meaning of Rule 2(1) of Second Schedule of the Business Profits Tax Act, 1947.
Two more decisions of this Court one in First National City Bank vs Commissioner of Income Tax (1) and the other in Commissioner of Income Tax (Central), Calcutta vs Standard Vacuum oil Co.(2) which provide two more guidelines, may now be considered.
In both these cases the Court was concerned with the question whether the amount set apart as "undivided profit" or set apart as "earned surplus" in accordance with the system of accountancy which obtained in the United States amounted to a reserve liable to be included in the capital computation under rule 2 of Schedule II of the Business Profits Tax Act, 1947.
In both the cases the assessees were non resident companies and followed the system of accounting that obtained in the American commercial world.
In the first case Justice Kapur, speaking for the court, pointed out the difference between the two system of accounting at Page 23 of the Report thus: "In India at the end of an year of account the unallocated profit or loss is carried forward to the account of the next year, and such unallocated amount gets merged in the account of that year.
In the system of accounting in the USA each year 's account is self contained and nothing is carried forward.
If afteral locating the profits to diverse heads mentioned above any balance remains, it is credited to the "undivided profits" which become part of the capital fund.
If in any year as a result of the allocation there is loss the accumulated undivided profits of the previous years are drawn upon and if that fund is exhausted the banking company draws upon the surplus.
In its very nature the undivided profits are accumulation of amounts of residue on hand at the end of the year of successive periods of accounting and these amounts are by the prevailing accounting practice and the Treasury directions regarded as a part of the capital fund of the banking company. ' 817 After quoting with approval the above observations, Mr. A Justice Shah in Standard Vacuum Oil Co. 's case went on to observe at page 695 of the report as follows: "It is true that the court in that case was dealing with a case of a banking company but the characteristics noted are not peculiar to the accounts of a banking company; they are applicable with appropriate variations to the accounts of all companies in which different nomenclatures are used in the accounts to designate the residue on hand as 'surplus ', ' undivided profits ' or 'earned surplus '.
Where the balance of net profits after allocation to specific reserves and payment of dividend are entered in the account under the caption 'earned surplus ', it is intended thereby to designate the fund which is to be utilised for the purpose of the business of the assessee.
Such a fund may be regarded according to the Indian practice as 'general reserve") This Court in the first case held that the amount designated as "undivided profits" which was available for continuous future use of the business for the bank was a part of the reserve and had to be taken into account while computing the capital under rule 2(1) of Schedule II of the Business Profits Tax Act; similarly, in the second case the Court held that the amount which had been allocated to "earned surplus" which was intended for the purpose of the business of the assessee company and was used in subsequent years in business, represented ' 'reserves" within the meaning of rule 2 of Schedule II of the Business Profits: Tax.
From these two decisions two aspects emerge very clearly.
In the first place, the nomenclature accorded to any particular fund which is set apart from out of the profits would not be material or decisive of the matter and secondly, having regard to the purpose of rule of 2 of Schedule II of the Business Profits Tax Act, 1947, if any amount set apart from out of the profits is going to make up capital fund of the assessee and would be available to the assessee for its business purposes, it would become a reserve liable to be included in the capital computation of the assessee under that Act.
The provisions of the also lend support to the proposition that an appropriation for proposed dividend would not amount to a reserve.
Section 217(1) runs thus: 818 "217(1) There shall be attached to every balance sheet laid before a company in general meeting, a report by its Board of directors, with respect to (a) the state of the company 's affairs, (b) the amounts, if any which it proposes to carry to any reserves in such balance sheet, (c) the amounts, if any, which it recommends should be paid by way of dividend; (d) . . . . . . " Regulation 87 of Table A in the First Schedule runs thus: "87(1) The Board may, before recommending any dividend, set aside out of the profits of the company such sums as it thinks proper as a reserve or reserves which shall, at the discretion of the Board, be applicable for any purpose to which the profits of the company may be properly applied, including provision for meeting contingencies or for equalising dividends; and pending such application may at the like discretion, either be employed in the business of the company or be invested in such investments (other than shares of the company) as the Board may, from time to time, think fit.
(2) The Board may also carry forward any profits which it may think prudent not to divide, without setting them aside as a reserve.
" The aforesaid provisions read together clearly show that creating re serves out of the profits is a stage distinct in point of fact and anterior in point of time to the stage of making recommendation for payment of dividend and the scheme of the provisions suggests that appropriation made by the Board of Directors by way of recommending a payment of dividend cannot in the nature of things be a reserve.
If regard be had to the guide lines indicated above as well as the provisions of the specified above we are clearly of the opinion that the appropiations made by the directors for proposed dividend in the case of the concerned assessee companies do not constitute 'reserves ' and the concerned amounts so set apart would have to be ignored or excluded from capital computation.
819 Since we have reached the aforesaid conclusion on first principles and on the basis of the guidelines discussed above it is unnecessary for us to go into or discuss the scope and effect of the Explanation to Rule 1 in Second Schedule to The though it seems to us prime facie that the Explanation, being clarifacatory in nature is declaratory of the existing legal position.
Dealing with the last case of Hyco Products Pvt.
Ltd. Bombay (Tax Reference Case No. 5 of 1978), where the question pertaining to dividend but in a different form arises for consideration, the admitted facts may briefly be stated.
The question relates to the Assessment Year 1974 75, the relevant previous year being calendar year 1973 and the material date being 1.1.1973.
After the accounts of the calendar year 1972 were finalised the directors transferred out of the profits of Rs. 61,03,382 of that year a sum of Rs. 29,77,000 to the General Reserve.
With such tranfer the General Reserve of the assessee company as on 1.1.1973 stood at Rs. 86,07,712.
At the end of the calendar year, 1973 admittedly the directors did not make any provision for 'proposed dividend ' in its accounts but there was note on the Balance Sheets to the following effect: "The directors have recommended dividend for the year 1972 at the rate of Rs. 10/ per share free of tax.
The dividend, if approved by the share holders at the forth coming Annual General Meeting, will be paid out of General Reserve and no separate provision has been made therefor in the accounts.
" At the Annual General Meeting held on June 30, 1973 dividend of Rs. 3,10,450 was declared by the share holders and the same was soon thereafter paid out of the said General Reserve.
In the surtax assessment proceedings under the 1964 Act the assessee claimed that the entire general reserve which stood as Rs. 86,07,712 as on 1.1.1973 should be taken into account while computing the capital of the assessee company.
But the taxing officer reduced the general reserves by the aforesaid sum of Rs. 3,10,450 and only the balance of Rs. 82,97,262 was added in computing the capital.
The Appellate Assistant Commissioner as well as the Income Tax Appellate Tribunal, Bombay confirmed the order of the Taxing officer.
The Tribunal took the view that though it was not a case of 'pro posed dividend ' since the amount actually paid out as dividend was a smaller sum than the amount transferred from out of profits to 820 the General Reserve that amount could not form part of the reserve and therefore the General Reserve as reduced by Rs. 3,10,450 was properly taken into account for the purpose of computation of the capital as on the relevant date.
At the instance of the assessee the Tribunal has referred the following question of law directly to this Court for its opinion under section 257 of the Income Tax Act 1961 read with section 18 of the : "Whether on the facts and in the circumstances of the case the Tribunal was justified in excluding a sum of Rs. 3,10,450 representing the dividends declared for the calendar year 1972 from the General Reserves on the opening date of the previous year while computing the capital under the Second Schedule of the for the assessment year 1974 75?" Counsel for the assessee company contended that after con ceding that this was not a case of "proposed dividend" the Tribunal erred in holding that the sum of Rs 3,10,450 representing the dividends paid out from the General Reserve was liable to be excluded while computing the capital of the company as on 1.1.1973 for purposes of sur tax assessment under the 1964 Act.
According to him under section 205(1) of the dividend can be paid from out of the current year 's profits or profits of any previous financial year or years and there is no presumption in law or in commercial accounting that a dividend has to be paid either from the current year 's profits or from the past year ' s profits.
He further urged that once from out of the current year 's profit a certain sum is transferred to the General Reserve it merges into the latter and the General Reserve so augmented becomes a conglomerate fund and if out of such conglomerate fund any sum is recommended or paid out as dividend it will be difficult to say that such payment has come out of the portion of current year 's profits that has been transferred and merged and there is no reason why the principle 'Last in, First out ' should be invoked for drawing the inference that the payment has been made out of the current year 's profits.
He pointed out that such a principle was applied by the Bombay High Court in two decisions, namely, Commissioner of Income Tax, Bombay City l vs Bharat Bijlee Ltd.(1) and Commissioner of Income Tax, Bombay City ll vs Marrior (India) Ltd.(2) but urged that there 821 was no warrant for it.
In support of his contention that the entire A General Reserve of Rs. 86,07,712 without any deduction should have been taken into account while computing the capital of the assessee company, counsel relied upon a decision of the Andhra Pradesh High Court in Super Spinning Mills Ltd. vs Commissioner of Income Tax, Hyderabad(l).
Alternatively counsel pointed out that as far as stock valuation is concerned a question often arises whether the stock on hand at the end of the year is to be valued at the closing price or at the initial purchase price and in 'Advanced Accounting ' by R. Keith Yorston and E. Bryan Smyth (a treatise on the principles and practice of accounting in Australia) three methods of valuing the closing stock have been indicated at pages 441 and 442 of Vol.
II (5th Edn.) of the treatise, namely, (a) First in First out, (b) Last in First out and (c) Average Cost.
In regard to these three methods the authors have stated thus .
(a) First in First out The assumption underlying this method is that the oldest stock is used or issued first or that sales are made in the order in which the goods are purchased or produced.
If there are several lots of goods at different prices, they are regarded as being exhausted in the order of purchase.
On a rising market this would write off the lower priced lots first, and on a falling market the higher priced lots would go first." (b) "Last in First out.
This method assumes that the items of stock purchased are the first to be issued or sold and thus the stock remaining is valued at the cost of the earlier purchase." (c) Average Cost.
On this basis issues of stocks are valued at the weighted average cost of the stock on hand at the beginning and of the purchases, less any issues already made.
" 822 Counsel for the assessee urged that for determining whether the entire General Reserve of Rs. 86,07,712 or reduced General Reserve of Rs. 82,97,262 should be taken into account for capital computation either the 'First in First out ' principle should be adopted; if not, only a proportionate deduction should be made and the balance should be held to be includible in capital computation, particularly because the payment of dividend has been from a conglomerate fund.
It is not possible to accept either of these contentions urged by counsel for the assessee company.
It is true that under section 205(1) a of the it is open to the directors to recommend and the share holders to approve payment of dividends either from the current year 's profits or from the past year 's profits.
It is also true that on transfer of a portion of current year 's profits to the General Reserve the augmented General Reserve becomes a conglomerate fund but having regard to the natural course of human conduct of hard headed men of business and commerce it is not difficult to predicate that the dividends would ordinarily be paid out from the current income rather than from the past savings unless the directors in their report expressly or specifically state that payment of dividends would be made from the past savings.
From the commercial point of view if any amount is required for incurring any expenditure or making any disbursement like distribution of dividends in a current year, then ordinarily the same will come out of the current income of the company if it is available and only if the same is insufficient then the past savings will be resorted to for the purpose of incurring that expenditure or making that disbursement; such a course would be in accord with the common sense point of view.
We may point out that this aspect of the matter was not considered by the Andhra Pradesh High Court in Super Spinning Mills Ltd. case (supra) and the view of the Bombay High Court in the case of Bharat Bijlee Ltd. (supra) and Marrior (India) Ltd. (supra) commends itself to us.
Even in regard to the question of valuing the closing stock the learned authors of the treatise referred to by the counsel for the assessee company merely indicate three methods for such valuation and it will be open to a commercial concern to avail of any one method.
In our view in the context of the question whether while incurring any expenditure or making any disbursement a commercial concern will resort to current income or past savings, the normal rule, in the absence of express indication to the contrary, would be to resort to the current income rather than past savings.
823 In our view, therefore, the Tribunal was right in excluding the sum of Rs. 3,10,450 from the General Reserves while computing the capital of the assessee company for the assessment year ]974 75, in the absence of express indication to the contrary.
In the result Civil Appeal No. 1614(NT) of 1978 and Review Petition No. 57 of 1980 are dismissed.
Civil Appeal No. 860 of g 1973 is partly allowed and the issue whether the appropriation for retirement gratuity is a reserve or not is remanded to the Taxing Authority and the rest of the appeal is dismissed.
In Tax Reference Cases Nos. 2 and 3 of 1977 and No. S of 1978 the questions referred to us are answered in favour of the Department and against the assessee companies.
Each party will bear its own costs in all the matters.
AMARENDRA NATH SEN, J.
At the outset I wish to observe that I have been somewhat diffident in hearing these matters.
I felt a little embarrassed as I found that as a Judge of the High Court at Calcutta, I had an occasion to consider some of the questions in the case of Braithwaite and Co. (India) Ltd. vs Commissioner of.
Income Tax, West Bengal, (I) (Income Tax Reference No. 262 of 1969).
As I have already considered some of the questions and have expressed my views on the same in the judgment delivered by me in the said reference, I was wondering whether I should hear these appeals.
The members of the Bar, however, represented to me that they had not only no objection to my hearing these appeals but they also wanted me to hear these appeals.
They further represented that most of the Judges of this Court had on some occasion or other considered these questions.
They further stated that if I would decline to take up these matters not only the members of the Bar who had come from various parts of the country for these appeals would be seriously inconvenienced; but also the litigant public who had been waiting for years for the hearing of these matters would be prejudiced.
It was further pointed out to me that the judgment which was delivered by me was not under appeal and further it would appear from the judgment which I had earlier delivered in Braithwaite matter, there was in fact a concession made by the learned counsel appearing on behalf of the assessee that the said case was covered by the decision of the Supreme Court in the case of Commissioner of Income tax Bombay City vs Century Spinning and Manufacturing Co. Ltd. ( ') The learned counsel appearing on behalf 824 of the parties further represented to me that the earlier judgment was delivered by me as a Judge of the High Court and it was always open to me to reconsider ' my view, particularly as a Judge of this Court after hearing the submissions to be made by the learned counsel appearing on behalf of the parties.
In view of the aforesaid representations and submissions made by the learned lawyers, I was persuaded to hear these appeals with my learned brothers to avoid inconvenience not only to the lawyers but to the litigant public.
I have also had no doubt in my mind that if I felt after hearing the submissions made by the learned counsel appearing on behalf of the parties in these appeals, that the earlier judgment delivered by me was wrong and incorrect, I would have no hesitation in reconsidering my earlier decision.
I do not propose to set out the facts of this case at any length in this judgment.
The facts have been fully and correctly set out in the judgment of my learned brother Tulzapurkar, J. My learned brother in his judgment has also dealt with the various arguments which were advanced from the Bar and has also considered the decisions which were cited.
I propose to notice only some of the decisions which, to my mind, are particularly important for decision of the question whether the provision made in the balance sheet for payment of dividend to the share holders recommended by the Board of Directors constituted a 'reserve ' and the amount, so set apart, should be taken into account, in computing the capital of the company for the purpose of Super Profits Tax Act, 1963.
It may be noted that in the Act itself the expression 'reserve ' has not been defined.
In the case of Commissioner of Income tax, Bombay City vs Century Spinning and Manufacturing Co. Ltd. (supra), this Court had the occasion to consider the meaning of the word 'reserve ' while dealing with a case under Business Profits Tax Act (XXI of 1947).
In this Act also, there were similar provisions with regard to computation of the capital of the Company and the assessee had claimed that the amount recommended by the Board of Directors and earmarked for payment of the dividend to the share holders should be treated as 'reserve ' and should be taken into consideration in computing the capital of the assessee.
The Supreme Court observed at pp.
503 504 as follows : "The term 'reserve ' is not defined in the Act and we must resort to the ordinary natural meaning as understood 825 in common parlance.
The dictionary meaning of the word 'reserve ' is : "1 (a) To keep for future use or enjoyment; to store up for some time or occasion; to refrain from using or for enjoying at once.
(b) To keep back or hold over to a later time or place or for further treatment.
To set apart for some purpose or with some end in view; to keep for some use.
To retain or preserve for certain purposes (oxford Dictionary, Vol .
VIII, P. 513.) In Webster 's New International Dictionary Second Edition, page 2118 'reserve ' is defined as follows: 1.
To keep in store for future or special use; to keep in reserve; to retain, to keep, as for oneself.
To keep back; to retain or hold over to a future time or place.
To preserve.
" The Supreme Court further observed at p. 504: "What is the true nature and character of the disputed sum, must be determined, with reference to the substance of the matter?" The Supreme Court held at p. 504 505 as follows : "A reserve in the sense in which it is used in rule 2 can only mean profit earned by a company and not distributed as dividend to the shareholders but kept back by the directors for any purpose to which it may be put in future.
Therefore, giving to the 'reserve ' its plain natural meaning it is clear that the sum of Rs. 5,08,637 was kept in reserve by the company and not distributed as profits and subjected to taxation.
Therefore, it satisfied all the requirements of rule 2.
The Directors had no power to distribute the sum as dividend.
They could only recommend as indeed they did, and it was upto the shareholders of the company to accept that recommendation in which case alone the 826 distribution could take place.
The recommendation was accepted and the dividend was actually distributed.
It is, therefore, not correct to say that the amount was kept back.
The nature of the amount which was nothing more than the undistributed profits of the Company, remained unaltered.
Thus the profits Lying unutilised and not specially set apart for any purpose on the crucial date did not constitute reserves within the meaning of Schedule II, rule 2(1).
" The Supreme Court also referred to S.l31 (a) and 132 of the Indian .
Referring to these sections the Supreme Court observed at p. 505 as follows: "Section 131 (a) enjoins upon the directors to attach to every balance sheet a report with respect to the state of company 's affairs and the amount if any which they recommend to be paid by way of dividend and the amount, if any, which they propose to carry to the reserve fund, general reserve or reserve account.
The latter section refers to the contents of the balance sheet which is to be drawn up in the Form marked in Schedule III.
This Form contains a separate head of reserves.
Regulation 99 of the Ist Schedule.
Table A, lays down 'that the directors may, before recommending any dividend set aside out of the profits of the company such sums as they think proper as a reserve or reserves which shall, at the discretion of the directors, be applicable for meeting contingencies, or for equalising dividends, or for any other purpose to which the profits of the company may be properly applied. ' The Regulation suggests that any sum out of the profits of the company which is to be made asa reserve or reserves must be set aside before the directors recommend any dividend.
In this case the directors while recommending dividend took no action to set aside any portion of this sum as a reserve or reserves.
Indeed, they never applied their mind to this aspect of the matter.
The balance sheet drawn up by the assessee as showing the profits was prepared in accordance with the provisions of the Indian .
These provisions also support the conclusion as to what is the true nature of a reserve shown in a balance sheet.
" In the case of Commissioner of Income Tax vs Standard Vacuum oil Co. (1) this Court had occasion to consider the decision in 827 the case of Commissioner of Income tax vs Century Spinning and A Manufacturing Co. Ltd. (supra).
Dealing with the said decision of this Court held at p. 697 98 as follows : "The Court was dealing in this case with the accounts of an Indian Company, the balance sheet of which was prepared according to the provisions of the Indian Companies Act, 1913.
Regulation 99 of the First Schedule, Table A, required that reserves must be set apart before the directors recommended any dividend but out of the profits of the company no amount was set apart towards reserves before the directors recommended payment of dividend to the shareholders.
The identity of the amount remaining on hand at the foot of the profit and loss account was not preserved.
rt is on these facts that the court held that there was no allocation of the amount to reserve and from the mere fact that it was carried forward in the account of the next year and ultimately applied in payment of dividend, it could not be said to be specifically set apart for any purpose at the relevant date, i. e. the end of the year of account." This Court then proceeded to hold at p. 697 98 as follows : "We are in this case dealing with a foreign company and the system of accounting followed by the company is different in important respects from the system which obtains in India.
Companies in India maintain diverse types of reserves: such as capital reserve, reserve for redemption of debentures, reserve for replacement of plant and machinery, reserve for buying new plant to be added to the existing ones, reserve for bad and doubtful debts? reserve for payment of dividend and general reserve.
Depreciation reserves within the limit prescribed by the Income tax Act or the Rules thereunder is the only reserve which is a permissible allowance in the computation of taxable profits.
In its ordinary meaning the expression 'reserve ' means something specifically kept apart for future use or for a specific occasion.
" In the case of Metal Box Company of India Ltd. vs Their Workmen, (1) this Court while dealing with a case under the pay 828 ment of Bonus Act, 1965 had occasion to consider the expression 'reserve ' and its meaning for the purpose of the said Act.
This Court held at p. 67 68 as follows : " The next question is whether the amount so provided is a provision or a reserve.
This distinction between a provision and a reserve is in commercial accountancy fairly well known.
Provisions made against anticipated losses and contingencies are charges against profits and therefore, to be taken into account against gross receipts in the P & L account and the balance sheet.
On the other hand reserves are appropriations of profits, the asset by which they are represented being retained in form part of the capital employed in the business.
Provisions are usually shown in the balance sheet by way of deductions from the assets in respect of which they are made whereas general reserves and reserve funds are shown as part of the proprietor 's interest (see Spicer and Pegler 's Book keeping and Accounts, 15th Edn. page 42).
An amount set aside out of profits and other surpluses, not designed to meet a liability, contingency, commitment or diminution in value of assets known to exist at the date of the balance sheet is a reserve but an amount set aside out of profits and other surpluses to provide for any known liability of which the amount cannot be determined with substantial accuracy is a provision; (see William Pickles Accountancy, Second Edn.
p. 192; Part III, clause 7, Schedule VI to the Companies Act, 1958, which derives provision and reserve." In the case of Commissioner of Income tax vs Mysore Electrical Industries Ltd.(1) the facts were briefly as follows: Out of the profits of the company for the accounting period ending March 31, 1963.
the Directors of the company appropriated the following amounts towards reserves on August 8, 1963: (i) Rs. 2,56,000 as plant modernisation and rehabilitation reserve: (ii) Rs. 89,557 as development rebate reserve.
The question was whether these amounts could be included in computing the capital of the respondent as on April 1, 1963 under rule 1 of Schedule II to the .
for the purpose of the statutory deduction for the assessment year 1961 65, The contention of the department was that since the appropriations were made on 8th August, 1963 they could not be treated as components of capital as on the first day of the previous year i.e. 1st April, 1963.
Negativ 829 ing the contention of the department, this Court held that the determination of the Directors to appropriate the amounts of the three items of reserve on 8th August, 1963 had to be related to first April, 1963, viz., the beginning of the accounts for the new year, and had to be treated as effective from that day and the said three items had to be added to the other items for computation of the capital of the company as on first April, 1963 under rule 1 of Schedule II to the .
It may be noted that in this case before the trial court a claim had been made by the company that a sum of Rs. 3,15,000 representing dividend reserve was to be considered in computing the assessee 's capital for the purpose of and the High Court had rejected this claim.
As against the rejection of this claim by the High Court, no appeal had been preferred by the assessee to the Supreme Court.
The Supreme Court while considering the three items which came up for consideration before it held, as already noted, that the decision of the directors to appropriate the amounts to these three items of reserve on 8th August, 1963 had to be related to 1st April, 1963 and this Court observed at pp.
560 570 as follows: "It is well known that the accounts of the company have to be made up for a year up to a particular day.
In this case that day was the 31st March, 1963.
If it was reasonably practicable to make up the accounts up to the 31st March, 1963, and present the same to the directors of the respondent on April 1, 1963, they could have made up their minds on that day and declared their intention of appropriating the said and other sums to reserves of different kinds.
But the fact that they could not do so for the simple reason that the calculation and collection of figures of all the items of income and expenditure of the company for the year ending March 31, 1962, was bound to take some time cannot make any difference to the nature or quality of the appropriation of the profits to reserves as determined by the directors after the first of April, 1963.
Their determination to appropriate the sums mentioned to the three separate classes of reserves on the 8th August, 1963, must be related to the 1st of April, 1963, i.e., the beginning of the accounts for the new year and must be treated as effective from that day".
830 Relying on the aforesaid decisions and also many other decisions of the various High Courts which have been considered by my learned brother Tulzapurkar, J. in his judgment, the learned counsel for the assessee has argued that the word 'reserve ' which has not been defined in the Act, has to be understood in its ordinary meaning as laid down by the Supreme Court in the case of Century Spinning Mills Ltd. The further argument is that the recommendation for dividend by the directors of the Company does not create any kind of liability, immediate or future.
It is argued that the obligation to pay the dividend only arises when the shareholders at the Annual General Meeting of the Company decided to accept the recommendation of the Directors and pass a resolution for declaration of dividend.
It is submitted that it is open to the Directors to withdraw or modify the recommendations made by them any time before the shareholders accept the recommendations and in support of this contention reference is made to the decision of this Court in the case of Keshoram Industries and Cotton Mills Ltd. vs Commissioner of Wealth Tax (Central), Calcutta (I) and n reliance is placed on the following observations at p. 772 : "The directors cannot distribute dividends but they can only recommend to the general body of the company the quantum of dividend to be distributed.
Under section 217 of the Indian Companies Act, there shall be attached to every balance sheet laid before a company in general meeting a report by its board of directors with respect to, inter alia, the amount.
if any, which it recommends to be paid by way of dividend.
Till the company in its general body meeting accepts the recommendations and declares the dividend, the report of the directors in that regard is only a recommendation which may be withdrawn or modified as the case may be.
As on the valuation date nothing further happened than a mere recommendation by the directors as to the amount that might be distributed as dividend, it is not possible to hold that there was any debt owed by the assessee to the share holders on the valuation date.
" It is further argued that it is open to the share holders to accept the i recommendations in its entirety or to modify the same by 831 deciding to declare dividend at a rate lower than the one recommended by the directors.
It is, therefore, contended that the recommendation of the directors for payment of dividend does not have the effect of creating any kind of liability and there is no debt owed by the company by virtue of the said recommendations.
It has been submitted that the decision of this Court in the case of Mysore Electrical Industries Ltd. (supra) is of no assistance and the said decision does not lay down that in the event of the share holders ' acceptance of recommendation made by the directors for the distribution of dividend to the share holders of the company, the liability for payment of the dividend will also relate back; and the doctrine of relation back applies only in respect of items which the directors are competent to decide for themselves, in view of the process involved in the preparation of accounts of the company.
The main argument advanced on behalf of the Revenue is that any amount which may be set apart for payment of dividend r recommended to be paid by the Directors cannot constitute 'reserve ' within the meaning of the Act.
The argument advanced on behalf of the assessee appears to be sound; but to my mind the said arguments are not sufficiently convincing to lead the Court to the conclusion that the amount set apart for payment of dividend recommended by the Board of Directors can constitute 'reserve ' within the meaning of the Act for the purpose of computation of the capital of the Company.
The word 'reserve ' has not been defined in the ACT.
In the absence of any such definition the word has to be understood in its ordinary sense.
It is, however, to be remembered that the word 'reserve ' in the instant case occurs in a taxing statute specially applicable to Companies only.
The word 'reserve ' should be so construed as to give the said word the meaning in which it is ordinarily understood by persons interested in Companies or in dealing with Companies.
In other words, the word 'reserve ' for the purpose of this Act should be understood in the sense in which it is understood in company circles and by persons interested in Companies and in dealing with Companies.
It may be noticed that while considering the true meaning and true nature of 'reserve ', the Supreme Court in the case of Commissioner of Income Tax vs Century Spinning and Manufacturing Co. Ltd. (supra) has referred 832 to section 131 (a) and 132 of the Indian Companies Act, to the Form marked in Schedule III in which balance sheet of the Company has to be prepared and also to Regulation 99 of the First Schedule, Table A. I have earlier quoted the relevant observations of the Supreme Court.
It is, no doubt, true that the re commendations of the Directors for payment of any dividend does not create any kind of liability for the payment of the said amount.
The liability for payment of any amount by way of dividend only arises when the share holders accept the recommendations and a dividend is declared at the annual general meeting of the Company.
It is open to the Directors to modify or withdraw the recommendation with regard to the payment of dividend before the said recommendation is accepted by the share holders.
It is also open to the share holders not to accept the recommendation of the Directors in its entirety and to modify the same.
The legal liability for the payment of any dividend only arises after the share holders at the annual general meeting have decided to declare a dividend on the basis of the recommendations of the Directors or on the basis of any modification thereof.
The liability for the payment of dividend only arises after the dividend has been declared by the share holders at the annual general meeting and this liability does not relate back to 3 any earlier date on the basis of the recommendations of the directors.
as the directors do not enjoy any power of declaring the b dividend.
The amount that may be set apart for payment of any dividend on the basis of the recommendations made by the Directors, cannot be considered to be an amount set apart for meeting a known or existing liability.
Though the amount which is set apart for payment of any dividend recommended by the Board of Directors is not an amount set apart for meeting any known or existing liability, yet the said amount so set apart cannot be considered to be a 'reserve ' within the meaning of the Act for the purpose of computation of the capital of the Company.
section 210 of the specifically provides that at every annual general meeting of a Company the Board of Directors of a Company shall lay before the Company the balance sheet of the Company and also the Profits and Loss account.
section 211 833 further provides that every balance sheet of a Company shall give a A true and fair view of the state of affairs of the Company as at the end of the Financial Year and shall, subject to the provisions of the section, be in the form set out in of Schedule VI, or as near thereto as circumstances admit or in such other form as may be approved by the Central Government either generally or in a parti cular case.
The preparation of a balance sheet in the prescribed form and laying the same before the share holders at the annual meeting are statutory requirements which the Company has to observe.
Regulation 87 of Table A in Schedule I provides: "(1) The Board may, before recommending any dividend, set aside out of the profits of the Company such sums as it thinks proper as a reserve or reserves which shall, at the discretion of the Board, be applicable for any purpose to which the profits of the Company may be properly applied, including provisions for meeting contingencies or for equalising dividends; and pending such application, may at the like discretion, either be employed in the business of the company or be invested in such investments (other than shares of the Company) as the Board may from time to time, think fit.
(2) The Board may also carry forward any profits which it may think prudent not to divide.
without setting them aside as a reserve".
This Regulation contemplates that the Board may set aside out of the profits of the Company such sums, as it thinks proper, as a reserve or reserves which shall, at the discretion of the Board, be applicable for any purpose to which the profits of the Company may be properly applied including the provisions for meeting contingencies or for equalising the dividends, before recommending any dividend.
In other words, the sums out of the profits of the Company have to be set apart as reserve before any dividend is recommended by the Board; and the recommendation of the Board for payment of dividend comes only after the creation of reserve.
The amount that may, therefore, be set apart for payment of dividend recommended by the Board is an amount which is set apart 834 after the Board had created the reserve.
The form of balance sheet referred to in section 211 of the is appended in of Schedule VI of the Statute.
In the statutory form there are various heads including heads of various kinds of reserves and also of provisions.
In the balance sheet of the Company which has necessarily been prepared in accordance with the provisions of the statute and in the form prescribed, the amount recommended by the Board for payment of dividend has been shown under the head provisions and not under any head of reserves.
It is, no doubt, true that the true nature and character of the sum so set apart must be determined with regard lo the substance of the matter.
The substance of the matter clearly appears to be that the amount is set apart for payment of dividend recommended by the Board to be paid to the share holders and the said amount is never intended to constitute a reserve of the Company.
Indeed a provision is made for payment of the said amount to the share holders by way of dividend on the basis of the recommendation made by the Directors.
Though in law the recommendation made by the Directors for payment of dividend to share holders does not create any liability for the payment of dividend and liability only arises when the shareholders accept the said recommendation, and though in law it may be open to the Board to modify or withdraw the recommendation with regard to the payment of dividend before the acceptance by the share holders and it may also be open to the share holders not to accept the said recommendation in its entirety and to modify the same, yet, for business purposes, when the directors make any recommendation for payment of dividend and set apart any amount for the payment of dividend so recommended, the directors intended to make a provision for the payment of dividend recommended by them and not to create any reserve, as the Directors very well know that the recommendation made by them with regard to the payment of dividend is not normally up set by the share holders and it is generally accepted by the share holders, as a matter of course.
Any amount set apart by the Directors for payment of dividend to the share holders recommended by them, is understood by persons interested in company and in dealing with companies to mean a provision for the payment of dividend to the share holders and is not understood to constitute a reserve.
In my opinion, this true nature and character of the sum so set apart are reflected in the provisions of the and more particularly in the manner of preparation of the balance sheet of the Company.
I am, therefore, of the opinion that the amount set apart for the payment 835 of any proposed dividend on the basis of the recommendation of A the Directors cannot constitute reserve for the purpose of computation of the capital of the Company.
The view that I have taken, to my mind, appears to be in accord with the view earlier expressed by this Court in the decisions to which I have already referred.
On the other questions, I entirely agree with the view expressed by my learned brother Tulzapurkar, J. and I agree with the order proposed by him.
C.A. No. 1614(NT)/78, Review Petition No. 57180 and Tax Reference Cases Nos 2&3/77 and 5/1978 dismissed.
P.B.R. C.A. No. 860/73 partly allowed.
| The Super (Profits Tax) Act, 1963 and the Company 's (Profits) Sur tax Act, 1964 (the scheme and main provisions of both of which are almost identical) impose a special tax on excess profits earned by companies.
The special tax is imposed in respect of so much of a company 's "chargeable profits" of the previous year as exceeded the "standard deduction" The term "chargeable profit" is defined to mean the total income of an assessee computed under the Income Tax Act, 1961 for any previous year and adjusted in accordance with the provisions of that Act.
"Standard deduction" is determined by computing the capital of a company in accordance with the rules laid down in the schedule.
The material part of rule I provides that before any amount or sum qualifies for inclusion in capital computation of a company two conditions are required to be fulfilled namely: (i) that the amount or sum must be a "reserve" and (b) that it must not have been allowed in computing the company 's profit for the purposes of Income Tax Acts, 1922 or 1961.
ln their respective balance sheets, the assessees had shown under the heading "current liabilities and provisions" appropriations of large sums of money for taxation, retirement gratuity and dividends and claimed that for the purposes of super profits tax these sums should be regarded as "other reserves" within the meaning of Rule 1 of Second Schedule to the Act and that for the computation of capital they should be taken into account.
Treating these sums as "provisions" and not as "reserves", the Super Profits Tax officer determined the capital and the standard deduction by excluding them from the computation of the capital.
He then levied super profits tax on that portion of the chargeable profits of the previous year as exceeded the standard deduction.
While the Appellate Assistant Commissioner upheld the assessee 's contention that these sums were "reserves" which should be taken into account for computing their capital, the Appellate Tribunal held that these were not "reserves" within 790 the meaning of Rule l of the Second Schedule to the Act and as such could not enter into capital computation.
On reference the High Court held that the sums set apart were not "reserves and so should be excluded in the computation of the capital for the purposes of levying the super profits tax.
In Tax Reference No. 5 (a case under the ) the assessee transferred from out of its current profits a large sum of money to the general reserves and paid dividend to its shareholders from out of the augmented general reserves.
On the question whether for computing the capital for the purpose of sur tax the general reserves should or should not be reduced by the sum of dividend paid, the taxing authorities and the appellate tribunal ignored this amount holding that it was not a "reserve".
None of the items of appropriation either for taxation or for retirement gratuity or for proposed dividend in the assessees ' cases had been allowed in computing their profits under the Income Tax Act, 1961.
^ HELD: [per Tulzapurkar & Venkataramiah, JJ] The expressions "reserve" and "provision" have not been defined in the Act.
Standard dictionaries, without making any distinction between the two concepts, use them more or less synonymously connoting the same idea.
But since in the context of the legislation a clear distinction between the two is implied it is essential to know the exact connotation of the two concepts and the distinction as known in commercial accountancy.
The rules for computation of capital contained in the Second Schedule to the Act proceed on the basis of the formula of capital plus reserve, a formula well known in commercial accountancy.
But since they occur in a taxing statute applicable to companies only these expressions will have to be understood in the sense or meaning attributed to them by men of business, trade and commerce and by persons interested in or dealing with companies.
Therefore, the meaning attached to these words in the would govern their construction for the purpose of these two enactments [800 C H] The broad distinction between the two expressions as judicially evolved by this Court is that, while a "provision" is a charge against the profits to be taken into account against gross receipts in the profit and loss account, a "reserve" is an appropriation of profits, the asset or assets by which it is represented being retained to form part of the capital employed in the business.
[801 F] C.l.
T. vs Ccntury Spinning & Manufacturiag Co., and Metal Box Company of India Ltd. vs Their Workmen, 73 lTR 67 followed.
The , which enjoins upon the Board of Directors of every company to lay before the annual general meeting of its shareholders an annual balance sheet and a profit and loss account, enumerates the separate heads that should be shown in the balance sheet, two of these items being "reserve ' and "provision".
The definitions of these two expressions given in the Act show 791 that if any retention or appropriation of a sum falls within the definition of A "provision" it can never be a "reserve".
But the converse is not true.
If the retention or appropriation is not a "provision" that is, if it is not designated to meet depreciation, renewals or diminution in value of assets or any known liability it is not automatically a "reserve" and the question will have to be decided having regard to the true nature and character of the sum so retained or appropriated depending on several factors, including the intention with which and the purposes for which such retention or appropriation had been made.
[803 E Fl Having regard to the type of definitions of the two concepts, if a particular retention or appropriation of a sum falls within the expression "provision" then that sum will have to be excluded from the computation of capital.
If the sum is in fact a "reserve" then it would be taken into account for the computation of capital.
[804 B C] Where the assessee had set apart a sum of money to meet tax liability in respect of profits earned during an accounting year, which liability was not quantified, such setting apart for a known and existing liability, would be a "provision" and could not be regarded as a "reserve".
[806 A C] Kesoram Industries and Cotton Mills Ltd.v.
Commissioner of Wealth Tax (central) Calcutta, ; followed.
But if provision for a known or existing liability is made in excess of the amount reasonably necessary for the purpose, such excess should be treated as reserve" and, therefore, would be includible in capital computation.
[806 E] Since the assessee (in C.A. No. 860/73) had at no stage of the proceedings before the Taxing Authorities or Appellate Tribunal or the High Court raised a plea that the provision made by it for taxation was in excess of the amount reasonably necesssary for the purpose and that such excess should be treated as a "reserve", the plea which needs investigation into facts, could not be allowed to be raised for the first time in appeal before this Court.
[807 F] Ordinarily an appropriation to gratuity reserve will have to be regarded as a provision made for a contingent liability, for, under a scheme framed by a company the liability to pay gratuity to its employee on determination of employment arises only when the employment of the employee is determined by death, incapacity, retirement or resignation an event (cessation of employment) certain to happen in the service career of every employee.
Moreover, the amount of gratuity payable is usually dependent on the employee 's wages at the time of G, determination of his employment and the number of years of service put in by him and the liability accrues and enhances with completion of every year of service; but the company can work out on an acturial valuation its estimated liability (i.e. discounted present value of the liability under the scheme on a scientific basis) and make a provision for such liability not all at once but spread over a number of years.
If by adopting such scientific method any appropriation is made such appropriation will constitute a provision representing fairly accurately a known and existing liability for the year in question; if however, an ad hoc sum 792 is appropriated without resorting to any scientific basis such appropriation would also be a provision intended to meet a known liability, though a contingent one, for, the expression 'liability ' occurring in cl.
(7)(1)(a) of Part III of Sixth Schedule to the includes any expenditure contracted for and arising under a contingent liability: but if the sum so appropriated is shown to be in excess of the sum required to meet the estimated liability (discounted present value on a scientific basis) it is only the excess that will have to be regarded as a reserve under clause (7) (2) of to the Sixth Schedule.
[807 G.H; 808 A D] In the instant case although the assessee had urged before the authorities below that different treatment for the same item could not be given for purposes of income tax assessment and super profits tax assessment the assessee did not clarify by placing material on record as to whether appropriation was based on any acturial valuation or whether it was an appropriation of an ad hoc amount a which has a vital bearing on the question, whether the appropriation could be treated as a provision or reserve.
In the absence of proper material the question should be decided by the taxing authorities whether the amount set apart and transferred to gratuity reserve by the assessee company was either a provision or a reserve and if the latter to what extent.
[812 C E] Standard Mills Co. Ltd. vs Commissioner of Wealth Tax, Bombay, 63, I.T.R.470 & Workmen of William Jacks & Co. Ltd. vs Management of Jacks & Co.Ltd; Madras.
[1971] Supp.
S.C.R. 450 followed.
Southern Railway of Peru Ltd. vs Owen ; referred to.
The appropriations of an amount by the Board of Directors by way of providing for proposed dividend would not constitute 'provision ', for, the appropriations cannot be said to be by way of providing for any known or existing liability, none having arisen on the date when the Directors made recommendation much less on the relevant date after the first day of the previous year relevant to the assessment year in question.
This by itself would not convert the appropriations into "reserves".
[813 E F] The tests and guidelines laid down by this Court in this respect are: (1) the true nature and character of the appropriation must be determined with reference to the substance in the matter, which means that one must have regard to the intention with which and the purpose for which appropriation has been made such intention and purpose being gathered from the surrounding circumstances.
A mass of undistributed profits cannot automatically become a reserve.
Some body possessing the requisite authority must clearly indicate that a portion thereof has been earmarked or separated from the general mass of profits with a view to constituting it either a general reserve or a specific reserve; (2) the surrounding circumstances should make it apparent that the amount so earmark ed or set apart is in fact a reserve to be utilised in future for a specific purpose on a specific occasion; (3) a clear conduct on the part of the Directors in setting apart a sum from out of the mass of undistributed profits avowedly for the purpose of distribution of dividend in the same year would run counter to any intention of making that amount a reserve, (4) the nomenclature accorded to any particular fund which is set apart from out of the profits would not be material 793 Or decisive of the matter; and (5) if any amount set apart from out of the profits A is going to make up capital fund of the assessee and would be available to the assessee for its business purposes it would become a reserve liable to be included in the capital computation of the assessee under that Act.
[815 F H, 817 G] The relevant provisions of the clearly show that creating reserves out of the profits is a stage distinct in point of fact and anterior in point of time to the stage of making recommendation for payment of dividend and the scheme of the provisions suggests that appropriation made by the Board of Directors by way of recommending a payment of dividend cannot in the nature of things be a reserve.
[818 F G] Judged in the light of the above guidelines the appropriations made by the Directors for proposed dividend in the case of the concerned assessee companies did not constitute 'reserves ' and the concerned amounts so set apart would have to be ignored or excluded from capital computation.
[818 H] Standard Mills Co. Ltd. vs Commissioner of Wealth tax Bombay, 63 I.T.R.470, Metal Box Co.
Of India Ltd. vs Their Workmen, , First National City Bank vs Commissioner of Income Tax, & Commissioner of Income tax (Central), Calcutta vs Standard Vacuum oil Co., followed.
Although under the it is open to the Directors to recommend and the share holders to approve payment of dividend from the current year 's profits or from the past year 's profits and on transfer of a portion of the current year 's profit to the general reserve the augmented general reserve becomes a congolmerate fund, having regard to the natural course of human conduct it is not difficult to predicate that dividends would ordinarily be paid out from the current income rather than from the past savings, unless the directors in their report expressly or specifically state that payment of dividends would be made from the past savings.
From the commercial point of view, if any amount is required for incurring any expenditure or making any disbursement like distribution of dividends in a current year, ordinarily the same will come out of the current income of the company if it is available and only if the sum is insufficient then the past savings will be resorted to for the purpose of incurring that expenditure or making that disbursement.
Such a course would be in accord with the common sense point of view.
[822 C F] In the absense of express indication to the contrary the normal rule for a commercial concern would be to resort to current income rather than past savings while incurring any expenditure or making any disbursement.
[822 H] Commissioner of Income Tax, Bombay City l vs Bharat Bijlee Ltd. ; & Commissioner of Income Tax, Bombay City ll vs Marrior (India) Ltd. 120 ITR Sl 2 approved.
[per A.N. Sen, J.] The amount set apart for payment of any dividend recommended by the Board of Directors is not an amount set apart for meeting a known or existing 794 liability and cannot be considered to be a "reserve" within the meaning of the Act for the purposes of computation of the capital of the company.
[832 F] The provides for the preparation of annual balance sheet in the prescribed form and laying it before the shareholders at the annual general meeting.
Regulation 87, Table A in Schedule I contemplates that the Board may set aside out of the profits of the company certain sum as "reserve" before dividend is recommended by it.
The amount recommended by the Board for payment of dividend is shown in the balance sheet under the head "provision" and not under any head of "reserve".
The true nature and character of the sum so set apart must be determined with regard to the substance of the matter which in this case is that the sum set apart was never intended to constitute a "reserve ' of the company.
In law the liability for payment of dividend arises only when the share holders accept the recommendations made by the Directors.
Till then it is open to the Directors to modify or withdraw their recommendation before it is accepted by the shareholders and it is equally open to the share holders not to accept the recommendation in its entirety.
Even so, for business purposes when the Directors make any recommendation for payment of dividend and set apart any amount for this purpose the Directors intend to make a provision and do not create any reserve, as Directors know that their recomendation is generally accepted by the shareholders as a matter of course.
Therefore any amount set apart for this purpose is understood by persons interested in company matters and in dealing with companies to mean a provision for the payment of dividend to the shareholders and is not understood to constitute a "reserve".
[832 C F] Commissioner of lncome tax Bombay City vs Century Spinning and Manufacturing Co. Ltd. , Commissioner of Income Tax vs Standard Vaccum oil Co., , Metal Box Co. Of Ltd. vs Their Workmen, , Commissioner of Income tax vs Mysore Electrical Industries Ltd., [1971] 80 l.
T.R. 567 and Kesho Ram Industries and Cotton Mills Ltd vs
Commissioner of Wealth Tax (Central), Calcutta; , referred to.
|
Appeal No. 865 of 1964.
930 Appeal by special leave from the judgment and order dated February 14, 1964 of the Bombay City Civil Court at Bombay in Appeal No. 86 of 1963.
M. C. Setalvad, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellant.
B. K. Bhattacharjee and section N. Mukherjee, for the respondent.
The Judgment of the Court was delivered by Hidayatullah, J.
In this appeal by special leave against the judgment and order of the Principal Judge, City Civil Court, Bombay dated February 14, 1964, the only question is whether the delegation by the Commissioner, Municipal Corporation of his functions under sections 105B to 105E to certain officers of the Corporation was valid and proper.
This question arises in the following circumstances : One Govind Hari was a monthly tenant of room No. 23 of a chawl at Chandanwadi.
After his death in 1961 the tenancy devolved on his widow Anusuyabai, who took in a boarder.
The chawl belonged to the Municipal Corporation and proceedings were taken to eject Anusuyabai and the boarder under Chapter VI A of the Municipal Corporation Act.
These proceedings were initiated by one of the officers to whom the powers of the Commissioner were delegated by him under section 68 of the Act.
After due enquiry the officer passed an order evicting these persons.
An appeal was filed under section 105F of the Act before the Bombay City Civil Court.
In that appeal it was held that the delegation was not proper inas much as the judicial functions of the Commissioner under sections 105B to 105E had been delegated to be exercised under the Commissioner 's control and subject to his revision.
The learned Judge pointed out that judicial or quasi judicial power could not ordinarily be delegated and, in any event, it could not be delegated so that the control over the decision was kept by the Commissioner.
He, therefore, held that the officer who had passed the order was not properly invested with jurisdiction and the order was thus a nullity.
The Bombay Municipal Corporation Act is an Act of 1888 and it has been amended frequently.
Section 68 is one of the original sections and it provides as follows : "68.
Municipal officers may be empowered to exercise certain of the powers, etc.
of the Commissioner.
931 (1) Any of the powers, duties or functions conferred or imposed upon or vested in the Commissioner by any of the sections, sub sections or clauses mentioned in sub section (2) may be exercised, performed or discharged, under the Commissioner 's control and subject to his revision and to such conditions and limitations, if any, as he shall think fit to prescribe, by any municipal officer whom the Commissioner generally or specially either by name or by virtue of office, empowers in writing in this behalf; and in each of the said sections, sub sections and clauses the word "Commissioner" shall, to the extent to which any municipal officer is so empowered, be deemed to include such officer.
(2) The sections, sub sections and clauses of this Act referred to in sub section (1) are the following namely Section 105B. " 105C. " 105D. " 105E. A reference to sections 105B, 105C, 105D and 105E was inserted by the Maharashtra Act XIV of 1961.
These sections are in Chapter 6A which was also newly added by the same Act.
It is not necessary to refer to these sections, except a portion from section 105B which brings into prominence the action taken by the Corporation against the respondents : "105B. Power to evict person from corporation premises.
(1) Where the Commissioner is satisfied (a) that the person authorised to occupy any corporation premises has, whether before or after the commencement of the Bombay Municipal Corporation (Amendment) Act, 1960, (i) 932 (ii) sub let, contrary to the terms or condi tions of his occupation, the whole or any part of such premises; or the Commissioner may notwithstanding anything contained in any law for the time being in force, by notice order that person, as well as any other person who may be in occupation of the whole or any part of the premises, shall vacate them within one month of the date of the service of the notice.
" It will be noticed that section 68 was originally intended to cover very different matters because Chapter 6A could not have been in contemplation.
When Chapter 6A was added and a reference to sections 105B to 105E was included in section 68, the wording of that section became applicable to the powers exercisable under sections 105B to 105E, even though that wording, taken literally, is somewhat inapt to cover delegation of judicial power.
No question has been raised that any of the amendments is ultra vires so the words of section 68 must be reasonably construed.
It goes without saying that judicial power cannot ordinarily be delegated unless the law expressly or by clear implication permits it.
In the present case the amendment of section 68 by inclusion of delegation of the functions of the Commissioner under sections 105B to 105E does indicate the intention that the judicial or quasi judicial powers contained in Chapter VIA were expressly intended to be delegated.
To the delegation as such there can be no objection.
What is objected to is the provision, both in the section as well as in the order of delegation, that the exercise of the function is to be under "the Commissioner 's control" and "subject to his revision".
These words are really appropriate to a delegation of administrative functions where the control may be deeper than in judicial matters.
In respect of judicial or quasi judicial functions these words cannot of course bear the meaning which they bear in the delegation of administrative functions.
When the Commissioner stated that his functions were delegated subject to his control and revision it did not mean that he reserved to himself the right to intervene to impose his own decision upon his delegate.
What those words meant was that the Commissioner could control the exercise administratively as to the kinds of cases in which the delegate 933 could take action or the period or time during which the power might be exercised and so on and so forth.
In other words, the administrative side of the delegate 's duties were to be the subject of control and revision but not the essential power to decide whether to take action or not in a particular case.
This is also the intention of section 68 as interpreted in the context of the several delegated powers.
This is apparent from the fact that the order of the delegate amounts to an order by the Commissioner and is appealable as such.
If it were not so the appeal to the Bombay City Civil Court would be incompetent and the order could not be assailed.
The order of the delegate was the order of the Commissioner and the control envisaged both in section 68 and the order of delegation was not control over the decision as such but over the administrative aspects of cases and their disposal.
No allegation has been made that the Commissioner intervened in the decision of the case or improperly influenced it.
In these circumstances the order impugned in the appeal cannot be sustained.
We allow the appeal and set aside the order of the Bombay City Civil Court and restore the order of the officer who exercised powers under section 105B of the Act, but make no order about costs.
Appeal allowed.
| One C a tenant of a Chawl belonging to the Municipal Corporation of Bombay died, and his widow on whom the tenancy devolved, took in a boarder.
Proceedings by the Corporation under Chapter VI A of the Municipal Corporation Act for their ejectment were initiated by an officer to whom the commissioner had delegated his powers under section 68 of the Act.
After due enquiry the officer passed an order evicting C 's widow and her boarder.
In an appeal filed under section 105F of the Act before the Bombay City Civil Court it was held that the delegation of the Commissioner 's power was not proper inasmuch as the judicial functions of the Com missioner under sections 105B to 105E had been delegated to be exercised under the Commissioner 's control and subject to his revision, and consequently the order of ejectment was without jurisdiction.
The Corporation appealed, by special leave, to the Supreme Court.
No question as to the validity of the law was raised.
It was only contended that judicial power was delegated with administrative control over the delegates decision.
HELD :(i) Section 68 was originally intended to cover very different matters because Chapter VI A could not then have been in contemplation.
When Chapter VI A was added and a reference to sections 105B to 105E was included in section 68, the wording of that section became applicable to the powers exercisable under sections 105B to 105E, even though that wording, taken literally, is somewhat inapt to cover delegation of judicial power.
[932 D] (ii) To the delegation of judicial power as such there can be no objection when the law either expressly or by necessary implication permits it.
In the present case the amendment of section 68 by inclusion of the delegation of the function of the Commissioner under sections 105B to 105E does indicate the intention that the judicial and quasi judicial powers contained in Chapter VI A were expressly intended to be delegated.
The words "the Commissioner 's control" and "subject to his revision" in section 68, as well as in order of delegation, are really appropriate to a delegation of administrative functions.
They must be reasonably construed.
In respect of judicial or quasi judicial functions these words cannot bear the meaning which they bear in the delegation of administrative functions.
When the Commissioner stated that his functions were delegated subject to his control and revision it did not mean that he reserved to himself the right to intervene to impose his own decision upon his delegate.
The control envisaged was not control over the decision as such but over the administrative aspects of cases and their disposal and the delegation was valid.
[932 F 933 B] The order of the Bombay City Civil Court could not therefore be sustained.
|
Civil "Appeals Nos.
30 18 21 of 1987.
From the Judgment and Orders dated 24.4.87, 2.3.87, & 1.4.87 of the Central Administrative Tribunal, Hyderabad in Original Applica 794 tion No. 121/86, T.A. Nos.
958& 180 of 1986 and O.A. No. 140of 1986.
WITH CA Nos.
3016/88 & 51 55/90 with CA Nos.
3083 & 4379 of 1990 and S.L.P. (C) Nos.
1094, 2344/90, 11680 of 1991.
Altar Ahmed, Additional Solicitor General, V.C. Mahajan, J.D. Jain, C.V.S. Rao, Hemant Sharma, B. Parthasarthy, A. Subba Rao, M.N. Krishnamani, Pravir Choudhary, Ms. Indu Malhotra, Ms. Shirin Jain, T.V.S.N. Chari, Ms. Suruchi Aggarwal and Ms. Manjula Gupta for the appearing parties.
The Judgment of the Court was delivered by SAWANT, J.
Civil Appeals Nos.
3019/87, 3020/87 and 3016/88 arise out of the judgment dated March 2, 1987 deliv ered by the Full Bench of the Central Administrative Tribu nal (hereinafter referred to as the 'Tribunal ').
Civil Appeals Nos.
3018/87 and 3021187 arise out of the judgments dated April 24, 1987 and April 1, 1987 respective ly of the Tribunal, Hyderabad Bench.
Civil Appeals Nos.
3083/90 and 4379/90 arise out of the judgments dated March, 2, 1989 and September 15, 1989 of the Madras and Hyderabad Bench of the Tribunal respectively and which are based on the aforesaid decision of the Full Bench of the Tribunal.
Civil Appeals Nos.
51 55 of 1990 arise out of the deci sion dated July 12, 1989 of the Tribunal, Chandigarh Bench.
Special Leave Petition (C) No. 1094 of 1990 arises out of the decision dated June 29, 1989 of the Tribunal; Bombay Bench.
SpeCial Leave Petition (C) No. 2344 of 1990 arises out of the decision dated 18th September, 1989 given by the Tribunal, Principal Bench, New Delhi.
Special Leave Petition (C) No. 11680 of 1991 arises out of the decision dated January 25, 1991 given by the Tribu nal, Principal Bench, New Delhi.
2, The common questions involved in all these matters relate to what in service jurisprudence has come to be known as "sealed cover procedure".
Concisely stated, the questions are: (1) what is the date from which it can be said that disciplinary/criminal proceedings are 795 pending against an employee? (2) What is the course to be, adopted when the employee is held guilty in such proceedings if the guilt merits punishment other than that of dismissal? (3) To what benefits an employee who is completely or par tially exonerated is entitled to and from which date? ' The , 'sealed cover procedure" is adopted when an employee is due for promotion, increment etc.
but disciplinary/criminal proceedings are pending against him at the relevant time and hence, the findings of his entitlement to the benefit are kept in a sealed cover to be opened after the proceedings in question are over '.
Hence.
the relevance and importance of the questions.
The Union of India and the other appellant authori ties have by these appeals challenged the findings recorded by the different Benches of the Tribunal in reply to one or the other ' of or all the aforesaid three questions, in the decisions impugned therein.
While recording its findings, the Full Bench of the Tribunal has also struck down two provisions of the Central Government Memorandum of 30th January, 1982 on the subject.
We may, therefore, first refer to the said memorandum.
The Government of India (Deptt. of Personnel & Train ing) issued an Office Memorandum No, 22011/1/79.
(A) dated January 30, 1982 on the subject of promotion of offi cers in whose cases "the sealed cover procedure" had been followed but against whom disciplinary/court proceedings were pending for a long time.
The Memorandum stated that according to the existing instructions, cases of officers (a) who are under suspension or (b) against whom discipli nary proceedings are pending or a decision has been taken by the competent disciplinary authority to initiate discipli nary proceedings or, (c) against whom prosecution has been launched in a court of law or sanction for prosecution has been issued, are considered for promotion by the Departmen tal Promotion Committee (hereinafter referred to as the 'DPC ') at the appropriate time but the findings of the Committee are kept in a sealed cover to be opened after the conclusion of the disciplinary/court proceedings.
While the findings are kept in the sealed cover, the vacancy which might have gone to the officer concerned is filled only on an officiating basis.
If on the conclusion of the departmen tal/court proceedings, the officer concerned is completely exonerated, and where he is under suspension it is also held that the suspension was.wholly unjustified, the sealed cover is opened and the recommendations of the DPC are acted upon.
If the officer could have been promoted earlier, he is promoted to the post which is filled on an officiating basis, the officiating arrangement being terminated.
On his 796 promotion, the officer gets the benefit of seniority and fixation of pay on a notional basis with reference to the date on which he would have been promoted in the normal course, but for the pending disciplinary/ court proceedings.
However, no arrears of salary are paid in respect of the period.
prior to the date of actual promotion.
The Memoran dum goes on to state further that it was noticed that some times the cases in the courts or the departmental proceed ings take unduly long time to come to a conclusion and the officers undergo considerable hardship, even where it is not intended to deprive them of promotion for Such a long time.
The Government, therefore, in consultation with the Union Public Service Commission examined how the hardship caused to the Government servant in such circumstances can be mitigated and has laid down the following procedure in such cases: "3.
(i)(a) It may be ascertained whether there is any departmental disciplinary proceedings or any case in a court of law pending against the individual under consideration, or (b) there is a prima facie case on the basis of which a decision has been taken to proceed against the official either departmentally or in a court of law. ' (ii) The facts may be brought to the notice of the Departmental PromOtion Committee who may then assess the suitability of the official(s) for promotion to the next grade/post and for the purpose of this assessment, the D.P.C. shall not take into consideration the fact of the pending case(s) against the official.
In case an official is found "unfit for promo tion ' on the basis of his record, without taking into consideration, the case(s) pending against him, the findings of the D.P.C. shall be recorded in the proceedings.
In respect of any other kind of assessment, the grading awarded by the D.P.C. may be kept in a sealed cover.
(iii) After the findings are kept in a sealed cover by the Departmental Promotion Committee subsequent D.P.Cs.
, if any, held after the first D.P.C. during the period the discipli nary/court proceedings may be pending, will also consider the officer 's case and record their findings.
which will again be kept in sealed cover in the above manner.
797 In the normal course, on the conclu sion of the disciplinary/court proceedings, the sealed cover or covers may be opened, and in case the officer is completely exonerated i.e. no statutory penalty, including that of censure, is imposed, the earliest possible date of his promotion but for the pendency of the disciplinary/court proceedings against him, may be determined with reference to the position(s) assigned to him in the findings in the sealed cover/covers and with reference to the date of promotion of his next junior on the basis of such position.
The officer con cerned may then be promoted, if necessary by reverting the juniormost officiating person, and he may be given a notional promotion from the date he would have been promoted, as determined in the manner indicated above.
But no arrears of pay shall be payable to him for the period .of notional promotion proceeding the date of actual promotion.
If any penalty is imposed on the officer as a result of the disciplinary pro ceedings or if he is found guilty in the court proceedings against him, the findings in the sealed cover/covers shall not be acted upon.
The officer 's case for promotion may be con sidered in the usual manner by the next D.P.C. which meets in the normal course after the conclusion of the disciplinary/court proceed ings.
The existing instructions provide that in a case where departmental disciplinary proceedings have been held under the relevant disciplinary rules, "warning" should not be issued as a result of such proceedings.
If it is found as a result of the proceedings that some blame attaches to the officer, then the penalty of censure at least should be imposed.
This may be kept in view so that no occasion arises for any doubt on the point whether or not an officer has been completely exonerated in disciplinary proceedings held against him.
" Clause (iv) of Para 3 of the Memorandum then lays down the procedure for ad hoc appointment of the concerned offi cer when the disciplinary/court .proceedings are not con cluded even after the expiry of two years from the date of the DPC which first considered him for promotion and whose findings are kept in the sealed cover, provided however that the officer is not under suspension.
It is not necessary to reproduce that clause in extenso here.
Suffice it to say that the Memorandum urges that in making the ad hoc promo tion in such cases, his case should be placed before the DPC which is held after the 798 expiry of the said period of two years, and the ad hoc promotion has to be made on the basis of the totality of the record of service etc.
Para 4 of the Memorandum states that if the officer concerned is acquitted in the court proceedings on the merits of the case or exonerated in departmental discipli nary proceedings, the ad hoc promotion already made may be confirmed and the promotion treated as a regular one from the date of the ad hoc promotion with all attendant bene fits.
In such cases, the sealed cover may be opened and the official may be assigned his place in the seniority list as he would have got in accordance with the recommendation of the DPC.
Paras 5, 6 and 7 of the Memorandum then read as follows: "5.
Where the acquittal in a court case is ' not on merits but purely on technical grounds, and the Government either proposes to take the matter to a higher court or to pro ceed against the officer departmentally, the appointing authority may review whether the ad hoc promotion should be continued.
Where the 'acquittal by court is on technical grounds, if the Government does not propose to go in appeal to a higher court or to take further departmental action, action should be taken in the same manner as if the officer had been acquitted by the court on merits.
If the officer concerned is not acquitted/exonerated in the court proceedings or the departmental proceedings, the ad hoc promotion already granted should be brought to an end by the issue of the "further order" contemplated in the order of ad hoc promotion (Please see para 3(vi) above) and the officer concerned reverted to the post from which he was promoted on ad hoc basis.
After such reversion, the officer may be considered for future promotion in the usual course by the next D.P.C." , 5.
To bring the record uptodate, it may be pointed out that in view of the decision of this Court in Union of India & Anr.
vs Tajinder Singh, [ ; decided on September 26, 1986, the Government of India in the Deptt.
of Personnel & Training issued another ' Office Memorandum No. 22011/2/86.
(A) dated January 12, 1988, in superses sion of all the earlier instructions on the subject 799 including the Office Memorandum dated 30th January, 1982 referred to above.
There is no difference in the instruc tions contained in this and the earlier aforesaid Memorandum of January 30, 1982, except that this Memorandum provides in paragraph 4 for a six monthly review of the pending proceed ings against the Government servant where the proceedings are still at the stage of investigation and if as a result of the review, the appointing authority comes to the conclu sion on the basis Of material and evidence collected in the investigation till that time, that there is no prima facie case in initiating disciplinary action or sanctioning prose cution, the sealed cover is directed to be opened and the employee is directed to be given his due promotion with reference to the position assigned to him by the the DPC.
A further guideline contained in this Memorandum is that the same sealed cover procedure is to be applied where a Govern ment servant is recommended for promotion by the DPC, but before he is actually promoted, he is either placed under suspension or disciplinary proceedings are taken against him or decision has been taken to initiate the proceedings or criminal prosecution is launched or sanction for such prose cution has been issued or decision to accord such sanction is taken.
These differences in the two Memoranda have no bearing on the questions to be answered.
On the first question, viz., as to when for the purposes of the sealed cover procedure the disciplinary/criminal proceedings can be said to have com menced, the Full Bench of the Tribunal has held that it is only when a charge memo in a disciplinary proceedings or a chargesheet in a criminal prosecution is issued to the employee that it can be said that the departmental proceed ings/criminal prosecution is initiated against the employee.
The sealed cover procedure is to be resorted to only after the charge memo/charge sheet is issued.
The pendency of preliminary investigation prior to that stage will not be sufficient to enable the authorities to adopt the sealed cover procedure.
We are in agreement with the Tribunal on this point.
The contention advanced by the learned counsel for the appellant authorities that when there are serious allegations and it takes time to collect necessary evidence to prepare and issue charge memo/charge sheet, it would not be in the interest of the purity of administration to reward the employee with a promotion, increment etc.
does not impress us.
The acceptance of this contention would result in injustice to the employees in many cases.
As has been the experience so far, the preliminary investigations take an inordinately long time and particularly when they are initi ated at the 800 instance of the interested persons, they are kept pending deliberately.
Many times they never result in the issue of any charge memo/chargesheet.
If the allegations are serious and the authorities are keen in investigating them, ordi narily it slould not take much time to collect the relevant evidence and finalise the charges.
What is further, if the charges are that serious, the authorities have the power to suspend the employee under the relevant rules, and the suspension by itself permits a resort to the sealed cover procedure.
The authorities thus are not without a ,remedy.
It was then contended on behalf of the authorities that conclusions nos.
1 and 4 of the Full Bench of the Tribunal are inconsistent with each other.
Those conclusions are as follows: "(1) consideration for promotion, selection grade, crossing the efficiency bar or higher scale of pay cannot be withheld merely on the ground of pendency of a disciplinary or crimi nal proceedings against an official; ( 3 ) . . . . . . . . (4) the sealed cover procedure can be resorted only after a charge memo is served on the concerned official or the charge sheet filed before the criminal court and not before . ' ' There ' is no doubt that there is a seeming contradiction between the two conclusions.
But read harmoniously, and that is what the Full Bench has intended, the two conclusions can be reconciled with each other.
The conclusion No. 1 should be read to mean that the promotion etc.
cannot be withheld merely because some disciplinary/criminal proceedings are pending against the employee.
To deny the said benefit, they must be at the relevant time pending at the stage when charge memo/charge sheet has already been issued to the employee.
Thus read, there is no inconsistency in the two conclusions.
We, therefore, repel the challenge of the appellant authorities to the said finding of the Full Bench of the Tribunal.
The Full Bench of the Tribunal, while considering the earlier Memorandum dated 30th January.
1982 has, among other things, held that the portion of paragraph 2 of the memoran dum which says "but no arrears are allowed in respect of the period prior to the date of the 801 actual promotion" is violative of Articles 14 and 16 of the Constitution because withholding of salary of the promotion al post for the perked during which the promotion has been withheld while giving other benefits, is discriminatory when compared with other employees ' who are not at the verge of promotion when the disciplinary proceedings ' were intiated against them.
The Tribunal has, therefore, directed that.
on exonera tion.
full salary should be paid to such employee which he would have on promotion if he had not been subjected to disciplinary proceedings.
We are afraid that the Tribunal 's reference to para graph 2 of the Memorandum is incorrect.
Paragraph 2 only recites the state of affairs as existed on January 30, 1982 and the portion of the Memorandum which deals with the relevant point is the 'last sentence of the first sub para graph after clause (iii) of paragraph 3 of the Memorandum which is reproduced above.
That sentence reads as follows: "But no arrears of pay shall be payable to him for the period of notional promotion preceding the date of actual promotion".
This sentence is preceded by the observation that when the ' employee is completely exonerated on the conclusion of the disciplinary/court proceedings, that is, when no statu tory penalty, including that of censure, is imposed, he is to be given a notional promotion from the date he would have been promoted as determined by the Departmental Promotion Committee.
This direction in the Memorandum has also to be read along with the other direction which follows in the next sub paragraph and which states that if it is found as a result of the proceedings that some blame attaches to the officer then the penalty of censure at least, should be imposed.
This direction is in supersession of the earlier instructions which provided that in a case where departmen tal disciplinary proceedings have been held, "warning" should not be issued as a result of such proceedings.
There is no doubt that when an employee is completely exonerated and is not visited with the penalty even of censure indicating thereby that he was not blame worthy in the least, he should not be deprived of any benefits includ ing the salary of the promotional post.
It was urged on behalf of the appellant authorities in all .these cases that a person is not entitled to the salary of the post unless he assumes charge of the same.
They relied on F.R. 17(1) ' of the Fundamental 802 Rules and Supplementary Rules which reads as follows: "F.R. 17(1) Subject to any excep tions specifically made in these rules and to the provision of sub rule (2), an officer shall begin to draw the pay and allowances attached to his tenure of a post with effect from the date when he assumes the duties of that post, and shall cease to draw them as soon as he ceases to discharge those duties: Provided that an officer who is absent from duty without any authority shall not be entitled to any pay and allowances during the period of such absence.
" It was further contended on their behalf that the normal rule is "no work no pay".
Hence a person cannot be allowed to draw the benefits of a post the duties of which he has not discharged.
To allow him to do so is against the elemen tary rule that a person is to be paid only for the work he bas done and not for the work he has not done.
As against this, it was pointed out on behalf of the concerned employ ees, that on many occasions even frivolous proceedings are instituted at the instance of interested persons, sometimes with a specific object of denying the promotion due, and the employee concerned is made to suffer both mental agony and privations which are multiplied when he is also placed Under suspension.
When, therefore, at the end of such sufferings, he comes out with a clean bill, he has to be restored to all the benefits from which he was kept away unjustly.
We are not much impressed by the contentions advanced on behalf of the authorities.
The normal rule of "no work no pay" is not applicable to cases such as the present one where the employee although he is willing to work is kept away from work by the authorities for no fault of his.
This is not a case where the employee remains away from work for his own reasons, although the work is offered to him.
It is for this reason that F.R. 17(1) will also be inapplicable to such cases.
We are, therefore, broadly in agreement with the find ing of the Tribunal that when an employee is completely exonerated meaning thereby that he is not 'found blameworthy in the least and is not visited with the penalty even of censure, he has to be given the benefit of the salary of the higher post along with the other benefits from the date on which he would have normally been promoted but for the disciplinary/ 803 criminal proceedings.
However, there may be cases ' where the pro ceedings, whether disciplinary or criminal, are, for example, delayd at the instance of the employee or the clearance in the disciplinary proceedings or acquittal in the criminal proceedings is with benefit of doubt or on account of non availability of evidence due to the acts attributable to the employee etc.
In such circumstances, the concerned authorities must be vested with the power to decide whether the employee at all deserves any salary for the intervening period and if he does, the extent to which he deserves it.
Life being complex, it is not possible to anticipate and enumerate exhaustively all the circumstances under which such consideration may become necessary.
To ignorehowever, such circumstances when they exist and lay down ' an inflexi ble rule that in every case when an employ ee is exonerated in disciplinary/ criminal proceedings he should be entitled to all salary for the intervening period is to undermine discipline in the administration and jeopar dise public interests.
We are, therefore, unable to agree with the Tribunal that to deny the salary to an employee would in all circumstances be illegal.
While, therefore, we do not ap prove of the said last sentence in the first sub paragraph after clause (iii) of paragraph 3 of the said Memorandum, viz. "but no arrears of pay shall be payable to him for the period of notional promotion preceding the date of actual promotion", we direct that in place of the said sentence the following sentence be read in the Memorandum: "However, whether the officer concerned will be entitled to any arrears of pay for the period of notional promotion preceding the date of actual promotion, and if so to what extent, will be decided by the concerned authority by taking into consideration all the facts and circumstances of the disciplinary proceeding/criminal prosecution.
Where the authority denies arrears of salary or part of it, it will record its reasons for doing so.
" To this extent we set aside the conclusion of the Tribu nal on the said point. 8.
The Tribunal has also struck down the 'following portion in the second sub paragraph after clause (iii) of paragraph 3 which reads as follows: "If any penalty is imposed on the officer as a result of the disciplinary proceedings or if he is found guilty in the court proceed ings against him, the findings in the sealed cover/covers shall not be acted upon" and has directed that if the pro ceedings result in a penalty, the person concerned should be considered for promotion in a 804 Review DPC as on the original date in the light of the results of the scaled cover as also the imposition of penal ty and his claim for promotion cannot be deferred for the subsequent DPCs as provided in the instructions.
It may be pointed out that the said sub paragraph directs that "the officer 's case for promotion may be considered in the usual manner by the next DPC which meets in the normal course after the conclusion of the disciplinary/court proceedings".
The Tribunal has given the direction in question on the ground that such deferment of the claim for promotion to the subsequent DPCs amounts to a double penalty.
According to the Tribunal, " 'it not only violates Articles 14 and 16 of the Constitution compared with other .employees who are not at the verge of promotion when the disciplinary proceedings are Initiated against them but also offends the rule against double leopardy contained in Article 20(2) of the Constitu tion".
The Tribunal has, therefore,.held that when an em ployee is visited with a penalty as a result of the disci plinary proceedings there should be a Review DPC us on the date when the sealed cover procedure was followed and the review DPC should consider the findings in the sealed cover as also the penalty imposed.
It is not clear to us as to why the Tribunal wants the review DPC to consider the penalty imposed while considering the findings in the sealed cover if, according to the Tribunal, not giving effect to the findings in the sealed cover even.
when a penalty is imposed, amounts to double jeopardy.
However, as we read the findings of the Tribunal, it appears that the Tribunal in no case wants the promotion of the officer to be deferred once the officer is visited with a penalty in the disciplinary proceedings and the Tribunal desires that the officer should be given promotion as per the findings in the sealed cover.
According to us, the Tribunal has erred in holding that when an officer is found guilty in the discharge of his duties, an imposition of penalty is all that is necessary to improve his conduct and to enforce discipline and ensure purity in the administration.
In the first instance, the penalty short of dismissal will vary from reduction in rank to censure.
We are sure that the Tribunal has not intended that the promotion should be given to the officer from the original date even when the penalty imparted is of reduction in rank.
On principle, for the same reasons, the officer cannot be rewarded by promotion as a matter of course even if the penalty is other than that of the reduction in rank.
An employee has no right to promotion.
He has only a right to be considered for promotion.
The promotion to a post and more so, to a selection post, depends upon several circum stances.
To qualify for promotion, the least that is expect ed of an employee is to have an 805 unblemished record.
That is the minimum expected to ensure a clean and efficient administration and to protect the public interests.
An employee found guilty of a misconduct cannot be placed on par with the other employees and his case has to be treated differently.
There is, therefore, no discrimi nation when in the matter of promotion, he is treated dif ferently.
The least that is expected of any administration is that it does not reward an employee with promotion retro spectively from a date when for his conduct before that date he is penalised in presentii.
When an employee is held guilty and penalised and is, therefore, not promoted at least till the date on which he is penalised, he cannot be said to have been subjected to a further penalty on that account.
A denial of promotion in such circumstances is not a penalty but a necessary consequence of his conduct.
In fact, while considering an employee for promotion his whole record has to be taken into consideration and if a promotion committee takes the penalties imposed upon the employee into consideration and denies him the promotion, such denial is not illegal and unjustified.
If, ,further, the promoting authority can take into consideration the penalty or penal ties awarded to an employee in the past while considering his promotion and deny him promotion on that ground, it will be irrational to hold that it cannot take the penalty into consideration when it is imposed at a later date because of the pendency of the proceedings, although it is for conduct prior to the date the authority considers the promotion.
For these reasons, we are of the view that the Tribunal is not right in striking down the said portion of the second sub paragraph after clause iii) of paragraph 3 of the said Memorandum.
We, therefore, set aside the said findings of the Tribunal.
In the circumstances, the conclusions arrived at by the Full Bench of the Tribunal stand modified as above.
It is needless to add that the modifications which we have made above will equally apply to the Memorandum of January 12,1988 9.
In the result, in Civil Appeals Nos. 3019/87, 3020/87 and 30 16/88 which arise out of the decision of the Full Bench, the Division Bench of the Tribunal to which the matters are remanded by the Full Bench., will dispose of the cases of the employee/s involved in the appeals in the light of what we have held hereinabove.
Civil Appeal No. 3018 of 1987 In this case, no charge sheet was served on the respon dentemployee when the DPC met to consider the respondent 's promotion.
806 Yet, the sealed cover procedure was adopted.
The Tribunal has rightly directed the authorities to open .the sealed cover and if the respondent was found fit for promotion by the DPC, to give him the promotion from the date his immedi ate junior Shri M. Raja Rao was promoted pursuant to the order dated April 30, 1986.
The Tribunal has also directed the authorities to grant to the respondent all the conse quential benefits.
The Tribunal has further stated in the impugned order that its order would not mean that the disci plinary proceedings instituted against the respondent em ployee should not go on.
We see no reason to interfere with this order.
The appeal, therefore, stands dismissed.
In the circumstances of the case, however, there will be no order as to costs.
Civil Appeal No. 302 1 of 1987 In this case, the DPC did not consider the case of the respondent employee for crossing efficiency bar w.e.f. 14th September, 1983 on the ground that disciplinary proceedings were contemplated against him.
We are, therefore, of the view that the Tribunal 's direction that the DPC should be convened to consider the case of the respondent for crossing the efficiency bar w.e.f.
14th September, 1983 on the basis of his confidential record at the relevant date and without reference to the contemplated disciplinary proceedings is both proper and valid.
In this case also the Tribunal has given the said direction without prejudice to the right of the appellant authorities to take any disciplinary action as might have been contemplated.
This order also does not require any interference from this Court.
Hence, the appeal stands dismissed.
In the circumstances of the case, however, there will be no order as to costs.
Civil Appeal No. 3083 of 1990 In this case, the respondent employee 's case was considered for promotion by the DPC in August 1982.
However, the result was kept in a sealed cover in view of the pending disciplinary proceedings against him.
According to the employee, on October 11, 1985 the disciplinary proceedings ended in complete exoneration.
Thereafter, a DPC was again constitut ed in March 1986 which, after consideration of the employ ee 's case, recommended him for promotion w.e.f.
July 26, 1986.
this was obviously contrary even to the instructions contained in the Memorandum.
He was entitled to promotion from the date his immediate junior was promoted in or after August 1982 if he was in August 1982 found fit for promotion by the DPC, The Tribunal has, 807 therefore, rightly directed the appellant to open the sealed cover and if the DPC in 1982 had found him fit for promo tion, to give him the promotion from the date on which his immediate junior was promoted.
However, while doing so, the Tribunal has ' also directed arrears of salary to be paid for intervening period along with all consequential benefits.
Since we have held disagreeing with the decision of the Full Bench of the Tribunal that the .benefit of the arrears of salary will not flow automatically but will depend upon the circumstances in each case, we modify the said order to the extent it directs the payment of arrears of salary, and direct the appellant authority to consider whether the employee in the circumstances of the case was entitled to any arrears of salary and to what extent.
The authority will, of course give reasons for denial of the whole or part of the arrears of salary The appeal is, there fore, allowed partly with no order as to costs.
Civil Appeal No. 4379 of 1990 In this case, the respondent employee was not recommend ed for promotion by the DPC in its meeting held on February 1, 1988 Instead, the DPC had kept the results in a sealed cover because of the pending dis.ciplinary proceed ings.
Admittedly, no charge memo was served.
On the employee till the date the DPC met on February 1, 1988 it was issued only in March 2, 1989.
The Tribunal has, therefor rightly directed the authorities tO open the sealed cover.
We are, however, unable to understand the direction of the Tribunal to convene a Review DPC for considering the employee 's case as on February 1 1988.
If the DPC had considered the case of the employee on February 1, 1988 and withheld the result because of the pending disciplinary proceedings, the proper direction would have been to ask the appellant authority to open the sealed cover and if the employee was found fit for promotion, to direct the authority to promote him from the date on which his immediate junior was promoted as a result of the recommendation of the DPC on February 1, 1988.
In case he is so found fit, he would be entitled to the bene fits of seniority etc.
on a notional basis.
However, whether he. would be entitled to the arrears of salary for the intervening period and to what extent will have to be decid ed by the appellant authority in the light of what we have state above.
In case the authority denies to the employee the salary in full or in part, it will, of course, record its reasons for doing so.
The appeal is therefore, allowed partly as above with no order as to costs.
Civil Appeals Nos.
51 55 of 1990 These appeals are filed against five respondent employees.
Dis 808 ciplinary proceedings as well as criminal prosecution were launched against each of them for lodging false Leave Travel Concession claims and for using forged documents to support them.
The employees were suspended from service on 15th July , 1983.
They admitted guilt and pleaded revocation of their suspension on depositing the amount of Rs. 1600.
They were reinstated in service in November, 1983.
Keeping in view the deposit of the amount voluntarily in October 1983, a lenient view was taken and the criminal.
prosecutions against them were dropped by the Administration by an order of January 14, 1985.
However, this was done without prejudice to the departmental proceedings which were subsequently initiated and the formal chargesheet was issued to the employees on December 24, 1987.
The Departmental Promotion Committee met in July 1986 to consider the cases of the employees for promotion but re sorted to sealed cover procedure in view of the pendency of the disciplinary proceedings against them.
There is no dispute that the formal chargesheet was issued either on August or December 24, 1987.
Conflicting months have been mentioned in the decision of the Tribunal.
However, we find that the Tribunal has taken a mechani cal view and applied the decision of the Full Bench and directed the promotions to be given to the employees on the basis of the recommendations, if any, of the DPC of July 1986.
We are of the view that in the present case when the DPC met in July 1986, the Committee had before it the record of the refund of the amount by the respondent employ ees and the consequent withdrawal of the prosecutions with out prejudice to the authorities ' right to institute depart mental proceedings.
In view of the aforesaid peculiar facts of the present case, the DPC which met in July 1986 was justified in re sorting to the .sealed cover procedure, notwithstanding the fact that the charge sheet in the departmental proceedings was issued in August/December, 1987.
The Tribunal was, therefore, not justified in mechanically applying the deci sion of the Full Bench to the facts of the present case and also in directing all benefits to be given to the employees including payment of arrears of salary.
We are of the view that even 'if the results in the sealed cover entitle the employees to promotion from the date their immediate juniors were promoted and they are, therefore, so promoted and given notional 'benefits of seniority etc., the.
employees in no case should be given any arrears of salary.
The denial of the benefit of salary will, of course, be in addition to the penalty,.if any,.
imposed on the employees at the end of the disciplinary proceedings.
We, 809 therefore, allow these appeals as above with no order as to costs.
S.L.P. (Civil) No. 1094 of 1990 Special leavegranted.
The respondent employee in this case was a Sepoy in the Department of Central Excise and Customs.
He passed his Departmental examination for the post of Lower Division Clerk against 10% vacancies and by letter of October 14, 1981, he was informed about his selection for the said post against the said vacancies reserved for educationally quali fied Group D staff.
However, he was informed that.
his appointment order as L.D.C. would be issued if he was exon erated from the disciplinary proceedings which were then pending against him.
In the Departmental Inquiry, .he, was exonerated of all the charges and by an order.of June 6, 1985 he was appointed to officiate as Lower Division Clerk.
By a subsequent order of July 3, 1985, the earlier order of June 6, 1985 was made effective from September 25, 1981.
By yet another order of July 29, 1985, his pay was fixed by giving him increment from September 25, 1981 but he was denied arrears of pay from that date till June 2, 1985.
The employee did not challenge the said order denying him ar rears of pay till he made his representation on February 18, 1988.
To his representation a reply was sent that since he had not worked as LDC during the said period he was not entitled to the arrears of salary.
By the impugned decision, the Tribunal has directed the authorities to grant to the respondent employee his pay and allowances from September 25, 1981 to June 2, 1985.
In view of what we have held above, the appeal is al lowed, the impugned order is hereby set aside and instead the appellant authorities are directed to examine the ques tion whether the respondentemployee was entitled to any salary and if so to what extent in the light of the view taken by us.
The appellant authorities will, of course, have to record reasons if the arrears of salary in its entirety or in part are denied to the employee.
In the circumstances of the case, however, there will be no order as to costs.
S.L.P. (Civil) No. 11680of1991 Special leave granted '.
The order impugned in this appeal is an interim one whereby the Tribunal has directed the appellant Union of India to open the sealed 810 cover and if the result shows that the DPC has found the respondentemployee fit for promotion to the post of Commis sioner of Incometax, to give effect to the said recommenda tions.
The admitted facts are that the DPC which met in 1988 had considered the respondentemployee 's case for promotion to the post of Commissioner of Income tax.
However, since some departmental proceedings were pending against him, he was not given the ,said promotion.
It was for the first time in 1990, that the appellants served on him a memorandum asking his explanation in respect of certain alleged acts of misconduct to which he sent a reply on May 18, 1990.
Till the date of the 'impugned order of the Tribunal, i.e., January 1, 1991, no charge sheet was served upon the re spondent employee.
However, 12 persons.
junior to him were promoted by an order dated April 16, 1990.
The Tribunal has, as stated above, therefore, made the impugned order.
There is .no direction in the order to pay him the arrears of salary for the interregnum.
In the circumstances of the case, we do not think it necessary to interfere with the impugned order.
The appeal, therefore, stands dismissed.
In the circumstances of the case, however, there will be no Order as to costs.
S.L.P. (Civil) No. 2344 of 1990 Special leave granted.
The peculiar facts in this case are that at the relevant time the respondent employee was working as Superintending Engineer since July 1986.
When earlier he was working as Garrison Engineer in Bikaner Division, there was a fire in the Stores in April 1984 and there were also deficiencies in the Stores held by: the Store keeper during the 'period between 1982 and 1985.
Hence, disciplinary proceedings were commenced in February 1988 and the respondent was served with a charge sheet on February 22, 1988.
By an order of August 19, 1988 a penalty of withholding of increment for one year was imposed on the respondent as a result of the said disciplinary proceedings.
On June 3, 1988, the DPC met for considering 'the promo tion 'to the Selection Grade.
Pursuant to this meeting, by an order of July 28, 1988 some juniors were given the Selection Grade with retrospective effect from July 30, 1986.
The respondent employee 's name was kept in a sealed cover and was, therefore, not included in the list of the promotee officers.
The Tribunal has found fault With the authorities on two 811 grounds.
The Tribunal has observed that although when the DPC met in June 1988, the employee was already served with a charge sheet on February 22, 1988 and, therefore, the sealed cover procedure could not be faulted, since admittedly his juniors were given promotion with retrospective effect from July 30, 1986,.
the DPC should not have excluded the re spondent 's name from consideration when it met on June 3, 1988.
The second fault which the Tribunal has found is that since the penalty of stoppage of increment was imposed at the end of the disciplinary proceedings, it was not open for the authorities to deny the 'respondent his promotion to the.
Selection Grade as that amounted to 'double penalty.
Having taken this view, the Tribunal has directed that a Review DPC should consider the 'respondent 's case for promo tion w.e.f.
July 1986 when his juniors were given promotion taking into account his performance and confidential records up to 1986.
We are afraid the Tribunal has taken an errone ous view of the matter.
Admittedly, the DPC met in June 1988 when the employee was already served with the charge sheet on February 22, 1988.
The charge sheet was for misconduct for the period between 1982 and 1985.
Admittedly further, the employee was punished by an order of August 19, 1988 and his one increment was withheld.
Although, therefore, the promotions to his juniors were given with retrospective effect from, July 30, 1986, the denial of promotion to the employee was not unjustified.
The DPC had for the first time.
met on June 3, 1988 for considering promotion to the Selection Grade.
It is in this meeting that his juniors were given Selection Grade with retrospective effect from July 30, 1986, and the sealed cover procedure was adopted in his case.
If no disciplinary .proceedings were pending against him and if he was.
otherwise selected by the DPC he Would have got the Selection Grade w.e.f. July 30, 1986, but in that case the.
disciplinary proceedings against him for his misconduct for the earlier period, viz., between 1982 and 1985 would have been meaningless.
If the Tribunal 's finding is 'accepted it would mean that by giving him the Selection Grade w.e.f. July 30, 1986 he would stand rewarded notwith standing his misconduct for the .earlier period for which disciplinary proceedings were pending at the time of the meeting of the DPC and for which again he was visited with a penalty.
We, therefore, allow the appeal and set aside.
the finding of the Tribunal.
There will, however, be no order as to costs.
Before we part with these appeals, we make it clear that if any of the respondent employees in any of the above appeals has/have been given any benefits the same will not be disturbed.
G.N. Appeals disposed of.
| In a writ petition challenging the termination of serv ices of the appellant, who was an employee in the National Council of Educational Research & Training (NCERT), the High Court upheld the preliminary objection that the writ peti tion was not maintainable as NCERT was not an instrumentali ty or authority within the meaning of article 12 of the Consti tution.
Aggrieved, the appellant filed the appeal by special leave to this Court.
On the question whether NCERT is "State" as defined under Article 12 of the Constitution, Dismissing the appeal, the Court, HELD: 1.1.
Like all societies, having a Memorandum of Association and Rules for internal management, the National Council of Educational Research and Training is a society registered under the Societies Registration Act.
[168 E] 1.2.
Having regard to the object, functions, activities, sources of funds of NCERT, freedom of application of its income and property towards the promotion of its objectives and implementation of programmes, confinement of Government control only to proper utilisation of the grant, and largely being an autonomous body, the institution does not satisfy the requirements of "State" under Article 12 of the Consti tution.
[169 G H; 170A C; 171 C D] Tekraj Vasandhi alias K.L. Basandhi vs Union of India ; , Sabhjit Tewari vs Union of India and Ors., ; , referred to.
166 Ajay Hasia vs Khalid Mujib Sehravardhi, ; P.K. Ramachandra Iyer vs Union of India, ; distinguished.
Article 12 should not be stretched so as to bring in every autonomous body which has some nexus with the Govern ment within the sweep of the expression "State".
A wide enlargement of the meaning must be tempered by a wise limi tation.
It must not be lost sight of that in the modern concept of Welfare State; independent institution, corpora tion and agency are generally subject to State control.
The State control does not render such bodies as "State" under Article 12.
The State control, however vast and pervasive, is not determinative.
The financial contribution by the State is also not conclusive.
[168 A B] 3.
The powers, functions, finances and control of the government are some of the indicating factors to answer the question whether a body is "State" or not.
These are merely indicative indicia and are by no means conclusive or clinch ing in any case.
Each case should be handled with care and caution.
[167 E G] Sukhdev Singh vs Bhagat Ram, ; ; R.D. Shetty vs International Airport Authority, [1979]3 SCC 489, and Sore Prakash Rekhi vs Union of India, ; , referred to.
4.1 The combination of State aid coupled with an unusual degree of control over the management and policies of the body, and rendering of an important public service being the obligatory functions of the State may largely point out that the body is "State".
[168 B C] 4.2.
If the Government operates behind a corporate veil, carrying out governmental activity and governmental func tions of vital public importance, there may be little diffi culty in identifying the body as "State", within the meaning of Article 12 of the Constitution.
[168 C] Central Inland Water Transport Corporation vs Brojo nath Gangoli, , Tekraj Vasandhi alias K.L. Basandhi vs Union.
of India, ; , referred to.
|
Civil Appeal No. 2437 of 1981 From the Judgment and Order dated 25.8.1981 of the Allahabad High Court in C.M.W.P.No. 3241 of 1980 R.N. Trivedi, Addl.
Genl., Gopal Subramaniam and Ms. Shobha Dikshit for the Appellants.
F.S. Nuriman, Raja Ram Agarwal, Yogeshwar Prasad, Rani Chhabra and Ms. Suman Bagga for the Respondents, 1025 The Judgment of the Court was delivered by DESAI, J.
Respondent Raja Ram Jaiswal alongwith the members of his family ( 'respondent ' for short) purchased premises No. 26/30, a plot of land with a small structure standing on it admeasuring 2978 sq yds.
situated at K.P.Kakkar Road, somewhere in March 1970.
The respondent desired to construct a cinema theatre on the plot of land after demolishing the existing structure.
As a first step, he got prepared the plans for a modern air conditioned, sound proof cinema building and got the same approved by the Local Municipal Corporation and the District Magistrate.
Subsequently on July 6, 1971, the respondent submitted an application as required by Rule 3 of the U.P.Cinematograph Rules, 1951 (1951 Rules ' for short) to the District Magistrate for obtaining a certificate signifying his approval of the site selected for constructing a permanent building to be used for cinematograph exhibition.
Before granting the requisite certificate the District Magistrate as the Licensing Authority has to be satisfied that the requirements of the 1951 Rules have been fully complied with.
Inter alia it must be satisfied that any recognised educational institution (other than primary school) or any residential institution attached thereto is not situated within a radius of 75 metres from the proposed cinema building.
There were other conditions to be satisfied but this one is being referred to by us because the allegation is that this condition has been contravened.
It also appears that before granting the requisite certificate, with a view to giving an opportunity to the public in the locality to express their opinion for or against the grant of the certificate, if they so desired, a public notice was issued specifying the request by the respondent for issue of a certificate of approval of the site for constructing a cinema theatre.
An organisation called The Hindi Sahitya Sammelan ( 'Sammelan ' for short) alone submitted its objection.
The District Magistrate referred the application of the respondent to the State Government.
The State Government directed the District Magistrate to carefully examine the matter and determine whether it would or would not be in public interest to grant the certificate.
There ensued some correspondence between the District Magistrate and the State Government, the query centering round the question whether the Sammelan was a recognised educational institution as envisaged by Rule 7(2)(b) of 1951 Rules.
The District Magistrate in his letter dated March 24,1972 inter alia stated that Sammelan can neither be styled as an 1026 educational institution nor a residential institution within the contemplation of Rule 7(2)(b) because it is an institution wedded to and working for the propagation of Hindi language and even though it may provide some research facility on its campus, it has no regular programme of class teaching.
The District Magistrate was also of the opinion that having regard to all the relevant circumstances, the construction of cinema building at the proposed site was not against public interest.
On the contrary according to him, a modern beautiful fully air conditioned cinema building apart from adding to the beautification of the city would enrich the coffers of the State exchequer in the form of entertainment tax.
He concluded by observing that in his opinion public interest will not be adversely affected if the per mission is granted for construction of the cinema house at the proposed site and that he proposed to grant the permission.
Accordingly, on March 28,1972, the District Magistrate informed the respondent that 'with reference to his application dated July 6,1971 in connection with the construction of a cinema house over Plot No. 26, Crosthwaite Road, the site plans checked and signed by the Executive Engineer, P.W.D. Allahabad have been approved on certain conditions including that the construction of the cinema house will be completed within two years from the date of the issue of the order and the cinema house will be fully air condition and according to the plans and specifications submitted to him. ' There was a small building over the plot in respect of which the certificate signifying the approval of the District Magistrate was granted.
This building was demolished and construction of the cinema building according to the plan was commenced.
Chagrined by the grant of the certificate, Sammelan initiated action for acquisition of the plot over which the cinema building was being constructed somewhere in August, 1973.
As the various steps taken for acquisition of land form part of a separate controversy to be dealt with in Civil Appeal No. 2458/80, the same may be skipped over here.
Suffice it to state that a notification under Sec.
4(1) of The Land Acquisition Act, 1894 was issued by the Collector, Allahabad on January 31,1974 notifying that Plot No. 26 admeasuring 2865 Sq.
was proposed to be acquired for a public purpose viz. for extension of Hindi Sangrahalaya of Hindi Sahitya Sammelan The respondent challenged this notification in Writ Petition No. 1932/74 in the High Court of Allahabad.
In the meantime as the period of two years specified in the certificate issued under r. 3 was about to expire, the respondent moved an application on March 1027 26,1974 before the District Magistrate for extension of time for completion of the construction of cinema building.
The State Government withdrew the notification dated January 31,1974 with the result that the writ petition filed by the respondent was dismissed on January 30,1975 as having become infructuous.
Within a period of six days on February 6,1975, the Collector of Allahabad issued a fresh notification under Sec.
4(1) of the Land Acquisition 13 Act for acquiring land described as bearing Plot No. 62 admeasuring 8265 sq.
for the same purpose.
The respondent questioned the validity and legality of the second notification in Writ Petition No. 3174/75.
During this period, the application for extension of time for the construction of cinema building was pending with the District Magistrate.
By Letter dated July 25,1975, the District Magistrate informed the respondent that 'with reference to his application dated March 26,1974 praying for extension of time, it is not possible to grant the extension as the matter is pending before the High Court at the instance of the respondent and as they have obtained stay against the land acquisition proceedings, it would not be proper for the District Magistrate to pass any order regarding this very land so long as the stay order granted by the High Court is in force.
It was also noticed that the period of two years initially granted had expired in March, 1974 and the same cannot be extended.
It appears, however, that during the time the application for extension of time for completion of the cinema building was pending with the District Magistrate, the work of construction was going a pace and it was completed presumably sometime before the District Magistrate declined to grant extension of time.
As the cinema building was complete, the respondent made an application on May 25,1979 under Sec.
3 of the U.P. Cinema (Regulation) Act, 1955 ( '1955 Act ' for short) for a licence to exhibit films in the cinema building.
Though the District Magistrate is a statutory authority for grant or refusal of licence under the 1955 Act, surprisingly, he referred the application of the respondent for grant of licence to the State Government specially in view of the pendency of the Writ Petition No. 3174/75 challenging the notification for acquisition of the land on which the cinema building was constructed.
A communication from the Joint Secretary of the State Government to the District Magistrate concerning the question of grant of cinema licence has a material bearing on the issue involved in the writ petition.
Therefore the relevant portion of the communication may be extracted.
It reads as under: 1028 "With reference to your letter No. 23/MAOKA./79 80 dated June 27, 1979, I have been directed to say that you may grant licence to Chandralok Cinema constructed by Sri Raja Ram Jaiswal on the Hindi Sahitya Sammelan Marg, for one year if you are satisfied that this cinema complies with the requirements of the Uttar Pradesh Chalchitra Niyamawali, 195 ' with the condition that if in the mean time the case pending before the Hon 'ble High Court is decided in favour of the Government, the licence would automatically stand cancelled.
" It would thus appear that the District Magistrate had to consider the application for licence uninfluenced by another litigation pending between the respondent and the State Government.
On receipt of this letter the District Magistrate after obtaining reports from various authorities vis a vis the building reiterated his view to the State Government on October 19,1979 that as the writ petition of the respondent challenging the notification for acquisition of land is pending, it would not be proper to grant cinema licence to the respondent.
On December 7,1979, writ petition filed by the respondent challenging the notification for acquisition of land on which the cinema building was constructed was allowed by a Division Bench of the High Court and the notification dated February 6,1975 was quashed.
On December 9,1975, the respondent made a representation to the State Government for issuance of a cinema licence.
By the, notification date December 13,1979, the State Government directed the first respondent to contact the District Magistrate in this behalf.
Accordingly, on December 18, 1979, the respondent wrote to the District Magistrate that all the concerned authorities had inspected the building and reported that the building complies with all the rules and regulations and recommended grant of licence.
By its communication dated December 24, 1979, the Additional District Magistrate informed the respondent that 'with reference to his application for cinema licence dated May 4, 1979 to run Chandralok Cinema he has to inform him that the District Magistrate ' by his order dated December 24, 1979 has refused to grant the licence. ' The respondent preferred an appeal under Sec.
5(3) of the 1955 Act to the State Government against the order of the District Magistrate refusing to grant the licence.
The reasons which weighed with the District Magistrate in rejecting ll the application will be dealt with a little while after.
The State 1029 Government called for the comments of the District Magistrate with regard to the contentions raised by the respondent in his appeal and after taking into consideration the comments, the State Government as per its order dated February 15,1980 allowed the appeal and remitted the matter to the District Magistrate with a direction, to re examine the grounds on which he had refused to grant licence to run the Chandralok cinema in accordance with the rules and pass suitable and legal order after giving them an opportunity of hearing.
If the District Magistrate feels necessary to seek prior approval of the Government to refuse to grant licence in public interest, he may express his opinion and send full facts through the Commissioner for prior approval. ' This order of remand was questioned by the respondent in Writ Petition No. 3241/80 in the Allahabad High Court.
A Division Bench of the High Court held that even though the order under challenge was one of remand, as the respondent has journeyed to and fro on numerous occasions, it is necessary to dispose of the petition on merits.
It was further held that while granting a certificate under Rule 3 of the 1951 Rules, it was open to the licensing authority to take into consideration whether it would be in public interest to grant the necessary certificate or to refuse the same, hut after the grant of the certificate when a full fledged cinema building comes up and is shown to comply with the relevant rules and regulations, cinematograph licence cannot be refused on the vague consideration that it would not be in public interest to grant the licence.
It was also held that the failure to complete the construction of cinema building within the prescribed time, if properly explained would not be a ground to refuse cinematograph licence, more so because the requirement of rule 3(3) is directory and not mandatory.
The High Court accordingly made the rule absolute and in modification of the order of the State Government dated February 15,1980 it directed the District Magistrate Licencing Authority to forthwith grant to the petitioner the requisite licence subject to reasonable conditions and restrictions.
An order in the nature of mandamus was issued accordingly.
Hence this appeal by the State of Uttar Pradesh and the District Magistrate by special leave.
Before we advert to the contentions canvassed before us on behalf of the appellants, a brief resume of the stages through which 1030 the proceedings journeyed in this Court may be mentioned.
The petition for special leave came up for admission on September 17, 1981 when special leave to appeal was granted and the operation of the judgment of the High Court was stayed.
Consequently, the mandamus directing the District Magistrate to grant licence stood suspended.
CMP 26710/81 was moved on behalf of the present respondent for vacating the stay granted by this Court.
The proceedings dated December 15, 1981 as recorded show that after the arguments were heard at some length, the Court in the interest of justice thought it expedient to modify the stay order dated September 17,1981 to the effect that the stay order granted by the Court will be in operation for a further period of two months only and that the hearing of the appeal may be expedited.
The present appeal and the cognate Appeal No. 2458/81 came up together for hearing and the cognate appeal was first taken up for hearing for the obvious reason that if the challenge to the notification for acquisition of the plot on which the cinema building is constructed failed in the appeal on behalf of the State of U.P., it would have an impact on the present appeal because if the land was to be acquired, the question of granting licence for running a cinema on the land under acquisition could hardly be envisaged.
The hearing as usual in this Court went on merrily.
Therefore, after hearing the parties, we made the order on January 20,1983 directing the District Magistrate to comply with the remind order.
It may be recalled that the order under challenge in this appeal was the order of remand made by the State Government to the District Magistrate for considering and disposing of the application for a cinema licence on merits.
We had some hesitation whether the court can grant a mandamus directing a statutory authority to grant a licence at a stage when the District Magistrate was yet to apply his mind and examine the application on merits because doing so would tantamount to the court substituting itself as a licensing authority without the licensing authority performing its duty, which would be impermissible.
We were conscious of the fact that the District Magistrate was bound to take some time in processing and disposing of the application for a cinema licence pending with him.
Accordingly, we directed the District Magistrate to proceed to consider the application of the respondent for grant of a cinema licence and dispose of it in the light of the observations made in the order.
Pursuant to this order, the District Magistrate, Allahabad proceeded to examine the application of the respondent for cinema licence on merits and having given him an opportunity of being heard, by his order dated 1031 February 20, 1983 rejected the application for licence observing that it would not be in public interest to grant the cinematograph licence applied for by the respondent.
The appeal was again placed on board for further directions on March 10, 1983.
After giving anxious consideration to the order of the District Magistrate, the Court made an order vacating interim stay granted by this Court staying the operation of the judgment of the High Court.
The effect of this order was that the mandamus granted by the State became operative.
Accordingly.
On March 19, 1983, the District Magistrate granted the licence to run Chandralok cinema.
Two CMPs Nos.
12718 19/83 were moved in this Court, one of them being for taking action for contempt and another for certain directions.
They were a sequel to the granting of a licence and public annoyance demonstrably exhibited by the authorities of the Sammelan.
While disposing of these petitions, we directed that the City Magistrate would withdraw the impugned order under Sec. 144, Cr.
P.C. within a fortnight from the date of the order and the District Magistrate shall renew the licence of Chandralok cinema to be operative and in force till the decision of appeal by this Court and the City Magistrate shall make necessary arrangements to maintain public order near and around Chandralok cinema if necessary by posting additional police force and grant necessary protection to the licensee enabling him to run the cinema house peacefully.
Regrettably, it must be concluded from this resume that the dispute is hardly between the State Government and the respondent, but it is a proxy fight consequent upon the clash of ego between the Sammelan and Jaiswal.
Uninfluenced by this irrelevant aspect, the appeal may be disposed of on merits.
It may be mentioned that even though the Sammelan had moved an application for being joined as a party to the writ petition in the High Court which was rejected, we, without the slightest hesitation, granted the request for intervention made by Shri S.N Kacker, learned counsel for the Sammelan to intervene and suspending the normal procedure that the interventionist is not entitled to address oral arguments, we heard Mr. Kacker on all points he wanted to canvass and at some length and permitted him to put his written submissions on record.
While the introduction has become some what long, the Contentions canvassed in the dispute are relatively of an insignificant 1032 nature save and except the one whether the statutory licencing authority acting within the parameters of the statute under which it is set up can be supplanted in exercise of the writ jurisdiction before the statutory authority has yet to discharge its functions under the statute.
Incidently, whether public interest has a relevance at the time of issuance of a certificate of approval under Rule 3 or at the time of grant of licence under Sec. 3 is another important question ? Other contentions are minor and of incidental nature.
The present situation viewing the background of public interest have a direct bearing on the rival contentions in this appeal.
A cinema building in which for the purposes of the record, we may note that Rs. 60 lakhs have been sunk stares into our face.
Admittedly, it is a modern air conditioned sound proof cinema building.
It abuts on a road named K.K.Marg, a very prominent locality in Allahabad town.
it is equally true that Hindi Sahitya Sammelan has its campus at a distance of roughly 95 feet from the outer boundary of the cinema building.
Hindi Sahitya Sammelan was founded for the development and propagation of Hindi, and certainly it is a prestigious institution devoted to making Hindi the Lingua Franca of India.
Though Hindi Films have contributed immeasurably to the propagation of Hindi yet the Sammelan championing Hindi appears not to have taken kindly to the modern mass media communication and detested the existence of a theatre somewhere near its campus.
That is the genesis of the present litigation.
Sincere efforts were made to assuage all the authorities in charge of the Sammelan, but they proved of no avail.
May be an institution devoted to research may consider cinema theatre a nuisance but in an urban area like Allahabad.
the Sammelan cannot hope to live in isolation of the existence of theatre as also the noise OF transport vehicles.
Let us have a glance at the relevant provisions of the 1955 Act and the 1951 Rules which should be our starting point.
1955 Act was enacted as its long title shows for making provisions and regulating exhibitions by means of cinematographs in the State of U.P. Sec.
3 provides that 'save as otherwise provided in the Act, no person shall give an exhibition by means of a cinematograph elsewhere than in a place licensed under this Act or otherwise than in compliance with conditions and restrictions imposed by such licence. ' Sec. 4 constitutes District Magistrate to be the Licensing 1033 Authority.
There are two provisos conferring power on the State Government to constitute other licensing authority.
They are hardly material for the present purpose.
5` prescribes restrictions on the power of the licensing authority and inter alia provides that 'the licensing authority has to be satisfied that the building or other place in which cinematograph exhibition proposed to be given (i) . . (ii) is situated at such minimum distance as may be Ii prescribed from other public buildings and from recognised educational and other public institutions and public hospitals. ' Sec. 5 (1)(c) provides that the licensing authority must be satisfied that the grant of licence otherwise is not contrary to public interest.
Sub sec.
(3) of Sec.
5 confers right of appeal to the State Government, on any person aggrieved by the decision of the licensing authority refusing to grant licence.
13 confers power on the State Government to make rules for carrying out the purposes of the Act.
1951 Rules were framed in exercise of the power conferred by Sec. 9 of the and by the deeming fiction enacted in Sec.
12 of the 1985 Act they remain in force.
Rule 3 provides as under "3.
Application for constructing a building (1) A person desirous of constructing a permanent building to be used for cinematograph exhibition shall submit an application specifying the site on which the proposed building is to be constructed together with` a plan and specifications thereof to the officer authorised in this behalf by Government.
(2) The plan mentioned in the aforesaid sub rule shall contain the elevations and sections of the buildings, the proposed electrical installations, arrangements for ventilation, sanitation and parking of vehicle and the position of the premises in relation to adjacent premises and public thoroughfare on which the building abuts, within a radius of one furlong.
(3) The Licensing Authority may, if it is satisfied that the site plans and specifications fully conform to the rules, grant to the applicant a certificate signifying his approval thereto.
The period within which the construction shall be completed shall also be stated in the certificate.
" Rule 4 provides for the contents of an application for a 1034 licence.
Rule 7 prescribes conditions for granting and renewal of a licence, the one to be noted for the present purpose is the one prescribed in Rule 7(2)(b)(i) which is to the effect that 'no building shall be so licensed, if it is situated within a radius of 75 metres from any recognised educational institution (other than primary school) or any residential institution attached thereto.
Rule 7(2)(c) provides that 'no building shall be so licensed, if for any other sufficient reason to be recorded, the licensing authority is satisfied that the location of a cinema at the site of that building is not in Public interest.
Learned Advocate General of Uttar Pradesh who appeared for the appellant urged that the scheme of the Act and the relevant rules reveal that the licensing authority has to take into consideration public interest both at the time of granting a certificate of approval as contemplated by Rule 3 as also public interest while granting a cinema licence under Sec.
3 read with Sec. 5.
It was urged that the High Court was in error in holding that once while granting a certificate of approval under Rule 3, public interest has been taken into consideration and it has been found that the location of a cinema at the site of the building is not shown to be not in public interest, the question of examining whether such building should be licenced for exhibition of a cinematograph does not call for a re examination whether the grant is not otherwise contrary to public interest.
It was urged that public interest cannot be fitted into a straight jacket formula and what relevant considerations would constitute public interest at the time of granting a certificate of approval under Rule 3 may materially vary or p differ from the relevant considerations which may constitute public interest while licensing the cinema theatre for exhibition of a cinematograph under Sec. 3.
The scheme manifested by the relevant provisions of the Act and the Rules would demonstrably establish the legislative intention that the licensing authority has to keep in view public interest both at the time of granting the certificate of approval under Rule 3 and granting a cinematograph licence under Sec. 3.
While granting a certificate of approval under Rule 3, the licensing authority may take into consideration the various aspects set out in Rule 4 as well as the conditions prescribed in Rule 7.
But even where all the conditions prescribed in rule 4 and Rule 5 as well as various other relevant rules are satisfied still the licensing authority may refuse to grant the 1035 certificate of approval, if it is satisfied that the location of cinema at the site in question is not in public interest.
What constitutes public interest at the time of consideration for granting certificate of approval may be culled out from the various conditions prescribed in the various statutes as well as all other considerations which may enter the verdict while granting the certificate.
But it will be a paper compliance with the relevant rules if it is merely stated that even though all other conditions are satisfied and complied with the licensing authority would refuse to grant the certificate as it is not in public interest to do so.
Rule 7(2)(c) casts an obligation to record the reasons in writing which must necessarily be sufficient reasons for refusing to grant the certificate on the ground that the location of a cinema at the site of the building is not in public interest.
The licensing authority has not an absolute discretion but it is hedged in by relevant considerations as also by the proviso that if the licensing authority is inclined to refuse the licence on the ground that the location of a cinema at the site of the building is not in public interest, it cannot do so except without the prior approval of the State Government.
There is an explanation which provides that for the purpose of the sub rule, the licensing authority shall, subject to the general control of the State Government, determine what is a public hospital or a recognized educational institution, and its decision shall be final and conclusive. ' It will be presently pointed out that the District Magistrate while granting the certificate of approval on March 24, 1972 had in term 's held that Hindi Sahitya Sammelan is neither an educational institution nor a residential institution nor it has a public hospital and that it cannot be styled as an educational institution for the purpose of Rule 7(2)(b)(i).
In view of the explanation herein extracted, this determination is final and conclusive.
Now while granting the cinema licence under Sec. 3, the licensing authority has to keep in view the provisions of Sec.
provides that no licence shall be granted unless the licensing authority is satisfied that the grant of licence is not otherwise contrary to public interest.
One has to compare the language of Rule 7(2)(c) with the language implied in Sec.
5(1)(c).
Undoubtedly the parameters of public interest while refusing to grant licence under Sec 5(1)(c) for exhibition of cinematograph would be materially different than the one which would 1036 enter the verdict while considering the application for granting a certificate of approval under Rule 7(2)(c).
It must, however, be made absolutely clear so as to put it beyond the pale of controversy that the relevant aspects required to be kept in view as prescribed under Rule 7 while granting or refusing to grant certificate of approval under Rule 3 cannot be reviewed in The name of public interest for rejecting an application for cinematograph licence under Sec.
3 read with Sec. 5 of the Act.
To wit, if while granting the certificate of approval the question whether a particular institution is an educational institution and is within or outside the prohibited distance, is examined and a decision is reached that the institution is held not to be an educational institution within the contemplation of the relevant rule nor it is within the prohibited area, this aspect cannot be reviewed to refuse to grant a licence under Sec.
3 read with Sec. 5 in the name of public interest.
If any other view is taken, it would lead to startling results.
Again to wit, if the Sammelan was held not to be an educational institution with in the contemplation of Rule 7(2)(b)(i) and the necessary certificate of approval is granted, the licensing authority cannot turn round in the name of public interest and hold at the time of considering the application for a cinematograph licence that the Hindi Sahitya Sammelan is an educational institution and it is also situated within the prohibited area because such an approach would do irreparable and irreversible harm to the person to whom certificate of approval is granted because by the time he applies for a cinematograph licence under Sec. 3, he has sunk a large sum of money in constructing a cinema building.
To refer to the facts of this case, if now the District Magistrate chooses not to grant licence on the ground that it would be contrary to public interest to grant licence only because the authorities of the Sammelan may act in a manner so as to disturb public peace and that it is an educational institution, Rs. 60 lakhs sunk by the respondent would go down the drain and would be an irreparable wastage affecting both the national interest and the public interest.
Therefore, while accepting the submission of the learned Advocate General that the concept of public interest statutorily recognised has to be kept in view both at the time of granting certificate of approval under Rule 3 and licence under Sec.
3 read with Sec.
5 of the 1955 Act, permitting exhibition of a cinematograph, the relevant parameters of public interest would differ and they cannot overlap each other and have to be justified on the relevant grounds stricter view about the parameters of public interest has to be taken at the 1037 second stage because by that time the person who has been granted certificate of approval has sunk a fortune in the venture.
Before we conclude on this point, we may refer to the two decisions to which our attention was drawn by the; learned Advocate General.
In The King vs London Country Council, Exparte London and Provincial Electric Theatres Limited(l) it was held that the statutory authority was justified in exercise of their discretion to sefuse to grant licence to a company, the majority of whose shareholders were alien enemies.
A submission was made on the basis of the ratio of this decision that even if a cinema building is constructed, licence can be refused on the ground that it is not in public interest to do so.
The decision in R. vs
Barnstaple justices, Exparte Carder.(8) is hardly of any assistance because it proceeds on the scheme of the Cinematograph act, 1909.
The Act empowered County Councils or justices where the power have been delegated to them to grant licences to persons to use premiss specified In the licence ' for the purposes of a cinema, subject to certain conditions, terms and restrictions.
The practice was stated to be in existence whereby, in cases where it was intended to erect premises for use as a cinema, justices were asked to approve the plans of the building to be erected, and thereby honourably to commit themselves or their successors to grant the licence after completion of the premises.
Disapproving this practice, it was held that the practice was beyond the powers given by the Act and is unenforceable.
It was observed that it was improper for justices by a gentlemen 's agreement to fetter, limit control, or in any way affect their own future decisions, or those of their successors or of other justices.
The scheme of the Act and the rules at present under examination envisages two stages when the licensing authority has to examine the application: (i) at the stage of grant of certificate Of approval of the site and (ii) at the stage of grant of cinema licence.
In view of this difference in the scheme, the decision is hardly of any assistance.
We have reached the conclusion purely on the examination and interpretation of the scheme merging from the Act and the Rules.
The High Court was therefore, in our opinion, in error in holding that once the public interest has been taken into cosidera (1) (2) 1038 tion while granting certificate of approval, consideration of public interest would not arise and cannot be countenanced while granting a cinematograph licence under Sec.
3 read with Sec. 5.
The next question is whether the District Magistrate in this case was justified in refusing to grant the licence in public interest on relevant consideration.
The District Magistrate initially refused to grant licence against which in the appeal preferred by the respondent, the order impugned in the writ petition was made by the State Government The State Government called for the comments of the District Magistrate qua the contentions raised by the respondent in his appeal.
Briefly summarised the view expressed by the District Magistrate in his comments, which was the view that prevailed with him while rejecting the application for license, was that the relevant rules having not been complied with: (i) inasmuch as the cinema hall has been constructed in the restricted area a; d educational institutions are situated within 100 yards of cinema house; (ii) there is no provision to give conditional licence under the cinema rules; (iii) the allegation that the District Magistrate has some bias against the respondent was not correct; (iv) the licence has been refused in public interest on consideration of public peace and order; (v) the construction of cinema building was not completed within the prescribed period of two years; (vi) if the licence is granted, there is apprehension of breach of peace.
These comments provide a peep into the mind of the District Magistrate while rejecting the application for licence.
The State Government while quashing the order of the District Magistrate refusing to grant licence held that the reasons on the basis on which the licence to run cinema was rejected do not fall within the cinematograph Rules and violation of no specific rule is shown.
That sets at naught ground Nos.
(i), (v) and (vi).
The charge of bias was shown to be not merited and failure to complete the construction within the specified time did not merit rejection of the application for licence.
Location of educational institutions within the prohibited area would not enter the verdict at the stage granting cinematograph licence because the same was taken care of and rejected while granting the certificate of approval.
It is even factually not correct.
Accordingly, the State Government remitted the matter to the incensing authority to consider whether licence could be refused in public interest and if it is to be so refused, the prior appro 1039 val of the State Government may be obtained.
Therefore the remand order limited the enquiry by the District Magistrate to question of grant or refusal of licence in public interest.
Other aspects are concluded by the remand order.
Therefore, the only question that survives for consideration is whether the District Magistrate is now justified in refusing to grant licence on the ground that it is not in public interest to do so.
Reading the order dated February 20, 1983, as a whole the influence of the Sammelan permeates through the order.
Curiously, after the direction given by the Court that the District Magistrate shall process and dispose of the application for licence, the District Magistrate give a public notice inviting objections to the grant of cinematograph licence.
The only objector again appears to have been the Sammelan and it has repeated all those objections which it had preferred at the time of granting of certificate of approval.
The objections of the Sammelan were founded on two environmental aspects: (i) that the surroundings of the campus of Sammelan are calm and quiet and there is such an atmosphere as would be conducive to the research work conducted on the campus of the Sammelan; (ii) granting of a cinematograh licence would disturb the cultural and educational environment of the locality and would be a traffic nuisance.
In our opinion, both are irrelevant considerations for the obvious reasons that they are deemed to have been disposed of while granting certificate of approval and affirmed by the State Government in appeal.
They ought to be rejected for the additional reason that the cinema building is an air conditioned sound proof building.
It is not possible to believe that conducting cinematograph exhibition in a sound proof building will add to the noise.
The grievance was that once a cinema theatre comes up, tea stalls will spring up, hawers would crowd the locality and traffic would increase is hardly relevant.
There is nothing special about it.
Anyone living in a developing urban area has obviously to put up with this situation.
Noise can be mitigated not wholly obliterated.
Therefore, the District Magistrate rejected the application on extraneous and irrelevant considerations not germane to the issue at the stage of granting the licence.
Licensing powers, an indisputable adjunct of controlled economy, take various forms and they are numerous.
They are generally couched in a language giving wipe scope for exercise of powers 1040 Therefore the courts have been vigilant to see that they are not exercised in an oppressive or arbitrary manner.
The powers being wide, the question of its exercise on relevant or considerations germane to the determination more often arises.
If the licence is refused on grounds which appear to be irrelevant, the court can legitimately interfere.
In this case the sole ground of refusal of licence is that it is not in public interest to grant it.
Lifting the veil of public interest what transpires is that the license should not be granted because the Sammelan is not reconciled to the existence of a cinema theater in its vicinity.
In other words, public interest is shown to be co extensive with the likes and dislikes of the authorities in charge of the Sammelan.
This cannot be countenanced.
Dislike of a body howsoever prestigious it may be, is not an adequate substitute for public interest.
The licensing authority has clearly acted on irrelevant consideration in refusing the licence.
The High Court was of course, clearly in error in issuing a mandamus directing the District Magistrate to grant a licence.
Where a statute confers power and casts a duty to perform any function before the power is exercised or the function is performed, the Court cannot in exercise of writ jurisdiction supplant the licensing authority hearing a writ petition praying for a wit of certiorari for quashing the order of remand.
The High Court could have quashed the order of remand if it was satisfied that the order suffers from an error apparent on the record.
But there its jurisdiction would come to an end.
The High Court cannot then proceed to take over the functions of the licensing authority and direct the licensing authority by a mandamus to grant license.
To that extent the judgment of the High Court is set aside.
However, as pointed earlier, while narrating the chronology of events through which the appeal proceeded in this Court, the present situation is that the District Magistrate by its order dated February 20, 1983 refused to grant licence on extraneous and irrelevant considerations, and it has failed to exercise jurisdiction vested in it.
This Court, therefore, on March 10, 1983 vacated the interim stay of the operation of the judgement of the High Court.
Within a week thereafter the District Magistrate granted license and lt was renewed for a further period of one year in April, 1984.
That licence is valid and in force and holds good, subject to the application for its renewal at prescribed intervals.
The order dated 1041 February 20, 1983 refusing to grant license in public interest is quashed and set aside.
The District Magistrate as licensing authority shall examine the application for renewal of licence whenever made, on relevant and legally valid considerations germane to the determination and in the light of the observations made in this judgment.
Subject to the modifications set out in this judgment, the appeal fails and is dismissed but with no order as to costs.
N.V.K. Appeal dismissed.
| The respondent desired to construct a cinema theatre on a plot of land.
He submitted an application under Rule 3 of the U.P. Cinematograph Rules 1951 to the District Magistrate, for obtaining a certificate signifying his approval of the site selected for constructing a permanent building to be used for cinematograph exhibition.
The District Magistrate as the licensing Authority issued a public notice specifying the request of the respondent for grant of a certificate and calling objections.
An organisation called the Hindi Sahitya Sammelan alone submitted its objection, The District Magistrate referred the application of the respondent to the State Government, which directed the District Magistrate to carefully examine the matter.
The District Magistrate was of the opinion that the Sammelan can neither be styled as an educational institution nor a residential institution within the contemplation or Rule 7(2)(b) because it was an institution wedded to and working for the propagation of Hindi language, and even though it may provide some research facility on its campus it has no regular programme of class teaching, and that having regard to all the 1022 relevant circumstances, the construction of a cinema building at the proposed site was not against public interest.
On the contrary, it was held that a modern beautiful fully air conditioned cinema building apart from adding to the beautification of the city would enrich the coffers of the State exchequer in the form of entertainment tax.
The District Magistrate granted the certificate informed the respondent that construction of a cinema house and be completed within two years from the date of the issuance of the order.
Chagrined by the grant of the certificate, the Sammelan initiated action for acquisition of the plot over which the cinema building was being constructed, should under the Land Acquisition Act.
The respondent successfully assailed the acquisition order in the High Court.
In the meantime as the period of two years specified in the certificate issued under Rule 3 was about to expire, the respondent moved an application for extension of time for completion of the construction of cinema building, and during the pendency of this application, the building was completed.
The respondent made an application under section 3 of the U.P. Cinema (Regulation) Act, 1955 for a licence to exhibit films in the cinema building.
The District Magistrate refused to grant the licence.
The respondent preferred an appeal under Sec.
5(3) of the 1955 Act to the State Government, which allowed the appeal and remitted the matter to the District Magistrate with a direction to re examine the grounds on which he had refused to grant licence to run the cinema in accordance with the rules and pass suitable and legal order after giving an opportunity of hearing.
Against the aforesaid order of remand the respondent filed a Writ Petition in the High Court.
A Division Bench held that even though the order under challenge was one of remand, as the respondent has journeyed to and fro on numerous occasions, it was necessary to dispose of the petition on merits, and held that while granting a certificate under Rule 3 of the 1951 Rules, it was open to the licensing authority to take into consideration whether it would be in public interest to grant the necessary certificate or to refuse the same, but after the grant of certificate when a full fledged cinema building comes up and is shown to comply with the relevant rules and regulations, cinematograph licence cannot be refused on the vague consideration that it would not be in public interest to grant the licence.
It was also held that the failure to complete the construction of the cinema building within the prescribed time, if properly explained would not be a ground to refuse the cinematograph licence, more so because the requirement of rule 3(3) is directory and not mandatory.
The High Court accordingly made the rule absolute and in modification of the order of the State Government, it directed the District Magistrate Licensing Authority to forthwith grant to the petitioner the requisite licence subject to reasonable condition and restrictions.
In the appeal to this Court it was contended on behalf of the appellant state that the scheme o f the U.P. Cinema (Regulation) Act, 1955 and the U.P. 1023 Cinematograph Rules 1951 reveal that the licensing authority has to take into consideration public interest both at the time of granting a certificate of approval as contemplated by Rule 3 as also public interest while granting a cinema licence under Sec.
3 read with See. 5, and that the High Court was in error in holding that one while granting a certificate of approval under Rule 3, public interest has been taken into consideration.
The question of examining whether such building should be licensed for exhibition of cinematograph does not call for a re examination whether the grant is not otherwise contrary to public interest.
Public interest cannot be fitted into a straight jacket formula and what relevant considerations would constitute public interest at the time of granting a certificate of approval under Rule 3 may materially vary or differ from the relevant considerations which may constitute public interest while licensing the cinema theatre for exhibition of a cinematograph under See.
Dismissing the appeal, ^ HELD: 1 The High Court was, clearly in error in issuing a mandamus directing the District Magistrate to grant a licence.
The High Court was hearing a Writ Petition praying for a Writ of Certiorari for quashing the order of removal.
The High Court should have quashed the order of remand if it was satisfied that the order of suffers from an error apparent on the record.
But there its jurisdiction would come to an end.
The High Court cannot then proceed to take over the functions of the licensing authority and direct the licensing authority by a mandamus to grant a licence.
To that extent the judgment of the High Court is set aside.
[1040D,F] 2.
Where a statute confers power and casts a duty to perform any function before the power is exercised or the function is performed, to the Court cannot in exercise of writ jurisdiction supplant the licensing authority and take upon itself the function of the licensing authority.
[1040 E] 3.
The High Court was in error in holding that once the public interest has been taken into consideration while granting certificate of approval, consideration of public interest would not arise and cannot be countenanced while granting a cinematograph licensee under See.
3 read with Sec. 5.
[1037H, 1038] 4.
Licensing powers, an indisputable adjunct of controlled economy, take various forms and they are numerous.
They are generally couched in a language giving wide scope for exercise of powers.
Therefore the Courts have been vigilant to see that they are not exercised in an oppressive or arbitrary manner.
The powers being vide, the question of its exercise on relevant or considerations germane to the determination more often arises.
If the licence is refused on grounds which appear to be irrelevant, the court can legitimately interfere.
[1039H,1040A] The scheme manifested by U.P. Cinema (Regulation) Act, 1955 and the U.P. Cinematograph Rubs 1951 establish the legislative intention that the 1024 licensing authority has to keep in view public interest both at the time of granting the certificate of approval under Rule 3 and granting a cinematograph licence under Sec. 5.
While granting a certificate of approval under Rule 3, the licensing authority may take into consideration the various aspects set out in Rule 4 as well as the conditions prescribed in Rule 7.
But even where all the conditions prescribed in Rule 4 and Rule 5 as well as various other relevant rules are satisfied still the licensing authority may refuse to grant the certificate of approval, if it is satisfied that the location of cinema at the site in question is not a public interest.
[1034G , 1035A] 6.
Rule 7(2)(c) casts an obligation to record the reason in writing which must necessarily sufficient reasons for refusing to grant the certificate on the ground that the location of a cinema at the site of the building is not in public interest.
The licensing authority has not an absolute discretion but it is hedged in by relevant considerations as also by the proviso that if the licensing authority is inclined to refuse the licence on the ground that the location of a cinema at the site of the building is not in public interest, it cannot do so except without the prior approval of the State Government.
[ 1035C D] In the instant case, the District Magistrate while granting the certificate of approval on March 24,1972 bad in terms held that Hindi Sahitya Sammelan is neither an educational institution nor a residential institution nor it has a public hospital and that it cannot be styled as an educational institution for the purpose of Rule 7(2)(b)(i).
This determination is final and conclusive.
[1035F] 7.
While granting the cinema licence under Sec. 3 the licensing authority has to keep in view the provision of Sec.
provides that no licence shall be granted unless the licensing authority is satisfied that the grant of licence is not otherwise contrary to public interest.
Undoubtedly, the para meters of public interest while refusing to grant licence under Sec.
5(1)(c) for exhibition of cinematograph would be materially different than the one which would enter the verdict while considering the application for granting a certificate of approval under Rule 7(2)(c).
[1035G 1036]
|
vil Appeal Nos.
4447 48 of 1988.
From the Judgment and Order dated 10.11.
1987 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. E/Stay/No.
45/87 A & E/Appeal No. 188 of 1987 A. (Order No. 681 & 682 of 1987 A. Soli J. Sorabjee, Attorney General, Ms. Nisha Bagchi and Mrs. Sushma Suri for the Appellant.
Debi Pal and P.K. Chakraborty for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ.
This is an appeal under section 35L(b) of the Central Excises & Salt Act, 1944 (hereinafter called 'the Act ').
The appeal by the appellant before the tribunal was dismissed on the ground that provisions of rule 9(2) of the Customs, Excise and Gold (Control) Appellate Tribunal (Procedure) Rules, 1982 had not been complied with.
The documents which are to accompany the memorandum of appeal are prescribed by rule 9 of the said rules which provides as follows: "9(1) Every memorandum of appeal shall be filed in quadru plicate and shall be accompanied by four copies (at least one of which shall be a certified copy) of the order ap pealed against and where such order is an order passed in appeal or revision, four copies (at least one of which shall be a certified copy) of the order appealed against and where such order is an order passed in appeal or revision, four copies (at least one of which shall be a certified copy) also of the order of the adjudicating authority.
(2) In an appeal filed under the direction of the Collector or the Administrator, the memorandum of appeal shall also be accompanied by an attested copy of the order containing such direction.
" The tribunal was of the opinion that the purpose and the spirit of rule 9(2) aforesaid was to ensure that the appeal was authorised by the collector to be filed.
Our attention was drawn to the authority in the instant case, which was annexed to the further affidavit filed in these proceedings.
The said authority dated 24th September, 1986 read as fol lows: 1029 "I hereby authorise Assistant Collector (Tribunal & Review, Collectorate of Central Excise, Calcutta II, Calcutta, to act on my behalf in the matter of filing appeal/ applica tions/cross objections/statement of reference before the Customs, Excise & Gold (Control) Appellate Tribunal/Collec tor (Appeals) in terms of Section 35B(2) and 35B(4), 35B(5), 35E(2), 35E(4), 35G(1) and 35G(2) of the Central Excises & Salt Act, 1944 and Section 81(3), 81(5), 81(6), 82(2), 82(4) and 823(1) & 823(2) of Gold (Control) Act, 1968.
" Pursuant to this authority the appeal was filed, and our attention was also drawn to the orders passed by the Collec tor in respect of this specific appeal.
The relevant portion of the same may be noted from the Order sheet.
The note dated 4th December, 1986 reads as follows: "Under the O/A date 14.8.86 as at page 19/C, Collector (Appeals) has set aside the O/O) of the Divisional A.C. (Vide P 197/C of linked file marked F/A).
In the O/O) the AC, CE, Howrah, South Division has disallowed abetment on account of I) Special Rebate on Addl.
Trade Discount and 2) cost of secondary packing purported to be used for protec tion and to facilitate transportation for reasons stated in detail in the adjudication order.
Collector (Appeals) has, however, allowed the assessee 's appeal on the ground that arguments put forward by the Asstt.
Collector for disallowing the party 's claim as not tenable.
In view of Supreme Court 's Judgment dated 7.10.83 in the case of M/s. Bombay Tyre International vs U.O.I. and clari ficatory Order date 14/15.11.83, it appears that the O/A passed by the Collector (Appeals) is not legal and proper and appeal to CEGAT against the same may be considered.
The arguments advanced by the Asstt.
Collector in her O/O dated 28.2.86 (pages 16 1 197/C of linked file) portions marked 'X ' & 'Y ' at Pages 17 1 173 & 163 165/ C of linked file may very well form our grounds of appeal as well.
Submitted for consideration please.
" 1030 Thereafter, it appears that the Collector desired to have a look on the judgment in Godfrey Philip 's case, and following are the orders noted by the Collector: "Godfrey Philips Judgment of the Supreme Court may be pe rused in ELT placed below.
(P=306 of Oct. 1985 issue).
" "Seen the judgment.
This judgment covers a different materi al namely cigarette.
For a classification from CEGAT.
We can appeal on this issue.
However, Collector may kindly see the side linked portions of page 323 of the book. ' ' The tribunal was of the opinion that there was nothing in the rules to justify acceptance of the kind of general authorisation or the notesheet orders which authorised filing of appeal without referring to a specified officer as being in consonance with rule 9(2) of the said rules.
Having regard to the purpose of these rules as we con ceive it, namely, to ensure that there was an application of mind to the points in respect of which the question for filing an appeal arose and that the appeal was duly autho rised by the Collector, and was filed by the person autho rised by the Collector in order to ensure that frivolous and unnecessary appeals are not filed, we are of the opinion that in the present context and in view of the terms of the rules and the purpose intended to be served, the appeal was competent and was duly filed in compliance with the proce dure as enjoined by the rules.
It has to be borne in mind that the rules framed therein were to carry out the purposes of the Act.
By reading the rules in the manner canvassed by Dr. Pal, counsel for the respondent, before us which had prevailed over the tribunal, in our opinion, would defeat the purposes of the rules.
The language of the relevant Section and the rules as we have noticed, do not warrant such a strained construction.
In the aforesaid view of the matter we are of the opin ion that the tribunal was in error in dismissing the appeal on the ground that it did.
In the premises, the judgment and order of the tribunal cannot be sustained.
We accordingly set aside the judgment and order of the tribunal dated 10th November, 1987.
In as much as, however, the tribunal has not disposed of the appeal on merits, we remand the matter to the tribunal for consideration of the appeal on merits and in accordance with law.
The appeal herein is disposed of as aforesaid.
T.N.A. Appeal dis posed of.
| The appellant, a licensed dealer, was charged under Section 55(3) of the Gold (Control) Act, 1968 for failure to maintain the necessary accounts and under section 27(7)(b) for carrying on business in the unlicensed premises on the ground that while the show room of the licensed premises was on the ground floor and appellant had kept the gold orna ments in the third floor of the building.
The Trim Court acquitted the appellant and the Appellate Court confirmed the finding under section 55(3) but convict ed him under section 27(7)(b) holding that the third floor does not form part of the licensed premises.
In this appeal it was contended on behalf of the appel lant that (i) the High Court misocnstrued the provisions of section 27(7)(b); (ii) two views being possible of the evidence on the record the interference with the order of acquittal by the Appellate Court was uncalled for.
Setting aside the conviction and allowing the appeal, this Court, HELD: 1.
In the instant case the entire building hears only one municipal number and the licence was given for conducting the business in that building.
There is no other evidence in support of the prosecution case that the third floor of the building does not form part of the licensed premises.
[796C; 797C] 794 2.
If the finding reached by the trial judge cannot be said to be unreasonable, the Appellate Court should not disturb it even if it were possible to reach a different conclusion on the basis of the material on the record.
The Appellate Court therefore should be slow in disturbing the finding of fact of the Trial Court, and if two views are reasonably possible of the evidence on the record, it is not expected to interfere simply because it feels that it would have taken a different view ff the case had been tried by it.
[797E F] Bhagwati and Ors.
vs State of Uttar Pradesh, , followed.
The view taken by the trial court is quite reasonable and there were no grounds for the High Court to interfere with the findings of the trial court acquitting the accused.
[797G]
|
: Special Leave Petition (Crl.) No. 2088 of 1979.
From the Judgment and Order dated 25 7 1979 of the Allahabad High Court in Criminal Revision No. 1189/79.
N. Ali Khan and A. D. Mathur for the Petitioner The Judgment of the Court was delivered by KRISHNA IYER, J.
Counsel for the petitioner states that the sentence imposed upon his client for the offence under section 7 read with section 16 of the Prevention of Food Adulteration Act must be reduced because the adulterant, namely, prohibited coal tar dye, is, in his submission, non injurious or an innocent mix.
Therefore, the imprisonment part of the sentence, it was urged, should be eliminated.
It is true that the High Court has observed that the "colour which was mixed with powdered chillies" is not mentioned in the Public Analyst 's report to be injurious to human life.
It does not follow that because it is not specifically mentioned to be injurious, it is non injurious.
Absence of evidence is not equal to evidence of absence.
For ought we know, the prohibition under the Act and the Rules has been imposed because it is harmful to human health.
It is true that the High Court has, under a mis conception, reduced the sentence, but we cannot be pressurised further into following the wrong path.
The special leave petition is dismissed.
V.D.K. Petition dismissed.
| HELD: The prohibition under the Prevention of Food Adulteration Act and the Rules has been imposed because it is harmful to human health.
[312 G] Absence of evidence is not equal to evidence of absence.
Non mention in the Public Analyst 's report that the "colour which was mixed with powdered Chillies" was injurious to human life does not amount to the adulterant being non injurious.
When the High Court under this misconception has already reduced the sentence, this Court cannot under article 136 of the Constitution be pressurised further to follow the wrong path.
[312 F H]
|
Appeal No. 1762 of 68.
(Appeal from the Judgment and Decree dated 18 5 1967 of the Calcutta High Court in Appeal from Original Decree No. 183/56).
980 G.L. Sanghi and Girish Chandra, for the Appellant.
Purushottam Chatterjee and Sukumar Ghose, for the respond ent.
The Judgment of the Court was delivered by RAY, C.J.
This appeal by certificate is from the judgment dated April 11, 1968 of the High Court at Calcutta.
The respondent filed this suit against the appellant in the High Court at Calcutta and claimed Rs. 76,691 2 0 with interest or in the alternative Rs. 78,204 8 4.
The respond ent 's case in short is that the respondent delivered to the defendant appellant pursuant to several orders from time to time goods described as Mac Intyre Sleeves and other goods.
The respondent alleged in the plaint that the appellant "wrongfully purported to reject the Mac Intyre Sleeves" supplied by the respondent.
The respondent further alleged that the rejection was unlawful inasmuch as the rejection was after lapse of reasonable time.
The respondent claimed the sum mentioned in the plaint as reasonable price of the goods.
The alternative case of the respondent is that the plaintiff respondent was entitled to the sum for supply of Mac Intyre Sleeves because the same were not supplied gratu itously.
The appellant denied in the written statement that there was any enforceable contract, and, therefore, the respondent was not entitled to sue for price of the goods delivered.
The appellant took the plea bar of the suit that there was no contract in compliance with section 175 of the Gov ernment of India Act, 1935.
The appellant pleaded to.
the alternative case of the respondent by alleging that the goods were lawfully rejected because the goods were found not to be of the correct description and quality.
The appellant further denied that the rejected goods were re tained after lapse of reasonable time without intimating the rejection.
At the trial the respondent found that the claim for the sum of money as price of goods could not be sustained be cause of lack of enforceability of contract.
The respondent therefore sought to make the appellant liable to compensate the respondent by reason of provisions contained in section 70 of the Indian Contract Act.
Counsel for the appellant raised the plea at the trial that there.
was ' no foundation in the plaint for any case under section 70 of the Indian Contract Act.
The three ingredients to support the cause of action under section 70 of the Indian Contract Act are these: First, the goods are to be delivered lawfully or anything has to be done for another person lawfully.
Second, the thing done or the goods delivered is so done or delivered "not intending to do so gratuitously".
Third, the person to whom 'the goods are delivered "enjoys the benefit thereof".
It is only when the three ingredients are pleaded in the plaint that a cause.
of action is constituted under section 70 of the Indian Contract Act.
981 If any plaintiff pleads the three ingredients and proves the three features the defendant is then bound to make compensa tion in respect of or to restore the things so done or delivered.
The allegation in the plaint in the present case was as follows.
"In any event the plaintiff is entitled to the said sum of Rs. 26,248 7 0, and Rs. 50,442 11 0 with interest for the said Mac Intyre Sleeves, Copper Strips and Stay Shackles for the same were not supplied gratuitiously".
The plaint lacked the two other essential features to constitute a cause of action under section 70 of the Indian Contract Act.
These were that the respondent delivered the goods lawfully to the appellant and that the appellant enjoyed the benefits thereof.
The Court should not have allowed the respondent to go to trial in the present case with a Claim under section 70 of the Indian Contract Act in the absence of proper pleadings.
In view of the fact that parties went to trial and issues were raised on claims under section 70 of the Indian Con tract Act and the litigation went through the course of trial and appeal we do not desire to non suit the respondent at this stage.
The trial court held that the goods were not properly rejected.
But the trial court also held that the wordings of the rejection memos negatived any case of enjoyment of benefit.
The trial court said that the documents show that the goods were not utilised or used by the appellant and the appellant disclaimed interest in the goods.
The trial court also found that the respondent accepted the goods.
The findings are inconsistent.
The trial court held that the appellant offered to restore the goods to the respondent but the respondent refused to take them back.
The trial court dismissed the suit.
When the trial court found that the goods were accepted there could be no question of restora tion.
The trial court should have decreed the suit.
The Division Bench on appeal held that the goods were accepted by the appellant.
The Division Bench held that title to the goods passed and if title passed then the whole context of section 70 of the Indian Contract Act would be irrelevant.
The judgment of the Division Bench is con fused.
The Division Bench treated the case of the respond ent to be "a claim for damages for wrongful rejection".
Under the Sale of Goods Act when there is any enforceable contract the seller may claim for price of goods sold or damages for non acceptance.
The present case could not be supported on the footing of any enforceable contract giving rise to damages for non acceptance or wrongful rejection.
The reasoning of the Division 'Bench in allowing the claim is erroneous.
The evidence in the present case as found by the trial court is that the signatures of Rodericks and Francis on the challans indicate acceptance of the goods, and, ,therefore, the rejection is wrongful.
The finding of the trial court that there was acceptance of the goods obviously repels any plea of rejection of the goods.
The error of the trial court was that it found the goods were accepted and yet dismissed the suit on the rea soning that the appellant 982 offered to restore the goods.
The error of the Division Bench was in decreasing the suit not _on the principles of section 70 of the Indian Contract Act but 'on damages for non acceptance of goods on the footing of unenforceable contract for sale of goods.
In view of the fact that there was acceptance of the goods no question of restoration arises.
Counsel for respondent argued that restoration under section 70 of the Indian Contract Act meant that the defendant would have to restore the goods to the plaintiff by delivering the same to the plaintiff.
This contention of the plaintiff respondent is utterly unsound.
As long as there is intimation by the defendant to the plaintiff that the plaintiff can take back the goods the defendant evinces intention of restoration.
In the present case no question of restoration arises be cause of the acceptance of the goods.
The respondent in view of the trial court and the Divi sion Bench of the High Court allowing the respondent to go on with the claim under section 70 of the Indian Contract Act became entitled to compensation for the goods accepted.
The High Court found that the respondent had received a sum of Rs. 7,602 0 0 out of the claim of the claim under sec tion 70 of the Indian contract Act and the respondent has been given a decree for Rs. 69,069 1 0 we order that the parties will pay and bear their own costs in this appeal.
We specify the period of two months for payment of the aforesaid sums of money Rs. 76,671 1 0.
The High Court gave a decree for the sum of Rs. 69,069 1 0.
For the foregoing reasons there will be a decree for Rs. 69.0169 1 0.
The High Court awarded half costs of the trial and full costs of the appeal.
We do not wish to disturb those two orders for costs.
In view of the fact that there was no proper case pleaded to support Appeal dismissed.
| Section 2(g) of the Central Provinces and Berar Sales Tax Act, 1947 defines 'sale ' and Explanation II to the sub section provides that notwithstanding anything to the contrary in the Indian , the sale of any goods which are actually in the State at the time when the contract of sale, as defined in that Act in respect thereof is made, shall, wherever the contract of sale is made, be deemed for the purpose of this Act to have taken place in the State.
The Amending Act of 1949 substituted for this Explanation another Explanation but as the amend ment did not receive the assent of the Governor General under section 107 of the Government of India Act, 1935, it was void.
The assessee owned manganese ore mines in the State and was entering into contracts at places outside the State for the despatch abroad of manganese ore through different ports.
The contracts contained specifications of strengths of manganese ore to be supplied with permissible percentages of other ingredients an admixtures.
The assessee arranged for the transport of various grades of menganese ore in railway wagons from one or more of the mines, and the order in which trucks were loaded and unloaded was so arranged that the required average consistency or strength of manganese ore specified in the contracts was obtained in the course of such unloading.
The assessee described the par ticular type of conglomerate as 'Oriental mixture. ' The assessee contended (1) that the original Explanation II was validly repealed by the Amending Act and since no sub stitution of the new provision had taken place, only the repeal survived, and that, therefore neither the old una mended provision nor its replacement were in operation, with the result that the Sales after the date of amendment were.
not subject to sales tax, and (2) even assuming that the unamended provision was in force, 'Oriental Mixture ', as a taxable commodity came into existence only after the ores got mixed up in the process of unloading and not before so that, its sale could not be taxed as 'goods which are actu ally in the State ', at the time when contracts: were entered into.
The High Court on a reference held the first contention against the assessee and the second in favour of the asses see.
Both sides appealed to this Court.
Dismissing the appeals of the assessee and allowing the appeals of the State.
HELD: (1) As the period involved is preconstitution period, article 286 of Constitution, which is not retrospective in operation would not help the assessee even though the as sessment was after the Constitution came into force.
[1007 F] (2) There was no repeal of the existing Explanation when 'substitution ' by means of the amending Act failed to be effective and so the sale could be taxed under it.
[1012 A B] (a) The question is one of gathering the intent from the use of words in the enacting provisions seen in the light of the procedure gone through, and from the nature of the action of the authority which functions, [1010 B] 1003 (b) The word 'substitution ' does not necessarily or 'always connote two severable steps, one of repeal and another of a fresh enactment, even if it implies two steps.
The natural meaning of the word 'substitution ' is to indicate that the process cannot be so split up.
If the process described as substitution fails, it is totally ineffective so as to leave in tact what was sought to be displaced.
It could not be inferred that; what was intended was that in case the substitution failed or proved ineffec tive, some repeal, not mentioned at all, was brought about and remained effective so as to create what may be described as a vacuum in the statutory law on the subject matter.
The term 'substitution ' when it occurs without anything else in the language used or in the context of it or in the sur rounding facts and circumstances, means, ordinarily, that unless the substituted provision is there to take its place, in law and in effect, the preexisting provision continues.
[1009 H, 1010 A G] (c) In the present case, the whole legislative process termed substitution was abortive.
because, it did not take effect for want of the assent of the GovernorGeneral.
Considering the actual procedure, even if the Governor had assented the substitution, yet the amendment would have been effective as a piece of valid legislation only when the assent of the Governor General had also been accorded to it.
It could not be said that what the Legislature intended or what the Government had assented to consisted of a separate repeal and a fresh enactment.
The two results were to follow from one and the same effective legislative process.
[1010 CD] (d) It is easier to impute an intention to an executive rule making authority to repeal altogether, in any event, what is sought to be displaced by another rule, because the repeal as we11 as replacement are capable of being achieved and inferred from a bare issue of fresh instructions on the same subject.
In the case of a legislative provision sought to be amended by a fresh enactment, the procedure for enact ment is far more elaborate and formal.
A repeal and a replacement of a legislative provision by a fresh enactment can only take place after such elaborate procedure has been followed in toto.
Even the analogy of a merger of an order into another which was meant to be its substitute could only where there is a valid substitute.
[1011 C F, 1012 A B] Koteswar Vittal Kamath vs
K. Rangappa Balica & Co. AIR 1969 SC & 509 ; @ 47 Firm .A.T.B.
Mehtab Majid & Co. vs State Madras [1963] Suppl.
2, SCR 435 and B.N. Tewari vs Union of India & Ors. ; explained.
Shriram Gulabdas vs Board of Revenue, Madhya Pradesh & Anr.
(1952) 3 STC 343 @ 367 approved.
The present case is not one of mixing various ingre dients at a 'mixing works ', and the product which comes into existence being sold as a separate commercial commodity in the market.
The goods got mixed up in the process of un loading without employing any mechanical or chemical process of manufacture.
The mere fact that the specifications in the conrtacts were satisfied when they got so mixed up is not a good enough ground for holding that a new product has been manufactured.
The mere giving of the new name 'Orien tal mixture by the assessee to.
what is really the same product is not the manufacture of a new product.
[1013 A D, G H, 1014 A B] The Stale of Madras vs Bell Mark Tobacco Co. (1967) 19 STC 129, The State of Madras vs Swasthik Tobacco Factory (1966) 17 STC 316 and Anwarkhan Mchboob Co. vs The State of Bombay (Now Maharashtra) & Ors.
(1960) 11 STC 698 and Shaw Bros & Co. vs The State of West Bengal (1963) 14 STC 878 referred to.
Shaw Wallace & Co. Ltd. vs The State of Tamil Nadu (1976) 37 STC 522 explained.
Nilciri Ceylon Tea Supplying Co. vs The State of Bombay (1959) 10 STC 500 approved.
|
Civil Appeals No. 127 130 of 1975.
Appeal by Special leave from the Judgment and order dated 15th October, 1974 of the Gujarat High Court in Civil Revision Appln.
1434 1437 of 1973.
V.M. Tarkunde.
Naresh Kumar Sharma and Vineet Kumar for the Appellant.
D.V. Patel, C.V. Subba Rao, Dy.
Advocate, M.N. Shroff, G.N. Desal, R.N. Poddar and R.H. Dhebar for the Respondent (State).
P.H. Parekh for Respondents 1 and 2.
The Judgment of the Court was delivered by VARADARAJAN, J.
These appeals by special leave are directed, against the judgment of the learned Chief Justice (B.J. Diwan) of the Gujarat High Court in Civil Revision Application Nos. 1434 to 1437 of 1973.
Those Civil Revision Applications (hereinafter referred to as 'Revisions ') were preferred against the judgment of the Civil Judge, (Junior Division) Vijapur as the authority appointed under section 20(i) of the for Vijapur Taluka in Civil Misc.
Applications Nos. 1 and 2 of 1970 and 1 and 2 of 1971 (hereinafter referred to as 'applications ').
The four Revisions raised a common question of law and were disposed of by a common judgment.
The applications before the Minimum Wages Authority were filed by the Gujarat Government Labour officer and Minimum Wages Inspector for Mehsana district against the Taluka Development officer, Vijapur Taluka and District Development officer (Panchayat) Mehsana.
The Minimum Wages Inspector contended in those applications that the four employees, Ishwerbhai 324 Prahladbhai, Dayabhai Umeddass, Kanjibhai Shankarbhai and Nathalal Maganlal, working in the Taluka Panchayat and District Panchayat as Tube well operators at Delva da and Vihar villages, fall within the (hereinafter referred to as the 'Act ') and had been made to work for more hours than what is prescribed under the Act and they were entitled to over time wages of Rs. 3018.40 and Rs. 3769.05 in respect of Ishwerbhai Prahladbhai and Dayabhai Umeddass respectively for the period from September 1969 to February 1970, and Rs. 3082/ for the period from October 1970 to March 1971 and Rs. 1178.25 for the transitional period of April and May 1971 in respect of Kanjibhai Shankarbhai and Rs. 3962.40 and Rs. 1237.80 for those identical periods in respect of Nathalal Maganlal.
Directions under section 20 of Act for payment of those amounts together with further sums for the period during which the applications were pending were prayed for in the applications.
The respondents in the applications denied that the four employees are working under any District Panchayat and contended that they were work charged employees in the State service and that on the introduction of Panchayat Raj in the State of Gujarat with effect from 1.4.1963 as per the Gujarat Panchayats Act, 1961, the maintenance of tube wells and further extension of tube wells and their maintenance and the work charged establishment relating to the tube wells were transferred to the District Panchayats by Government 's Circular No. MNS/41162/V dated 27.3.1963 and the employees were continued as work charged employees by the District Panchayat and were transferred to and continued as such in the Panchayats.
The respondents in the applications thus contended that the four employees concerned were employees of the State of Gujarat, whose terms and conditions of employment are subject to orders of the State Government and that they are paid out of the IOO per cent grant made by the State Government.
The respondents in the applications further contended that the terms and conditions of service of the work charged employees of the State Government are governed by the P.W.D. Manual and that the four employees concerned are not entitled to the over time wages claimed in the applications.
The Minimum Wages Authority found on the evidence adduced by the parties that the Tube well operators concerned were State Government servants and not the servants of the Panchayats, that Panchayats exercised supervisory control over them and that it was not controverted by the applicant, before him 325 that the Tube well operators were employed by the State Government before 1.4.1963.
Following the decision in G.L. Shukla vs State of Gujarat,(l) the found that Panchayat service is, like any other branch of service, service under the State, and he held that though employment in any District Panchayat or Taluka Panchayat is scheduled employment as per section 2(g) of the Act, the Tube well operators concerned being Government servants in Panchayat service are not entitled to claim minimum wages under the Act.
In that view he dismissed the applications.
The Minimum Wages Inspector took the matter in revision before the High Court.
Diwan, C. J., who heard these Revisions followed the decision of the Full Bench of the Gujarat High Court in Criminal Appeal No. 361 of 1972, disposed of on 2.5.1974, in which the ratio of the decision in Shukla 's case was approved and held that Panchayat service was part of the service of the State and the Tube well operators concerned are State Government servants holding civil posts.
In that view the learned Chief Justice agreed with the Minimum Wages Authority that as State Government servants the Tube well operators concerned are not entitled to the benefit of the Act and he dismissed the Revisions.
The point arising for consideration in these civil appeals is simple.
The Minimum Wages Authority and the learned Chief Justice have found that the Tube well operators are Gujarat State Government servants.
That is the contention of the contesting respondents I and 2., viz. Taluka Development officer Vijapur, Taluka Panchayat and District Development officer, Mehsana District Panchayat, in these appeals.
The contention of the State of Gujarat before us in Civil Appeal No. 359 of 1974 was that the employees in the District Panchayats and Taluka Panchayats constituted under the Gujarat Panchayat Act, 1961 and Talatis and Kotwals working in Gram and Nagar Panchayats in the local cadre of Panchayats constituted under that Act are Government servants and that the other employees in the local cadre are Panchayat employees and not State Government employees.
I n that appeal we have repelled the contention that employees of the local cadre, namely, Gram and Nagar Panchayat servants barring Talatis and Kotwals are Panchayat servants and not Government servants and held that they also are State Government servants like the District H 326 Panchayat and Taluka Panchayat employees and Talatis and Kotwals working in the Gram and Nagar Panchayats.
Section 3 of the provides for the appropriate government, in the manner provided in.
the Act, fixing minimum rates of wages payable to employees employed in an employment specified in Part I and Part II of the Schedule and in any other employment added to either Part by notification under s.27 of the Aet subject to the proviso to section 3(1) (a) and has power to review at such intervals as it thinks fit, such intervals not exceeding S years, the minimum rates of wages so fixed and revise the minimum rates, if necessary, subject to the proviso to clause (b) of sub section (I) of section 3.
Section 2(i) of the Act defines "employee" as meaning "any person who is employed for hire or reward to do any work, skilled or unskilled, manual or clerical, in a scheduled employment in respect of which minimum rates of wages have been fixed and includes an out worker. " "Employer" is defined in section 2 (e) of the Act as "any person who employs, whether directly or through another person, or whether on behalf of himself or any other person, one or more employees in any scheduled employment in respect of which minimum wages have been fixed under the Act and includes, except in sub section (3) of section 26".
(i). . (ii) . . . (iii) in any scheduled employment under any local authority in respect of which minimum rates of wages have been fixed under the Act, the person appointed by such authority for the supervision and control of the employees or where no employee is so appointed, the Chief Executive officer of the local authority; and (iv) in any other case where there is carried on any scheduled employment in respect of which minimum rates of wages have been fixed under the Act, any person responsible to the owner for the supervision and control of the employees or for the payment of wages . ".
We are not concerned in these appeals with section 26 (3) of the Act.
Section 2 (g) defines "scheduled employment" as meaning "an employment specified in the Schedule or any process or branch of work forming part of such employment".
"Employment under any local authority" is item 6 in the Schedule of the Act.
Therefore, there can be no doubt that the Tube well operators concerned in these appeals are in scheduled employment under the Panchayats.
The question is whether, being Government servants, employed under the local authority, they are not entitled to minimum wages and other benefits under the Act.
"Employer" under the Act being "any person who employs whether directly or through another 327 person, or whether on behalf of himself or any other person, one or A more employees in any scheduled employment in respect of which minimum wages have been fixed under the Act", the Panchayat or Panchayats under which the Tube well operators concerned are employed in scheduled employment would be "employers" under the Act even though they are Government servants, for under section 102 (2) of the Gujarat Panchayat Act, 1961 a Secretary of a Gram Panchayat or Nagar Panchayat shall subject to the control of the Sarpanch or Chairman as the case may be, perform certain duties mentioned in clauses (a), (b), (c) and (d) to that sub section and under sub section (3) of that section the other servants of the panchayats shall perform such functions and duties and exercise such powers under the Act as may be imposed or conferred on them by the Panchayat, subject to rules, if any, made in this behalf.
We are, therefore, of the opinion that the Tube well operators concerned in these appeals, even thought State Government servants, are employed in scheduled employment under the local authority or authorities and are consequently entitled to minimum wages and other benefits under the Act, it not being disputed that minimum wages have been fixed by the State Government in respect of Tube well operators generally though that benefit has not been extended to the Tube well operators concerned in these appeals.
The appeals are accordingly allowed with costs.
The applications before the Minimum Wages Authority are allowed as prayed for and the directions shall be issued as prayed for.
H.L.C. Appeals allowed.
| After obtaining the requisite sanction from the Governor on 19th February, 1979, a chargesheet in Vigilance P.S. case No. 9 (2) 78 was filed by the State of Bihar against Respondent No 2 (Dr. Jagannath Mishra), Respondent No. 3 (Nawal Kishore Sinha), Respondent No. 4 (Jiwanand Jha) and three others (K.P. Gupta since deceased, M.A. Haidari and A.K. Singh who later became approvers) for offences under Sections 420/466/471/109/120 B I.P.C. and under Section 5 (1) (a), 5 (1) (b) and 5 (1) (d) read with Section 5 (2) of the Prevention of Corruption Act, 1947.
Inter alia, the gravamen of the charge against the respondent No. 2, was that all times material he was either a Minister or the Chief Minister of Bihar and in that capacity by corrupt and or illegal means or by otherwise abusing his position as a public servant, he, in conspiracy with the other accused and with a view to protect Nawal Kishore Sinha, in particular, sought to subvert criminal prosecution and surcharge 62 proceedings against Nawal Kishore Sinha and others, and either obtained for himself or conferred on them pecuniary advantage to the detriment of Patna Urban Co operative Bank, its members, depositors and creditors and thereby committed the offence of criminal misconduct under Section 5 (1) (d) read with Section 5 (2) of the Prevention of Corruption Act, 1947 and in that process committed the other offences specified in the charge sheet, including the offences of forgery under section 466 I.P.C. Cognizance of the case was taken on 21st November, 1979 by the learned Chief Judicial Magistrate cum Special Judge (Vigilance)Patna, who issued process against the accused, but before the trial commenced the State Government, at the instance of Respondent No. 2, who in the meantime had come to power and had become the Chief Minister; took a decision in February 1981 to withdraw from the prosecution for reasons of State and Public Policy.
Though initially Shri Awadesh Kumar Dutt, Senior Advocate Patna High Court, had been appointed as a Special Public Prosecutor by the previous Government for conducting the case, the State Government (now headed by Respondent No. 2) without cancelling Shri Dutt 's appointment as Special Public Prosecutor, on 24th February 1981 constituted a fresh panel of lawyers for conducting cases pertaining to Vigilance Department.
Sri Lalan Prasad Sinha, one of the Advocates so appointed on the fresh panel was allotted the said case and was informed of the Government 's said decision and on 26th March, 1981, he was further requested to take steps for withdrawal of the case after he had considered the matter and satisfied himself about it.
On 17th June, 1981, Sri Lalan Prasad Sinha made an application under Section 321 Crl.
P.C. 1973 to the Special Judge seeking permission to withdraw from the prosecution of Respondent Nos. 2, 3 and 4 in the case on four grounds: namely, (a) Lack of prospect of successful prosecution in the light of the evidence, (b) Implication of the persons as a result of political and personal vendetta, (c) Inexpediency of the prosecution for the reasons of the State and Public Policy; and (d) Adverse effects that the continuance of the prosecution will bring on public interest in the light of the changed situation.
The learned Special Judge by his order dated 20th June 1981 granted the permission.
A Criminal Revision No. 874/81 preferred by the appellant against the said order was dismissed in limine by the High Court on 14th September, 1981.
Hence the approval by Special Leave of the Court.
Allowing the Appeal, the Court ^ HELD: (i) Lalan Prasad Sinha was the competent officer entitled to apply for the withdrawal from the prosecution, there being no infirmity in his appointment.
[155 B C] (ii) He did apply his mind and came to his own conclusions before making the application for the withdrawal from the prosecution.
[149 G] Per majority (Baharul Islam and Misra JJ, Tulzapurkar J dissenting) The executive function of the Public Prosecutor and or the supervisory function of the trial court in granting its consent to the withdrawal have been properly performed and not vitiated by reason of any illegality.
[143E 158A] 63 Per Tulzapurkar J (Concurring with Baharul Islam and Misra JJ.) 1:1 Sri Lalan Prasad Sinha was the competent officer entitled to apply for the withdrawal from the prosecution.
[84 E. It is true that the appointment of the former prosecutor, in the instant case, made by the previous government to conduct the case in question had not been cancelled, though in fitness of things it should have been cancelled but that did not prevent the new government to make a fresh appointment of a Public Prosecutor and to put him in charge of the case.
Appointments of Public Prosecutors generally fall under Section 24 (3) of the Code of Criminal Procedure, but when the State Government appoints public prosecutors for the purpose of any case or class of cases, the appointees became Special Public Prosecutors under Section 24 (8) of the Code.
[85 B D] 1:2 Further it cannot be disputed that the former prosecutor not having appeared before the Special Judge at any stage of the hearing was never incharge of the case not in the actual conduct of the case; on the other hand, after the allotment of this case to him, the latter was incharge of the case and was actually conducting the case he having admittedly appeared in the case at least on four occasions before the Special Judge.
[85 D F] State of Punjab vs Surjeet Singh and Anr., ; ; M.N.S. Nair vs P.V. Balakrishnan and Ors ; , followed.
1:3 It is true that, in the instant case, the State Government had taken its own decision to withdraw from the prosecution in the case against the accused persons and it is also true that the said decision was communicated to the Public Prosecutor, but if the letters communicating the decision are carefully scrutinised, it will be clear that the State Government merely suggested him (which it was entitled to do) to withdraw from the prosecution but at the same time asked him to consider the matter on his own and after satisfying himself about it make the necessary application which he did, and there is no material to doubt the recital that is found in the application that he had himself considered relevant materials connected with the case and had come to his own conclusions in that behalf.
[86 D F] 2.
From the Supreme Court 's enunciation of the legal position governing the proper exercise of the power contained in Section 321, three or four things became clear : (i) Though withdrawal from prosecution is an executive function of the Public Prosecutor for which statutory discretion is vested in him, the discretion is neither absolute nor unreviewable but it is subject to the court 's supervisory function.
In fact being an executive function it would be subject to a judicial review on certain limited grounds like any other executive action; the authority with whom the discretion is vested 'must genuinely address itself to the matter before it, must not act under the dictates of another body, must not do what it has been forbidden to do, must act in good faith, must have regard to all relevant considerations and must not be swayed by irrelevant considerations, must not seek to promote purposes alien to the letter or the spirit of the legislation that gives it power to act arbitrarily or capriciously." [81 E H, 82A] 64 (ii) Since the trial court 's supervisory function of either granting or refusing to grant the permission is a judicial function the same is liable to correction by the High Court under its revisional powers both under the old and present Code of Criminal Procedure, and naturally the Supreme Court would have at least coextensive jurisdiction with the High Court in an appeal preferred to it by special leave or upon a certificate by the High Court.
[82 B D] (iii) No dichotomy as such between political offences or the like on the one hand and common law crimes on the other could be said to have been made by the Supreme Court for purposes of Section 321, for, even in what are called political offences or the like, committing common law crimes, is implicit, for the withdrawal from the prosecution of which the power under Section 321 has to be resorted to.
But the decisions do lay down that when common law crimes are motivated by political ambitions or considerations or they are committed during or are followed by mass agitations, communal frenzies, regional disputes, industrial conflicts, student unrest or like situations involving emotive issues giving rise to an atmosphere surcharged with violence, the broader cause of public justice, public order and peace may outweigh the public interest of administering criminal justice in a particular litigation and withdrawal from the prosecution of that litigation would become necessary, a certainty of conviction notwithstanding, and persistence in the prosecution in the name of vindicating the law may prove counter productive.
In other words, in case of such conflict between the two types of public interests, the narrower public interest should yield to the broader public interest, and, therefore, an onerous duty is cast upon the court to weigh and decide which public interest should prevail in each case while granting or refusing to grant its consent to the withdrawal from the prosecution.
For, it is not invariably that whenever crime is politically motivated or is committed in or is followed by any explosive situation involving emotive issue that the prosecution must be withdrawn.
In other words, in each case of such conflict the court has to weigh and decide judiciously.
But it is obvious that unless the crimes in question are per se political offences like sedition or are motivated by political considerations or are committed during or are followed by mass agitations, communal frenzies, regional disputes, industrial conflicts, student unrest or the like situations involving emotive issues giving rise to an atmosphere surcharged with violence, no question of serving any broader cause of public justice, public order or peace would arise and in the absence thereof the public interest of administering criminal justice in a given case cannot be permitted to be sacrificed, particularly when a highly placed person is allegedly involved in the crime, as otherwise the common man 's faith in the rule of law and democratic values would be sheltered.
[82 D H, 83 A D] (iv) When paucity of evidence or lack of prospect of successful prosecution is the ground for withdrawal the court has not merely the power but a duty to examine the material on record without which the validity and propriety of such ground cannot be determined.
[83 D E] State of Bihar vs Ram Naresh Pandey, ; State of Orissa vs Chandrika Mohopatra and Ors., ; ; Balwant Singh and Ors.
vs State of Bihar, ; R.K. Jain vs State, ; ; M.N.S. Nair vs P.V. Balakrishnan and Ors, ; , referred to.
65 3:1 In the light of the legal principles, it would be clear, that this Vigilance P.S. case 9 (2) (78) being an ordinary criminal case involving the commission of common law crimes of bribery and forgery in ordinary normal circumstances with self aggrandisement or favouritism as the motivating forces, grounds (b), (c) and (d) stated in the application for withdrawal were irrelevant and extraneous to the issue of withdrawal and since admittedly these were the considerations which unquestionably influenced the decision of the Public Prosecutor in seeking the withdrawal as well as the decision of the trial court to grant the permission, the impugned withdrawal of Vigilance P.S. case 9 (2) 78 from the prosecution would stand vitiated in law.
[87 H, 88 A, G H, 89 A B] 3:2 Admittedly, the offences of bribery (criminal misconduct) and forgery which are said to have been committed by Respondent No. 2 in conspiracy with the other accused are ordinary common law crimes and were not committed during nor were they followed by any mass agitation or communal frenzy or regional dispute or industrial conflict or student unrest or the like explosive situation involving any emotive issue giving rise to any surcharged atmosphere of violence; further it cannot be disputed that these are not per se political offences nor were they committed out of any political motivation whatsoever; in fact the motivating force behind them was merely to give protection to and shield Sri Nawal Kishore Sinha, a close friend, from criminal as well as civil liability a favouritism amounting to criminal misconduct allegedly indulged in by Respondent No. 2 by abusing his position as a Minister or Chief Minister of Bihar.
If therefore, the offences did not partake of any political character nor were committed in nor followed by any explosive situation involving emotive issue giving rise to any surcharged atmosphere of violence, no question serving any broader cause of public justice, public order or peace could arise and in absence thereof the public interest of administering criminal justice in this particular case could not be permitted to be sacrificed.
[88 C F] 3:3.
No results of any election, howsoever sweeping, can be construed as the people 's mandate to condone or compound the common law crimes allegedly committed by those who have been returned to power; in fact such interpretation of the mandate would be contrary to all democratic canons.
Success at hustings is no licence to sweep all dirt under the carpet and enjoy the fruits nonchalantly.
Therefore, the plea of change in the situation brought about by the elections putting Respondent No. 2 in power as Chief Minister and prosecution against the head of State would have had adverse effects on public interest including public order and peace is misplaced.
At the worst, all that can happen is that Respondent No. 2 will have to step down and nothing more.
Any fear of destabilisation of the Government is entirely misplaced.
On the other hand, withdrawal from the prosecution of such offences would interfere with the normal course of administration of criminal justice and since Respondent No. 2 is placed in a high position, the same is bound to affect the common man 's faith in the rule of law and administration of justice.
Further if the proof of the offences said to have been committed by Respondent No. 2, in conspiracy with the other accused based on undisputed and genuine documentary evidence, no question of political and personal vendetta or unfair and overzealous investigation would arise.
[89 D H, 90 A] 66 3:4 The documentary evidence, comprising the Audit Reports, the relevant notings in the concerned file and the two orders of the Respondent No. 2, the genuineness of which cannot be doubted, clearly makes out a prima facie case against Respondent No. 2 sufficient to put him on trial for the offence of criminal misconduct under Section 5 (1) (d) read with Section 5 (2) of the Prevention of Corruption Act, 1947.
Similar is the incidental offence of forgery under Section 466 I.P.C. for antedating the second order.
The question of "paucity of evidence", therefore, does not arise.
The trial court failed, therefore, in its duty to examine this before permitting the withdrawal from prosecution.
[101 C E, H, 102 A] 3:5 Yet another legal infirmity attaching to the executive function of the Public Prosecutor as well as the supervisory judicial function of the trial court which would vitiate the final order is that while the charge sheet is under sub clauses (a), (b) and (d) of Section 5 (1) read with Section 5 (2) of the Prevention of Corruption Act along with other offences under the Penal Code, in the application for withdrawal and during the submission made before the Court as well as in the order of the trial Court permitting the withdrawal the reference is to Section 5 (1) (c) and not 5 (1) (d).
Obviously the permission granted must be regarded as having been given in respect of an offence with which Respondent No. 2 had not been charged, completely ignoring the offence under Section 5 (1) (d) with which he had been mainly charged.
This state of affairs brings out a clear and glaring non application of mind both on the part of the Public Prosecutor and also the learned special Judge with the issue of withdrawal; in the High Court also there is no improvement in the situation.
[103 B, D, E, F, H, 104 A C] Per Baharul Islam, J. 1:1 In view of the definition of "Public Prosecutor" in Section 2 of the Code of Criminal Procedure read with Section 24 (8) of the Code and in the light of the decision of the Supreme Court in State of Punjab vs Surjeet Singh ; , there cannot be any doubt, that Sri L.P. Sinha was a Public Prosecutor validity appointed under sub section (8) of Section 24 of the Code.
[115 D E] State of Punjab vs Surjeet Singh, ; , followed.
1:2 The appointment of Shri L.P. Sinha cannot be collaterally challenged particularly in an application under Article 136 of the Constitution.
Shri A.K. Dutta, the earlier appointee had at no point of time came forward to make any grievance at any stage of the case, either at the appointment of Sri L.P. Sinha as Special Public Prosecutor or in the latter 's conduct of the case; nor Sri L.P. Sinha whose appointment and right to make an application under Section 321 of the Code have been challenged is before the Supreme Court.
[115 E G] 1:3 The appointment of the latter prosecutor without the termination of the appointment of the earlier one might at best be irregular or improper, but cannot said to be legally invalid.
The doctrine of de facto jurisdiction which has been recognised in India will operate in this case.
[115 G H, 116A] 67 Gokaraju Rangaraju vs State of Andhra Pradesh, ; , followed.
Newzealand and Norton vs Shelly Country p. ; quoted with approval.
1:4 Shri L.P. Sinha was both de jure and de facto Public Prosecutor in the case.
If he fulfilled the two conditions as required by Section 321, namely, (i) that he was the Public Prosecutor; and (ii) was incharge of the case, he was competent to supply for withdrawal of the case, even if he were appointed for that purpose only.
[118 H, 119 A C] 2:1 Section 321 enables the Public Prosecutor or Assistant Public Prosecutor incharge of a case to withdraw from the prosecution with the consent of the court.
Before an application is made under Section 321, the Public Prosecutor has to apply his mind to the facts of the case independently without being subject to any out side influence.
But it cannot be said that a Public Prosecutor 's action will be illegal if he receives any communication or instruction from the Government.
Unlike the Judge, the Public Prosecutor is not an absolutely independent officer.
He is an appointee of the Government, Central or State.
appointed conducting in Court any prosecution or proceedings on behalf of the Government.
A public prosecutor cannot act without instructions of the Government; a public prosecutor cannot conduct a case absolutely on his own, or contrary to the instructions of his client, namely, the Government.
Section 321 does not lay any bar on the public prosecutor to receive any instruction from the Government before he files an application under that Section.
If the public prosecutor receives such instructions, he cannot be said to act under extraneous influence.
On the contrary, the public prosecutor cannot file an application for withdrawal of a case on his own without instruction from the Government.
[119 D H, 120 B C] 2:2 A mere perusal of the application made by the public prosecutor abundantly shows that he did apply his mind to the facts of the case; he perused the case Diary and the relevant materials connected with the case", before he made the application.
He did not blindly quote from the Government letter which contained only one ground, namely, "inexpediency of prosecution for reasons of state and public policy".
A comparison of the contents of this letter with the contents of the application under Section 321 completely negatives the contention that he did not himself apply his mind independently to the fact of the case and that he blindly acted on extraneous considerations.
[112 F H] 3:1 The object of Section 321 appears to be to reserve power to the Executive Government to withdraw any criminal case on larger grounds of public policy, such as, inexpediency of prosecutions for reasons of State; broader public interest like maintenance of law and order; maintenance of public peace and harmony, social, economic and political; changed social and political situation; avoidance of destabilisation of a State Government and the like.
And such powers have been rightly reserved for the Government; for, who but the Government is in the know of such conditions and situations prevailing in a State or in the country.
The Court is not in a position to know such situations.
[126 D F] 68 3:2 The withdrawal from the prosecution is an executive function of the public prosecutor and the ultimate decision to withdraw from the prosecution is his; the Government may only suggest to the Public Prosecutor that a particular case may not be proceeded with, but nobody can compel him to do so; not merely inadequacy of evidence, but other relevant grounds such as to further the broad ends of public justice, economic and political; public order and peace are valid grounds for withdrawal.
The exercise of the power to accord or withdraw consent by the court is discretionary.
Of course, it has to exercise the discretion judicially.
The exercise of the power of the Court is judicial to the extent that the Court in according or refusing consent has to see: (i) whether the grounds of withdrawal are valid; and (ii) whether the application is bonafide and not collusive.
It may be remembered that an order passed by the Court under Section 321 is not appealable.
[128 D G] 3:3 A mere perusal of the impugned order of the Special Judge granting permission to withdraw from the prosecution of accused persons, in the case in question shows that he has applied his mind to the relevant law.
What the court has to do under section 321 is to see whether the application discloses valid grounds of withdrawal valid as judicially laid down by the Supreme Court.
[128 G H] 3:4 A criminal proceeding with a prima facie case may also be with drawn.
Besides, the normal practice of the Supreme Court in a criminal appeal by Special Leave under article 136 of the Constitution directed against an order of conviction or acquittal is that it does not peruse the evidence on record and appreciate it to find whether findings of facts recorded by the courts below are correct or erroneous, far less does it peruse the police diary to see whether adequate materials were collected by the investigating agency.
It accepts the findings of the Courts below unless it is shown that the findings are the results of a wrong application of the principles of law and that the impugned order has resulted in grave miscarriage of justice.
[129 A C] R.K. Jain vs The State, ; , followed.
3:5 An order under Section 321 of the Code does not have the same status as an order of conviction or acquittal recorded by a Trial Court or appellate court in a criminal prosecution, in as much as the former has not been made appealable.
An order under Section 321 of the Code has a narrower scope.
As an order under Section 321 of the Code is judicial, what the trial court is expected to do is to give reasons for according or refusing its consent to the withdrawal.
The duty of the Court is to see that the grounds of withdrawal are legally valid and the application made by the public prosecutor is bonafide and not collusive.
In revision of an order under Section 321 of the Code, the duty of the High Court is to see that the consideration by the trial court of the application under Section 321 was not misdirected and that the grounds of withdrawal are legally valid.
In this case the trial court elaborately considered the grounds of withdrawal and found them to be valid and accordingly accorded its consent for withdrawal.
In revision the High Court affirmed the findings of the trial court.
In this appeal by special leave, therefore, there is no justification to disturb the findings of the courts below and peruse the statements of witnesses recorded or other materials collected by the investigating officers during the course of investigation.
[129 C H] 69 3:6 A question of fact that needs investigation cannot be allowed to be raised for the first time in an appeal by special leave under Article 136 of the Constitution.
In his application before the special Judge the appellant did not find fault with any of the grounds of withdrawal in the application filed by the Public Prosecutor under Section 321.
There was no mention of any forgery by antedating or by pasting of any earlier order and thereby making any attempt at shielding of any culprit.
He thus prevented the special Judge and the High Court from giving any finding an alleged forgery and thereby depriving the Supreme Court also from the benefits of such findings of the courts below.
[131 C E] 3:7 There is no prima facie case of forgery or criminal misconduct made out on the materials on record.
If the Chief Minister found that his first order was unwarranted by law, it was but right that he cancelled that order.
Pasting order by a piece of paper containing another order prima facie appears suspicious, but pasting is the common practice in the Chief Minister 's Secretariat.
Antedating simpliciter is no offence.
[132 C,E,F] 3:8 If two interpretations are possible, one indicating criminal intention and the other innocent, needless to say that the interpretation beneficial to the accused must be accepted.
[132 G] 3:9 Remand for trial if made will be a mere exercise in futility and it will be nothing but an abuse of the Court to remand the case to the trial court in view of the following circumstances, namely, (1) the occurrence took place as early as 1970; it is already more than twelve years; (ii) Respondent No. 2 is the Chief Minister in his office.
Knowing human nature, as it is, it can hardly be expected that the witnesses, most of whom are officials, will come forward and depose against a Chief Minister; and (iii) Even after the assumption of office by Respondent No. 2 as the Chief Minister is in the court of Special Judge, the prosecution was pending on several dates but the Prosecutor, Sri A.K. Dutta, did not take any interest in the case at all.
It cannot be accepted that a Public Prosecutor appointed by the Government in power, will now take interest and conduct the case so as to secure conviction of his own Chief Minister.
[136 F H, 137 A B] Per R.B. Misra J. 1:1 A bare perusal of Section 321 of the Criminal Procedure Code shows that it does not put any embargo or fetter on the power of the Public Prosecutor to withdraw from prosecuting a particular criminal case pending in any court.
All that he requires is that he can only do so with the consent of the court where the case is pending in any court.
[140 C D] 1:2 In this country, the scheme of criminal justice places the prime responsibility of prosecuting serious offences on the executive authority.
The investigation, collection of requisite evidence and the prosecution for the offences with reference to such evidence are the functions of the executive.
The function of the court in this respect is a limited one and intended only to prevent the abuse.
The function of the court in according its consent to withdrawal is, however, a judicial function.
It, therefore, becomes necessary for the court before 70 whom the application for withdrawal is filed by the public prosecutor to apply its mind so that the appellate court may examine and be satisfied that the court has not accorded its consent as a matter of course but has applied its mind to the grounds taken in the application for withdrawal by Public Prosecutor.
[140 E G] State of Bihar vs Ram Naresh Pand ey, ; M.N.S. Nair vs P.V. Balakrishnan & Ors.
, ; , State of Orissa vs C. Mohapatra, ; Balwant Singh vs State of Bihar, ; R.K. Jain vs State; ; , referred.
2:1 Section 321 is in very wide terms and in view of the decisions of the Supreme Court, it will not be possible to confine the grounds of withdrawal of criminal proceeding only to offences which may be termed as political offences or offences involving emotive issues.
The only guiding factor which should weigh with Public Prosecutor while making the application for withdrawal and the court according its permission for withdrawal is to see whether the interest of public justice is advanced and the application for withdrawal is not moved with oblique motive unconnected with the vindication of the cause of public justice.
[145 E G] 2:2 The Indian Penal Code or the Code of Criminal Procedure does not make any such distinction between political offences and offences other than political ones.
Even if it is accepted that political offences are unknown to jurisprudence and other Acts do contemplate political offences, the fact remains that Section 321 Cr.
P.C. is not confined only to political offences, but it applies to all kinds of offences and the application for withdrawal can be made by the Public Prosecutor on various grounds.
[145 H, 146 A B] 2:3 To say that unless the crime allegedly committed are per se political offences or are motivated by political ambition or consideration or are committed during mass agitation, communal frenzies, regional disputes, no question of serving a broader cause of public justice, public order or peace can arise is to put limitation on the broad terms of Section 321 of the Code.
[148 F G] 3:1 The Public Prosecutor may withdraw from the prosecution not only on the ground of paucity of evidence but on the other relevant grounds as well in order to further broad aims of justice, public order and peace.
Broad aim of public justice will certainly include appropriate social, economic and political purposes.
[143 G H] 3:2 An application for withdrawal from the prosecution can be made on various grounds and it is not confined to political offences.
Therefore, it cannot be said that the grounds mentioned in the application for withdrawal, namely: (i) implication of the accused persons as a result of political and personal vendetta, (ii) inexpediency of the prosecution for the reasons of State and Public policy, and 71 (iii)adverse effects that the continuance of the prosecution will bring on public interest in the light of the changed situation, are irrelevant.
are not liable grounds for withdrawal.
[145 G H] 3:3 Further, the decision of the public prosecutor to withdraw from the case on the grounds given by him in his application for withdrawal cannot be said to be actuated by improper oblique motive.
He bonafide thought that in the changed circumstances it would be inexpedient to proceed with the case and would be a sheer waste of public money and time to drag on with the case if the chances for conviction are few and far between.
In the circumstances, instead of serving the public cause of justice, it will be to the detriment of public interest.
[149 B D] 3:4 The letter sent by the Government to the public prosecutor did not indicate that the Government wants him not to proceed with the case, but the letter gave full discretion to the Public Prosecutor, to apply his own mind and to come to his own conclusion.
Consultation with the Government or high officer is not improper.
But the Public Prosecutor has to apply his own mind to the facts and circumstances of the case before coming to the conclusion to withdraw from the prosecution.
From the materials on the record, it is clear that the Public Prosecutor has applied his own mind and came to his own conclusions.
[155 D F] 3:5 The statutory responsibility for deciding withdrawal squarely rests upon the public prosecutor.
It is non negotiable and cannot be bartered away.
The court 's duty in dealing with the application under Section 321 is not to reappraise the materials which led the public prosecutor to request withdrawal from the prosecution but to consider whether public prosecutor applied his mind as a free agent uninfluenced by irrelevant and extraneous or oblique considerations, as the court has a special duty in this regard in as much as it is the ultimate repository of legislative confidence in granting or withdrawing its consent to withdrawal from prosecution.
[149 D E] 3:6 If the view of the Public Prosecutor is one, which could in the circumstances be taken by any reasonable man, the court cannot substitute its own opinion for that of the Public Prosecutor.
If the Public Prosecutor has applied his mind on the relevant materials and his opinion is not perverse and which a reasonable man could have arrived at, a roving enquiry into the evidence and materials on the record for the purpose of finding out whether his conclusions were right or wrong would be incompetent.
[154 H, 155 A] In the view taken that no prima facie case has been made out under Section 466 of the Indian Penal Code and Section 5 (1) (d) of the Prevention of Corruption Act and the fact that the High Court in revision agreed with the view of the Special Judge giving consent to the withdrawal from the prosecution on the application of the Public Prosecutor under Section 321 I.P.C. this Court cannot make a fresh appraisal of evidence and come to a different conclusion.
72 All that this Court has to see is that the Public Prosecutor was not actuated by extraneous or improper considerations while moving the application for withdrawal from the prosecution.
Even if it is possible to have another view different from the one taken by the Public Prosecutor while moving the application for withdrawal from prosecution the Supreme Court should be reluctant to interfere with the order unless it comes to the conclusion that the Public Prosecutor has not applied his mind to the facts and circumstances of the case, and has simply acted at the behest of the Government or has been actuated by extraneous and improper considerations.
On the facts and circumstances of the case, it is clear that the Public Prosecutor was actuated by oblique or improver motive.
[157 B F]
|
Criminal Appeal No. 533 of 1989.
From the Judgment and Order dated 31.8.88 of the Bombay High Court in Criminal Appeal No. 24 of 1988.
Govind Mukhoty and V.B. Joshi for the Appellant.
Anil Dev Singh, C.K. Sucharita and Ms. A. Subhashini for the Respondent.
The following order of the Court was delivered Special leave granted.
The appellant who is a French national has preferred this appeal 1029 under Article 136 of the Constitution of India canvassing the correctness of his conviction under Sections 21, 20(b)(ii) and 18 of the (for brevity hereinafter referred to as the 'Act ') and the sentence of 10 years rigorous imprison ment in addition to pay a fine of Rs. 1,00,000 in default to undergo rigorous imprisonment for one year inflicted by the Court of Sessions Judge, South Goa, Margao and confirmed by the High Court of Bombay, Panaji Bench (Goa) with a modifi cation of the default sentence from one year to six months on the indictment that the appellant on 7.12.87 at about 0.40 hours at Colva was found in possession of prohibited drugs/namely 51 gms.
of brown sugar, 45 gins.
of ganja oil and 55 gms.
of opium all worth approximately Rs. 13,465 without valid documents.
Adumberated in brief, the relevant facts of the prosecu tion case giving rise to this appeal are as follows.
On 6th December, 1987 at about 11.00 p.m. the Assistant Sub Inspector of Police, Shri Laxman Mahalsekar (PW 7) while along with his police party was on his patrol duty at the 3rd ward of Colva, saw the appellant speeding up his motor cycle, bearing Registration No. GDK 851 ignoring his signal to stop.
The appellant in such attempt, presumably to escape from being nabbed by the police lost control over the vehi cle and fell down.
No sooner he stood up and removed a paper wrapping from his pant pocket and threw it away.
PW 7 on entertaining suspicion over the conduct of the appellant verified that wrapping to contain small quantity of brown sugar and then he took the appellant along with his motor cycle to the nearby Police Out Post.
A handbag, bluish in colour with red strips had been attached to the motorcycle.
When the said bag was opened with a key handed over by the appellant and examined in the presence of two pancha wit nesses, namely Francis Xavier D 'Silva (PW 1) and one Connie D 'Silva (not examined), it was found to contain some person al belongings such as wearing apparels, a pair of shoes and a canvas bag.
Inside the bag, there was one shaving cream tube, one camera, a torch and four plastic rolls.
There was also one plastic bag containing contraceptives.
The torch was found to contain two bundles of plastic material each one containing a small piece of blackish substance.
Inside the cream tube, four bandies wrapped in a plastic material were found.
Each of the bundle contained small pieces of blackish substance.
There was also one more bundle of plas tic material concealed in the shoes which when opened was found to contain small piece of blackish substance similar to the one found in the torch as well in the shaving cream tube.
The 1030 camera was found in a box in which there were five packets of plastic material with some powder of yellowish colour i.e. brown sugar.
According to PW 7, there were 50 gms.
of brown sugar hidden in the camera case, 45 gms.
of Ganja oil in the steel container and 55 gms.
of opium in the shaving cream tube, torch light and shoes.
All the materials were weighed and seized under a panchnama (exhibit P. 1) attested by PW 1 and Connie D 'Silva.
The appellant was arrested and kept under medical treatment and observation.
Samples of these articles were sent to Chemical Analyst (PW 6) who has de posed that she received three envelopes Ex.1 to 3.
According to her, the envelope marked Ex.1 contained 1.57 gms.
of substance which on analysis was found to contain 16.8% w/w of Morphine (which is an alkaloid extracted from opium i.e. conversion of opium).
The quantity of the substance namely a dark brown soft mass having characteristic colour of opium found in the envelope exhibit 2, weighing 2.45 gms.
was not sufficient to carry out further analysis.
The substance in envelope exhibit 3 weighing 2.97 gms.
on analysis was found to contain a dark brown sticky substance having odour similar to that of extract of cannabis.
PW 6 gave her report (exhibit
P 3) dated 8.2.88.
PW 7, after receiving exhibit P 3 and complet ing the investigation charge sheeted the accused under the provisions of the Act on the ground that the appellant was in possession of prohibited drugs without a valid licence or permit or authorisation in violation of Section 8 punishable under the penal provisions of the Act.
The defence of the appellant is one of total denial.
As pointed out in the earlier part of this judgment both the Trial Court and the Appellate Court have concurrently found the accused guilty.
Mr. Govind Mukhoty, learned senior advocate appearing on behalf of the appellant directed a manifold scathing attack on the prosecution case raising the following conten tions: 1.
The absence of any visible injury on the person of the appellant while apprehended belies the prosecution version that the appel lant had fallen down from the vehicle on accelerating the speed; 2.
The fact that the Investigating Offi cer did not deliberately join with him respec tive inhabitants of the locality i.e. within the vicinity of the Police Out Post to witness the seizure but had taken pain to secure PW 1 and Connie D 'Silva who were residing far away from the place of seizure and who seem to 1031 have been readily willing and obliging to be pancha witnesses devalues the evidence regard ing the seizure of the contrabands and more so it is in violation of the salutary provisions of law prescribing the procedure to be fol lowed before making the search and seizure; 3.
PW 7 sent only three samples from the alleged seized substances that too in small quantity instead of sending sufficient repre sentative quantity from each of the packets seized for assay.
Therefore, in the absence of scientific test of all the substances found in each of the packets, no safe conclusion can be arrived that the entire substances seized under various packets were all prohibited drugs; 4.
The admission of PW 6 in her evidence that she does not know the difference between the narcotic drugs and psychotropic substances militates against the evidentiary value of her opinion under Exh.
P 3. 5.
The non inclusion of PW 5, the owner of the motor cycle as an accused and the non examination of Cavin at whose instance PW 5 lent the vehicle are fatal to the prosecution case; 6.
Even assuming but not conceding that the prosecution version is acceptable in the absence of any evidence that the appellant was carrying on with the nefarious trade of pro hibited drugs either as a 'peddler ' or 'push er ', the appellant would be liable to be punished within the mischief of Section 27(a) of the Act, since the attending circumstances present in this case indicate that the appel lant was in possession of the drugs in small quantity only for his personal consumption.
We shall now examine the contentions seriatim with reference to the evidence available on record.
There is no denying the fact that the appellant had been taken into police custody on the early hours of 7.12.87 by PW 7 along with the motor cycle involved in this case.
The submission of Mr. Mukhoty is that in the absence of any injury on the person of the appellant, the case of the prosecution that the appellant fell down from his vehicle is hardly acceptable.
No doubt if a person is thrown off or falls down from a speeding vehicle he may sustain injuries either serious or simple or escape sometimes unhurt but it depends on the speed of the 1032 vehicle, the manner of fall, the nature of the soil and the surface of the earth etc.
In the present case, evidence of PWs 4 and 7 is that the appellant on seeing the police party accelerated the speed ignoring the signal given by PW 7 to stop and it was only during the course of this attempt, the appellant fell down from the motor cycle at a place where the street lights i.e. the fluorescent tube lights and bulbs were on and thereafter immediately stood up.
The evidence on these two witnesses and the other connected facts lead to the inference that the appellant had fallen down immediately after he attempted to speed up the vehicle and was caught hold of by the police.
It is not the case of the prosecution that the appellant sped away to some distance and then had fallen down from the speeding vehicle.
PW 3, the Medical Officer attached to Hospicio Hospital speaks to the fact that when she examined the appellant on 8.12.87 at about 8.00 p.m., the appellant complained of bodyache, nosia etc.
but PW 3 does not whisper of having seen any visible injury on the person of the appellant.
After carefully scanning the evidence of PWs 4 and 7 coupled with the recovery of the articles Nos 1 to 14, we unhesitatingly hold that the appel lant was caught by the police under the circumstances as put forth by the prosecution and the appellant however escaped unhurt.
Hence in the light of the above evidence, we are constrained to hold that this submission made by the learned defence counsel does not merit consideration.
After the appellant was secured by the police, PW 7 directed PW 4 to bring two pancha witnesses.
Accordingly, PW 4 brought two witnesses from a place which is according to PW 7 is within a distance of 1 KM and according to PW 5 at five minutes walking distance.
Much argument was advanced by the learned defence counsel that these two witnesses were not the respectable inhabitants of that locality; that they were readily willing and obliging witnesses to the police and that there is deliberate violation of the statutory safeguard.
This argument cannot be endured for more than one reason to be presently stated.
The appellant was secured in the midnight near the police out post.
It clearly transpires from the records that these two witnesses are not outsiders but residents of the same area, namely Colva.
Except making some bare suggestions that both the witnesses were regular and professional witnesses, nothing tangible has been brought out in the cross examination to discredit the testi mony of PW 1.
This Court, while considering a similar con tention in Sunder Singh vs State of U.P., [1956] Crl.
Law Journal 801 and Tej Bahadur vs State of U.P., has observed that if pancha witnesses are not respect ables of the same locality but from another locality, it may amount only to an 1033 irregularity, not affecting the legality of the proceedings and that it is a matter for Courts of fact to consider and the Supreme Court would not ordinarily go behind the finding of facts concurrently arrived at by the Courts below.
See also State of Punjab vs Wasson Singh and Five Oth ers; , When such is the view, expressed by this Court on a number of occasions, we are unable to appreciate the submis sion of the learned counsel that the prosecution case is in violent disregard of the procedure relating to search and seizure.
The question that PW 1 and other pancha witnesses are not the inhabitants of the locality does not arise in the present case because it is indisputably shown that they are the residents of the same Colva area where the Police Out Post is situated.
The fact that these two witnesses are not residing in the vicinity of the seizure, in our view, does not disturb the acceptance of the evidence of PW 1 relating to the seizure of the contrabands and other arti cles.
With regard to the drawing up of the panchnama, the defence has come forward with two diametrically contradicto ry suggestions in that, the suggestion made to PW 1 is that he only subscribed his signatures on some papers whilst a new story, suggested to PW 7 is that the panchanama was fabricated around the 5th of January 1988 in order to save one Ramesh, brother of PW 5 from being prosecuted in connec tion with this seizure.
To establish the seizure of all the articles including the contrabands, the prosecution rests its case not only on the testimony of PW 1 but also on the evidence of PWs 5 and 7 whose evidence is amply corroborated by the towering circumstances attending the case.
From the records, it is found that PW 7 divided the contrabands into three categories and sent the samples from each of the categories for analysis.
No doubt, it would have been appreciable, had PW 7 sent sufficient representative quantity from each of the packets but however this omission in the present case does not affect the intrinsic veracity of the prosecution case.
PW 6 has fairly stated that she was able to thoroughly assay only the substances found in two envelopes marked as exhibit P 1 and P 3 and the substances in envelop exhibit P 2 was not sufficient to carry out further analysis though it was a dark brown soft mass having charac teristic of odour of opium.
The testimony of PW 6 and her opinion recorded in the unimpeachable document (exhibit P 3) lend assurance to the case of the prosecution that the contrabands seized from the possession of the appellant were prohibited drugs and substances.
1034 The criticism levelled by the learned defence counsel is that the evidence of PW 6 is not worthy of acceptance since she has admitted that she does not know the difference between the narcotic drugs and psychotropic substances.
This attack, in our view, does not assume any significance be cause as rightly pointed out by Mr. Anil Dev Singh, the learned senior advocate for the respondent, the Medical Officer is not expected to know the differences in the legal parlance as defined in Section 2(xiv) and (xxii) and speci fied under Schedules 1 to III in accordance with the con cerned Narcotic Drugs and Psychotropic Substances Rules, 1985 made under the Act and so this ground by itself, in our view, is no ground for ruling out the evidence of PW 6.
Yet another attack by the defence that the omission on the part of the prosecution to include PW 5 as an accused and to examine Cavin as a witness has to be mentioned simply to be rejected as devoid of any merit, as there is absolute ly no material to hold that PW 5 was in any way connected with the seizure of the contrabands or he has committed any indictable offence though the vehicle belonged to him.
The non examination of Cavin at whose instance PW 5 lent his motorcycle to the appellant does not in any way affect the prosecution case.
For the discussions made above, we see no force in the contentions 1 to 5.
Lastly, we have to consider the legal submission made by Mr. Mukhoty that the appellant was in possession of these drugs or substances in a small quantity for his personal consumption and as such he would be punishable only under Section 27(a) of the Act providing imprisonment for a term which may extend to one year or with fine or with both.
He further pleaded that the appellant is neither an 'uncrowned king of the mafia world ' nor a 'peddler ' nor a 'pusher '; that he being a foreigner by prolonged and continuous use of drugs has become a drug dependent and that he had all symp toms of an addict and exhibited sufferance of withdrawal symptoms on discontinuing the drug which, it seems, he was taking on his own as borne out from the testimony of the Medical Officers (PWs 2 and 3) under whose observation the appellant has been kept for some days.
Incidentally, he has added that though ignorance of law is not an excuse and it cannot be permitted to be pleaded, yet this Court may take note of the fact that the appellant who is a foreigner should have been lacking awareness of the stringent provi sions of the Act.
Firstly, let us examine whether the offence would fail within the 1035 mischief of Section 27(a) of the Act.
This section provides punishment for illegal possession in small quantity for personal consumption of any narcotic drug or psychotropic substance.
The expression 'small ' quantity occuring in that section is explained under Explanation I annexed to that Section which reads thus: "For the purposes of this section 'small quantity ' means such quantity as may be speci fied by the Central Government by notification in the Official Gazette.
" In compliance with this explanation, the Ministry of Finance (Department of Revenue) has issued notification No. S.O. 827(E) dated November 14, 1985 published in the Gazette of India, Extra., Part II Section 3(ii) dated 14th November 1985 which notification reads thus: "In exercise of the powers conferred by Expla nation (1) of Section 27 of the (61 of 1985) and in partial modification of the notification of the Government of India in the Ministry of Finance, Department of Revenue No.S.O. 825(E), dated the 14th November 1985 the Central Government hereby specifies the quantity mentioned in Column 3 of the Table below, in relation to the narcotic drug men tioned in the corresponding entry in column (2) of the said Table, as 'small quantity ' for the purposes of that section.
TABLE Serial No. Name of the Narcotic Drug Quantity 1 2 3 1.
Heroin or drug commonly 250 milligrams known as Brown Sugar or smack 1036 2.
Hashish or Charas 5 grams 3.
Opium 5 grams 4.
Cocaine 125 milligrams 5.
Ganja 500 grams Coming to the case on hand, the appellant was found to be in possession of the narcotic drugs or substances far in excess of the quantity mentioned in column 3 of the table under the notification.
According to the prosecution, he was in possession of 51 grams of brown sugar, 45 grams of Ganja oil and 55 grams of opium.
In view of the above position, it cannot be contended that the prohibited drugs and substances seized from the appellant 's possession were in small quantity so as to bring him only within the mischief of Section 27(a) of the Act.
It may not be out of place to mention that even if a person is shown to have been in possession of a small quan tity of a narcotic drug or psychotropic substance, the burden of proving that it was intended for the personal consumption of such person and not for sale or distribution, lies on such person as per Explanation 2 of Section 27 of the Act.
Thirdly, the very fact that the appellant had kept these drugs and substances in many ingeniously devised places of concealment in the camera, shaving tube, torch and shoes would indicate that the appellant was having Fuji knowledge that the drugs he carried were prohibited drugs and that he was having them in violation of law.
We, for the above reasons, see no merit in this contention also.
The Trial Court while inflicting the punishment has expressed its view about the drug menace spreading in Gao as follows: "The spreading of the drugs in Gao is becoming day by day a terrible menace which is com pletely destroying the very fiber of our society being also instrumental in subverting the tender soul of our young generation which is being badly contaminated by such danger in a very alarming 1037 provisions calling for severe punishment in case of illegal possession and transportation of drugs meant for personal consumption and eventual trade.
" With deep concern, we may point out that the organised activities of the underworld and the clandestine smuggling of narcotic drugs and pyschotropic substances into this country and illegal trafficking in such drugs and substances have led to drug addiction among a sizable section of the public, particularly the adolescents and students of both sexes and the menace has assumed serious and alarming pro portions in the recent years.
Therefore, in order to effec tively control and eradicate this proliferating and booming devastating menace, causing deleterious effects and deadly impact on the society as a whole, the Parliament in its wisdom, has made effective provisions by introducing this Act 81 of 1985 specifying mandatory minimum imprisonment and fine.
As we have now rejected the plea of the defence hold ing that the penal provisions of Section 27(a) has no role to play as the prohibited drugs and substances possessed by the appellant were far in excess of the quantity mentioned in Column 3 of the table under the notification, the sen tence of 10 years rigorous imprisonment and the fine of Rs. 1,00,000 with the default clause as modified by the High Court does not call for interference.
In the result, the appeal is dismissed.
T.N.A. Appeal dismissed.
| One Sh.
G.V. Ranade took four policies on his own life from the LIC during the period.
1958 to 1960.
In April 1969 G.V. Ranade assigned absolutely all these four policies in favour of his wife Smt.
Kamalabai G. Ranade and the assign ment was duly registered by the LIC.
These policies were paid up and the date of maturity of these were 14.9.72, 28.12.73, 9.11.75 and 21.12.75.
There were some income tax dues against the said G.V. Ranade for recovery of which income tax officer 'commenced recovery proceedings.
The Income Tax Officer on 27.1.71 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 I.T.O. forthwith any amount due from the LIC to or, held by the LIC for or on account of the said Ranade to meet the amount due from Ranade as arrears of income tax.
The Divisional Manager of the LIC at Nagpur intimated this 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.
By further correspondence the ITO required the LIC to deposit the amount of Rs.3415.70 payable against the first policy which was to mature on 14.9.72 and the LIC informed the assignee that the moneys due under the policies will be paid to her only after her getting the notice served on LIC by the ITO vacated.
On 5.9.72 Smt.
kamalabai G. Ranade flied a Writ Petition in the High Court of Bombay impleading LIC and the ITO claiming several reliefs including a direction to the LIC for payment of Rs.3415.70 and also to make a statement that no part of the said amount is due to G.V. 98 Ranade nor does the LIC hold any part of the sum for or on account of Ranade.
This Writ Petition was dismissed in limine.
Kamalabai G. Ranade filed an appeal by special leave in this court and this court disposed of the appeal on the counsel for the LIC stating that he would file the necessary statement on oath in accordance with section 226(3)(vi) of the Income Tax Act, 1961 stating that no sum of money is due to the Assessee, insured person, before the ITO except one policy in respect of which the LIC having already paid the money to ITO no statement need be made and consequently no order can be made u/s 226(3)(vi) and the appeal was disposed of accordingly.
It appears that the ITO did not revoke the order of attachment inspite of the LIC making the requisite statement on oath under section 226(3)(vi) of the Income Tax Act on 5.12.75.
This led to the filing of another Writ Petition in the Bombay High Court by Smt.
Kamalabai praying for a direc tion to the ITO to revoke all notices issued under section 226(3) to the LIC and to the LIC to pay her the amount due against the policies which had matured.
On 4.4.1977 counsel for the ITO produced before the High Court a copy of the order dated 1.4.77 passed by the ITO withdrawing the notice u/s 226(3) of the Income Tax Act and the Writ Petition was dismissed as withdrawn.
Kamalabai then sent notice to the LIC demanding payment of the total amount due against the four policies together with interest @ 15% since the delay in payment had been occasioned by the default of the LIC.
LIC made the payment of these amounts to her but disputed its liability to pay interest thereon for the period subsequent to the date of maturity on the ground that the delay was occasioned by the ITOs notice u/s 226(3).
This dispute regarding the LIC 's liability to pay interest led to the filing of Writ Petition No. 1248 of 1977 decided on January 7, 1981 which gives rise to this appeal.
The impugned judgment holds that the last two policies having matured on 9.11.75 and 21.12.75 a few days before or after 5.12.75 when the statement on oath u/s 226(3) of the Income Tax Act was made by the LIC did not qualify for award of such interest which was payable in respect of the first two which had matured earlier on 14.9.72 and 28.12.73.
This view of the High Court on which the award of interest is based is assailed on behalf of the appellant.
The dispute in this appeal is only about the LIC 's liability for payment of interest on the principal amount from the date of maturity of the first two policies to 31.12.75 and the rate of 15% p.a. which is alleged to be excessive.
99 Dismissing the appeal with costs this Court, HELD: In the instant case, admittedly assignment of the policies was made by the insured G.V. Ranade and the same was duly accepted and registered by the LIC in April 1969.
It is, therefore, obvious that the LIC 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 author ity on a proper proceeding taken for this purpose [111B] Mere issuance of notice under section 226(3) of the Income Tax Act, 1961 did not have the effect of invalidating the assignment nor did the casual mention of section 281 of the Income Tax Act, 1961 by the ITO in his letter dated 28.8.72 result in this consequence.
Any further step towards formation of the final opinion by the ITO could be taken only after the LIC had made the requisite statement on oath under section 226(3)(vi) of the Income Tax Act, 1961 on the basis of the registered assignment of policies.
[111C D] The question of revocation of the notice under clause (vii) of subsection (3) of Section 226 of the Income Tax Act, 1961 arose in the present case only after the LIC 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 informa tion of the assignment to the ITO and keeping the assignee informed of the ITO 's action did not amount to discharge of the statutory obligation under section 226(3)(vi) of the Act by the LIC.
Sub section (3) of Section 226 of the Income Tax Act, 1961 clearly shows that on a notice thereunder being issued by the ITO to the LIC in the present case, it was incumbent on the LIC 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 ITO to proceed further and form his final opinion and revoke the notice under clause (vii).
[112D E; 113G H] The inordinate delay in making the statement on oath by the LIC under section 226(3)(vi) of the Income Tax Act, 1961 was the result of misconstruction of the provisions and misappreciation of its liability thereunder.
[114B] Obviously the assignee of the policies who had become entitled to receive the amount due thereunder on the dates of their maturity must be compensated by the LIC for its failure to perform its statutory 100 obligation under section 226(3)(vi) of the Income Tax Act, 1961 within a reasonable time.
Performance of this statutory obligation by the LIC in the present case being after inor dinate delay award of interest to the assignee of the poli cies to whom the payment thereunder had to be made even according to the stand of the LIC is, therefore, clearly justified.
[114C D]
|
Appeal No. 129 of 1986.
From the Judgment and Order dated 12.5.1982 of the Allahabad High Court in Civil Misc.
Writ Petition No. 13431 of 1981.
B.D. Agarwal and Indeever Goodwill for the appellant.
A.K. Srivastava for the Respondents.
The following Order of the Court was delivered: This appeal by special leave has been filed by the landlady.
She laid action under s.21 of the U.P. Urban Building (Regulation of letting, rent and eviction) Act, 1972 (for short 'the Act ') for eviction of the tenant on the ground of bona fide requirement to start business by her son.
The prescribed authority and the Appellate Tribunal found as a fact that the appellant required the premises bona fide to start the business.
But the High Court allowed the writ petition, set aside the order on the sole ground that the married daughters of the original tenant, Lalu were not impleaded who are the necessary parties and, therefore, the non joinder of the necessary parties disentitle the landlady to have the ejectment of the tenants namely the sons and the widow of the deceased tenant Lalu.
The only question that arises in this case is whether the married daughters of the deceased tenant are necessary parties and that non impleading them would disentitle the landlady to maintain the action for ejectment.
Admittedly, Lalu the original tenant died in 1%5.
Thereafter, the pro ceedings were initiated in 1974.
Till then, one of the sons of Lalu, 537 namely, Bhole Nath was in occupation of the premises and did carry on business as admitted by him in affidavit Exhibit SA II "that the deponent is the tenant of a portion of house No. 55, Thatheri Bazar, Allahabad on payment of Rs. 40/ per month as rent including electric charges".
It is also not in dispute that the married daughters never participated, nor claimed interest in the business conducted by Bhole Nath.
It is also an admitted fact that even before the death of the father they were married and they are living with their husbands elsewhere.
Indisputably s.3 (a)(2) postulates that "In this Act, unless the context otherwise requires (a) tenant in relation to a building means a person by whom its rent is payable, and on the tenant 's death (2) in the case of a non residential building, his heirs.
" Therefore, as defined under s.3(a)(2) all heirs of the tenants are the tenants who succeeded intestate as per the .
Certainly, therefore, they are tenants within the meaning of s.3(a)(2).
They are entitled to succeed to the tenant 's lease hold rights under the Act, including not merely to the liabilities to pay rent as contended by the appellant but also to continue the business until duly ejected as per the provisions of the Act.
Whether non im pleadment of the married daughters would vitiate maintain ability of the proceedings for ejectment.
The finding re corded by the Rent Appellate Tribunal that by necessary implication, the married daughters surrendered their tenancy rights inherited under the Act.
After the demise of Lalu, the daughters evinced no interest to assert their rights, is well justified.
Once that is found to be so, their nonim pleadment as respondents does not vitiate the action for non joinder of them as necessary parties nor maintainability of the proceedings for ejectment itself.
The High Court committed grave errors of law in allowing the writ petition and dismissing the application for ejectment.
The order of the High Court is set aside and that of the Prescribed Authority and the Tribunal are restored.
It is not in dis pute that the landlady offered a reasonable portion of the premises to the respondent to an extent of 3 1/2 'x 6 ' in the Varanda but respondent had refused to accept that offer but in this Court the learned counsel for the respondents re quested to allow the tenant to retain the portion offered.
In fairness, Mr. Agarwal, learned senior counsel for the appellant, has not objected to it.
Accordingly it is open to the tenant to occupy the portion offered by the appellant and vacate the other portion which is required by the peti tioner for starting the business of her son.
The appellant would carve out the portion in a suitable and convenient manner to run the business by the respondent.
The appeal is allowed with the above modifications, but in the circum stances parties are directed to bear their own costs.
N.P.V. Appeal Allowed.
| The appellant landlady, filed a suit under s.21 of the U.P. Urban Building (Regulation of letting, rent and evic tion) Act, 1972 for eviction of the tenant on the ground of bona fide requirement The prescribed authority and the Appellate Tribunal found as a fact that the appellant 's requirement was bona fide and decreed the suit.
But, the High Court set aside the order on the sole ground that the married daughters of the original tenant, who were the necessary parties, were not impleaded and, therefore, the non joinder of the necessary parties disentitled the appel lant landlady to have the ejectment of the tenants, namely, the sons and the widow of the deceased tenant.
Allowing the appeal of the landlady, this Court, HELD: 1.1 Section 3(a)(2) of the U.P. Urban Building (Regulation, of letting, rent and eviction) Act, 1972 postulates that tenant in relation to a building means a person by whom rent is payable, and on the tenant 's death, in the case of a non residential building, his heirs.
There fore, as defined under s3(a)(2) all heirs of the tenants are the tenants who succeeded intestate as per the Hindu Succes sion Act, 1956.
Consequently, the married daughters are tenants within the meaning of section 3(a)(2), and entitled to succeed to the tenant 's lease hold rights under the Act, including not merely to the liabilities to pay rent but also to continue the business until duly ejected as per the provisions of the Act.
[537 B C] 1.2 However, in the instant case, the original tenant died in 1965.
536 Thereafter, the proceedings were initiated in 1974.
Till then, one of the sons of the deceased tenant.
namely, the first respondent was in occupation of the premises and did carry on business.
The married daughters never participated, nor claimed interest in the business conducted by the first respondent and even before the death of the father, they were married and they were living with their husbands else where.
The Rent Appellate Tribunal has found that by neces sary implication, the married daughters surrendered their tenancy rights inherited under the Act, since after the demise of the original tenant, the daughters evinced no interest to assert their rights.
In view of this, their non impleadment as respondents does not vitiate the action for non joinder of them as necessary parties nor maintain ability of the proceedings for ejectment itself.
[S36 H, 537 AB, D E]
|
No. 136 of 1971.
Appeal by special leave from the judgment and order dated August 6, 1970 of the Madhya Pradesh High Court, Indore Bench in Civil Revision No. 415 of 1969 I. N. Shroff, for the appellant.
section V.Gupte, section K. Mehta and K. L. Mehta,for respondent No.1.
Vaidialingam, J. Civil Miscellaneous Petition No. 5801 of 1971, is by the first respondent, is an application under sections 17 and 29 of the (hereinafter to be referred as the Act) to pass a judgment and decree according to the Award of the arbitrator dated August 24, 1971 and to grant interest from the date of the decree, on the amount found payable by the appellant.
Civil Miscellaneous Petition No. 5802 of 1971, by the State of Madhya Pradesh, the appellant in the Civil Appeal, is an application requesting this Court to decline to take the Award dated August 24, 1971 on its file.
Without prejudice to the above prayer, there is a further request made to this Court to set aside or modify the Award in certain respects.
The relevant facts leading up to the filing of the two applications may be adverted to The erstwhile State of Madhya Bharat and entered into a contract with M/s. Saith & Skelton ( P.) Ltd., the first respondent, for the supply and erection of Pen, stocks for Gandhi Sagar Power Station, Chambal Hydel works.
The acceptance of the contract was by tender No. Project/SE/ 235 2522 F/II/25 dated June 5, 1956.
Under the said contract, the first respondent firm was required to supply material for the five penstocks of P.O.R. Jhalwar Road, Railway Station at Rs. 1,570 per M. Ton within the time stipulated, the total quantity being 463.939 M. Tons.
The material was to be transported from Jhalwar Road Railway Station to the works site by the consignee, ,,he Madhya Bharat Government, and the work of erection was to commence on the receipt at the work site of running length of 96 ft. for any of the penstocks.
Clause 21 of the contract provided for any question or dispute, arising under the conditions of the contract or in connection therewith, to be referred to the arbitrators, one to be nominated by the State and the other by the firm The said clause also provided for the matter being referred to an Umpire to be appointed by the arbitrators in case of disagreement between them.
That clause also referred to certain other matters relating to arbitration proceedings.
Disputes arose between the appellant and the respondent firm with reference to the performance of the contract.
The firm intimated the appellant on December 31, 1959 nominating one Shri T. R. Sharma, as an arbitrator under Cl.
21 of the contract and also called upon the appellant to nominate an arbitrator.
The Directorate General of Supplies and Disposals, who were acting as the agent of the Madhya Bharat Government, nominated one Shri G. section Gaitonde, as an arbitrator on behalf of the appellant.
But the said arbitrator resigned his appointment and in consequence on April 26, 1960 one Shri R. R. Desai, was nominated as an arbitrator on behalf of the appellant.
This nomination was also by the Directorate General of Supplies and Disposals.
On September 6, 1960, the two arbitrators appointed one Sri R. C. Soni, as an Umpire.
The two arbitrators disagreed in their views resulting in the matter being referred to the Umpire on October 20, 1961.
According to the appellant, the appointment of Shri Gaitonde, in the first instance and of Shri R. R. Desai, later, as an arbitrator, by the Directorate General of Supplies and Disposals was without any authority from the appellant.
Later on, the Directorate General of Supplies and Disposals again reappointed Shri R. R. Desai as an arbitrator on behalf of the appellant on January 4, 1961.
According to the appellant the appointment of Shri R. C. Sone, as Umpire on September 6, 1960 was not valid.
Accordingly, the appellant filed in the Court of the Additional District Judge, Mandsaur, Civil Miscellaneous Case No. 16 of 1962 under section 5 of the Act, for setting aside the nominations, as arbitrators of Shri T. R. Sharma and Shri R. R. Desai, as well as the appointment by them of Shri R. C. Soni, as the Umpire.
By order dated October 19, 1963, the Addl.
District Judge, Mandsaur held that the appointments of Shri R. R. Desai, as an arbitrator and Shri 236 R. C. Soni, as Umpire, were both invalid and not binding on the appellant.
The firm filed all appeal before the High Court of Madhya Pradesh against the order of the Addl.
District Judge.
This appeal was later oil treated as a Revision and numbered as Civil Revision No. 415 of 1969.
The High Court, by its order dated August 6, 1970 appointed Shri R. C. Soni as the Sole Arbitrator under section 12(2) of the Act and accordingly modified the order of the Addl.
District Judge, Mandsaur.
The appellant filed Special Leave Petition No. 2370 of 1970 in this Court for grant of Special Leave to Appeal against the order of the High Court dated August 6, 1970.
The firm entered caveat.
On January 29, 1971, this Court ranted Special Leave land, by consent of parties, appointed an arbitrator, whose Award is sought to be made a decree of the Court by the respondent in its application C.M.P. No. 5801 of 1971 and is sought to be set aside by the appellant by C.M.P. No. 5802 of 1971.
As the terms of the order passed by this Court are material, it is reproduced below : Special Leave is granted.
The appeal is allowed The appointment of Shri R. C. Soni as the sole arbitrator is set aside by consent of the parties.
Mr. V. section Desai, Senior Advocate, is appointed Arbitrator by consent of the parties to go into all the questions in this matter and make his awar.
The remuneration for the arbitrator would be Rs. 5,000, which will be shared by both the parties equally.
The arbitrator will make his award within three months from today.
The parties will be at liberty 1 to mention for extension of time, for making the award.
G. K. Mitter J, January 29, 1971.
A. N. Ray J." On February 1, 1971 this Court gave directions in the appeal,, in the presence of the counsel for both parties, that the records of the arbitration be called for forthwith and sent to the sole arbitrator Mr. V. section Desai, appointed as per order dated January 29, 1971.
Again on April 30, 1971, this Court,, in the presence of the counsel for both the parties, extended the time for making the Award by four months and also permitted the arbitrator to hold the arbi tration proceedings at Bombay.
The arbitrator gave his Award on August 24, 1971 and filed the same in this Court, the next day.
He also crave notice to the parties of the Making and signing of 237 the Award.
A signed copy of the Award was also sent to both the parties.
The operative part of the Award is as follows : (1) The opponents, the State of Madhya Pradesh will pay to the claimants a sum of Rs. 1,79,653.18 p. for the balance payable to them in respect of the price of supply and erection of the 5 penstocks.
(2) The State will also pay interest on the said amount at 9% per annum simple interest from 7th June, 1958 to the date of decree.
The State will also refund to t,he claimants a sum of Rs. 15,414,19 p. which they have recovered from the claimants as excess railway freight.
V. section Desai, Sole Arbitrator.
" In C.M.P. No. 5801 of 1971, the firm prays for passing a judgment and decree, according to the Award and also prays for grant of interest from the date of decree at the rate of 9% per annum.
On the other hand, the appellant State, in its application C.M.P. No. 5802 of 1971 prays for an order declining to take the Award on its file or in any event to set aside or modify the award in respect of interest granted prior to August 24, 1971 as well as the direction regarding the refund by the appellant of the sum of Rs. 15,414.19 P.
The Award is also sought to be modified on the ground that the award of interest at 9% is very excessive.
The question of pronouncing judgment according to the Award, as provided under section 17 of the Act and which is the prayer in C.M.P. No. 5801 of 1971 will arise only if the prayer to set aside the Award made in C.M.P. No. 5802 of 1971, by the State, is rejected.
Therefore, we will proceed to consider the contentions raised by Mr. 1.
N. Shroff, learned counsel for the appellant, in support of the application C.M.P. No. 5802 of 1971.
Mr. Shroff has raised the following four contentions: (1) The arbitrator had no power to suo motu file his Award, as he has done in this case, and as such no action can be taken on such an Award; (2) This Court is not the Court as contemplated by section 14(2) read with section 2(c) of the Act.
Hence the filing of the Award in ' this Court is illegal and ineffective in law; (3) The arbitrator had no jurisdiction to award interest from a period anterior to the date of the award or reference; and (4) The Arbitrator has committed a manifest error in directing the refund of Rs. 15,414.19 P. when this amount has already been taken into account in arriving at the figure of Rs. 1,79,653.18 P. 238 We will now proceed to deal with these contentions scriatim.
With regard to the first contention, which relates to the validity of the filing of the Award in this Court suo motu, reliance is placed by Mr. Shroff on section 14(2) of the Act.
It is the contention of the counsel that under this section an arbitrator can cause an award to be filed in court only under two circumstances : (a) when a request to do so is made by any party to the ' arbitration agreement or any person claiming under such party; and (b) when the arbitrator is directed by the Court to file the award.
In this case, it is pointed out,, that no such request was made by any of the parties to the arbitration agreement or any person claiming under such party to the arbitrator to file the Award.
It is pointed out that there was no direction by this Court to the arbitrator to file the Award.
Hence it is urged that the filing of the Award suo motu is illegal, as being contrary to the terms of section 14(2) of the Act.
Mr. section V. Gupte, learned counsel for the respondent firm, referred us to section 38 of the Act and pointed out that the scheme of the Act clearly shows that the Award has to be filed in the Court by the arbitrator either suo motu or on request made by the parties to the arbitration agreement or any person claiming under such party or on being directed by the Court.
The counsel pointed out, there is no prohibition in section 14(2) of the Act, against the arbitrator filing the Award in Court suo motu.
The question specifically arose before the Nagpur High Court in Narayan Bhawu vs Dewajibhawu(1).
The High Court held that there is nothing in section 14(2) of the Act, which precludes the arbitrator from filing the Award suo motu and it is not correct to say that the Award should be filed only if the parties make a request to the arbitrator to file the award or make an application to the Court for that purpose.
We are in agreement with this view of the law, especially when there is no prohibition in the Act, particularly in section 14(2) against the arbitrator filing suo motu his Award in Court.
Mr. Shroff referred us to the decision in Parasramka Com mercial Company vs Union of India(2).
From the facts stated in the said decision, it is seen that the arbitrator made his Award and signed the same on April, 26, 1950.
The arbitrator without sending any notice of the making and signing of the Award, sent a copy of the signed Award to the parties.
The appellant therein acknowledged receipt of the said signed copy of the Award by his letters dated 5th and 16th May, 1950; but he filed an application on March 30, 1951 in the Subordinate Judge 's Court for passing a decree in terms of the Award.
An objection was raised by the (1) A I R (2) ; 239 opponent that the application was out of time under article 178 of the Indian Limitation Act, 1908, as not having been filed within 90 days of the date of service of the notice of the making of the Award.
It is also seen that the arbitrator on July 3, 1951 filed the original Award before the Court suo motu.
The Subordinate Judge rejected the application filed on March 30, 1951 as barred by time.
That order was confirmed by the High Court.
This Court, after a consideration of section 14(1) of the Act held that the serving, by the arbitrator on the appellant before this Court of a signed copy of the Award amounted to giving him notice in writing of the making of the Award.
This Court further upheld, as correct, the view of the Subordinate Judge and the High Court that the application filed by the appellant, beyond the period prescribed under article 178 of the Indian Limitation Act, 1908, was barred.
This Court did not express any view regarding the action taken by the arbitrator in filing suo motu the Award and left open the question as follows : ". .
But we make it clear that the other part of the case, namely what is to happen to the award sent by the Arbitrator himself to the court has yet to be determined and what we say here will not affect the determination.
of that question.
Obviously enough that matter arises under the second sub section of section 14 and will have to be considered quite apart from the application made by the company to have the award made into rule of Court.
" Again the question whether a plea of limitation can be raised with respect to the suo matu filing of the award by the arbitrator was left open as.
follows : ".
As to whether, similar objections can be raised in answer to the award filed at the instance of the arbitrator is a question which we cannot go into the present appeal and no expression of opinion must be attributed to us on that point." Therefore, it is clear from what is stated above that in the said decision this Court had no occasion to consider whether an award can be filed suo motu by an arbitrator nor the further question whether such filing should be within the period of limitation provided under the relevant provisions of the Limitation Act.
In the case before us the period of limitation is dealt with under Entry 119 of the Schedule to the .
As the arbitrator in this case made his Award on August 24, 1971 and filed the same the next day, the question of limitation, if any, does not at all arise.
We do not express any opinion whether the period of limitation will apply when the arbitrator files his award Suo 887Sup.
CI/72 240 motu.
As the filing of the Award by the Arbitrator suo motu is legal, the first contention of Mr. Shroff has to be rejected.
The second contention of Mr. Shroff is that this Court is not "Court" as &fined under section 2(c) of the Act, where the Award could be filed.
Section 2 (c) of the Act is as follows : "2.
In this Act, unless there is anything repugnant in the subject or context, (c) "Court" means a Civil Court having jurisdiction to decide the questions forming the subject matter of the reference if the same had been the subject matter of a suit, but does not, except for the purpose of arbitration proceedings under section 21, include a Small Cause Court." According to Mr. Shroff the Award should have been filed, not in this Court, but in the Court of the Addl.
District Judge, Mandsaur, as that is the Court which will have jurisdiction to entertain the suit regarding the subject matter of the reference.
We are not inclined to accept this contention of Mr. Shroff.
It should be noted that the opening words of section 2 are "In this Act, unless there is anything repugnant in the subject or context.
Therefore the expression "Court ' will have to be understood as defined in section 2(c) of the Act, only if there is nothing repugnant in the subject or context.
It is in that light that the expression "Court" occurrmg in section, 14(2) of the Act will have to be understood and interpreted.
It was this Court that appointed Shri V. section Desai on January 29, 1971, by consent of parties, on an arbitrator and to make his Award.
It will be seen that no further directions were given in the said order which will indicate that this Court had not divested itself of its jurisdiction to deal with the Award or matters arising out of the Award.
In fact the indications are to the contrary.
The direction in the order dated January 29, 1971 is that the arbitrator is "to make his Award".
Surely the law contemplates further steps to be taken after the Award has been made, and quite naturally the forum for taking the further action is only this Court.
There was also direction to the effect that the parties are at liberty to apply for extension of time for making the Award.
, In the absence of anv other court having been invested with such jurisdiction by the order, the only concluonsion that is possible is that such a request must be made only to the court which passed that order, namely, this Court.
That this Court retained complete control over the arbitration proceedings is made clear by its orders dated February 1, 1971 and April 30, 1971.
On the former date, after hearing counsel for both the parties, this Court gave direction that the record of 241 the arbitration proceedings be called for and delivered to the Sole Arbitrator Mr. V. section Desai.
On the latter date, again, after hearing the counsel, this Court extended the time for making the Award by four months and further permitted the arbitrator to hold the arbitration proceedings at Bombay.
The nature of the order passed on January 29, 1971 and the subsequent proceedings, referred to above, clearly show that this Court retained full control over the arbitration proceedings.
Mr. Shroff referred us to the fact that in the order dated January 29, 1971, it is clearly stated "The appeal is allowed".
According to him, when the appeal has come to an end finally, this Court had lost all jurisdiction regarding the arbitration proceedings and therefore the filing of the Award should be only in the Court as defined in section 2(c) of the Act.
Here again, we are not inclined to accept the contention of Mr. Shroff.
That the appeal was allowed, is no doubt correct.
But the appeal was allowed by setting aside the order of the High Court and this Court in turn appointed Mr. V. section Desai as the Sole Arbitrator.
All other directions contained in the order dated January 29, 1971 and the further proceedings, as pointed out earlier, indicate the retention of full control by this Court over the arbitration proceedings.
In Ct. A. Ct.
Nachiappa Chettiar and others vs Cf.
A. Cf.
Subramaniam Chettiar(1), the question arose whether the trial eourt had jurisdiction to refer the subject matter of a suit to an arbitrator when the decree passed in the suit was pending appeal before the High Court.
Based upon section 21, it was urged before this Court that the reference made by the trial court, when the appeal was pending, and the award made in consequence of such reference, were both invalid as the trial court was mot competent to make the order of reference.
This Court rejected the said contention and after a reference to sections 2(c) and 21 of the Act held that the expression "Court" occurring in section 21 includes also the Appellate Court, proceedings before which are a continuance of the suit.
It was further held that the word "suit" in section 21 includes also appellate proceedings.
In our opinion, applying the analogy of the above decision, the expression "Court" occurring in section 14 (2) of the Act will have to be understood,in the context in which it occurs.
So understood, it follows that this Court is the Court under section 14(2) where the arbitration Award could be validly field.
The decision in Union of India vs Surjeet Singh Atwal(2) relied on by Mr. Shroff, dealt with a different aspect and therefore, it is not necessary for us to refer to the same.
The above reasoning leads us to the conclusion that the filing of the Award in this Court by the arbitrator was valid and legal.
The second contention of Mr. Shroff will stand rejected.
(1) ; (2) 242 The third contention of Mr. Shroff is that the arbitrator had no jurisdiction to award interest from a period anterior to the date of award or reference.
Before we deal with this contention, it is necessary to refer to the findings of the arbit rator in his Award.
Issues Nos. 6, 7 and 19 frame by the arbitrator and which are relevant on this aspect are as follows: "6 (a) Was the claimant entitled to the payment for supply as well as for erection on the total weight of 463.939 M. tons inclusive of electrodes ? 6 (b) If not, what are the weights on which the price of supply and the erection charges are to be calculated.
What is due to the claimant from the respondent in respect of the supply and erection of the penstocks ? 19.
Are any of the parties entitled to interest and/ or any other relief.
" On issue No. 6(a) the arbitrator found that the firm was entitled to the same weight both for the calculation of price as well as for the price for erection and the said weight was 463.939 M. Tons inclusive of electrodes.
In view of the above finding on issue No. 6(a), the arbitrator held that issue No. 6(b) does not survive.
On issue No. 7 he found that for the price of supply and erection of 463.939 M. Tons at the rate specified in contract, the total price due to the firm comes to Rs. 12,15,520.18P.
It was admitted before the arbitrator that the firm had been paid by the State of sum of Rs. 10,35,867/.
In view of this admission the arbitrator found that the balance payable to the firm towards the price for supply and erection is, Rs. 1,79,653.18 P. On issue No. 19, the arbitrator found that the firm is entitled to interest at 9% per annum on the balance of Rs. 1,79,653.18 P. from June 7, 1958, the date on which the final inspection of the, penstock took place.
The interest was to be paid till the date of the decree.
It is on the basis of the above findings that the arbitrator made the Award, the operative part of which has already been extracted in the earlier part of the judgment.
The direction regarding the payment of Rs. 1,79,653.18 P. is not challenged by the State.
It is only the direction regarding the period from which interest is payable, that is under challenge.
The arbitrator has made the interest payable from June 7, 243 1958, on the ground that it was the date on which final inspection took place and when the amount become payable to the. respondent.
Mr. Shroff referred us to a decision of the Judicial Com mittee and to certain decisions of this Court to the effect that section 34 of the Code of Civil Procedure will not apply to the proceedings before an arbitrator, as he is not a Court and that interest cannot be awarded by way of damages.
He further referred to those decisions in support of his contention that in the absence of any usage or contract, express or implied, or of any provision of law to justify the award of interest on an amount for a period before the institution of the suit, interest anterior to the date of the suit cannot be allowed.
The decisions referred to by Mr. Shroff are Bengal Nagpur Raliway Company Limited vs Ruttanji Ramji and others(1),, Seth Thawardas Pherumal vs The Union of India(2), Mahabir Prashad Rungta vs Durga Datt(3), Union of India vs A. L. Rallia Ram(4), Vithal Das vs Rupchand and others(5) and Union of India vs Bungo Steel ' Furniture Pvt.
Ltd. (6).
It is no doubt true that for awarding interest under the Interest Act, 1939, or under section 34 of the.
Code of Civil Procedure, certain circumstances must exist.
But one of the principles laid down is that interest prior to the institution of a suit can be awarded if there is any provision of a suit can be awarded if there is any provision of law to justify the award of such interest.
In the cases, referred to above, it is seen that there was neither any agreement pleaded for payment of interest; nor was any provision of law entitling the party to recover interest prior to the period of the suit or arbitration proceedings, referred to or relied upon.
Under such circumstances it was held that the arbitrator or a court had no power to award interest prior to the date of the Award.
In Union of India vs Bungo Steel Furniture Pvt.
Ltd. 17)this Court recognised the power of an arbitrator to award interest on the amount of the award from the date of the award till the date of the decree.
According to Mr. Shroff, the power of the arbitrator to award interest is only from the date of the award and not for any period anterior to that date.
In Firm Madanlal Roshanlal Mahajan vs Hukamchand Mills Ltd. Indore(7), the power of the arbitrator, to whom the subject matter of a suit had been referred for arbitration, to award pendente life interest was considered by this Court.
It was held in (1) L.R. 65 I.A. 66.
(2) (3) ; (4) ; (5) [1966] Supp.
S.C.R. 164.
(6) ; (7) ; 244 the said decision that all the disputes in the suit were referred to the arbitrator for his decision.
One of the disputes, so referred, was whether the respondent therein was entitled to pendente lite interest.
h was held that though in terms, section 34 C.P.C. does not apply to the arbitration, it was an implied term of the reference in the suit that the arbitrator was to decide the dispute, according to law, to grant such relief with regard to pendente lite interest as the Court itself could give, if it decided the dispute.
It was further held that such a power of the arbitrator was not fettered either by arbitration agreement or by the Act.
The decision in Seth Thawardas Pherumal vs The Union of India(1) distinguished on the ground that the said decision is silent on the question whether an arbitrator can award interest during the pendency of the arbitration proceedings if all the disputes in the suit including the claim for interest were referred for arbition.
From the decision in Firm Madanlal Roshanlal Mahajan vs Hukamchand Mills Ltd. Indore(2), it is clear that if all the disputes are referred for arbitration, the arbitrator has power to award interest pendente lite, i.e. during the, pendency of the arbitration proceedings.
In the case before there is no controvery that all the disputes including a claim for payment of the amount with interest was referred to the arbitrator.
The arbitrator, as pointed out earlier, found that the firm was entitled to the Payment as price in the sum of Rs. 1,79,653.18 P.
The arbitrator has further found that this amount became payable as balance price for the goods supplied by the firm on June 7, 1958, on which date the final inspection took place.
If that is so, section 61 of the Sat , of Goods Act, 1930 squarely applies and it saves the right of the seller (in this case the firm) to recover interest, where by law interest is recoverable.
Sub section (2) of section 61, which is material is as follows : "61 (2) In the absence of a contract to the contrary the Court may award interest at such rate as it thinks fit on the amount of the 'Price , (a) to the seller in a suit by him for the amount of the price from the date of the tender of the or from the date on which the price was payable.
(b) to the buyer in a suit by him for the refund of the price in a case of a breach of the contract on the part of the seller from the date on which the payment was made." (1) (2) ; 245 in the case before us, admittedly the contract does not pro vide that no interest is payable on the amount that may be found due to any one of them.
if so, it follows that the seller, namely, the firm is entitled to claim interest from the date on which the price became due and payable.
The finding of the arbitrator in this case is that the price became payable on June 7, 1958.
As held by this Court in Union of India vs A. L. Rallia Ram(1), which related to an arbitration proceeding, under sub section (2) of section 61, in the absence of a contract to the contrary, the seller is eligible to be awarded interest on the amount of the price for the goods sold.
On this principle it follows that the award of interest from June 7, 1958 is justified.
If the contention of Mr. Shroff that under no circumstances anarbitrator can award interest prior to the date of the Award, or prior to the date of reference, is accepted, then the position will be very anomalous.
As an illustration, we may point out that there may be cases where the only question that is referred to the arbitrator is whether any of the parties is entitled to claim interest on the amount due to him from a date which may be long anterior to the date of reference.
When such a question is referred to the arbitrator, naturally he has to decide whether the claim for award of interest from the date referred to by the parties is acceptable or not.
If the arbitrator accepts that claim, he will be awarding interest from the date which will be long prior even to the date of reference.
Therefore, the question ultimately will be whether the dispute referred to the arbitrator included the claim for interest from any particular period or whether the party is entitled by contract or usage or by a provision of law for interest from a particular date.
Mr. Shroff further contended that the award of interest at 9% per annum is exorbitant.
The short answer for negativing this contention is that it is seen from the claim statement filed by both the appellant and the respondent firm that each of them claimed for payment of the amount, due to them with interest at 12% per annum under section 61 of the .
Therefore, it follows that the rate of interest awarded is not excessive.
As we have already held that the arbitrator has got power in this case to award interest from June 7, 1958 at the rate specified by him, the third contention of Mr. Shroff will have to be rejected.
The last contention of Mr. Shroff relates to the direction regarding the refund of Rs. 15,414.19 P. The contention is that this amount has already been taken into account by the arbitrator when he directed the payment of Rs. 1,79,653.18 P. Mr. Shroff (1) ; 246 was not able to satisfy us that the amount, directed to be paid as refund, has been already taken into account in the amount fixed as the balance price payable by the State.
Therefore, this contention also will have to be rejected .
Now that we have rejected all the contentions of Mr. Shroff raised in C.M.P. No. 5802 of 1971, it follows that the prayer asked for,therein cannot be granted.
Now coming to C.M.P. No. 5801 of 1971, filed by the firm, that application is accepted and a judgment and decree are passed on the basis of the Award as against the State is favour of the respondent firm.
The appellant State will pay to the respondent firm a sum of Rs. 1,79,653.18 P. with 9% per annum simple interest from June 7, 1958, till the date of the decree and thereafter at 6% till the date of payment.
The appellant State will also refund to the respondent firm a sum of Rs. 15,414.19 P. which they have recovered from them as excess railway freight.
In the result, C.M.P. No. 5802 of 1971 will stand dismissed with costs.
C.M.P. No. 5801 of 1971 is allowed with costs.
A. decree as stated above will issue.
| Disputes having arisen between the appellant and the respondent with reference to the performance of a contract which provided for arbitration, steps were taken to appoint arbitrators and an umpire.
The appellant filed a petition in the District Judge 's Court, having jurisdiction over the matter, for setting aside the nominations.
When the matter came up to this Court in appeal, this Court appointed a sole arbitrator with consent of the parties.
Thereafter in the presence ' of counsel for both parties this Court gave directions in the appeal that the arbitration records be sent to the sole arbitrator, and later extended the time for making the award, and gave directions regarding the venue.
The arbitrator gave his award, directing the payment of a certain sum by the appellant to the respondent with simple interest at 9% from a date anterior to the reference, and filed the award ip.
this Court 'the next day.
The respondent filed a petition for passing a decree in terms of the award but the appellant opposed the petition.
On the questions : (1) Whether the arbitrator had no power suo motu to file his award; Whether the award should not have been filed in this Court as it is not the Court contemplated by sections Z((4) and 14(2) of the ; and (3) Whether the arbitrator had no jurisdiction to.
award the interest from a date anterior to the date of award or reference, HELD : (1) There is nothing in section 14(2) of the Act which precludes the arbitrator from filing the award suo motu and it is not correct to say that the award should be filed only if the parties make a request to the arbitrator to file it, or make an application to the Court for that purpose.
The arbitrator having filed the award the next day after making it, no question of limitation arises.
[239 G B] Narayan Bhawu vs Dewajibhawu, A.I.R. 1945 Nag. 117, approved.
(2) The expresion 'Court ' occurring in section 14(2) of the Act will have to be understood in the context in which it occurs, because, the definition of the word in section 2(c) applies only when there is nothing repugnant in the subject or context.
The word 'Court ' would include 'an appellate court ' and the word 'suit ' would include 'appellate proceedings '.
Merely because the order of this Court appointing the sole arbitrator stated 'the ,appeal is allowed ' it is not as if this Court had lost all jurisdiction regarding the arbitration proceedings.
The various directions given by this Court indicate that this Court retained full control over the arbitration proceedings.
Therefore this Court is the Court under section 14(2) where the arbitration award should be validly filed.
[240 E. H; 241 B D] 234 Ct. A. Ct.
Nachiappa.
Chettiar & Ors.
V. Ct.
A. Ct.
Subramaniam Chettiar; , , referred to.
(3) In the present case, all the disputes including the claim for the payment of interest had been referred to the arbitrator.
The contract does not provide that no interest was payable on the amount that may be found due.
Therefore the respondent was entitled, under section 61 (2) of the , to claim interest from the date on which the price became due and payable.
The arbitrator had found that the price had become payable from a date anterior to the date of the award.
There fore, the award of interest from the anterior date was justified.
The award of interest at 9% 'is also not exorbitant because the parties themselves claimed interest at 12%, [245 A G] Union of India vs A. L. Rallia Ram, ; and Firm Madanlal Roshanlal Mahajan vs Hukumchand Mills Ltd. Indore; , , followed,
|
Appeal No. 512 of 1957.
Appeal by special leave from the judgment and decree dated August 29 ' 1952, of the Madras High Court in Second Appeal No. 2349 of 1946.
Azizuddin and K. R. Choudhury , for the appellant.
Shaukat Hussain and P.C. Agarwala, for respondents Nos. 1 and 2. 1961.
February 14.
The Judgment of the Court was delivered by SHAH J.
There is in the village of Cavelong, District Chiugleput in the State of Madras an ancient Durgah to which is appurtenant a Masjid.
The Nawab of Carnatic had granted two villages in inam for the maintenance of the Durgah and the Masjid.
Offerings from the devotees who visited the Durgah and the Maajid were also received.
The income of the institution after disbursing the expenses of "Sandal", and "Urs" and of feeding the poor has since long been shared by descendants in four families in equal shares.
By 'Custom females and persons claiming through females were excluded from receiving a share of the income and the income was distributed amongst the males descended 'in the male fine.
In original suit No. 27 of 1940 of the file of the Subordi nate Judge, Chingleput, a scheme was framed for administration of the Durgah and the Masjid and a Board of trustees was appointed for that purpose.
By the scheme, provision was.
made for distribution of the surplus income amongst the members of the four families.
69 Fakruddin, in the following genealogy, belonged to one of the four families which received the income.
Sheik Mohammad Fakir Mohammad Sheik Miran Giasuddin Nismat Ulla Khamruddin Nayeem Uddir Fakir Mohammad Fakruddin=Sulai Niama Ulla Abdul Safi man Bi Wahid Ulla (2nd plaintiff) (1st deft.) Nayeemuddin (died unmarried) Ramat Syed Un Unnissa (2nd nissa (Ist defendant) plaintiff) As a descendant of Sheik Mohammad, Fakruddin received a 1/8th share of.
the income.
He was also by arrangement with others entitled to perform the "Urs" ceremony once in eight years.
Fakruddin died in 1921 leaving him surviving his wife Sulaiman Bi and two daughters Rahmat Unnissa and Syed Unnissa.
Sulaiman Bi is plaintiff No. 2 and Rahmat Unnissa and Syed Unnissa are respectively defendant No. 2 and plaintiff No. 1 in suit No. 156 of 1937 out of which this appeal arises.
In the year 1926, it was the turn of Fakruddin to perform the "Urs" and it is claimed by the plaintiffs that it was performed on behalf of the widow and daughters of Fakruddin by their deputies.
The next turn was in the year 1934, but in the performance of the "Urs", the plaintiffs and defendant No. 2 were obstructed by Abdul Wahid son of Nayeem Uddin belonging to the other branch in Sheik Mohammad 's family.
Plaintiffs 1 and 2 then filed suit No. 156 of 70 1937 in the court of the District Munsif at Chingleput .For a declaration that they were entitled to enjoy the properties described in the schedule annexed to the plaint and to manage the Durgah, perform the "Urs" festival and receive all "incomes, endowments and perquisites thereof once in every eight years" since 1934 according to their turn.
They also claimed an injunction restraining Abdul Wahib from interfering with their rights in that behalf.
Rahmat Unnissa the eldest daughter of Fakruddin was impleaded as defendant No. 2.
Abdul Wahid defendant No. 1 died during the pendency of the suit and defendants 4 to 10 who were brought on record on their own application as heirs and legal representatives to the exclusion of the daughter of Abdul Wahid defended the suit.
They denied the right of the plaintiffs to a share in the income contending that lay custom in the family, females were excluded from inheritance, that the office of "Peshimam", "Khatib" and "Mujavar" could only be held by males and that females were excluded from those offices, that the plaintiffs ' claim was barred by the law of limitation and that in any event the suit for a mere declaration was not maintainable.
The Trial Judge held and the appellate court agreed with him that there was an immemorial custom governing the institutions precluding the plaintiffs from performing services or sharing the income, emoluments and perquisites and therefore the plaintiffs were not entitled to perform those services and enjoy the surplus income, and accordingly they were not entitled to the declaration of an injunction prayed for.
In second appeal, the High Court at Madras held that by virtue of the Shariat Act, 1937, the income received from the institution had to be shared according to the per sonal law of the parties and that the plaintiffs ' claim was not barred by the law of limitation nor was the suit open to the objection that it was as framed not maintainable.
Against the decree passed by the High Court, this appeal with special leave under article 136 of the Constitution is preferred.
In our view, the suit as framed was maintainable.
The management of the institution is vested in the 71 trustees.
The four families, it is true, are by tradition entitled to perform and officiate at certain ceremonies and also to share in the income.
A suit for declaration with a consequential relief for injunction, is not a suit for declaration simpliciter; it is a suit for declaration with further relief.
Whether the further relief claimed in a particular case as consequential upon a,declaration is adequate must always depend upon the facts and circumstances of each case.
In Kunj Behari Prasadji Purshottam Prasadji vs Keshavlal Hiralal (1), it was held that section 42 of the Specific Relief Act does not empower the court to dismiss a suit for a declaration and injunction and that an injunction is a further relief within the meaning of section 42 of the Specific Relief Act.
In that case, the plaintiff had claimed that a certain will was null and void and that being a close relative of the last holder of a gadi, he was entitled to be the Acharya in the place of that last holder and for an injunction restraining the defendants from offering any obstruction to his occupation of the gadi.
It was held that such a suit was maintainable.
The surplus income .of the institution is distributed by the trustees and the plaintiffs are seeking a declaration of the right to receive the income and also an injunction restraining the defendants from interfering with the exercise of their right.
The High Court hold that plaintiff No. 1 was at the date of the suit 19 years of age and was entitled to file a suit for enforcement of her right even if the period of limitation had expired during her minority within three years from the date on which she attained majority by virtue of sections 6 and 8 of the Indian Limitation Act.
Apart from this ground which saves the claim of the first plaintiff alone, a suit for a declaration of a right and an injunction restraining the defendants from interfering with the exercise of that right is governed by article 120.
of the Limitation Act and in such a suit the right to sue arises when the cause of action accrues.
The plaintiffs claiming under Fakruddin sued to obtain a declaration of their rights in the institution which (1) I.L.R. (1904) XXVIII Bom.
72 was and is in the management of the trustees.
The trial judge hold that the plaintiffs were not "in enjoyment of the share" of Fakruddin since 1921 and the suit filed by the plaintiffs more than 12 years from the date of Fakruddin 's death must be held barred, but he did not refer to any specific article in the first schedule of the Limitation Act which barred the suit.
It is not shown that the trustees have ever denied or are interested to deny the right of the plaintiffs and defendant No. 2; and if the trustees do not deny their rights, in our view, the suit for declaration of the rights of the heirs of Fakruddin will not be barred under article 120 of the Limitation Act merely because the contesting defendant did not recognize that right.
The period of six years prescribed by article 120 has to be computed from the date when the right to sue accrues and there could be no right to sue until there is an accrual of the right asserted in the suit and its infringement or at least a clear and unequivocal threat to infringe that right.
If the trustees were willing to give a share and on the record of the case it must be assumed that they being trustees appointed under a scheme would be willing to allow the plaintiffs their legitimate rights including a share in the income if under the law they were entitled thereto, mere denial by the defendants of the rights of the plaintiffs and defendant No '.
2 will not set the period of limitation running against them.
The trial court as well as the first appellate court held on an exhaustive review of the evidence that there was an immemorial custom governing the institutions whereby the plaintiffs were not entitled to perform service or share the income, emoluments and perquisites.
But since the enactment of the Shariat lot 26 of 1937, this custom must be deemed inapplicable to the members of the family.
By section 2 of the Act, it was enacted as follows: "Notwitlwtanding any customs or usage to the contrary in all questions (save questions relating to agricultural lands) regarding intestate succession, ,special property of females, including personal property inherited or obtained under contract or gift or 73 any other provision of Personal Law, marriage, dissolution of marriage, including talaq, ila, zihar, lian, khula and mubarrat, maintenance, dower, guardian.
ship, gifts, trusts and trust properties, and wakfs (other than charities and charitable institutions and charitable and religious endowments) the rule of decision in cases where the parties are Muslims shall be the Muslim Personal Law (Shariat).
" Under the Shariat Act,, 1937, as framed, in questions relating to charities and charitable institutions and charitable and religious endowments, the custom or usage would prevail.
But the Act enacted by the Central Legislature was amended by Madras Act 18 of 1949 and a. 2 as amended provides: "Notwithstanding any custom or usage to the contrary, in all questions regarding intestate succession, special property of females including personal property inherited or obtained under contract, or gift or arty other provision of personal law, marriage, dissolution of marriage, including Tallaq, ila, zihar, lian, Khula and Mubarrat, maintenance, dower, guardianship, gifts, trusts and trust proper.
ties and wakfs the rule of decision in cases where the parties are Muslims shall be the Muslim Personal Law (Shariat).
" Manifestly by this act ' "the rule of decision" in all questions relating to intestate succession and other specified matters including wakfs where the parties to the dispute are Muslims is the Muslim Personal Law.
The, terms of the Act as amended are explicit.
Normally statute which takes away or impairs vested rights under existing laws is presumed not to have retrospective operation.
Where vested rights are affected and the question is not one of procedure, there is a presumption that it was not the intention of the legislature to alter vested rights.
But the question is always one of intention of the legislature to be gathered from the language used in the statute.
In construing an enactment, the court starts with a presumption against retrospectivity if the enactment seeks to affect vested rights: but such a presumption 74 may be deemed rebutted by the amplitude of the language used by the Legislature.
It is expressly enacted in the Shariat Act as amended that in all questions relating to the matters specified, "the rule of decision" in cases where the parties are Muslims shall be the Muslim Personal Law.
The injunction is one directed against the court: it is enjoined to apply the Muslim Personal Law in all cases relating to the matters specified notwithstanding any custom or usage to the contrary.
The intention of the legislature appears to be clear; the Act applies to all suits and proceedings which were pending on the date when the Act came into operation as well as to suits and proceedings filed after that date.
It is true that suits and proceedings which have been finally decided would not be affected by the enactment of the Shariat Act, but if a suit or proceeding be pending even in appeal on the date when the Act was brought into operation, the law applicable for decision would be the Muslim Personal Law if the other conditions prescribed by the Act are fulfilled.
In our view, the High Court was right in holding that it was bound to apply the provisions of the Shariat Act as amended by Madras Act 18 of 1949 to the suit filed by the plaintiffs.
We are unable to agree with the view of the Lahore High Court in Syed Roshan Ali vs
Mt. Behmat Bibi (1) that a right acquired before 1937 (the date on which the Shariat Act was brought into operation) to bring a suit for a declaration that the alienation by the widow of the last holder who had by custom succeeded to the limited estate left by her husband was not binding upon the reversioner, was not taken away by the enactment of the .
It may be observed that the court proceeded merely upon the general presumption against retrospectivity and their attention, it appears, was not directed to the phraseology used by the legislature to give section 2 a retrospective operation.
The plea raised by counsel for.
the contesting defendants that even under the Muslim Personal Law, females are excluded from performing the duties of (1) A.I.R. 1943 Lah. 219.
75 the offices of "Peshimam", "Khatib" and "Mujavar" and that they cannot carry out the duties of those offices even through deputies is one which was not raised before the High Court.
The trial court has found that the duties of those offices could be performed through deputies.
The first appellate court did not express any opinion on that question and before the High Court, this question was not mooted.
We do not think that we would be justified in allowing the contesting defendants to argue this question in this appeal.
In any event, if the income was being distributed amongst the four families, the plaintiffs and defendant No. 2 claiming under Fakruddin would, by virtue of the provisions of the Shariat Act, be entitled to receive that income.
There is nothing on the record to suggest that the right to receive the income is conditional upon the performance of the duties of the offices of "Peshimam", "Khatib" and "Mujavar".
In that view of the case, this appeal fails and is dismissed with costs.
Appeal dismissed.
| The City of Bangalore Municipal Corporation resolved to levy octroi on cotton and wool and the resolution was notified in the Official Gazette as required by section 98(1) of the City of Bangalore Municipal Corporation Act.
Objections were invited and the appellants filed their objections to the tax.
Final resolution in regard to the tax was passed under section 98(2) of the Act which was published in local newspapers but not in the Official Gazette.
Notices were also sent to the appellants to the effect that after considering their objections the Municipality had decided to levy octroi on the goods at the rate already notified.
The appellants then filed applications in the High Court under article 226 of the Constitution challenging the legality of the levy of octroi but the High Court dismissed the applications.
On appeal with a certificate of the High Court: Held, that publication of the resolution in the Official Gazette and invitation of objections under section 98(1) which were filed, were sufficient compliance with the provisions of the Act.
The notice stating that the tax had been resolved to be levied instead of stating that it was intended to be levied was at the most only technically defective but all such defects were validated by section 38 of the Act.
It was not necessary first to pass a resolution specifying the goods and then another resolution showing the intention of the Municipality to tax those goods.
The goods and the rate of tax were specified and the resolution, was passed after following the procedure laid down in section 98(1).
This amounted to substantial compliance with the provisions of the Act.
The legislature has laid down the powers of the Municipality to tax various goods and enumerated certain goods; Class VIII in Part V of Schedule III read with section 97(e) of the Act authorised the Municipality to impose tax on other articles and goods.
In 699 the present case there was a resolution which sought to include the goods in dispute in the Schedule for the purpose of imposing the tax.
Bijay Colton Mills Ltd. vs Their Workmen [1960] 2 S.C.R. 982, distinguished.
The conferment of power upon the Municipality to specify goods under Class VIII is in the nature of conditional delegation and does not amount to excessive delegation.
Baxter vs Ah Way ; , followed.
Hamdard Dawakhana vs Union of India ; , held not applicable.
The High Court was right in holding that Cotton and Wool do not cease to be raw materials for the purposes of the Act, merely because they are ginned and pressed in bales.
The resolution in the present case covered the articles imported by the appellants into the limits of the Corporation of Bangalore.
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Appeal No. 1313 of 1973.
(From the Judgment and Order dated 7 9 1972 of the Calcutta High Court in Income Tax Reference No. 208 of 1966).
V.P. Raman, Addl.
Solicitor Genl.
and M.N. Shroff for the Appellant.
K. Ray and D.N. Gupta, for the Respondent.
The Judgment of the Court was delivered by KHANNA, J.
This appeal on certificate, by the Commissioner of Income tax, is against the judgment of the Calcutta High Court whereby the High Court answered in a reference under the Income tax Act the following question in favour of the assessee respondent and against the revenue: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that in making the reassessment under section 147(b) of the Income tax Act, 1961, the Income tax Officer could not depart from the method of computation permitted in Rule 33 of the Income tax Rules and followed in the original assessment, and adopt an alternative method of computation also permitted under the said Rules (corresponding to Rule 10 of the Income tax Rules, 1962) ?" The matter relates to the assessment year 1959 60, the corresponding financial year for which ended on March 31, 1959.
The assessee is a non resident company carrying on business as construc tion engineers.
The Income tax Officer made the original assessment on May 31, 1960 on a total income of Rs. 21,49,169.
On November 5, 1962 the Income tax Officer initiated proceedings under section 147(b) of the Income tax Act, 1961 (herein after referred to as the Act) and completed the assessment on February 29, 1964 on a total income of Rs. 69,85,097.
At the time of the original assessment the assessee filed the return of income along with the auditor 's certificate of the trading results of the various contracts.
One of those contracts was in respect of work at Durgapur with the Hindustan Steel Ltd. In respect of that work 209 the assessee filed a provisional estimate of income which was arrived at "by calculating the income that could be attributable in relation to the tax deducted under section 18(B) by the Hindustan Steel Ltd." The Income tax Officer computed the income from that contract at Rs. 5,33,164.
The income from the other contracts was computed at Rs, 16,16,005 "as per audited statements.
" In the reassessment proceedings the Income tax Officer purported to find as under: (i) That the assessee 's outlay in India to the total outlay in various contracts represented a fair index of operations carried out in India and as such 60 per cent of the profits attributable to sterling payments and claimed to be exempt related to operations in India and fell to be included in the assessee 's total income; (ii) that the figure of depreciation required to be changed; and (iii) that some portion of the income had to be assessed under section 4(1)(A) on receipt basis.
The total income of the assessee, as already mentioned, was determined as a result of reassessment to be Rs. 69,85,097.
In arriving at the figure of the total income the Income tax Officer estimated the income in respect of Durgapur contract to be Rs. 5,33,164 as had been done in the original assess ment.
Regarding the other contracts, the Income tax Officer determined the income of the assessee in reassessment pro ceedings to be Rs. 64,51,933.
The difference in the income computed at the time of the original assessment and at the time of reassessment was due to the fact that the Income tax Officer at the time of original assessment adopted one method of computation under rule 33 of the Income tax Rules, 1922 while the Income tax Officer making reassessment adopt ed another method under that rule.
On appeal it was submitted before the Appellate Assist ant Commissioner on behalf of the assessee that the action of the Income tax Officer in reopening the assessment under section 147(b) was without jurisdiction and that the Income tax Officer had no jurisdiction to change the method of computation as originally adopted in the revised proceedings.
The Appellate Assistant Commissioner held that the proceedings under section 147(b) were bad and that the Income tax Officer could not adopt an alternative method of computation in the reassessment proceedings.
He, therefore, allowed the appeal.
The Appellate Assistant Commissioner at the same time observed that the Income tax Officer would be justified in computing the income to be Rs. 22,23,231 and that the assessee had no objection to such a revision.
In appeal before the Tribunal the department urged that the Appellate Assistant Commissioner was not justified in holding that the Income tax Officer (i) had no jurisdic tion to start proceedings under section 147(b) of the Act; and (ii) that the Appellate Assistant 210 Commissioner had erred in allowing deductions in the income of the assessee.
The Tribunal held on the first ground that proceedings under section 147(b) had been validly initiat ed.
Regarding the second ground, the Tribunal observed in agreement with the Appellate Assistant Commissioner that the mode of computation adopted in the original assessment was one permitted under rule 33 of the Income tax Rules 1922 and that the mode adopted in reassessment was another alterna tive method.
The tribunal held that both the methods being permissible, it could not be said that any mistake was committed in computing the income at the time of the origi nal assessment on a particular basis adopted with reference to rule 33.
In the opinion of the Tribunal, the Income tax Officer could not in reassessment proceedings depart from the method of computation adopted in the original assess ment.
The Tribunal directed that the reassessment be made "adopting the same method of computation as in the original assessment subject to any adjustments which may be justified such as excess depreciation being charged in the account and so on." At the instance of the revenue, the question reproduced above was referred to the High Court.
The High Court, while answering the question against the revenue, referred to the connotation of the words "escaped income" and observed " . it means an income which the asses see has succeeded in getting away with or has eluded observation or search or notice of the tax authorities.
In other words, it cannot mean an item of income which has not been taxed by purusing a method approved by law.
In the instant case, the excess income was not taxable under the third method but it has become taxable by following another method sanctioned by the same rule, namely, rule 33.
This is not, therefore, a case of escaped income which has not been brought into the orbit of taxation in the reassessment proceedings.
" In appeal before us learned Additional Solicitor General has assailed the judgment of the High Court and has contended that the High Court was in error in holding that the instant case was not one of income escaping assessment.
As against that, Mr. Ray on behalf of the assessee respondent has canvassed for the correctness of the view taken by the High Court.
Before dealing with the contentions advanced, it may be apposite to refer to the relevant provisions.
According to section 4(1 )(c) of the Indian Income tax Act, 1922, subject to the provisions of that Act, the total income of any previous year of any person includes all income, profits and gains from whatever source derived which if such person is not resident in the taxable territories during such year, accrue or arise or are deemed to accrue or arise to him in the taxable territories during such year.
Sub section (1) of section 42 of the Act of 1922, inter alia, provides that all income, profits or gains accruing or arising, whether directly or indirectly, through or from any business connec tion in the taxable territories, shall be deemed to be income 211 accruing or arising within the taxable territories, and where the person entitled to the income, profits or gains is not resident in the taxable territories, shall be chargeable to income tax either in his name or in the name of his agent.
According to sub section (3) of section 42, in the case of a business of which all the operations are not carried out in the taxable territories, the profits and gains of the business deemed under this section to accrue or arise in the taxable territories shall be only such profits and gains as are reasonably attributable to that part of the operations carried out in the taxable territories.
The assessee respondent in the present case carried on business as construction engineers both in India and other parts of the world.
The Income tax Officer, it seems, found that the provisions of section 42 of the Act of 1922 did not provide sufficient criteria for computing the profits and gains of business deemed to accrue or arise in India.
Resort was accordingly had to rule 33 of the 1922 Rules.
The above rule has been made to meet such an eventuality, and reads as under: "In any case in which the Income tax Officer is of opinion that the actual amount of the income, profits or gains accruing or arising to any person residing out of the taxable territories whether directly or indirectly through or from any business connection in the taxable territories or through or from any property in the taxable territories, or through or from any asset or source of income in the taxable territories, or through or from any money lent at interest and brought into the taxable territories in cash or in kind cannot be ascer tained, the amount of such income, profits or gains for the purposes of assessment to income tax may be calculated on such percentage of the turnover so accruing or arising as the Income tax Officer may consider to be reasonable, or on an amount which bears the same proportion to the total profits of the business of such person (such profits being computed in accordance with the provisions of the Indian Income tax Act) as the receipts so accruing or arising bear to the total receipts of the busi ness or in such other manner as the Income tax Officer may deem suitable.
" Shorn of the parts with which we are not concerned, the rule provides that in any case in which the Income tax Officer is of the opinion that the actual amount of income, profits or gains accruing or arising to any person residing out of the taxa ble territories, whether directly or indirectly, through or from any business connection in the taxable territories cannot be ascertained, the amount of such income, profits or gains for the purpose of assessment to income tax may be calcu lated (i) on such percentage of the turnover so accruing or arising as the Income tax Officer may consider to be reasonable, or (ii) on an amount which bears the same propor tion to the total profits of the business of such person (such 212 profits being computed in accordance with the provisions of the Indian Income tax Act) as the receipts so accruing or arising bear to the total receipts of the business, or (iii) in such other manner as the Income tax Officer may deem suitable.
The above rule makes it clear that if other condi tions mentioned in the rule are satisfied, it would be open to the Income tax Officer in computing the income, profits or gains to apply one of the three methods mentioned in the rule.
It is the common case of the parties, and that is also the underly ing assumption of the question referred to the High Court, that the Income tax Officer in making the original assessment adopted one method while the Income tax Officer making reassessment adopted another method contemplated by rule 33.
The ques tion with which we are concerned is whether it would be a case of income escaping assessment if the Income tax Officer adopts a method of computa tion which is permissible under the law but which method results in lower tax liability compared to the other method which too is permissible in law.
According to the learned Additional Solicitor General, the adoption of a method even though permitted by rule 33 which results in lower tax liability of the assessee compared to the other method mentioned in the rule would warrant the conclusion that income has escaped assessment and as such section 147 of the Act of 1961 would get attracted.
After giving the matter our earnest consideration, we find it difficult to accept the above contention.
It was open, as already men tioned, to the Income tax Officer at the time of making the original assessment to adopt one of the three methods mentioned in rule 33 for computing the taxable income of the assessee.
Discretion was vested by rule 33 in the Income tax Officer for the purpose of making his choice of the methods, and the same was to be exercised in a proper and judi cious manner.
There is nothing before us to show that the discretion was not exercised by the said officer in a proper or judicious manner.
It is also not suggested that the Income tax Officer was actuated by some oblique motive.
From the mere fact that the method selected by him was such as result ed in lower tax liability of the assessee compared to the liability which would have resulted from the adoption of other method, it would not follow that the discretion was not exercised in a proper and judicious manner.
The taxing authorities exercise quasi judicial powers and in doing so they must act in a fair and not a partisan manner.
Although it is part.
of their duty to ensure that no tax which is legitimately due from an assessee should remain unrecovered, they must also at the same time not act in a manner as might indicate that scales are weighted against the assessee.
We are wholly unable to subscribe to the view that unless those authori ties exercise the power in a manner most beneficial to the revenue and consequently most adverse to the assessee they should be deemed not to have exer cised it in a proper and judicious manner.
The order made by the Income tax Officer at the time of the original assessment was a legally correct order and was not vitiated 213 by any error.
The absence of an error in that order would justify the inference that the present is not a case of income escaping assessment.
There is necessarily an element of error in cases of income escaping assessment mentioned in section 147(b) of the Act of 1961.
Such error resulting in income escaping assessment becomes manifest in the light of information coming subsequently into the possession of the Income tax Officer.
Where, as in the present case, the order making the original assessment was a legally correct order and was not vitiated by any error, the case would not be one which would fall within the ambit of section 147(b) of the Act of 1961 or section 34(1)(b) of the Act of 1922.
We may add that the Income tax Officer ordering reassess ment ' does not sit as a court of appeal over the Income tax Officer making the original assessment.
Nor is it open to the Income tax Officer ordering reassessment to substitute his own opinion regarding the method of computing the income for that of the Income tax Officer who made the original assessment, especially when the method of computation adopt ed at the time of original assessment was permissible in law.
The fact that the adoption of a different method of computation would have resulted 'in higher yield of tax would not in such a case justify the reopening of the as sessment.
It has been argued on behalf of the appellant that reassessment under section 147(b) would be justified where in the original assessment income liable to tax has escaped assessment due to oversight, inadvertence or a mistake committed by the Income tax Officer.
The present however, we find, is a case which does not fall in any of those categories.
We would, therefore, uphold the judgment of the High Court and dismiss the appeal with costs.
V.P.S. Appeal dis missed.
| The City of Bangalore Improvement Act, 1945, is con cerned with the improvement and future expansion of the city, and for the appointment of a Board of Trustees with special powers to carry out that purpose.
an incident of such improvement and expansion, it provides for acquisi tion of land also.
.Section 16 of the Act provides for the publication of a notice so that any representations which objectors may make may be considered by the Board itself under section 17.
The object of the two sections is to provide for the notification similar to that under 5.
4(1), Mysore Land Acquisition.
1894, and for hearing of objections as under section 5A, of that Act.
Section 18 of the Bangalore Act provides for the publication in the Gazette of the declaretion that the land is acquired for a public; purpose.
Section 27 provides that acquisitions otherwise than by agreement, shall be regulated by the provisions of the Acquisition Act in so far as they are applicable and by certain further provisions in the section.
Section 27(1) provides that upon the passing of a resolution by the Board that an improvement scheme under section 14 is necessary in respect of any locality, it shall be lawful for any person, authorised by the Board to do all such acts in respect of the land as it would be lawful for an officer duly autho rised by the Government under section 4(2) of the Acquisition Act; and under section 27(2) the publication Of a declaration under section 18 shall be deemed to be the publication of a declaration under section 6, Acquisition Act In the present case, the notifications under section 16 of the Bangalore Act were issued in 1960 and the notifications under section 18 were published in 1967.
On the question as to which date was to be taken for the determination of the market value for the purpose of awarding compensation, the High Court held that the date of notification under section 18 is the relevant date.
The High.
Court held that decision of Full Bench of the High Court in Venkatamma vs Special Land Acquisition Officer (AIR covered the ques tion: and it also relied on another decision of the Court, determining compensation with respect of the acquisition of certain other lands, as relevant evidence for the purpose of determining compensation in the instant case.
In appeal to.
this Court the respondent also supported the judgment of the High Court on the ground that section 23(1) of the Acquisition Act which provides that the determination of the market value should be as on the date of the publication of a notification under section 41(1), would not apply, because, (a) No. principle o.r procedure governing award of compensation is specified in the Bangalore Act, (b) the words "so far as applicable", used in section 27, are equivalent to "in so far as they are specifically mentioned"; and section 23(1) is not so specifically mentioned; and, (c) since No. procedure or principle is laid down for the= award of compensation in the Bangalore Act, it would be equitable to hold that the market value should be determined with reference to the late.r date of.
the notification under s 18 of the Act.
Allowing the appeal, HELD: The matter should be remanded to the High Court for determination of the market value of the land as on the date of the notification under 179 section 16 of the Bangalore Act, which corresponds to.
the notification under section 4(1 ) of the Acquisition Act, after affording opportunities to the parties whether the judgment sought to be offered as additional evidence could be so admitted shall be decided.
[193 E F] (1)(a) The Full Bench of the High Court, while inter preting the City of Mysore Improvement Act, 1903, observed that the Acquisition Act had been amended in 1927 so as to make compensation payable as on the date of the notification under section 4(1) of that Act instead of the date of notifica tion under section 6 according to the unamended law and but that, in the Mysore Act, there was no corresponding amendment.
Therefore, the Mysore Act had to be construed with refer ence to the provisions of the Land Acquisition Act as it stood in 1903.
[182 F G] But, the Bangalore Act, even though its corresponds substantially with the provisions of the Mysore Act of 1903, should be interpreted with reference to the Acquisition Act as it stood in 1945, because, the Bangalore Act was, enacted in 1945.
[182 H] (b) The Full Bench also held that if there was long delay between the two notifications, the acquisition itself would be unconstitutional, and the.re.fore the date of notifica tion under section 18 would be the relevant date.
The delay between the dates of notification under section 16 and under section 18 would not have any bearing on the question of the date on which the market value is to, be determined, because, if a particular acquisition becomes unconstitutional due to an unreasonable mode.
of exercising the statutory powers of acquisition, the meaning of provisions, which are relevant for determining the date of market value, could not be affected.
[183 F H, 184 A] (2) Under section 43, Evidence Act, judgments other than those falling under sections 40 to 42, Evidence Act are irrele vant unless they fall under some other provisions of the Evidence Act.
In the present case, the earlier judgment of the High Court cannot operate as resjudicata because it is not between the same parties.
Such judgments are also not judgments in rem.
However, in Khaja Fizuddin vs State of Andhra Pradesh (CA.
No. 176 dt. 10 4 1963) this Court held that such judgments would be relevant if they relate to similarly situated properties and contain determinations of value on dates fairly proximate to the relevant date in a case.
BUt, in the present case, the appellant was not given any opportunity of showing that the earlier judgment related to dissimilar land.
The High Court also did not comply with the provisions of 0.41 r. 27, C.P.C. before admitting the earlier judgment as additional evidence.
It had recorded no 'reasons to show that it had considered the requirements or ' the rule and why it found the admission of such evidence to be necessary.
[191 G H, 192 B H 193 A B] Special Land Acquisition Officer, Bombay vs Lakhamsi Ghelabhai, , referred to.
(3)(a) Section 27 of the Bangalore Act enables the procedure in the Acquisition Act to be utilised except tel the extent to which the procedure in the bangalore Act may differ from that in the Acquisition act.
These difference section 27(2) and (2); are: (i) that the Board of Trustees could do the: things provided for in section 4.(2) of the Acquisition: Act without a notification under section 4(1); and (ii) the notifica tion under section 18 of the Bangalore Act is equated to the one under section 6 of the Land Acquisition Act.
Therefore, even though section 23 of the Acquisition Act is ' not specifically mentioned in the Bangalore Act, the obvious purpose of the opening words of section 27 of the Bangalore Act, and the effect of non specification of a different principle in the Banga lore Act, is that the award of compensation, which is a necessary part of any law providing for acquisition must be governed by section 23 of the Acquisition Act, which is the only provision applicable; for determining the date of market value.[189 D G] (b) The words "so far as they are applicable" cannot be equated to in so far as they are specifically mentioned.
" The words are used to exclude only those provisions of the acquisition Act which become inapplicable, because 180 of the special procedure prescribe.d by the Bangalore Act.
They cannot be construed as excluding the application of general provisions such as section 23 of the Acquisition Act.
They amount to stating that what is not either expressly or by necessary implication excluded must be applied.
[190 H, 191 A B] (c) Equity supplements but does not supplant law.
If, in the face of the provision that the notification under section 18, Bangalore Act is equated with a notification under section 6 of the.
Acquisition Act for the purpose of determining the market value for awarding compensation, some transcendental principle of ' equity is applied, then, it would be supplant ing the law laid down in section 27 of the Bangalore Act read with section 23 of the Acquisition Act.
It would also be absurd to hold that a notification under s.18, Bangalore Act, could be equated with a notification under section 4(1) Acquisition Act.
Therefore, the relevant date would be the date of notification under section 16, because, the objects achieved by a notification under section 16, Bangalore Act, and one under section 4, Acquisition Act are identical.
In the Full Bench decision of the High Court, it was held.
relying on section 23 of the City of Mysore Improvement Act, 1903 that section 14 of that Act should be equated to section 4(1) of the Acquisition Act.
But in view of the provisions of r. 27 of the Bangalore Act, the only result of equating a resolution under section 14 of the Bangalore Act with a notification under section 4(1) of the Acquisition Act would be to shift the date of ascertaining of market value still further back which is not the conten tion of the respondents.
[191 A, F] OBITER: An additional compliance with section 4(1) of the Acquisition Act is not necessary in view of the special procedure unders.
16 of the Bangalore Act: and, it would be reasonable for the authorities to exercise the powers pro vided for by section 27(1) of the Bangalore Act, corresponding to those in section 4(2) of the Acquisition Act, only after the notification under section 16 of the Bangalore Act.
[185 B.C] M. Manicklal vs The State of Mysore approved.
|
Civil Appeals Nos. 775 and 1107 of 1975.
(From the Judgment and order dated the 9 4 19.75 of the Allahabad High Court in Election Petition No. 24 of 1974) N. section Bindra.
K. C. Agarwala.
R. D. Uppadhaya and M. M. L. Srivastava, for the appellant in CAs 775/75.
Yogeshwar Prasad and Miss Rani Arora and Bir Bahadur Singh, for the appellant in CA 1107/75.
N. section Bindra, K. C. Agarwala, R. D. Uppadhaya and M. M. L. Srivastava, for the respondent in CAs 1107/75.
Yogeshwar Prasad, Miss Rani Arora and Bir Bahadur Singh, for respondents 1 and 2 in CAs 775/75.
The Judgment of the Court was delivered by SHINGHAL, J.
Civil Appeal No. 775 of 1975 has been filed under section 116A of the Representation of`People Act, l95l, hereinafter referred to as the Act, by Balwan Singh whose election to the Uttar Pradesh Legislative Assembly from the Sarwan Khera constituency at the general election of 1974, has been set aside by the Allahabad High Court by its judgment dated April 9, 1975.
The appellant has been.
held guilty of committing a corrupt practice under section 123(S) of the Act.
and has been disqualified for a period of six years.
this election was challenged on several grounds by an election petition filed by respondents Prakash Chandra and Jai Chandra, hereinafter referred to as the election petitioners, who were electors of the constituency.
There were several candidates at the election, but the main contestants were appellant Balwan Singh of the Bhartiya Kranti DaI (B.K.D.) who secured 34.968 votes, and Ragunath Singh, respondent No. 2 of the Congress (R) party who secured 31,008 votes.
Appeal No.1167 of 1975 is by election petitioner Prakash Chandra for setting aside the judgment on issues decided against the election petitioners.
337 The allegation regarding the commission of the corrupt practice referred to above was to the effect that the appellant, his workers, agents and supporters, with his consent hired and procured vehicles for the free conveyance of electors.
A concise statement of the mate rial facts in that respect was made in paragraph 12 of the election petition.
Particulars of the vehicles used for the free conveyance of the electors were given in Schedule III of the petition.
The appellant denied the allegation and pleaded in his written statement that none of the vehicles mentioned in Schedule III was either, procured or hired by him or his workers and agents with his consent for the purpose of carrying voters to and from the polling stations and that no such vehicle was "used for the purposes of carrying electors to and from the polling stations on the date of poll".
It was also stated that the allegations contained in sub paragraphs 12(a), 12(b) and 12(c) were not the facts required by section 83.
They were totally vague and lack ed in material particulars, and were liable to be struck off.
The High Court considered that and the other objections and stated in its order dated August 30, 1974, in regard to the objection that the names of the persons who procured or hired vehicles were not given in paragraph 12 or Schedule III, that the counsel for the election petitioner had undertaken to furnish the names.
The election tioners furnished better particulars by adding paragraph 12(d) stating that the names of the persons who hired or procured the vehicles by which the electors were "carried free of cost from their houses to the polling station" on the date of election by respondent No. 1 were given in Schedule III(l).
They save the percentage and residence of the persons named in Schedule III, as also particulars and names of the persons who hired and procured vehicles for the free conveyance of the electors, and the names of the owners of the vehicles.
An objection was then taken that such an amendment was not permissible.
The High Court rejected that objection by its order dated October 10, 1974, except that the names of two new persons were not allowed to be inserted in Schedule V, with which we are not concerned.
The High Court framed several issues, including issue No. 2 which was as follows "2.
Whether the respondent No. 1 himself, or his workers and agents with his consent, hired or procured vehicles for the free conveyance of the voters and whether the vehicles so hired and procured were used for the purpose and , .
thereby the respondent No. 1 committed corrupt practice.
" After recording the evidence of the parties, the High Court recorded its finding as follows. "My answer on issue No. 2 accordingly is that the respondent No. 2 procured tractor 9962 with trolly and hired Jeep UPW 359 and Tractor UTE 5865 with trolly and that the said vehicles were used for free conveyance of voters to Maubasta, Jaganpur and Tigain polling stations and further that the respondent No. 1 thereby committed a corrupt practice under section 123(5) of the R.P. Act." 338 It was in view of that finding that the election petition was allowed with costs, the election of the appellant was declared void, and he was disqualified as aforesaid.
That is how appeal No. 775 has arisen The other appeal No. 1 107 has been filed by election petitioner.
Prakash Chandra, as he feels aggrieved against the High Court 's findings on the other issues, but Mr. Yogeshwar Prasad has stated that he would not press that appeal.
We have therefore only Balwan Singh 's appeal for consideration.
It has been argued by Mr. Bindra on behalf of Balwan Singh, hereinatter referred to as the appellant, that the High Court ought not to have entertained the election petition as it was not verified in the manner laid down in the Code of Civil Procedure for the verification of pleadings even though that was the clear requirement of section 83(1)(c) of the Act.
We asked the counsel to refer us to any such objection of the appellant in the triaI court, and all that he could do was to invite our attention to paragraph 5 of the application dated November 27, 1974.
That paragraph however relates to the objection regarding the defective verification of the affidavit accompanying the election petition, which is a different matter.
That is in fact the subject matter of Mr. Bindra 's second argument, and we shall deal with it separately.
The fact remains that an objection regarding the alleged defective verification of the election petition was not taken in the High Court, and it was not a point at issue there.
There is therefore no justification for allowing it to be raised here.
It is in fact significant that even though an objection was taken on November 27, 1974 in regard to the verification of the affidavit, no such objection was taken about the verification of the main election petition.
It was vaguely stated that verification of the affidavit and verification of the Schedule (i.e. Schedule III) were "at variance", but that was a different matter.
In so far as the verification of the affidavit is concerned, it would be sufficient to say that that part of it which related to the commission of the corrupt practice which was the subject matter of issue No. 2 was concerned (Schedule III) it was verified in accordance with the prescribed form (No.25 of the Conduct of Election Rules, 1961) as true to the election petitioner 's information received from the persons mentioned in it.
It was therefore quite in order.
It may be mentioned that although the High Court examined the objections of the appellant on two occasions, no objection was taken or pressed for its consideration in regard to the verification of the main election petition, its schedules or the affidavits.
An objection was raised in the appellant 's application dated November 27, 1974 that the election petition may not be tried because of defective affidavit, but it was rejected by the High Court 's order of the same date on the grounds that it was a belated objection, and the allegation of corrupt practice could not be deleted merely because of the defective form of the affidavit.
No issue was joined in respect of any such objection and it cannot be allowed to be raised for the first time in this appeal.
It has next been argued by Mr. Bindra that the High Court committed a serious error of law in allowing the election petition to be 339 amended, after the expiry of the period prescribed for its presentation, even though it did not allege that any vehicle was used for the free conveyance of any elector and did not specify the names of the persons who were alleged to have hired or procured the vehicles.
It has been urged that as the facts alleged in the petition did not bring out all the ingredients of the corrupt practice, there was no cause of action for trial.
Reference in this connection has been made to Samant N. Balakrishna etc.
vs George Fernandez and Others(1).
Hardwari Lal vs Kamal Singh,(2) Rai Narain vs Smt.
Indra Nehru Gandhi and another(3) and Vatal Nagaraj vs R. Dayanand Fagar.(4).
By the amendment in question, the election petitioners had applied for insertion of a new sub paragraph (d) in paragraph 12 of the petition as follows, "The names of the persons who hired or procured the vehicles by which the electors were carried free of cost from their houses to polling station on the date of election by respondent No. 1, his workers and agents with his consent are given in schedule III(i) of the election petition.
" Schedule III(i) gave the particulars and names of the persons who hired and procured the vehicles for the free conveyance of electors.
The High Court took note of the law that a fresh corrupt practice could not be alleged by means of an application to amend the election petition and, after referring to the decisions in Balwan Singh vs Lakshmi Narain and others(5) and Joshbhai Chunibhai Patel vs Anwar Beg A. Mirza,(6) given before and after the amendment made by Act 47 of 1966, it held that it was the requirement of the law that in addition to proving the hiring or procuring of the vehicles for the free conveyance of any elector to and from any polling station, it was a necessary particulars` to allege and prove that the vehicle was used for the conveyance of the electors.
It then noticed paragraph 9 (iii ) of the election petition which stated that the appellant, his workers, agents and supporters with his consent, hired and procured vehicles for the free conveyance of electors and committed corrupt practice as provided under sub section (S) of section 123 of the Act.
It also noticed paragraph 12 which clearly stated that the concise statement of material facts in relation to the aforesaid ground relating to the procuring and hiring of tractors, jeep and car "for free conveyance of voters to thc polling stations from their houses" were given in sub paragraphs (a) and (b).
Those sub paragraphs clearly mentioned that the vehicles had been hired and procured for the free conveyance of the electors from their houses to the polling stations on the date of poll.
Reference was also made to Schedule III of the petition for which it was stated in paragraph 12(c) of the petition that the full particulars in regard to the corrupt practice were given in it.
That schedule contained the "particulars of vehicles used for (1) ; (2) (3) ; [1972] 3 S.C.R. 811.(4) (5) ; 340 free conveyance of electors on the date of election" and contained not only the place from which the electors were conveyed, the time of conveyance, the name of the polling station.
The particulars of The vehicle, but also the names of the electors who were so conveyed and the names of the workers and agents who conveyed them.
The schedule was an integral part of the election petition, and the original election petition thus contained what was required to be stated by section 83 of the Act, and the amendment was meant to furnish some further particulars in regard to the same corrupt practice.
It is therefore futile to contend that a new corrupt practice was allowed to be inserted by the High Court 's order of amendment.
It may be pointed out that, as would appear from paragraph 12(c) of the appellant 's original written statement to the unamended election petition, he also understood the allegation in the election petition to mean that it related to the use of the vehicles for carrying the electors to and from the polling stations on the date of poll.
It will be recalled that the issues were framed on August 30, 1974, before the making of the application for leave to amend the election petition, and issue No 2 clearly raised the question whether appellant Balwan Singh, or his workers and agents with his consent, hired or procured the vehicles for the free conveyance of the voters and whether the vehicles so hired and procured "were used for the purpose.
" The appellant was therefore fully aware that the election petitioners has, inter alia, alleged the user of the vehicles also, and that was why he joined issue for the trial of that allegation.
There is thus no justification for the argument to the contrary.
We have already made a mention of issue No. 2 and the High Court 's finding thereon in favour of ' the election petitioners in respect of tractors No. as UPG 9962 and UTE 5865, and jeep No. UPW 359, for the free conveyance of electors to Naubasta, Jaganpur and Tigain` polling stations.
Mr. Bindra has challenged that finding and we shall proceed to examine his arguments in respect of the Naubasta polling station.
The election petitioners alleged in the election petition that the appellant, his workers, supporters and agents hired and procured the vehicles mentioned in Schedule III, with his consent, for the free conveyance of electors from their houses to the polling stations on the date of poll namely.
On February 26, 1974.
Particulars of the corrupt practice were given in the schedule.
It was thus stated.
in regard to Naubasta polling station, that electors were conveyed there from Bbimpur and Basehi villages, by tractor No. UPG 9962.
in a trolly.
It was specifically stated that electors Munshi Lal (P.W.2O), Ram Swarup (P.W. 13) and Misri Lal (P.W. 13) of Bhimpur, and Radhelal and Bahulal (P.W.Il) of Basehi were thus taken to Naubasta.
So also, it was stated that some of the workers and agents who conveyed the electors were Bhavwan Singh (P.W. 11) and Babu Singh of Naubasta, and Maikoo of Bhimpur.
The appellant pleaded in his written statement that the allegation was "totally incorrect and false," and that "none of the vehicles men 341 tioned in Schedule III was either procured or hired by the answering A respondent or by any of his workers and agents with his consent for the purposes of carrying voters to and from the polling station, nor any such vehicles were used for the purpose of carrying electors to and from the polling stations on the date of poll.
" It was not the case of the appellant that tractor No. UPG 9962 was taken to Naubasta polling station in some other connection, or that there was no occasion or question of hiring or procuring it as it was his own property, or that it was otherwise utilised for his election campaign or for some other work.
He merely stated that the tractor "was not used in connection with the election.
" It has been argued by Mr. Bindra that the tractor really belonged to the appellant, and that his wife was only a 'benamidar ' so that there could be no question of "hiring or procuring it whether on payment or otherwise" within the meaning of sub section (5) of section 123 of the Act.
Reliance in this connection has been placed on Surinder Nath Gautam vs Vidya Sagar Joshi( ').
That tractor No. UPG 9962 belonged to the appellant 's wife Smt.
Vimla, has been clearly admitted by him in his own statement in the High Court.
In fact, as has been stated, it was not his case in the written statement that this was not so and that it was his own property and there could be no question of hiring or procuring it.
A. U. Siddiqui (P.W.2), tax clerk of the office of R.T.O. Kanpur, has proved that the tractor was registered in the name of Smt.
Vimla Yadav, wife of appellant Balwan Singh, and that it stood in her name since May 1, 1971.
Balwan Singh 's statement shows that she was an independent candidate for being coopted as a member of the Zila Parishad.
and it appears from the statement of Vijay Kumar Singh (P. W. 5) that she was her husband 's counting agent.
It cannot therefore be urged with any justification that the tractor which belonged to her, must be deemed to belong to her husband, or that it should be inferred that she was a mere 'benamidar ' when that was not the appellant 's case anywhere.
We must therefore accept it as proved beyond doubt that tractor No. UPG 9962 belonged to the wife of the appellant and was not his own property.
There is thus no justification for contending that there could be no question or occasion for hiring or procuring it as it belonged to the appellant.
The word "procure ' has been defined in the Century Dictionary to mean "to obtain, as by request, loan, effort, labour, or purchase; get; gain, come into possession of.
" It has been defined in the Oxford English Dictionary to mean "to gain, win, get possession of, acquire." This in our view is the correct meaning of the words as used in sub section
(5) of s.123 of the Act.
It would therefore amount to "procuring" the tractor if it could be shown that the appellant obtained or got it or acquired it from his wife.
As has been stated.
the tractor did not belong to the appellant and, in that view of the matter.
it is not necessary for us to examine the correctness of the view taken by the Delhi High Court in Surinder Nath Gautam 's case (supra).
(1) 342 We shall now examine whether tractor No. UPG 9962 was used for the free conveyance of any elector to or from the Naubasta polling station on the date of the poll, and whether it was hired or pro cured for that purpose by the appellant or his agent or by any other person with his consent.
As has been stated, polling in the constituency took place on February 26, 1974.
It has been stated by Vijay Kumar Singh (P.W. S) who was the polling agent of respondent Raghunath Singh, that he saw the workers of the appellant bringing voters to Naubasta polling station in the trolly of tractor No. UPG 9962.
The tractor, according to him, carried the B.K.D. flag and the posters of that party were pasted on the trolly.
When he saw the tractor making the first trip to the polling station, he made an oral complaint to the presiding officer.
It took some time for him to come out of the polling station, and by that time the tractor had gone.
But when the tractor came for the second time, he made written complaint exhibit 4 about it to Mr. Singh who was the presiding officer, and he made an endorsement on it in his presence.
The witness has stated further that the presiding officer came out of the polling station and himself saw the tractor as well as the persons who got down from it.
Those persons, according to the witness, were assisted by the workers of the B.K.D. in standing in the queue at the polling booth.
"Parchis were given to them from the camp of the B.K.D. which also had that party 's flag and posters.
According to Vijay Kumar Singh, The tractor and the trolly made only two trips to the polling station, the second trip being at about 3.30 p.m.
The witness has stated further that the presiding officer made an enquiry on his complaint, and he must have mention ed the result of the enquiry in his diary.
He has stated further that the presiding officer saw the tractor from a distance of about 100 paces and the registration number could be read from that distance.
The witness was cross examined at length, but nothing could be brought out to discredit his testimony, except that both the witness and respondent Raghunath Singh were related to one Shashi Bhushan Singh.
That might be the reason why the witness was appointed as the polling agent of respondent Raghunath 'Singh, but that distant relationship cannot justify the argument that the witness is unreliable and his testimony should be rejected for that reason.
The statement of vijay Kumar Singh has in fact been corroborated in material particulars by the statement of M. P. Singh (P.W. 6) who was an employee of the U.P. Institute of Agricultural Sciences and was the Presiding officer of the Naubasta polling station.
He has stated that the aforesaid complaint exhibit 4 was presented to him by Vijay Kumar Singh on February 25, 1974 at 3.30 p.m. and that he made an endorsement to that effect on the complaint.
The complaint exhibit 4 was in Hindi but it ' is not disputed that its English translation reads as follows: "It is submitted that the workers of Sri Balwan Singh have brought voters in UPG 9962 tractor trolly bearing flag, and the agents of B.K.D. are setting them in queue.
It is 343 entirely illegal.
I have already spoken to you in this connection.
But no action has been taken.
Kindly taker proper action.
" M. P. Singh has stated that he came out of the polling station, as the polling agent said that he should see things for himself, and also because he was aware of paragraph 60 of the "Instruction to Presiding officers" issued by the Election Commission of India.
The witness admitted that it was the requirement of the instruction that the Presiding officer of the polling station should forward any complaint filed before him in regard to the illegal conveyance of voters to the sub divisional and other magistrate having jurisdiction, with such remarks as he could make on his "own observation and personal knowledge." He saw on coming out of the polling station that a tractor and trolly were standing at a distance of 500 or 600 yards from the polling .
station.
The witness admitted ultimately that the "tractor was standing near the camp of the B.K.D.", he "saw some persons getting down from the tractor and the trolly" and that "those who got down from the tractor were seen by me (him) going towards the B.K.D. Camp.
" It may be mentioned that the High Court allowed the counsel for the election petitioners to cross examine the witness as there was some inconsistency in the statement made by 1 him in the Court and the report (exhibit 5) made in his diary.
We shall refer to that report in a while.
It was then that the witness stated as follows: "I had read the whole of the complaint (exhibit 4) while going out.
Having seen the tractor and the trolly outside the polling station near the B.K.D. camp and having seen the persons getting down the tractor and trolly and moving towards the camp, I concluded that everything contained in the complaint (exhibit 4) was correct, and it was for this reason that I mentioned in the report (exhibit 5) that the facts of the complaint were found to be correct.
I stayed outside the polling station for hardly 5 or 6 minutes.
" The witness has therefore corroborated the statement of Vijay Kumar Singh (P.W. 5) in several material particulars.
He has thus stated that (i) complaint exhibit 4 was presented to him on February 26, 1974 at 3.30 p.m. by Vijay Kumar Singh, (ii) he read the whole of it, (iii) he came out of the polling station to see for himself whether the allegation was correct, (iv) he saw that the tractor and trolly were outside the polling station near the B.K.D. camp, (v) persons were getting down the tractor and trolly, and (vi) they were moving towards the camp.
The witness has also stated that he forwarded the complaint to the District Election officer and that he made report exhibit 5 in his diary to the following effect, "22 Serious complaint made by the candidates.
The Congress polling agent made a complaint, that B.K.D. workers were conveying voters to the polling station by a tractor and trolly. ' The fact of the complaint were found to be correct and the complaint forwarded.
" 344 M. P. Singh was cross examined in regard to the correctness of the report, but he was unable to deny its genuineness or correctness.
His explanation that he merely concluded after seeing what he has stated, that everything contained in complaint exhibit 4 was correct, but did not notice the registration number of the tractor and did not see any flag or posters on the tractor or the B.K.D. agents setting them in queue, cannot be accepted because of his statement that he went out of the polling station as he considered it necessary to see for himself whether the allegation was correct, and also because of his contemporaneous note in the diary that "the facts of the complaint were found to be correct.
" We have therefore no reason to disagree with the view taken by the High Court that the statement of M. P. Singh and documents Exs. 4 and 5 go to prove the correctness of the statement of Vijay Kumar Singh (P.W. 5).
Mr. Bindra has argued that M. P. Singh could not have seen the registration number of the tractor as it was standing at a distance of 500 or 600 yards from the polling station, and that there is no reason to disbelieve his statement to that effect.
It would be sufficient for us to say in this connection that Vijay Kumar Singh (P.W 5) has stated that the Presiding officer had seen the tractor from a distance of about 100 paces, and his statement to that effect has not been contradicted by any other witness except M. P. Singh (P.W. 6) who, as has been shown, tried to give an inconsistent statement and was allowed to be cross examined by an order of the High Court.
But even M. P. Singh has stated that he saw the tractor standing near the B.K.D. camp.
Section 130 of the Act prohibited canvassing or exhibiting any notice or sign within a distance of 100 metres of the polling station, and Mr. Bindra was unable to refer us to any requirement of the law that it was not permissible for a candidate to locate his camp at that distance.
Moreover, if it had not been possible for M. P. Singh to see the registration number of the tractor, he would not have recorded in his report exhibit 5 that the facts mentioned in the complaint (exhibit 4) were "found to be correct.
" The same is the position in regard to M. P. Singh 's statement that he did not notice whether the tractor and the trolly did or did not carry any flag or posters.
It is pertinent to point out in this connection that the complaint (exhibit 4) of Vijay Kumar Singh was that workers of the appellant had brought the voters in the tractor trolly, and it would not have been possible for him to "conclude that everything contained in the complaint exhibit 4) was correct" if he had not seen some distinguishing mark on the tractor or the trolly to connect it with the appellant.
It has been stated by Vijay Kumar Singh (P.W. S) that the persons who got down from the tractor trolly went and took "parchis" from the B.K.D. camp outside the polling station.
M. P. Singh (P.W. 6) has also stated that those who got down from the tractor were seen by him going towards the B.K.D. camp.
It is not the case of the appellant that they were not the electors of the constituency.
In fact it would not have availed him or his workers to bring those who were not the electors to the polling station.
The election petitioners stated in the petition that the names of some of the electors who were conveyed to polling station Naubasta 345 were Babu Lal (P.W. 11) and Radhey Lal '(P.W. 12) of village A Basehi, and Ram Swarup (P.W. 13), Misri Lal (R.W. 13) and Munshi Lal (P.W. 20) of village Bhimpur.
While Babu Lal, Radhey Lal, Ram Swarup and Munshi Lal have been examined by the election petitioners, Misri Lal (R.W. 13) has been examined by the appellant.
We have gone through the statement of these witnesses.
Babu Lal (P.W. 11) has stated that a tractor having a trolly came to Basehi on the date of poll carrying the flag and posters of the B.K.D. and that he travelled in it to the polling station along with others including Radhey Lal (P.W. 12), Kunji Lal, Hira, Babbu Prasad and Raghubar Dayal, and that no fare was demanded, or was paid Voluntarily.
Radhey Lal (P.W. 12) has stated much to the same effect, except that he was not asked to name the other persons who travelled with him in the trolly.
He has however stated that Babu Lal had gone with him in the trolly.
Nothing has been elicited in the cross examination to shake the testimony of these witnesses.
We have also gone through the statements of Ram Swarup (P.W. 13) and Munshi Lal (P.W. 20) of Bhimpur.
Ram Swarup has stated that a tractor and trolly carrying the flag and posters having the symbol of "Haldhar Kisan" came to Bhimpur on the date of poll and that he and Munshi (P.W. 20) and Lallu, Sukhnandan and his sons went in it to the polling station to cast their votes and that they were neither asked to pay any fare for travelling by the tractor to Naubasta nor did they voluntarily pay anything.
He has stated that he returned to the village in the same tractor, after casting, his vote.
Munshi Lal (P.W. 20) has deposed much to the same effect, and he has stated that Ram Swarup (P.W. 13) also travelled in the tractor trolly along with the other persons named by him.
The statements of these witnesses have not been shaken in cross examination.
As has been stated, Misri Lal (R.W. 13) was also named in the schedule to the election petition as the elector who was conveyed in the tractor trolly, and he has been examined on behalf of the appellant.
He has stated that there is a distance of 2 or 2 1/2 furlongs between the "abadi" of Bhimpur and the "abadi" of Naubasta, and that he went on foot to cast his vote at the polling station.
He has stated further that the persons living at Bhimpur had gone to the polling station on foot and that it was wrong to say that any tractor come to Bhimpur to transport the voters to the polling station.
The appellant has admitted that he knew Misri Lal for 3 or 4 years, and we are unable to think that the High Court erred in rejecting his statement in face of the other evidence to which reference has been made above.
It was specifically stated in Schedule III of the election petition that Bhagwan Singh (R.W.ll) and Babu Singh of Naubasta, and Maikoo of Bhimpur were the workers and agents of the appellant who conveyed the electors to the Naubasta polling station.
Of these only one Bhagwan Singh (R.W.ll) has been examined on behalf of Balwan Singh.
He has stated that it was wrong to say that he, Maikoo and 346 Babu Singh brought any 'voters in tractor trolly from Bhimpur to Naubasta, or that he got any "parchis" distributed to any voters in the queue at the polling station.
It may be mentioned that the election petitioners made it clear that Bhagwan Singh was Bhagwan Singh Thakur.
Bhagwan Singh (R.W.ll) has admitted that there r was another Bhagwan Singh in his village.
He has stated that he did not see appellant Balwan Singh during the election, in his village, that he had put the flag and poster of the Congress party at his house and that he and his sons worked for the Congress in the election.
As against this, the appellant has stated that he did go to Naubasta and talked to Thakur Bhagwan Singh there who was a sympathiser of B.K.D. It therefore appears that Bhagwan Singh (R.W.ll) cannot be said to be the worker named in the Schedule of the petition, and nothing can possibly turn on what he has stated.
It will be recalled that Vijay Kumar Singh (P.W.5) who was the polling agent of the Congress candidate at Naubasta had stated in the trial court that he had made an oral as well as a written complaint about the conveyance of voters by the workers of the appellant, to the Presiding officer.
The appellant also appointed his polling agent at the polling station, but he has not examined him in rebuttal of Vijay Kumar Singh 's statement to that effect.
We have gone through the other evidence which has been led by way of rebuttal of the allegation regarding the use of tractor No. UPG 9962 for the conveyance of electors to Naubasta polling station.
We have already dealt with the statements of Bhagwan Singh (R.W. 11) and Misri Lal (R.W.13) and have given our reasons for rejecting them as unsatisfactory.
The remaining witnesses, to whose testimony our attention has been invited by Mr. Bindra, are Vijai Pal Singh (R.W.14) and appellant Balwan Singh (R.W.34).
Vijai Pal Singh is a self condemned witness for whereas he stated that he was the polling agent of Ayodhya Prasad who contested the election as a Congress (o) candidate and did not see any tractor trolly conveying voters to Naubasta polling station although he remained present at the polling station, he admitted under cross examination that he was not a polling agent at the Naubasta polling station and had made a false statement to that effect.
In so far as Balwan Singh (R.W.34) is concerned, it will be sufficient to say that he has admitted that he did not go to Naubasta on the date of the poll.
He could not therefore disprove the evidence of the election petitioners in regard to the alleged corrupt practice.
He once ventured to state that he came to know on the "next day after polling that (his) tractor had gone to the National Sugar Institute" for transporting "seta" and "patwar", but he qualified that statement by saying that the tractor may have been sent there by his wife and that "seta" and "patwar" were obtained before February 26, 1974.
An attempt was made to examine Iqbal Bahadur Dwivedi along with the original gate pass of the Institute, but it was given up by Balwan Singh.
He cannot therefore be said to have rebutted the evidence of the election petitioners.
It may be mentioned in this connection that although the important role of conveying voters to Naubasta polling station had been assigned to Babu 347 Singh and Maikoo in the election petition, they were not examined in defence.
It may be mentioned that some witnesses of the election petitioners, namely, Babu Lal (P.W.II), Ram Swarup (P.W.13) and Munshi Lal (P.W.20) named certain persons who, according to them, travelled with them to the polling station Naubasta free of cost.
Most of those persons were summoned at the instance of the appellant, but they were not examined ultimately, and were given up.
The election petitioners have also led evidence to prove that tractor UPG 9962 was procured by appellant Balwan Singh himself for the conveyance of the electors to the Naubasta polling station.
Amarpal Singh (P.W.33) has stated in this connection that he held a diploma in motor mechanism and was running a repairing shop at Rawatpur for motors and tractors.
The appellant was known to him and asked him to do the repair work of the vehicles at the B.K.D. office at Rania for Rs. 25/ per day.
He has stated further that he went to Rania and worked there for 12 days.
One day before polling, the tractor of the appellant was brought to Rania as it had developed some defects.
Balwan Singh 's wife Smt.
Vimla and his driver were present when he was working on that tractor.
Ram Swarup Sharma, Babu Singh and the appellant came there at that time and the appellant asked the witness to complete the repairing work as early as possible, and he asked Smt.
Vimla to send the tractor to Naubasta with Babu Singh for transporting voters.
Witness has stated further that his partner Ramesh was present at that time.
Ram Swarup Sharma is dead.
Appellant Balwan Singh cited Babu Singh as a defence witness, but gave him up.
He did not examine Ramesh.
Uma Shankar (R.W.24) was examined to prove that the appellant did not have any election office at the house of Ram Swarup in Rania and no vehicle of the appellant was repaired there, but he has not stated anything about Amarpal Singh, and it is difficult to place reliance on his statement as he was admittedly a worker of the B.K.D. party in Rania.
Rania, according to the witness, had a population of some 3500 persons and it is difficult to believe that the appellant had no office there.
The appellant recorded his own statement to the effect, inter alia, that he did not employ Amarpal Singh for repairing any vehicle and did not give any instruction that Babu Singh should take the tractor for transporting voters.
No reason has how ever been assigned why Amarpal Singh should have tried to implicate the appellant falsely.
The trial Judge has placed reliance on his statement, and we see no reason for taking a different view.
Tractor UPG 9962 belonged to the appellant 's wife Smt.
Vimla, and it was alleged from the very inception, in the contemporaneous report exhibit 4, that it had been used for the conveyance of electors, some of whom were named in the Schedule to the election petition along with the names of the workers and agents who utilised the tractor for the work.
It could be expected of the appellant that he would give satisfactory particulars and details about any other use of the tractor on the date of the poll if that was within his special knowledge, but he has not done so.
On the other hand, as has been 348 shown, his attempt to prove that the tractor had been sent to the National Sugar Institute met with dismal failure.
His wife Smt.
Vimla did not even appear as a witness and no attempt was made even to examine the driver of the tractor although the appellant has stated that tractor UPG 9962 was driven by a driver whose name was Rangilal.
It is not always possible for an election petitioner to adduce direct evidence to prove that a particular vehicle was hired or procured by the candidate or his agent or by any other person with the consent of the candidate or his election agent, but this can be inferred from .
the proved circumstances where such inference is justifiable.
Reference in this connection may be made to the decisions of this Court in Bhagwan Datta Shastri vs Badri Narayan Singh and others(1) and Shri Umed vs Raj Singh and others(2).
In the present case, it has been proved by clear and reliable evidence that tractor UPG 9962 was used for the conveyance of electors to and from the Naubasta 1 ' a polling station, and r that it was so used by the workers of the appellant.
Then there is the further fact that the voters were conveyed free of cost.
It has also been proved that the tractor belonged to the appellant 's wife and he could not succeed in his effort to prove that it was used elsewhere or for some other purpose.
In these facts and circumstances, it would be quite permissible to draw the inference that the tractor had been procured, by the appellant for the free conveyance of the electors.
For the reasons mentioned above, we have no doubt that the finding of the High Court that appellant Balwan Singh procured `tractor No. UPG 9962 with trolly and that they were used for the purpose of transporting the voters to the Naubasta polling station, and he thereby committed a corrupt practice within the meaning of ' section 123(5) of the Acts.
is correct and must be upheld.
In view of this categorical finding it is not necessary for us to examine the allegation regarding the hiring or procuring of tractor No. UTE 5865 and jeep No. UPW 359 for the free conveyance of electors to two other polling stations.
It may be mentioned that in arriving at the above finding we have ' ' taken due note of the view expressed by this Court in Ram Awadesh Singh vs Sumitra Devi and others(8) in regard to the generation of factious feelings during elections and their continuance even after the election enabling the parties to produce a large number of witnesses some of whom may be seemingly disinterested, and the view expressed in Rahim Khan vs Khurshid Ahmed and others(4) that an election once held should not be treated in a light hearted manner and ' the court should insist on clear and cogent testimony compelling it to uphold the corrupt practice alleged against the returned candidate.
So also, we have noticed the view expressed in Baburao Ragaji Karem ore and others vs Govind and others(5) that the Court should (1) A.I.R. 1960 S.C. 200.
(2) ; (3) ; (4) 19751 S.C.R. 643.
(5) ; 349 examine the evidence having regard to the fact that where the electorate has chosen their candidate at an election, their choice ought not to be lightly upset.
We have also taken notice of the view expressed by Ray C.J. in Smt.
Indira Nehru Gandhi vs Raj Narain(1) that in an election contest it is the public interest, not the parties ' claims, which is the paramount concern.
Mr. Bindra has placed consider " able reliance on these decisions.
But, as has been shown, the finding of the High Court regarding the aforesaid corrupt practice is based on clear, cogent and convincing evidence and there is no justification for interfering with it.
Mr. Bindra has laid much stress on the fact that the appellant was successful at the election to the U.P. Legislative Assembly from another constituency in 1957, but his election was set aside on the round, inter alia, that he and/or his election agent and/or other persons with his consent, had committed corrupt practice, including the corrupt practice of hiring a tractor for the conveyance of electors.
He has argued that in view of this Court 's decision against him in Balwan Singh vs Shri Lakshmi Narain and others (supra) he could not possibly have taken the risk of committing another similar corrupt practice at the election in question.
The argument is based on mere conjecture and cannot disprove or rebut the clear, cogent and reliable evidence on which the appellant has been held guilty of committing the corrupt practice in this case.
Mr. Bindra tried to argue further that the High Court committed an illegality in setting aside the appellant 's election without finding that the result of the election had been materially affected thereby.
The argument is misconceived, for it is not the requirement of section 100(1) (b) which has been found to be applicable to the corrupt practice in question, that the High Court should declare the election of the returned candidate to be void only if the result of the election has r been materially affected by it.
Another argument of Mr. Bindra was that the corrupt practice in question should not have been found to have ben committed as the election petitioners did not examine themselves during the course of the trial in the High Court.
There was however no such obligation on them, and the evidence which the election petitioners were able to produce at the trial could not have been rejected for any such fanciful reason when there was nothing to show that the election petitioners were able to give useful evidence to their personal knowledge but stayed away purposely.
In the result, the appeal (Civil Appeal No. 775 of 1975) filed by Balwan Singh fails and is dismissed with costs.
The cross appeal (Civil Appeal No. 1107 of 1975) is dismissed as not pressed, but without any order as to the costs.
P.B.R. Appeal dismissed.
(1) A.I.R. 1975 S.C. 299.
| The appellant company having its registered office at Calcutta, with branches at Bombay, Delhi, Lucknow, has a principal factory Cum branch at Madras.
The registered office and the various branches are registered as dealers both under the Central Sales Tax Act and the local Sales Tax Acts.
The appellant company in respect of the assessment year 1965 66, did not include a sum of Rs. 21.88,540.41 in its turnover in the return filed under the Central Sales Tax Act on the ground that the turnover represented sales out side the State of Madras.
The said sale related to a Bombay buyer who placed the order with the Bombay branch of the appellant company after it was informed by the said branch in consultation with the Madras branch factory that the price was f.o.r.
Madras at the buyer 's risk and that the delivery would be ex works, Madras.
The Bombay buyer was also informed by the Bombay branch of all the particulars, condition of sale, the fact that the goods would be manufac tured at the Madras branch factory and would be supplied by the Madras Branch etc.
as advised by the Madras branch to the Bombay branch.
The respondent treated it as inter State sale under section 3(a) of the Central Sales Tax Act and issued a notice of demand whereupon the appellant filed an applica tion under article 226 of the Constitution in the Madras High Court praying for a writ of Prohibition restraining the respondents from taxing and/or including in the turnover for the purposes of assessment for the year 1965 66.
The said petition was dismissed.
Dismissing the appeals by certificate, the Court.
HELD: (1) When the movement of the goods from one State to another is an incident of the contract it is a sale in the course of inter State sale.
It does not matter in which State the property in the goods passes.
What is decisive is whether the sale is one which occasioned the movement of goods from one State to another. 'the inter State movement must be the result of a covenant, express or implied in the contract of sate or an incident of the contract.
It is not necessary that the sale must precede the inter State move ment in order that the sale may be deemed to have occasioned such movement.
It is also not necessary for a sale to be deemed to have taken place in the course of inter State trade or .commerce, that.the covenant regarding inter State movement must be specified in the contract itself.
It will be enough if the movement is in pursuance of 2nd incidental to the contract of sale.
[634D E] (2) Branches have no independent and separate entity.
Branches are different agencies.
In the instant case, the contract of sale is between the appellant company and the Bombay buyer.
[634C]
|
Appeal No. 127 of 1966 Appeal from the judgment and order dated December 11, 1962 of the Calcutta High Court in Income tax Reference No. 47 of 1962.
section T. Desai, A. N. Kirpal and R. N. Sachthey, for the appellant.
A. K. Sen and B. P. Maheshwari, for the respondent.
The Judgment of the Court was delivered by Bhargava, J.
This appeal arises out of proceedings for registration of the firm, Juggilal Kamalapat, Calcutta, under section 26A ,of the Income Tax Act (hereinafter referred to as "the Act") for the assessment year 1943 44.
Prior to this assessment year, the three Singhania brothers, Sir Padampat Singhania, Kamiapat Singhania and Lakshmipat Singhania, were carrying on a hosiery business in the name of Messrs. Juggilal Kamalapat with Head Office at Kanpur and a branch at Calcutta.
On November 29, 1939, these three brothers executed a deed of partnership, by which one Jhabbarmal Saraf was taken in as a partner, and under this deed, all the four partners had equal shares.
On October 27, .1941, the three brothers executed a trust deed known as the Kamla Town Trust, the principal object of which was the welfare of the employees of Juggilal Kamalapat Cotton Spinning and Weaving Mills Ltd. Under this deed, the three brothers became the first trustees.
On December 2, 1942, a Deed of Relinquishment was executed by the three brothers, relinquishing their rights and claims to all the properties and assets of the firm, Juggilal Kamalapat, in favour of Jhabbarmal Saraf and of themselves in the capacity of the three first trustees of the Kamla Town Trust.
This relinquishment deed purported to recognise an earlier oral relinquishment which was stated as having been operative with 786 effect from March 26, 1942.
On December 1, 1942, a Partnership Deed was executed between Jhabbarinal Saraf and the three trustees, by which they purported to constitute a partnership firm taking effect from March 27, 1942, the two partners in the firm being Jhabbarmal Saraf and the Kamla Town Trust represented by these three trustees.
The shares of the two partners in this partnership were: Kamla Town Trust . As. /12/ , and Jhabbarmal Saraf. As.
The firm, Juggilal Kamalapat, which had been carrying on the business of hosiery, owned both movable and immovable properties at Belur near Calcutta.
The immovable properties consisted of lands and buildings constructed for the use of the factory for manufacturing hosiery, and they were shown in their balance sheet as properties belonging to the firm.
The firm had also been showing expenses incurred for maintaining or making additions or alterations to these buildings in their accounts and had been claiming depreciation in respect of them.
It was in these circumstances that the new partnership, purporting to consist of the Kamla Town Trust and Jhabbarmal Saraf, applied for registration under section 26A of the Act for the assessment year 1943 44.
The Income tax Officer rejected this claim and, in doing so, also took notice of the fact that a sum of Rs. 50,000/ had been introduced into this partnership firm by the Trust.
The reason given by the Income tax Officer for not accepting the registration need not be mentioned here, because that reason was not accepted by the Tribunal and was not urged before the High Court or before this Court on behalf of the Commissioner.
On appeal, the Appellate Assistant Commissioner upheld the order of the Income tax Officer for reasons given by him which were different from those given by the Income tax Officer.
Those reasons are again immaterial because those reasons were not accepted by the Tribunal or the High Court and have not been relied upon before us.
The Income tax Appellate Tribunal upheld the order rejecting the application for registration under section 26A on the main ground that the Relinquishment Deed dated 2nd December 1942, being an unregistered document, could not legally transfer rights and title to the immovables owned by the firm in favour of the Kamla Town Trust, and that the transfer of the immovable properties being thus legally ineffective and they being not separable from the other business assets, the entire business of the firm was not legally transferred in favour of the Kamla Town Trust.
Two other reasons were also given that the constitution of the new firm was not notified to any of the Banks with which the old firm was dealing, and the new partnership was not got registered with the Registrar of Firms till May, 1946.
On these facts, at the request of the respondent firm, Juggilal Kamalapat, the following question was referred by the Tribunal or opinion to the Calcutta High Court: 787 "Whether on the above facts and in the circumstances of this case, the partnership, as evidenced by the Deed of 1 st December 1942, legally came into existence and as such should be registered?" When this reference came up before the High Court on two different occasions, the High Court sent back the case for submission of further statements of the case to the Tribunal, because the High Court felt that facts, necessary to hold whether the respondent firm claiming registration was a genuine firm or not, had not been properly found by the Tribunal in its appellate order.
On the first occasion, when submitting the supplementary statement of the case, the Tribunal purported to submit two different questions in lieu of the question which had been already submitted for opinion to the High Court.
The two questions thus newly suggested were: "(1) Whether in the facts and circumstances of this case, can the non registration of Relinquishment Deed invalidate the transfer of the business assets to the new partnership ?, and (2)Can the registration application be rejected merely on the ground that the business assets were not legally transferred to the new partnership ?" The High Court disposed of the reference by giving the following answer: "Regard being had to the admissions made on behalf of the department, the facts and circumstances mentioned in paragraph 6 of the statement of case dated 13th March 1952 do not show that there was any legal flaw in the consti tution of the partnership firm as evidenced by the deed of 1st December, 1942.
Upon such evidence, it must be concluded that it did come into existence and there is no impediment to its registration under Section 26A of the Income tax Act.
It is made clear that the question itself postulates the facts and circumstances and therefore, the conclusion is based upon them.
In view of the facts in this case, there will be no order as to costs.
" This appeal has been brought up by the Commissioner of Income tax against this answer returned by the High Court on certificate under section 66A(2) of the Act.
It appears from the judgment delivered by the High Court that when the reference came up before it, an argument was raised on behalf of the Commissioner of Income tax that the Tribunal had recorded a finding of fact that the firm seeking registration, consisting of the Kamla Town Trust and Jhabbarmal Saraf, was not a genuine firm and that this should be the answer returned by the 788 High Court to the Tribunal.
It was in view of this point raised before the High Court that the High Court considered it necessary to remand the case twice to the Tribunal to ask for supplementary .statements of the case under section 66(4) of the Act.
At the final hearing, however, the High Court held that it could not be accepted that the Tribunal had, as a question of fact, recorded the finding that this firm seeking registration was not genuine and had never come into existence, and, thereupon, proceeded to deal with the question referred as a question of law so as to determine whether the firm had come into existence as a legally valid firm.
In this appeal before us, again, it was urged by Mr. section T. Desai on behalf of the Commissioner that the High Court was wrong in holding that it was not bound to return the answer to the Tribunal that the partnership seeking registration was not genuine in fact.
In our opinion, the question sought to be raised on behalf of the Commissioner should not have been allowed to be raised by the High Court even at the earliest stage, and that it was the error .committed by the High Court in entertaining this question that has resulted in unnecessary proceedings and consequent delay.
When the case first came up before the High Court, the question that was referred in the statement of the case was, as we have mentioned above, whether the partnership legally came into existence and, as such, should be registered.
The existence of a firm could be challenged on two alternative grounds.
One was that, in fact, on the evidence, it could not be held that such a firm had at all been constituted and had come into existence.
The other was that even though it purported to come into existence as a fact, it could not claim to be a valid partnership because of some legal defect, or, in other words, whether its existence was valid in law.
On the face of it, the question that was referred to the High Court for opinion was the second question and not the first one.
The first question, in fact, could not have been referred to the High Court at all for opinion, because that would be a pure question of fact on which the decision of the Tribunal would be final and no reference to the High Court would lie under section 66.
A reference to the High Court lies only on a question of law.
The High Court, when requested to answer the question referred in the first statement of the case, should, therefore, have confined itself to the legal aspect of the existence of the partnership and should not have entered at all into the question whether the partnership had come into existence in fact or not.
The Tribunal which had passed the appellate order in these proceedings consisted of two Members, and the first statement of the case was submitted by those very Members.
It is clear that they themselves, when making the reference to the High Court, were of the view that they had not anywhere recorded a finding that the firm had not come into existence in fact, because, if they had come ,to such a finding, no question of law could possibly have been 789 referred by them to the High Court.
The existence in law of a firm, which does not exist in fact, could not possibly be found by the High Court on the question referred.
Consequently, we must reject the submission made on behalf of the Commissioner that, in this case, the High Court should have gone into the question of existence of the respondent firm as a question of fact; and in this appeal also, we must proceed on the basis that the respondent firm did in fact come into existence, and that all that the High Court was called upon to decide was whether it also came into existence It appears to us that, in this case, the submissions that were made on behalf of the Commissioner before the High Court and which have been made before us have ignored the effect of the important relevant documents and have unnecessarily placed too much reliance on the Deed of Relinquishment.
The Tribunal found that a Kamla Town Trust had been constituted of which the three Singhania Brothers were the Trustees.
The Tribunal also found that a deed of partnership was executed so as to constitute the firm Juggilal Kamalapat, consisting of two partners, the Kamala Town Trust, represented by the three trustees, and Jhabbarmal Saraf.
Their shares in the profits and losses were also specified in the deed of partnership.
There was the further finding by the Income Tax Officer that the Kamla Town Trust, which entered into the partnership, actually introduced a sum of Rs. 50,000/ as its capital ill this partnership firm.
On these facts by themselves, it should have been held that a valid partnership had come into existence.
So far as the deed of relinquishment is concerned, learned counsel appearing on behalf of the Commissioner has not been able to show to us any provision of law, or any decision of a Court laying down that a deed of relinquishment executed by partners of a firm in respect of their share and interest in a firm required registration, in case the firm owned immovable properties.
In this connection, learned counsel for the respondent firm brought to our notice a recent decision of this Court in Addanki Narayanappa and Another vs Bhaskara Krishnappa (dead) and thereafter his heirs, and Others(1) where the question that came up for consideration was whether the interest of a partner in partnership assets comprising of movable as well as immovable property should be treated as movable or immovable property for the purposes of section 17(1) of the .
The Court upheld the view of the Full Bench of the Andhra Pradesh High Court in Addanki Narayanappa & Anr.
vs Bhaskara Krishtappa & Ors.
() Mudholkar, J., speaking for this Court held: "It seems to us that looking to the scheme of the Indian Act, no other view can reasonably be taken.
The whole concept of partnership is to embark upon a (1) ; (2) I.L.R. 1959 A.P.p.
387 790 joint venture and for that purpose to bring in as capital money or even property including immovable property.
Once that is done, whatever is brought in would cease to be the exclusive property of the person who brought it in.
It would be the trading asset of the partnership in which all the partners would have interest in proportion to their share in the joint venture of the business of partnership.
The person who brought it in would, therefore, not be able to claim or exercise any exclusive right over any property which he has brought in, much less over any other partnership property.
He would not be able to exercise his right even to the extent of his share in the business of the partnership.
As already stated, his right during the subsistence of the partnership is to get his share of profits from time to time as may be agreed upon among the partners and after the dissolution of the partnership or with his retirement from partnership of the value of his share in the net partnership assets as on the date of dissolution or retirement after a deduction of liabilities ,ties and prior charges.
" On this basis, the ultimate decision was that a deed, evidencing the transfer of an interest of a partner in partnership assets, does not require registration even though the partnership assets are comprised of movable as well as immovable property.
A Full Bench of the Lahore High Court in Ajudhia Pershad Ram Pershad vs Sham Sunder and Others( ') held that the interest in a partnership of a partner is to be regarded as movable property when it is sought to be dealt with under 0 .
21 r. 49, Civil Procedure Code, notwithstanding that at the time when it is charged or sold, the partnership assets include immovable property.
The Deed of Relinquishment, in this case, was in respect of the individual interest of the three Singhania Brothers in the assets of the partnership firm in favour of the Kamla Town Trust, and consequently, did not require registration, even though the assets of the partnership firm included immovable property, and was valid without registration.
As a result of this deed, all the assets of the partnership vested in the new partners of the firm.
In the alternative, we think that, even if it had been accepted that this deed of relinquishment required registration, that would not lead to the conclusion that the partnership seeking registration was not valid and had not come into existence in law.
The deed of relinquishment could, at best, be held to be invalid in so far as it affected the immovable properties included in the assets of the firm; but to the extent that it purported to transfer movable assets of the firm, the document would remain valid.
The deed could clearly be divided into two separate parts, one relating to immovable properties, and the other to movable assets; and the part of the deed dealing with movable assets could not be held invalid for want (1) I.L.R 28 Lab.
791 of registration.
A deed of relinquishment is in the nature of a deed of gift, where the various properties dealt with are always separable, and the invalidity of the deed of gift in respect of one item cannot affect its validity in respect of another.
This view was expressed by the Madras High Court in Perumal Ammal vs Perumal Naicker & Anr.(1) A deed of relinquishment, or a deed of gift, differs from a deed of partition in which it is not possible to hold that the partition is valid in respect of some properties and not in respect of others, because rights of persons being partitioned are adjusted with reference to the properties subject to partition as a whole.
In the case before us, therefore, the deed of relinquishment was valid at least in respect of movable properties, and the partnership seeking registration, thus, became owner of all the movable assets of the,partnership in addition to having contributed a sum of Rs. 50,0001 as capital investment in it.
The Kamla Town Trust and Jhabbarmal Saraf constituted the partnership under a deed of partnership, which was properly executed, and in these circumstances, the partnership that came into existence was clearly valid in law.
There is, therefore, no force in this appeal and it is dismissed with costs.
V.P.S. Appeal dismissed.
(1) I.L.R 44 Mad.
| The Food Inspectorof the appellant Municipality took a sample of curd from the respondent 's shop for the purpose of testing whether there was any adulteration.
The sample was divided into three equal parts, put in separate bottles and sealed.
One bottle was handed over to the respondent and one was sent to the Public Analyst who analysed it and sent his report.
On the basis of that report a complaint was filed, seven months after receipt of the report, against the respondent, for an offence under sections 7 and 16 of the .
During the trail, the respondent applied to have the sample given to him analysed by the Director of the Central Food Laboratory in accordance with section 13(2) of the Act.
The Director reported that the sample had become highly decomposed and could not be analysed.
The trial Court acquitted the respondent accepting his contention that he could not be convicted after having been denied his right of obtaining the Director 's certificate by the delay in launching the prosecution.
On the question whether he should have been convicted on the basis of the Public Analyst 's report.
HELD : A right is conferred by section 13 (2) on the accused vendor to have the sample, given to him by the Food Inspector, analysed by the Director after the prosecution was launched against him.
It is a valuable right, because, he could for his proper defence, have that sample analysed by a more competent expert, whose certificate supersedes the report of the Public Analyst under section 13(3), and is to be accepted by the Court as conclusive evidence of its contents under the proviso to section 13(5).
However, if for any reason, no certificate is issued by the Director, the report of the Public Analyst does not cease to be evidence of the facts contained in it.
But, in a case where there is denial of this right on account of the deliberate conduct of the prosecution, the accused vendor would be seriously prejudiced in his trial, and could not be convicted on 'the report of the Public Analyst, even though that report may be evidence in the case, of the facts stated therein.
In the present case, the prosecution should have anticipated that there would be some delay, in the analysis by the Public Analyst and in the sending of his report, and consequently, the elementary precaution of adding a preservative to the sample given to the respondent should have been taken by the Food Inspector.
If such a precaution had been taken, the sample given to the respondent would have been available for analysis by the Director, for a period of 'four months; and the prosecution could have been launched, after receiving the Public Analyst 's report, well within time to enable the respondent to exercise his right under section 13(2).
The respondent was therefore denied a valuable right in defending himself, due to the inordinate delay in launching the prosecution, ad was prejudiced in his defence.
[119 H; 120 A B, F H; 121 A] 117
|
ivil Appeal No. 4053 of 1985.
From the Judgment and Order dated 25.1.1985 of the Madhya Pradesh High Court in Civil Revision No. 378 of 1984.
U.R. Lalit, S.S. Khanduja, Y.P. Dhingra and Mrs. Madhu Kapoor for the Appellants.
T.C. Sharma and S.K. Gambhir for the Respondents.
The Judgment of the Court was delivered by DUTT, J.
This appeal by special leave is directed against the judgment of the Madhya Pradesh High Court, whereby the High Court affirmed the order of the District Judge, Bhopal, dismissing the counter claim by the appel lants on the ground that it was barred by section 14 of the , hereinafter referred to as 'the Act '.
The High Court also held that the counter claim was not maintainable under sub rule (1) of Rule 6A of Order VIII of the Code of Civil Procedure, as the same was filed by the appellants after the filing of the written statement.
The predecessor in interest of the appellants, namely, Babulal, purchased a house in Bhopal in the year 1947 from the sons of one Mannulal.
The appellants and the respondents Nos.
6 to 8 are the sons of the other three brothers of Mannulal.
In the year 1976, the respondents Nos. 2 to 5, who were the heirs and legal representatives of the said Babu lal, started reconstructing or renovating the house and for that purpose they commenced digging the plinth.
In the course of digging, a treasure consisting of gold and silver ornaments and also Government currency notes amounting to Rs.2,900 was found.
The respondents Nos. 2 to 5 intimated the discovery of the treasure to the Collector of the Dis trict, who issued a notification under section 5 of 159 the Act requiting all persons claiming the treasure,.
or any part thereof, to appear personally or by agent before him on the day and place mentioned in the notification.
Pursuant to the said notification, the respondents Nos. 2 to 5, and the appellants and the respondents Nos. 6 to 8 filed claims before the Collector.
It has been held by the Collector that the respondents Nos. 2 to 5, the finders of the treasure, are the owners of the house from where the treasure was found during excavation undertaken by them with a view to starting reconstruction, and he permitted them under section 8 of the Act to institute a suit in the Civil Court to establish their right before February 22, 1979.
The respondents Nos. 2 to 5 instituted a suit being Civil Suit No.1 A of 1979, in the Court of the District Judge, Bhopal, for a declaration of their title to the treasure found by them.
The respondents Nos. 2 to 5 did not, however, make the other claimants before the Collector including the appellants, parties to the suit.
The appel lants and the respondents Nos.
6 to 8 made an application for their addition as parties to the suit under the provi sion of Order I, Rule 10 of the Code of Civil Procedure.
The learned District Judge allowed the said application and, accordingly, they were made defendants in the suit.
Thereafter, the appellants and the respondents Nos. 6 to 8 filed their written statement, inter alia, denying the claim of the respondents Nos. 2 to 5 to the treasure.
They claimed title to the treasure.
After the filing of the written statement, the appel lants filed a counter claim claiming title to the treasure.
It is not necessary for us to state the basis of the claims of the parties to the treasure.
The respondents Nos. 2 to 5 filed an application praying that the counter claim should be dismissed contending that it was barred by limitation as prescribed under section 14 of the Act and that it was also not maintainable under Order VIII, Rule 6A(1) of the Code of Civil Procedure.
The learned District Judge came to the finding that the counter claim was barred by section 14 of the Act and, in that view of the matter, dismissed the counter claim.
Being aggrieved by the said order of the learned District Judge, the appellants and the said respond ents Nos. 6 to 8 moved the High Court in revision against the same.
The High Court upheld the order of the learned District Judge that the counterclaim was barred by limita tion as prescribed by section 14 of the Act.
The High Court further held that the counter claim having been filed after the filing of the written statement, it was not maintainable under Order VIII, Rule 6A(1) of the Code of Civil Procedure.
Hence this appeal by special leave.
160 At this stage, it is necessary to refer to some of the provisions of the Act.
Section 4 of the Act provides, inter alia, for the giving of notice by the finder of treasure to the Collector containing the details of the treasure.
The treasure may be deposited in the nearest Government Treasury or the finder may give the Collector such security as the Collector thinks fit to produce the treasure at such time and place, as he may, from time to time, require.
Under section 5, the Collector shall, after making such enquiry, if any, as he thinks fit, issue a notification requiting the claimants to the treasure to appear before him on a day and at a place mentioned in the notification, such day not being earlier than four days or later than six months, after the date of the publication of such notification.
Section 6 provides that any person having claimed any fight to such treasure or any part thereof, as owner of the place in which it was found or otherwise, and not appearing as required by the notification issued under section 5, shall forfeit such right.
Sections 7, 8, 9, 13 and 14 which are relevant for our purpose are extracted below: "section 7 On the day notified under section 5, the Collector shall cause the treasure to be produced before him, and shall enquire as to and determine (a) the person by whom, the place in which, and the circumstances under which, such treasure was found; and (b) as far as is possible, the person by whom, and the circumstances under which, such treasure was hidden.
If, upon an enquiry made under section 7, the Collector sees reason to believe that the treasure was hidden within one hundred years before the date of the finding, by a person appearing as required by the said notification and claiming such treasure, or by some other person under whom such person claims, the Collector shall make an order adjourning the hearing of the case for such period as he deems sufficient, to allow of a suit being instituted in the Civil Court by the claimant, to establish his right.
If upon such enquiry the Collector sees no reason to believe that the treasure was so hidden; or If, where a period is fixed under section 8, no suit is 161 instituted as aforesaid within such period to the knowledge of the Collector; or if such suit is instituted within such period, and the plaintiff 's claim is finally rejected; the Collector may declare the treasure to be ownerless.
Any person aggrieved by a declaration made under this section may appeal against the same within two months from the date thereof to the Chief Controlling Revenueauthority.
Subject to such appeal, every such declaration shall be final and conclusive." "section 13.
When a declaration has been made as aforesaid in respect of any treasure, and two or more persons have appeared as aforesaid and each of them claimed as owner of the place where such treasure was found, or the right of any person who has so appeared and claimed is disputed by the finder of such treasure, the Collector shall retain such treasure and shall make an order staying his proceedings with a view to the matter being enquired into and determined by a Civil Court.
section 14.
Any person who has so appeared and claimed may, within one month from the date of such order, institute a suit in the Civil Court to obtain a decree declaring his right and in every such suit the finder of the treasure and all persons disputing such claim before the Collector shall be made defendants.
" Under the scheme of the Act, two kinds of suits can be filed at two stages, namely, one under section 8 and the other under section 14 of the Act.
Section 8 provides that if the Collector has reason to believe that the treasure 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.
So under section 8, the suit has to be filed by the claimant within the period for which the hearing 162 of the case is adjourned for the establishment of his right to the treasure.
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 adjourned by the Collector or if the plaintiffs claim is rejected.
An appeal lies against a declaration by the Collector to the Chief Controlling Revenue Authority and subject to the appeal, such declaration shall be final and conclusive.
If, however, no such contingencies as mentioned in section 9 take place, the Collector will have no juris diction to make a declaration that the treasure is owner less.
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 claim ing the ownership of the place where such treasure was found or the finder of the treasure disputes the fight of any person who has so appeared 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.
It may be noticed here that the claim made under section 13 by the rival claimants relate to the ownership of the place and not to the ownership of the treasure for, it has been already noticed that the declaration by the Collector under section 9 that the treasure is ownerless shall, subject to the appeal to the Chief Controlling Revenue Authority, be final and conclusive.
The object of an enquiry as to the ownership of the place by the Civil Court is necessary is as much as section 10 of the Act provides inter alia 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 found.
Thus it is manifestly clear that if no declaration is made under section 9, there is no question of filing a suit under section 14 of the Act.
While a suit under section 8 relates to the establishment of the right of the claimant to the treasure, a suit under section 14 relates to the estab lishment of the ownership of the place where the treasure was found for the purpose of division of the treasure be tween the finder and the owner of the place.
Section 14 lays down that such a suit has to be filed within one 163 month from the date of such order to obtain a decree declar ing his right.
It is manifestly clear from section 14 that the suit referred to therein is a suit to be filed by a person for the establishment of his right after the Collector had declared 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, in our view, refer to the order passed by the Collector under section 13.
Further, the placement of section 14 after section 13 of the Act points only to the filing of the suit by a person after the Collec tor had made an order staying the proceedings under section 13.
The suit contemplated by section 8 of the Act has to be filed by the claimant within the period for which the hear ing of the case is adjourned.
Such period for which the hearing under section 8 is adjourned by the Collector, may be more than a month.
It is absurd to think that although section 8 provides that the suit has to be filed within the period for which the hearing is adjourned, yet it has to be filed within one month under section 14.
Section 8 and sections 13 and 14 contemplate two different situations.
While under section 8 the suit has to be filed within the period during which the hearing stands adourned, the suit under section 14 has to be filed within one month of the order of the Collector under section 13 of the Act.
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 inten tion of the Legislature as indicated in the provisions.
Another aspect in this regard may be considered.
It may be argued that as the Collector had not allowed the appel lants and the respondents Nos. 6 to 8 to file a counter claim or a suit, the suit was not maintainable.
In our opinion, the question of filing a counter claim arises after a suit is filed by the claimant under section 8.
It may be that there is no substantial difference between a counter claim and a suit, but nonetheless a defendant cannot be prevented from filing a counter claim under the Code of Civil Procedure.
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 stands 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 for the establishment of the right to ownership of the place where the treasure was found by the respondents Nos. 2 to 5.
Thus 164 section 14 has no manner of application to a suit filed under section 8 of the Act.
The next point that remains to be considered is whether Rule 6A(1) of Order VIII of the Code of Civil Procedure bars the filing of a counter claim after the filing of a written statement.
This point need not detain us long, for Rule 6A(1) does not, on the face of it, bar the filing of a counter claim by the defendant after he had filed the writ ten 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 counterclaim is in the nature of a claim for damages or not.
The High Court, in our opinion, has misread and misunderstood the provision of Rule 6A(1) in holding that as the appellants had filed the coun ter claim after the filing, of the written statement, the counter claim was not maintainable.
The finding of the High Court does not get any support from Rule 6A(1) of the Code of Civil Procedure.
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.
Under Article 113 of the , the period of 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.
It is not disputed that a counter claim, which is treated as a suit under section 3(2)(b) of the has been filed by the appellants within three years from the date of accrual to them of the fight to sue.
The learned District Judge and the High Court were wrong in dismissing the coun ter claim.
For the reasons aforesaid, the appeal is allowed.
The order of the learned District Judge and the judgment of the High Court are set aside.
The learned District Judge is directed to proceed with the hearing of the suit and the counter claim in accordance with law.
The appellants shall pay court fee on the counter claim, if not already paid, within such time as may be fixed by the learned District Judge.
A.P.J. Appeal allowed.
| Consequent to an agreement between the Executive Commit tee of the Central Board of the appellant Bank and its Officers ' Federation, in pursuance of the Pillai Committee Report, the Grade I and Grade II Officers discharging mana gerial and supervisory functions, were merged into the new Junior Management Grade.
It was agreed that Officers, of Grade II would be junior to the existing officers of Grade I and the seniority list would be prepared accordingly.
There after, in exercise of powers conferred by sub section
(1) of section 43 of the the State Bank of India Officers ' (Determination of Terms and Conditions of Service) Order, 1979 was made and brought into force with effect from October 1, 1979.
Paragraph 2(1) of that Order provided that it shah apply to the existing officers of the Bank and to such employees of the Bank to whom it may be made applicable.
Under paragraph 3(h) the expression "exist ing officers" was defined to mean officers in the service of the Bank immediately prior in the appointed date, i.e., October 1, 1979.
Paragraph 7 provided for the placement of existing officers on the appointed date in the corresponding new grades and scales.
Paragraph 8(1) provided for fitment of existing officers in the new grades, and scales of pay in accordance with paragraph 7, at a stage corresponding to the existing grade and scale.
Under paragraph 18(5) the seniori ty among the existing officers was to 116 remain the same, i.e., the Officers Grade I were to rank senior to Officers Grade II.
Certain Probationary/Trainee Officers, who were appoint ed by the Bank in Grade I on October 30/31, 1979 before the Order was made on December 19, 1979 flied writ petitions before the Allahabad High Court and some others before the Delhi High Court claiming seniority over the erstwhile Grade II Officers, in which it was contended for the Bank that since the petitioners were not the employees of the Bank on October 1, 1979, i.e., the appointed date, they could not be given seniority over the erstwhile Grade II Officers, who were the 'existing officers ' within the mean ing of the expression under paragraph 3(h) of the Order.
The Allahabad High Court took the view that the expres sion 'existing officers ' has to be read as including the Probationary Officers and Trainee Officers, otherwise a repugnancy between the definition of 'existing officers ' and the provisions of paragraph 7 and 8 of the Order will arise, that the notional date of the coming into force of the Order, viz., October 1, 1979 is only to protect the emolu ments of the officers and nothing else, and directed the Bank to prepare the seniority list of its officers accord ingly.
The Delhi High Court, however, took a contrary view and dismissed the writ petitions.
In these appeals by the Bank against the decision of the Allahabad High Court and Special Leave Petition by the Probationary/Trainee Officers against the decision of the Delhi High Court, it was submitted for the Probationary/Trainee Officers in support of their contention that they should be considered as 'existing officers ' within the meaning of paragraph 3(h) of the Order, that the Bank itself had treated them as 'existing officers ' by fitting them to the Junior Management Grade and giving them a higher start of Rs.960 p.m., that such fitment had been made by the Bank following the principles laid down in paragraphs 7 and 8 of the Order, that unless the expression 'existing offi cers ' is read as including 'Probationary/Trainee Officers ', three will be a repugnancy between the definition of 'exist ing officers ', as contained in paragraph 3(h) and the provi sions of the paragraphs 7 and 8 of the Order, that the definition of 'existing officers ' is only illustrative and not exhaustive, that the merger of officers of Grade II and Grade I into the Junior Management Grade was only for the purpose of fitment in the higher scale of pay and not for the purpose of seniority, that they have to undergo tests which were more stringent than the tests to be undergone by Grade II Officers and as such Probationary/Trainee 117 Officers, could not be placed under Officers Grade II in the seniority list, and that the Bank had no authority to give retrospective operation to the Order with effect from Octo ber 1, 1979 inasmuch as section 43 of the Act under which the Order has been passed, did not authorise the Bank to pass any such Order with retrospective effect.
For the Bank it was contended that the order had not been made retrospective, that all that has been done was that the Officers Grade I and Grade II, who were in the employment of the Bank immediately before October 1, 1979 have been merged into one category, namely, Junior Manage ment Grade, in terms of the recommendations of the Pillai Committee, that these Officers were already employees of the Bank before October 1, 1979 and as such they were 'existing officers ' within the meaning of paragraph 3(h) of the Order, that the Probationary/Trainee Officers, who were appointed on 30th/31st October, 1979 had no locus standi to challenge the Order or the merger of Officers Grade I and Grade II and that as no order has been passed under paragraph 2(1) of the Order applying the same to the Probationary/ Trainee Offi cers, they were outside the purview of the Junior Management Grade and, as such, were precluded from challenging the seniority of the erstwhile Officers of Grade II.
Allowing the appeals and dismissing the special leave petition, this Court.
HELD: 1.
The expression 'existing officers ' as defined in paragraph 3(h) of the State Bank of India Officers ' (Determination of Terms and Conditions of Service) Order, 1979 means officers in the service of the Bank immediately prior to the appointed date, i.e., October 1, 1979.
The Probationary/Trainee Officers who were appointed by the Bank on 30/31st October, 1979 after the appointed date could not, therefore, be held to be 'existing officers ' within the meaning of paragraph 3(h) of the Order.
[128B; F] 2.
It is incorrect to say that when an employee is fitted to a particular scale of pay of another cadre, he does not become a member of that cadre.
In the instant case, the Probationary/Trainee Officers were placed in the corre sponding scales of pay in the Junior Management Grade for the purpose of fitment in the new scales of pay.
It may be that such fitment has been made by the Bank following the principles as laid down in paragraphs 7 and 8 of the Order presumably with a view to removing any disparity between Officers Grade I and Officers Grade II in the Junior Manage ment Grade, but it cannot be said that they were treated as existing officers and such fitment was made under 118 paragraphs 7 and 8 of the Order.
The Probationary/Trainee Officers were not in the service of the Bank immediately prior to the appointed date.
As such the Bank could not treat them as existing officers for the purpose of fitment or giving a higher scale of pay.
[128D F; B] 3.1 Repugnancy of the definition of any term my arise only if such definition does not agree with the subject or context of a particular provision.
But any action not in conformity with the provision of the definition clause will not render the definition of a term repugnant to the subject or context of any provision of the statute containing that term.
[129BC] 3.2 In the instant case, there is no ambiguity in the definition of 'existing officers ', as given in paragraph 3(h) of the Order, nor is it in any way repugnant to the subject or context of paragraphs 7 and 8.
If the Probation ary/Trainee Officers are treated as 'existing officers ' it would be doing violence to the provision of paragraph 3(h).
[129B; A] 4.
The definition of 'existing officers ' in paragraph 3(h) does not give any illustration whatsoever.
On the contrary, it is quite specific and points to only one class of officers who were in the service of the Bank immediately prior to the appointed date and to whom any of the rules, as mentioned in that paragraph were applicable.
[129D] 5.
All the officers of the Bank at the lower level before the Probationary or Trainee Officers were appointed on 30/31 October, 1979 had agreed that they would merge into a new grade, and Officers Grade I would be senior to the Officers Grade ii.
When two grades of officers are merged into a new grade, the question of inter se seniority automatically arises and casts a duty on the employer to fix the seniori ty.
Paragraph 18(5) of the Order lays down that the seniori ty among the existing officers will remain the same, that b, the Officers Grade I will remain senior to Officers Grade II.
Therefore, it cannot be said that the merger was only for the purpose of fitment in the higher scale and not for purposes of seniority.
[130B D; 129F] 6.
The question is not whether the Probationary/Trainee Officers have to undergo more stringent tests than the tests to be undergone by Grade H Officers, but whether the Probationary/Trainee Officers were existing officers or not, that is to say, whether they were in the employment of the Bank immediately prior to October 1, 1979.
As they were not existing officers, they could not claim seniority over the Officers of Grade II.
[130FG] 119 7.1 Unless the statute, under which the rules are framed by the rule making authority, does not specifically autho rise the making of rules with retrospective effect, such authority cannot frame any role with retrospective effect.
[130H 131A] Cannanore Spinning and Weaving Mills Ltd. vs Collector of Customs and Central Excise, Cochin, & Ors.
, ; ; Income Tax Officer, Alleppey vs M.C. Ponnoose & Ors., ; ; Hukam Chand etc.
vs Union of India & Ors.
, ; and Regional Transport Officer, Chittoor, & Ors.
vs Associated Transport Madras (P) Ltd. & Ors., ; , referred to.
7.2 In the instant case, it cannot be said that the Order was retrospective in operation.
All that has been done by it is that the Officers Grade I and Grade II in the em ployment of the Bank immediately prior to October 1, 1979 have been merged into one category, namely, Junior Manage ment Grade.
Although the Order was actually published on December 19, 1979, the Officers of the Bank who were there on or before October, 1, 1979 were aware of the fact that the Order would be given effect to from October 1, 1979 as agreed to between the Bank and the Officers ' Federation.
The appointed date is relevant for the purpose of applicability of the Order to the Officers who have been there in the service of the Bank immediately prior to the appointed date.
[131E; C; 132G 133A] V.T. Khanzode & Ors.
vs Reserve Bank of India & Anr., and Reserve Bank of India vs C.N. Sahasra naman, [1986] Suppl.
SCC 143, referred to.
The distinction in the status of Officers Grade I and Grade II having been abolished in the instant case, it is apparent that the Probationary/Trainee Officers being Offi cers of Grade I were of the same status and position as the Officers of Grade II.
Admittedly, the erstwhile Officers of Grade H were appointed much earlier than the Probationary/Trainee Officers.
They cannot, therefore, be considered senior to the erstwhile Officers Grade II.
[134G 135AB] 9.
The Probationary/Trainee Officers have not been brought within the purview of the new cadre, viz., the Junior Management Grade since no order has been passed under paragraph 2(1) of the Order applying the same to them.
As they are not in the Junior Management Grade, which is a completely different cadre, they have no locus standi to challenge any benefit conferred on the Officers of the 120 Junior Management Grade comprising erstwhile Officers Grade I and Officers Grade II as were in the employment of the Bank prior to October 1, 1979.
[134F; CD; 135C]
|
Appeal No. 1172 of 1965.
Appeal from the judgment and order dated December 17, 1963 of the Patna High Court in Misc.
Judicial Case No. 566 of 1960.
R. H. Dhebar for R. N. Sachthey, for the appellant.
section P. Varma, for the respondent.
The Judgment of the Court was delivered by Mitter, J.
, This is an appeal from a judgment and answer of the High Court of Judicature, Patna, on a certificate granted by it under section 66 A(2) of the Income tax Act of 1922 corresponding to section 261 'of the Income tax Act of 1961.
The Tribunal referred two questions of law to the High Court under section 66(1) "I.
Whether on the facts and circumstances of the case, could assessment be made upon the Manager of Court of Wards, Bettiah Estate, in respect of the income from the Bettiah Estate ? 2.
If the assessment could be made on the Manager of the Court of Wards in respect of the income from the 749 Bettiah Estate, was it chargeable to tax at maximum rates under section 41(1) of the I ncome tax Act?" The facts of the case are as follows : Maharani Janki Kuer who was the last holder of the Bettiah Estate in Bihar died on November 27, 1954.
For many years past before her death, the estate was under the management of the Court of Wards and continued under such management even after her death as it was not known whether she had left any heirs.
Under section 13 of the Bengal Court of Wards Act (IX of 1879) "Whenever, on the death of any ward, the succession to his property or any part thereof is in dispute, the Court may either direct that such property or part thereof be made over to any person claiming such property, or may retain charge of the same until the right to possession of the claimant has been determined under Bengal Act VII of 1876, or until the dispute has been determined by a competent Civil Court.
" "Court ' here means the Court of Wards.
One Suresh Nandan Sinha filed a suit claiming the estate on the allegation that he was the nearest heir of the deceased Maharani.
After the death of the Maharani, the Income tax Officer made an assessment on the Manager of the Court of Wards as representing the estate of Bettiah, the assessment relating to the assessment year 1956 57 the accounting year being the financial year 1955 56.
The Government of Bihar claimed that the estate had vested in the State Government by escheat and the Manager, Court of Wards put forward that claim before the Income tax authorities.
There was a further contention raised by the Manager that even if the assessment was made on him representing the estate, the income should not be taxed at a maximum rate under section 41 (1) of the Income tax Act, 1922.
As the litigation was pending, the Income tax Officer and the Appellate Assistant Commissioner both held that it could not be said of the estate that the same had vested in the State by escheat and they also held that the income was taxable at the maximum rate.
The same plea was raised before the Appellate Tribunal and the Tribunal observed that as no notification had been issued by the Government on the death of the Maharani or later to the effect that the estate had vested in the State of Bihar by escheat, there was no certainty as to who would be found to be the ultimate heir in view of the pending litigation.
The High Court on the case stated, referred to articles 289 and 296 of the Constitution and taking note of the contentions urged on behalf of the parties observed : "In the circumstances of the present case, it is manifest that the Income tax authorities cannot validly impose a tax upon the Manager, Court of Wards, 750 Bettiah Estate, merely because a title suit has been filed with regard to the heirship of the Bettiah Estate without deciding the question as to whether the claim of the State of Bihar that the property has vested in it by escheat is established or not." On this view, the first question was answered in favour of the assessee and no answer was given to the second question because it was academic.
It was asserted on behalf of the respondent and not denied by the appellant that the suit of Suresh Nandan Singh had been dismissed, but an appeal had been preferred therefrom and was pending.
On the facts as the same appear to us at present, it is not possible to hold that the estate of Bettiah has escheated to the State of Bihar.
It is obvious that in case of such escheat there can be no assessment to income tax.
The position will be clarified after the appeal by Suresh Nandan Sinha is disposed of.
In this view of the matter, the judgment of the Patna High Court is set aside.
The proceedings should be finalised after the disposal of the litigation and the High Court may call for a supplementary statement of case, if it thinks necessary.
The question as to whether the estate has escheated to the State of Bihar is left open, and the costs of this appeal will abide by the ultimate decision of the High Court.
In case it be found that the escheat had taken place, the appellant before us will have to pay the costs of this appeal and if there is no escheat, the Commissioner will have the costs of this appeal.
| The assessee mill claimed deduction under section 10(2) (xv) of the Indian Income tax Act of the expenses incurred by it and the costs awarded to Government in respect of unsuccessful writ petition and appeals therefrom.
The deduction was disallowed by the departmental authorities, and the question was answered against the assessee by the High Court.
In appeals to this Court.
HELD: The appeal must be allowed.
The proceeding started by the assessee was in relation to the business of the assessee.
Expenditure incurred to resist in a civil proceeding the enforcement of a measure legislative or executive, which imposes restrictions on the carrying on of a business or to obtain a declaration that the measure is invalid would. if other conditions are satisfied, be admissible under section 10(2) (xv) as a permissible deduction in the computation of taxable income, even though the expenditure does not directly relate to the earning of income.
Expenditure may not be denied admission as a permissible deduction in computing the taxable income merely because the proceeding has failed.
Persistence of the assessee in launching the proceeding and carrying it from Court to Court and incurring expenditure for that purpose again cannot be a ground for disallowing the claim.
(396 B C; 399 B) Commissioner of Income tax, West Bengal vs H. Hirjee 23 I.T.R 427, Morgan (Inspector of Taxes) vs Tate & Lyle Ltd. : and Commissioner of Income tax, Kerala vs Malayalam Plantations Ltd., (196 HI 7 S.C.R. 693, referred to.
|
etition (C) No. 381 of 1998.
8 (Under Article 32 of the Constitution of India).
S.K. Sinha for the Petitioner.
D. Goburdhan, Ms. A. Subhashini, K.K. Lahiri, Ms. Lira Goswami and D.N. Misra for the Respondents.
The Judgement of the Court was delivered by SINGH,J. We heard the arguments in detail on 13.12.
1990 and dismissed the petition with costs amounting to Rs. 5,000 with the direction that the reasons shall be delivered later on.
We are, accordingly, delivering our reasons.
This petition is under Article 32 of the Constitution by Subhash Kumar for the issue of a writ or direction directing the director of Collieries, West Bokaro Collieries at Ghatotand, District Hazaribagh in the State of Bihar and the Tata from & Steel Co. Ltd. to stop forthwith discharge of slurry/sludge from its washeries at Ghatotand in the District of Hazaribagh into Bokaro river.
This petition is by way of public interest litigation for preventing the pollution of the Bokaro river water from the sludge/slurry discharged form the washeries of the Tata Iron & Steel Co. Ltd. The petitioner has alleged that the Parliament has enacted the (hereinafter referred to as `the Act ') providing for the prevention and control of water pollution and the maintaining or restoring of wholesomeness of water, for the establishment of Board for the prevention and control of water pollution.
Under the provisions of the Act the State Pollution Control Board constituted to carry out functions prescribed under Section 17 of the Act which among other things provide that the Board shall inspect sewage or trade effluents and plants for the treatment of sewage and trade effluents and to review plans, specifications or other data set up for the treatment of water and to lay down standards to be complied with by the persons while causing discharge of sewage or sullage.
Section 24 of the Act provides that no person shall knowingly cause or permit any poisonous, noxious or polluting matter to enter into any stream or well, which may lead to a substantial aggravation of pollution.
The petitioner has asserted that Tata Iron and Steel Co respondent No.5 carries on mining operation in coal mines/washeries in the town of Jamshedpur.
These coal mines and collieries are known as West Bokaro Collieries and the Collieries have two coal washeries where the coal after its extraction from the mines is brought and broken into graded pieces and there 9 after it is processed for the purpose of reducing its ash contents.
A chemical process is carried out which is known as `froth floatation process '.
Under this process the graded coal is mixed with diesel oil, pine oil and many other chemical ingredients and thereafter it is washed with the lacs of gallons of water.
The end water is washed coal with reduced quantity of ash content fit for high graded metallurgical process for the purposes of manufacture of steel.
In the process of washing large quantity of water is discharged through pipes which carry the discharged water to storage ponds constructed for the purpose of retaining the slurry.
Along with the discharged water, small particles of coal are carried away to the pond where the coal particles settle down on the surface of the pond, and the same is collected after the pond is de watered.
The coal particles which are carried away by the water is called the slurry which is ash free, it contains fine quality of coal which is used as fuel.
The petitioner has alleged that the surplus waste in the form of sludge/slurry is discharged as an effluent from the washeries into the Bokaro river which gets deposited in the bed of the river and it also gets settled on land including the petitioner 's land bearing Plot No.170.
He was further alleged that the sludge or slurry which gets deposited on the agricultural land, is absorbed by the land leaving on the top a fine carbonaceous product or film on the soil, which adversely affects the fertility of the land.
The petitioner has further alleged that the effluent in the shape of slurry is flown into the Bokaro river which is carried out by the river water to the distant places polluting the river water as a result of which the river water is not fit for drinking purposes nor it is fit for irrigation purposes.
The continuous discharge of slurry in heavy quantity by the Tata Iron & Steel Co. from its washeries posing risks to the health of people living in the surrounding areas and as a result of such discharge the problem of pure drinking water has became acute.
The petitioner has asserted that inspite of several representations, the State of Bihar and State Pollution Control Board have failed to take any action against the Company instead they have permitted the pollution of the river water.
He has further averred that the State of Bihar instead of taking any action against the Company has been granting leases on payment of royalty to various persons for the collection of slurry.
He has, accordingly, claimed relief for issue of direction directing the respondents which include the State of Bihar, the Bihar Pollution Control Board, Union of India and Tata Iron & Steel Co. to take immediate steps prohibiting the pollution of Bokaro river water from the discharge of slurry into the Bokaro river and to take further action under provisions of the Act against the Tata Iron & Steel Co. 10 The respondents have contested the petition and counter affidavits have been filed on behalf of the respondent Nos. 2, 4 and 5 State of Bihar, State Pollution Board, Directors of Collieries and Tata Iron & Steel Co. Ltd. In the counter affidavits filed on behalf of the respondents, the petitioner 's main allegation that the sludge/slurry is being discharged into the river Bokaro causing pollution to the water and the land and that the Bihar State Pollution Board has not taken steps to prevent the same is denied.
In the counter affidavit filed on behalf of the Bihar State Pollution Board it is asserted that the Tata Iron & Steel Co. operates open case and underground mining.
The Company in accordance to Sections 25 and 26 of the Water (Prevention Control of Pollution) Act, 1974 applied for sanction from the Board of discharge their effluent from their outlets.
The Board before granting sanction analysed their effluent which was being watched constantly and monitored to see that the discharges does not affect the water quality of the Bokaro river adversely.
In order to prevent the pollution the Board issued direction to the Director of the Collieries to take effective steps for improving the quality of the effluent going into the Bokaro river.
The State Pollution Board imposed conditions requiring the Company to construct two settling tanks for settlement of solids and rewashing the same.
The Board directed for the regular samples being taken and tested for suspended solids and for the communication of the results of the tests to the Board each month.
The State Board has asserted that the Company has constructed four ponds ensuring more storing capacity of effluent.
The Pollution Board has been monitoring the effluent.
It is further stated that on the receipt of the notice of the instant writ petition the Board carried out an inspection of the settling tanks regarding the treatment of the effluent from the washeries on 20th June, 1988.
On inspection it was found that all the four settling tanks had already been completed and work for further strengthening of the embankment of the tanks was in progress, and there was no discharge of effluent from the washeries into river Bokaro except that there was negligible seepage from the embankment.
It is further stated that the Board considered all the aspects and for further improvement it directed the management of the collieries for removal of the settle slurry from the tanks.
The Board has directed that the washeries shall perform desludging of the settling tanks at regular intervals to achieve the proper required retention time for the separation of solids and to achieve discharge of effluents within the standards prescribed by the Board.
It is further asserted that at present there is no discharge from any of the tanks of the Bokaro river and there is no question of pollution of the river water of affecting the fertility of land.
In their affidavits files on behalf of the respondent 11 Nos. 4 and 5, they have also denied the allegations made in the petition.
They have asserted that the effective steps have been taken to prevent the flow of the water discharge from the washeries into the river Bokaro.
it is stated that infact river Bokaro remains dry during 9 months in a year and the question of pollution of water by discharge of slurry into the river does not arise.
However, the management of the washeries have constructed from different ponds to store the slurry.
The slurry which settles in the pounds is collected for sale.
The slurry contains highly carbonaceous materials and it is considered very valuable for the purpose of fuel as the ash contents are almost nil in the coal particles found in the slurry.
Since, it has high market value, the Company would not like it to go in the river water.
The Company has taken effective steps to ascertain that no slurry escapes from its ponds at the slurry is highly valuable.
The Company has been following the directions issued by the State Pollution Control Board constituted under the 1974 Act.
On the facts as appearing from the pleadings and the specific averments contained in the counter affidavit filed on behalf of the State Pollution Control Board of Bihar, prima facie we do not find any good reason to accept the petitioner 's allegation that the water of the river Bokaro is being polluted by the discharged of sludge or slurry into it from the washeries of the respondent company.
On the other hand we find that the State Pollution Control Board has taken effective steps to check the pollution.
We do not consider it necessary to delve into greater detail as the present petition does not appear to have been filed in public interest instead the petition has been made by the petitioner in his own interest.
On a perusal of the counter affidavit filed on behalf of the respondent Nos. 4 and 5 it appears that the petitioner has been purchasing slurry from the respondent Nos. 4 and 5 for the last several years.
With the passage of time he wanted more and more slurry, but the respondent company refused to accept his request.
The petitioner is an influential businessman, he had obtained a licence for coal trading, he tried to put pressure through various sources on the respondent company for supplying him more quantity of slurry but when the Company refused to succumb to the pressure, he started harassing the Company.
He removed the Company 's slurry in an unauthorised manner for which a Criminal Case No., 173 of 1987 under Sections 379 and 411 of the Indian Penal Code read with Section 7 of the Essential Commodities Act was registered against the petitioner and Pradip Kumar his brother at Police Station Mandu, which is pending before 12 the Sub Judge, Hazaribagh.
One Shri Jugal Kishore Jayaswal also filed a criminal complaint under Section 379 and 411 of the IPC against the petitioner and his brother Pradip Kumar in the Court of Judicial Magistrate, First Class, Hazaribagh, which is also pending before the Court of Judicial Magistrate, 2nd Class Hazaribagh.
The petitioner initiated several proceedings before the High Court of Patna under Article 226 of the constitution for permitting him to collect slurry from the Raiyati land.
These petitions were dismissed on the ground of existence of dispute relating to the title of the land.
The petitioner filed a writ petition C.W.J.C. No. 887 of 199o in the High Court of Patna for taking action against the Deputy Commissioner, Hazaribagh for implementing the Full Bench judgment of the Patna High Court in Kundori Labours Cooperative Society Ltd. & etc.
vs State of Bihar & Ors.
, AIR 1986 Patna 242 wherein it was held that the slurry was neither coal nor mineral instead it was an industrial waste of coal mine, not subject to the provisions of the Mines and Mineral (Regulation and Development) Act, 1957.
Consequently the collection of slurry which escaped from the washeries could be settled by the State Government with any person without obtaining the sanction of the Central Government.
The petitioner has been contending before the High Court that the slurry which was discharged from washeries did not belong to the Company and he was entitled to collect the same.
Since the respondent company prevented the petitioner from collecting slurry from its land and as it further refused to sell any additional quantity of slurry to him, he entertained grudge against the respondent company.
In order to feed fat his personal grudge he has taken several proceedings against the respondent company including the present proceedings.
These facts are quite apparent from the pleadings of the parties and the documents placed before the Court.
Infact,there is intrinsic evidence in the petition itself that the primary purpose of filling this petition is not to serve any public interest instead it is in self interest as would be clear from the prayer made by the petitioner in the interim stay application.
The petitioner claim interim relief from this Court permitting him to arrest/collect sludge/slurry flowing out of the washeries of the respondent Nos. 4 and 5 and with a direction to the State of Bihar, its officers and other authorities for not preventing him from collecting the sludge/slurry and transporting the same.
The prayer for the interim relief made by the petitioner clearly indicates that he is interested in collecting the slurry and transporting the same for the purposes of his business.
As already state a Full Bench of the Patna High Court held that the slurry was not coal and the provisions of the Mines and Mineral (Regulation and Development) Act, 1957 were not applicable, the State Government was tree to settle the same 13 and the Tata Steel & Iron Co. had no right to collect the slurry which escaped from its washeries.
The respondent company filed an appeal before this Court.
During the pendency of the aforesaid appeal, the petitioner filed the present petition.
The appeal preferred by the Tata Iron & Steel Co. Ltd. and Bharat Coking Coal Ltd. was allowed by this Court and judgment of Patna High Court was set aside.
The judgment of this Court is reported in Judgments today Vol. 3 wherein it has been held that the slurry/coal deposited on any and continues to be coal and the State Government has no authority in law to deal with the same and the slurry deposited on the Company 's land belongs to the Company and no other person had authority to collect the same.
Article 32 is designed for the enforcement of Fundamental Rights of a citizen by the Apex Court.
It provides for an extraordinary procedure to safeguard the Fundamental Rights of a citizen.
Right to live is a fundamental right under Art 21 of the Constitution and it includes the right of enjoyment of pollution free water and air for full enjoyment of life.
If anything endangers or impairs that quality of life in derogation of laws, a citizen has right to have recourse to Art, 32 of the Constitution for removing the pollution of water or air which may be detrimental to the quality of life.
A petition under article 32 for the prevention of pollution is maintainable at the instance of affected persons or even by a group of social workers or journalists.
But recourse to preceeding under article 32 of the Constitution should be taken by a person genuinely interested in the protection of society on behalf of the community.
Public interest litigation cannot be invoked by a person or body or person to satisfy his or its personal grudge and enmity.
if such petitions under Article 32, are entertained it would amount to abuse of process of the Court, preventing speedy remedy to other genuine petitioner from this Court.
Personal interest cannot be enforced through the process of this Court under article 32 of the Constitution in the garb of a public interest litigation.
Public interest litigation contemplates legal proceeding for vindication or enforcement of fundamental rights of a group of persons or community which are not able to enforce their fundamental rights on account of their incapacity, poverty or ignorance of law.
A person invoking the jurisdiction of this Court under article 32 must approach this Court for the vindication of the fundamental rights of affected persons and not for the purpose of vindication of his personal grudge or enmity.
It is duty of this Court to discourage such petitions and to ensure that the course of justice is not obstructed or polluted by unscrupulous litigants by invoking the extraordinary jurisdiction of this Court for personal matters under the garb 14 of the public interest litigation see Bandhua Mukti Morcha vs Union of India, ; ; Pandey vs State of West Bengal, ; at 331; Ramsharan Autyanuprasi & Anr. vs Union of India & Ors., [1989] Suppl.
1 SCC 251 and Chhetriya Pardushan Mukti Sangharsh Samiti vs State of U.P. & Ors., [1990] 4 SCC 449.
In view of the above discussion we are of the opinion that this petition has been filed not in any public interest but for the petitioner 's personal interest and for these reasons we dismissed the same and directed that the petitioner shall pay Rs. 5,000 as costs.
These costs are to be paid to the respondent Nos. 3,4 & 5.
| Petitioner was a member of the state Judicial Service and was elevated as a Judge of the High Court on 1.7.1975, and was later transferred to another High Court where he retire on 21.7.1984.
A dispute relating to pension was disposed of by this Court on 9.4.1985 fixing it at Rs.21,500 per annum.
Meanwhile, the High Court Judges (Conditions of Services) Act,1954 was amended by Central Acts 38/86 and 20/88, and he applied under the said Amending Acts asking for benefits there under, and this Court refixed the petitioner 's pension at Rs.41,600 per annum w.e.f 1.1.1986 and at Rs. 46,100 per annum w.e.f. 1.11.1986.
In an interlocutory petition the petitioner challenged the ceiling on additional pension appearing in clause (h) of paragraph 2 of Part III of the First Schedule to the .
Allowing the petition, this Court, HELD: 1.
There was no justification to introduce a further ceiling of Rs.8,000 per annum irrespective of the years of completed service rendered and allow a discrimination operate.
Once the proviso has a limit which meets the purpose there is no basis for the further limit of Rs 8,000.
[101A} 2.
The ceiling of Rs. 8,000 is not necessary to be imposed and if that is applied, a situation giving rise to the application of Article 14 of the Constitution does arise.
[101E] 3.
Fixing the pension at Rs. 48,000 per annum held that the ceiling in paragraph 2(b) of Part III of the First Schedule is unsustainable under Article 14 of the Constitution and would not be operative.
[101F]
|
Appeal No. 354 of 1967.
Appeal from the judgment and decree dated August 25, 1965 of the Madras High Court in Appeal No. 177 of 1961.
section V. Gupte, R. Thiagarajan, Janendra Lal and B. R. Agar wala, for the appellant.
N. H. Hingorani and K. Hingorani, for the respondent.
The Judgment of the Court was delivered by Shah, J.
Perumal Nadar married Annapazham (daughter of Kailasa Nadar an Indian Christian) on November 29, 1950, at Kannimadam in the State of Travancore Cochin according to Hindu rites.
Annapazham gave birth to two children the first on September 14, 1951 and the other on March 5, 1958.
The elder child died shortly after its birth.
The younger named Ponnuswami acting through his mother Annapazham as his guardian filed an action in the Court of the Subordinate Judge, Tirunelveli, for separate possession of a half share in the properties of the joint family held by his father Perumal.
The suit was defended by 51 Perumal contending that he had not married Annapazham as claimed by her; that if it be proved that marriage ceremony had been performed, it was invalid, and in any event Ponnuswami was an illegitimate child and could not claim a share in his estate.
The Trial Court rejected the defence, and decreed the suit.
Perumal appealed to the High Court of Madras, but without success.
With certificate under article 133(1)(c) of the Constitution, this appeal is preferred.
Three contentions are urged in support of this appeal : (1) that Annapazham was an Indian Christian and a marriage between a Hindu and an Indian Christian is regarded by the Courts in India as void; (2) that the marriage was invalid because it was prohibited by the Madras Act 6 of 1949; (3) that Annapazham and Perumal were living apart for a long time before the birth of Ponnuswami and on that account Ponnuswami could not be regarded as a legitimate child of Perumal.
Annapazham was born of Christian parents and she followed the Christian faith.
She married Perumal when she was about 19 years of age.
It is not now in dispute that on November 19, 1950 she went through the ceremony of marriage and lived with Perumal as his wife for several years thereafter.
The children born to Annapazham in September 1951 and March 1958 were entered in the Register of Births as Hindus.
On the occasion of the marriage, printed invitations were sent to the relatives of Perumal and of Annapazham and an agreement was executed by Perumal and Annapazham reciting that: "Individual No. 1 (Perumal) among us has married Individual No. 2 (Annapazham) as settled by our parents and also with our full consent.
As our relatives are of the opinion that our marriage should be registered, this agreement has been registered in accordance therewith.
We have executed this agreement by consenting that both of us shall lead a family life as husband and wife from this day onwards, that we shall not part each other both in prosperity and adversity and that we shall have mutual rights in respect of the properties belonging to us, under the Hindu Mitakshara Law.
" The marriage ceremony was performed according to Hindu rites and customs : a bridal platform was constructed and Perumal tied the sacred than which it is customary for a Hindu husband to tie in acknowledgement of the marriage.
The High Court on a consideration of the evidence recorded the following finding: "Oral evidence was adduced to prove that the marriage was celebrated according to Hindu rites and Sams 52 karas.
Invitations were issued at the time of the marriage and usual customary tying of thali was observed.
After the marriage she ceased to attend the Church, abandoned the Christian faith and followed the Hindu customs and manner prevailing among the Hindu Nadar community of Travancore." Perumal who had previously been married to one Seethalakshmi agreed to and did go through the marriage ceremony.
It is in evidence that marriage between Hindu males belonging to the Nadar community and Christian females are common and the wife after the marriage is accepted as a member of the Hindu Nadar community.
Mr. Gupte on behalf of Perumal contends that a valid marri age mistake place between two Hindus only and not between a Hindu and a non Hindu and in the absence of any evidence to show that Annapazham was converted to Hinduism before she married Perumal, the marriage, even if performed according to the Hindu rites and ceremonies, is not valid in law.
Counsel also contended that the evidence that Annapazham lived after the marriage is a Hindu will not validate the marriage.
It is not necessary to decide in this case whether marriage between a Hindu male and an Indian Christian female may be regarded as valid for, in our judgment, the finding of the Courts below that Annapazham was converted to Hinduism before her marriage with Perumal is amply supported by evidence.
A person may be a Hindu by birth or by conversion.
A mere theoretical allegiance to the Hindu faith by a person born in another faith does not convert him into a Hindu, nor is a bare declaration that he is a Hindu sufficient to convert him to Hinduism.
But a bona fide intention to be converted to the Hindu faith, accompanied by conduct unequivocally expressing that intention may be sufficient evidence of conversion.
No formal ceremony of purification or expiation is necessary to effectuate conversion.
In Muthusami Mudaliar vs Masilamani alias Subramania Mu liar(1) the validity of a marriage according to Hindu rites between a Hindu and a Christian woman fell to be determined.
It was held that the marriage contracted according to Hindu rites by a Hindu with a Christian woman, who before marriage is converted to Hinduism, is valid, though the marriage was not in strict accordance with the Hindu system of law.
Such a marriage is still common among and recognised as valid by the custom of the caste to which the man belongs.
In Goona Durgaprasada Rao and Another vs Goona Sudarasa naswami and others(1), Mockett, J., observed that no gesture or (1) I.L.R. (2) I.L.R. 53 declaration may change a man 's religion, but when on the facts it appears that a man did change his religion and was accepted by his co religionists as having changed his religion and lived and died in that religion, absence of some formality cannot negative what is an actual fact.
Krishnaswami Ayyangar, J., observed that a Hindu who had converted himself to the Christian faith returned to Hinduism and contracted a second marriage during the life time of his first wife and remained and died a Hindu having been accepted as such by the community and co religionists without demur.
Absence of evidence of rituals relating to conversion cannot justify the Court in treating him as having remained a Christian.
The evidence clearly establishes that the parents of Anna pazham arranged the marriage.
The marriage was performed according to Hindu rites and ceremonies in the presence of relatives who were invited to attend : customary ceremonies peculiar to a marriage between Hindus were performed : no objection was raised to the marriage and after the marriage Annapazham was accepted by the local Hindu Nadar community as belonging to the Hindu faith, and the plaintiff was also treated as a Hindu.
On the evidence there can be no doubt that Annapazham bona fide intended to contract marriage with Perumal.
Absence of specific expiatory or purificatory ceremonies will not, in our judgment, be sufficient to hold that she was not converted to Hinduism before the marriage ceremony was performed.
The fact that Perumal chose to go through the marriage ceremony according to Hindu rites with Annapazham in the presence of a large number of persons clearly indicates that be accepted that Annapazham was converted to Hinduism before the marriage ceremony was performed.
The second contention has little substance.
The Madras Hindu (Bigamy Prevention and Divorce) Act 6 of 1949 provided by sections 3 & 4(1) : section 3 "This Act applies to Hindus domiciled in the State of Madras.
Explanation.
This Act shall also apply if either of the parties to the marriage was a Hindu domiciled in the State of Madras." section 4(1) "Notwithstanding any rule of law, custom or usage to the contrary, any marriage solemnized after the commencement of this Act between a man and a woman either of whom has a spouse living at the time of such solemnization shall be void, whether the marriage is solemnized within or outside the State of Madras : Provided. . . . . . " 54 Mr. Gupte contended that Perumal was domiciled in the village of Kannamkulam, Taluka Nanguneri, District Tirunelveli in the State of Madras and on that account governed by Madras Act 6 of 1949, and since Perumal had been previously married to Seethalakshmi who was alive, his marriage with Annapazham was invalid.
The Courts below have held that Perumal had married Seethalakshmi before he married Annapazham, and that Seethalakshmi was alive at the date of Perumal 's marriage with Annapazham.
But no contention was raised in the written statement filed by Perumal that he was domiciled in the State of Madras.
The marriage with Annapazham took place in Kannimadam which is admittedly within the territory of the State of Travancore Cochin and after the marriage Perumal and Annapazham lived at Kannimadam.
M. Thangiah Nadar P.W. 2, and Kailasa Nadar P.W. 4 have deposed that the families of Annapazham and Perumal were the subjects of the Travancore Maharaja and that evidence was not challenged.
Perumal and Annapazham were married according to the ceremonies which make a valid marriage: they had lived as husband and wife and if it was the case of Perumal that the marriage was, by reason of the prohibition contained in Madras Act 6 of 1949, invalid, it was for him to set up and to establish that plea by evidence.
It is true that an attempt was made after plaintiff closed her case to suggest to witnesses examined that he Perumal was a resident of Kannamkulam and that he occasionally visited Kannimadam where he had a house.
But no argument was raised that Perumal was domiciled in the State of Madras.
In the absence of any such contention, the Trial Court held that Perumal was not domiciled in the State of Madras.
It cannot be held in the absence of a specific plea and issue raised to that end that Perumal was domiciled in the State of Madras and was on that account governed by the provisions of the Madras Hindu (Bigamy Prevention and Divorce) Act 6 of 1949.
We agree with the High Court that it is not proved that Perumal was domiciled in the State of Madras at the date of his marriage with Annapazham.
Nor can we accept the contention that the plaintiff Ponnu swami is an illegitimate child.
If it be accepted that there was a valid marriage between Perumal and Annapazham and during the subsistence of the marriage the plaintiff was born, a conclusive established that at the time when the plaintiff was conceived, Peru presumption arises that he was the son of Perumal, unless it be mal had no access to Annapazham.
There is evidence on the record that there were in 1957 some disputes between Annapazham and Perumal.
Annapazham had lodged a complaint before the Magistrate 's court that Perumal had contracted marriage with one Bhagavathi.
That complaint was dismissed and the order was 55 confirmed by the High Court of Madras.
Because of this com plaint, the relations between the parties were strained and they were living apart.
But it is still common ground that Perumal and Annapazham were living in the same village, and unless Perumal was able to establish absence of access, the presumption raised by section 112 of the Indian Evidence Act will not be displaced.
In Chilukuri Venkateswarlu vs Chilukuri Venkatanarayana(1) in a suit filed by a Hindu son against his father for partition it was contended that the plaintiff was not the legitimate child of the defendant.
The defendant relied upon certain documents by which he had agreed to pay maintenance to the plaintiffs mother, and upon a deed gifting a house to her and assertions made in a previous suit that he had no intercourse with her after he married a second wife.
The Court in that case observed, following the judgment of the Privy Council in Karapaya vs Mayandi(1) that .,non access could be established not merely by positive or direct evidence; it can be proved undoubtedly like any other physical fact by evidence, either direct or circumstantial, which is relevant to the issue under the provisions of the Indian Evidence Act, though as the presumption of legitimacy is highly favoured by law it is necessary that proof of non access must be clear and satisfactory", and since on the basis of that proof there was evidence on the record that the plaintiffs mother lived in the house gifted to her by her husband and there was no impossibility of cohabitation between the parties, there was no acceptable evidence of non access.
In Ammathayee vs Kumaresain (3) this Court held that the conclusive presumption under section 112 of the Indian Evidence Act can.
only be displaced if it is shown that the parties to the marriage had no access at any time when the child could have been begotten, There is a concurrent finding of the Trial Court and the High Court that there is no evidence to establish that Perumal living in the same village as Annapazham had no access to Annapazham during the time when the plaintiff could have been begotten.
The appeal fails and is dismissed with costs.
G.C. Appeal dismissed.
(1) (2) I.L.R. 12 Rang.
| Rule 19(2) of the Displaced Persons (Compensation and Rehabilitation) Rules provides for the method of compensation to joint families which have migrated to India as a result of the partition of the country in 1947.
Rule 19(3)(b) provides that for the purpose of calculating the number of members of a joint family.
Under r. 19(2), a person who was a lineal descendant in the main line of another living member of the family entitled to claim partition shall be excluded.
A joint family consisting of a father and his sons had migrated to India from Sind.
The father made an application for the verification of claim in respect of the properties left by the family in Sind and the claim was verified.
One of the sons claimed that the father and sons should be treated as tenants in common.
The authorities under the Act held that the parties constituted a joint Hindu family 'and that in view of the r. 19 (3) (b), r. 19(2) was not applicable.
The High Court quashed the order holding that the living member of the family whose lineal descendants are to be excluded under r, 19(3) (b), must be a person other than their father, on the assumption that a person against whom partition can be claimed by the father must be some member of the family other than his lineal descendants.
In appeal to this Court, HELD : The special provision embodied in the rule is intended to treat a joint Hindu family consisting only of a father and his sons as one unit for the purpose of payment of compensation for the joint family property left in Pakistan.
The rule is rational and logical and its_language is not susceptible of the meaning given to it by the High Court, because under Hindu law a father and each of his sons are entitled to claim partition against each other.
[444 A B, C F]
|
No. 170 of 1959.
Petition under Article 32 of the Constitution of India for enforcement of Fundamental rights.
785 R. V. section Mani.
for the petitioner.
C. K. Dephtary, Solicitor General of India, B. R. L. lyengar and R. H. Dhebar, for the respondent.
1960, January 20.
The Judgment of the Court was delivered by IMAM J.
This petition was heard on January 4, 1960, and we intimated that it was being dismissed and reasons for the same will follow later.
We proceed to give our reasons now.
The petitioner was detained by an order dated May 4, 1959, of the Central Government under the provisions of section 3 of the (hereinafter referred to as the Act).
The grounds of detention dated May 7, 1959, were served on the petitioner.
His case was considered by the Advisory Board constituted by the Central Government under section 8 of the Act.
On the report of the Advisory Board the Central Government by its order dated June 23, 1959, directed that the petitioner be detained until May, 4 1960.
It is against this order of detention that the present petition under article 32 of the Constitution has been filed by the petitioner.
The grounds of detention contained 5 grounds upon which the Central Government was satisfied that it was necessary to detain the petitioner as he was likely to act further in a manner prejudicial to the security of India and the relations of India with foreign powers.
It was further stated in the grounds of detention that the Central Government considered it against the public interest to disclose to the petitioner any facts or particulars as to dates, persons, places, nature of activities and the assistance given by him other than those which had been mentioned in the grounds of detention.
The grounds of detention further mentioned that some of the specimen despatches sent by the petitioner and some of the reports appearing in a newspaper published in Pakistan were annexed thereto.
From the grounds of detention it would appear that the allegation against the petitioner was that he had been engaged in carrying on propaganda against the Government of India and the Government of the 786 State of Jammu and Kashmir established by law and against the administration of that State Government in a manner calculated to bring into hatred and contempt the Government of tile State and the Government of India; that in furtherance of his propaganda the petitioner had been inter alia sending for publication in a foreign newspaper despatches of news and views relating to the State of Jammu and Kashmir containing false, incomplete, one sided and misleading information about the administration of the State by the Government of that State, about the policy of the Government of India in relation to that State and about the conditions in India in general and in the State of Jammu and Kashmir in particular; that the said despatches were published prominently by the said newspaper, having a large circulation in Pakistan and other foreign countries, in a manner prejudicial to India and her cause in relation to the State of Jammu and Kashmir and also prejudicial to the relations of India with foreign powers ; that the petitioner was in regular touch and closely associated with several persons who are hostile to the cause of India in relation to the State of Jammu and Kashmir and were engaged in activities prejudicial to the security of India and that the cumulative effect of the petitioner 's aforesaid activities was prejudicial to the relations of India with foreign powers in general and particularly in regard to the cause of India in respect of the State of Jammu and Kashmir and the maintenance of public order therein.
We have examined the various extracts from the despatches sent by the petitioner annexed to the grounds of detention served upon him.
They disclose sufficient particulars to enable the petitioner to make a representation to the Advisory Board.
Having regard to what appears in these extracts from the despatches sent to the newspaper concerned, they disclose sufficient grounds for the action taken by the Central Government in detaining the petitioner.
On behalf of the petitioner it was urged that the order of detention was confined only to two matters (1) that it was made with a view to preventing the 787 petitioner from acting in a manner prejudicial to the relations of India with foreign powers and (2) to the security of India.
As to the first matter, it was argued that Pakistan not being a Foreign State, there could be no question of any act of the petitioner being prejudicial to the relations of India with foreign powers.
It was pointed out that under article 367(3) of the Constitution, for the purposes of the Constitution, Foreign State meant any State other than India.
The proviso, however, enabled the President, subject to the provisions of any law made by Parliament, by order to declare any State not to be Foreign State for such purposes as may be specified in the order.
Reference was made to the Constitution (Declaration as to Foreign State) Order, 1950 (hereinafter referred to as the Order) made by the Governor General of India under article 392(3) of the Constitution read with article 367(3).
The Order directed that it shall come into force at once, that is to say, on January 23, 1950.
Clause (2) of the Order states: "Subject to the provisions of any law made by Parliament, every country within the Commonwealth is hereby declared not to be a Foreign State for the purposes of the Constitution".
On behalf of the petitioner it was urged that by the Order,, Pakistan being a member of the Commonwealth, was declared not to be a Foreign State.
Although the Order was subject to the provisions of any law made by Parliament no law had yet been enacted by Parliament contrary to the declaration made by the Order.
Pakistan not being a Foreign State could not therefore be regarded as a foreign power and none of the acts of the petitioner referred to in the grounds of detention could therefore be regarded as acts prejudicial to the relations of India with foreign powers.
The ground in this respect being an invalid ground the order of detention must be set aside because even if one ground was an invalid ground the entire order of detention must be set aside though other grounds appeared to be valid grounds, having regard to certain decisions of this Court.
It was also urged on behalf of the petitioner that none of the extracts of the, despatches and the grounds 788 of detention disclose any word or phrase suggesting incitement to violence or subversion of the Government of the State of Jammu and Kashmir or of the Government of India.
Accordingly, there could be no question of any act of the petitioner being prejudicial to the security of India.
Some other submissions were also urged on behalf of the petitioner with respect to the grounds of detention which will be dealt with in due course.
It was also urged that in violation of the principles of natural justice the respondent 's case was heard by the Advisory Board prior to the case of the petitioner and in his absence and that copies of the further materials, which were placed before the Advisory Board by the respondent, were not supplied to the petitioner.
As already stated the contention on behalf of the petitioner has been that Pakistan is not a Foreign State and therefore cannot be regarded as a foreign power.
It is true, that in view of the Order, for the purposes of the Constitution of India, Pakistan is nota Foreign State.
There is, however, a distinction between a country not being regarded as a Foreign State for the purposes of the Constitution and that country being a foreign power for other purposes.
The Commonwealth is an Association of Nations each of which has a sovereign status independent of each other in its internal and foreign affairs.
They have a sovereign status as complete as that of any nation which is not a member of the Commonwealth.
Each member of the Commonwealth can have diplomatic relations with each other and with nations outside the Commonwealth.
Indeed, in the matter of sovereign status they are as independent as any nation outside the Commonwealth.
It follows, therefore, that in their relations between each other and nations outside the Commonwealth they must be regarded as foreign powers and their affairs as between them are foreign affairs.
In our opinion, that which is not concerned with the internal affairs of a member of the Commonwealth, is its external affair, that is to say, a foreign affair.
789 Under item 9 of List 1 of the Seventh Schedule of the Constitution, Parliament is empowered to enact laws with respect to preventive detention for reasons connected with defence, foreign affairs or the security of India and persons subjected to such detention.
Under section 3 of the Act the Central Government or the State Government may, if satisfied with respect to any person, with a view to preventing him from acting in any manner prejudicial to the defence of India, the relations of India with foreign powers or the security of India, make an order directing that such person be detained, if it thinks it necessary so to do.
The expression " Foreign Affairs " includes the relations of India with foreign powers.
The question for decision is whether Pakistan is a foreign power.
On a correct interpretation of the meaning of the words " the relations of India with foreign powers " we have no doubt that Pakistan must be regarded as a foreign power, although that country may be a part of the Commonwealth as India is.
It has sovereignty in matters of internal administration and external relations quite independent and disconnected with the sovereignty of India or any other member of the Commonwealth in these respects.
Pakistan has its own diplomatic relations with various countries including India.
Apart from its membership of the Commonwealth, the independent sovereign status of Pakistan is the same as the sovereign status of any country outside the Commonwealth.
It was, however, suggested that the Order made by the Governor General took Pakistan outside the category of a foreign power.
In our opinion, this is a fallacious argument because article 367(3) itself states that for the purposes of the Indian Constitution Foreign State means any State other than India but the President, and before the commencement of the Constitution the Governor General of India under article 392(3), may by order declare any State not to be a Foreign State for such purposes as may be specified in the Order.
In the Order the Governor General declared that every country within the Commonwealth was not a Foreign State for the purposes of the Constitution.
In the Constitution of India there are various Articles in which the expression 790 Foreign State appears, e.g., article 18(2), (3), (4), article 19(2), article 102(1)(d.) and article 191(1)(d).
It is clear,therefore. that under the Order, for the purposes of these Articles or any other Article where the expression "Foreign State" appears, that expression would not cover a country within the Commonwealth unless Parliament enacted otherwise.
The Order cannot be brought into aid for the purposes of construing the expression "foreign affairs" appearing in item 9 of List 1 of the Seventh Schedule and the expression "foreign powers" in section 3 of the Act.
These expressions must be construed in the ordinary way giving the words their ordinary meaning.
We have no doubt that Pakistan is a foreign power.
Under the provisions of the Act the Central Government and the State Governments could detain a person who was acting in a manner prejudicial to the relations of India with foreign powers which would include Pakistan.
It is to be further remembered that neither in the order of detention nor in the grounds of detention there is any mention of Pakistan specifically.
On the contrary, in the grounds of detention, it is clearly stated that the cumulative effect of the petitioner 's activities was prejudicial to the relations of India with foreign powers in general (vide grounds 3 and 4).
The grounds of detention refer to the publication in a foreign newspaper of despatches of news and views relating to the State of Jammu and Kashmir containing false, incomplete, one sided and misleading information and about the policy of the Government of India in relation to that State.
The extracts of the despatches, sent by the petitioner to the foreign newspaper, annexed to the grounds of detention show that they are not only prejudicial to the Government of India vis a vis Pakistan but they are prejudicial to the relations of India with foreign powers in general, the subject of the affairs of the State of Jammu and Kashmir not being a matter of interest solely to Pakistan but also of interest to other foreign powers.
Coming now to objections made as to the grounds of detention : regarding ground No. 1, it was urged that this ground was outside the scope of the order of 791 detention.
This ground mentions that the petitioner is engaged in carrying on propaganda against the Government of India and the Government of the State of Jammu and Kashmir in such a manner as to bring these two Governments into hatred and contempt.
In our opinion, it cannot be said that this ground is beyond the scope of the order of detention because the bringing of the Government of India and the Government of the State of Jammu and Kashmir into hatred and contempt does involve the security of India.
Regarding ground No. 2 it was urged that it does not disclose a single suggestion about the subversive activities of the petitioner, nor does it disclose what portions of the despatches were false, incomplete, misleading or one sided.
It was further pointed out that this ground speaks of the conditions in India in general and the policy of the Government of India in relation to the State of Jammu and Kashmir.
What the policy of the Government of India is concerning that State is not stated.
All these allegations were so vague that they gave no real opportunity to the petitioner to make a representation.
Similarly, concerning grounds 3 and 4 it was urged that the grounds did not disclose what was the cause of India in relation to the State of Jammu and Kashmir.
Here again, sufficient particulars were not given to enable the petitioner to make an effective representation to the Advisory Board.
In our opinion, none of these contentions has any substance because with the grounds of detention were annexed extracts from the despatches sent by the petitioner to the newspaper " ]Dawn " published in Pakistan.
These extracts gave sufficient particulars to enable the petitioner to make a represen tation with respect to all matters stated in the grounds of detention.
Coming now to the submission that the respondent 's case was heard before the petitioner 's case and in his absence and that copies of further materials placed before the Advisory Board by the respondent were not supplied to the petitioner, it is necessary to refer to the procedure to be adopted by the Advisory Board under 101 792 the provisions of the Act.
Under section 9, in every case where a detention order has been made the appropriate Government must within 30 days from the date of detention place before the Advisory Board the grounds, on which the order has been made, and the representation, if any, made by the detenus and, in a case where an order has been made by an officer, also the report by such officer under sub section
(3) of section 3.
Section 10 sets out the procedure which the Advisory Board must follow when reference has been made to it under section 9.
Section 10(1) states : " The Advisory Board shall, after considering the materials placed before it and, after calling for such further information as it may deem necessary from the appropriate Government or from any person called for the purpose through the appropriate Government or from the person concerned, and if in any particular case it considers it essential so to do or if the person concerned desires to be heard, after hearing him in person, submit its report to the appropriate Government within ten weeks from the date of detention.
" It is clear from these provisions that the Advisory Board after considering the materials placed before it under section 9 can call for further information from the appropriate Government, and that thereafter if in any particular case it considers it essential so to do or if the detenue desires to be heard, after hearing him, submit its report to the appropriate Government.
In such a situation the Advisory Board must of necessity obtain further information from the appropriate Government before it hears the detenue.
In our opinion, there is nothing in section 10 which offends against the principles of natural justice.
Furthermore, the petition does not assert as a matter of fact that the respondent 's case was heard in the absence of the petitioner.
Indeed, the respondent 's affidavit does not admit that any such thing happened.
As for the copies of the further materials placed by the respondent before the Advisory Board not being supplied to the petitioner, it has to be observed that in paragraph 3 of the grounds of detention it was 793 clearly stated that the Central Government considered it against public interest to disclose to the petitioner any facts or particulars as to dates, persons, places, nature of activities and the assistance given by him other than those which had already been mentioned in the grounds of detention.
Under article 22(6) of the Constitution it is clearly stated that nothing in cl.
(5) of that Article shall require the authority making an order of detention to disclose facts which such authority considers to be against public interest to be disclosed.
In the present case the authority concerned had declined to disclose in the public interest any facts or particulars as to dates, persons, places, nature of activities and the assistance given by the petitioner other than those which had already been mentioned in the grounds of detention.
In such circumstances, it would have been entirely inappropriate for the respondent to supply copies of the further materials placed before the Advisory Board although the Advisory Board may have required further information in order to satisfy itself The petition is accordingly dismissed.
Petition dismissed.
| The petitioner was detained by an order of the Central Government under section 3, of the .
The Advisory Board which considered the petitioner 's case in accordance with the provisions of the Act did not recommend that the order of detention should be withdrawn.
The allegations against the petitioner were that he was carrying on propaganda of hatred and contempt against the Government of India and the State of Jammu and Kashmir by sending for publication in a widely published foreign Newspaper, false, one sided and misleading information about the administration of the State and the condition of India in general and the said State in particular.
The petitioner 's contentions, inter alia, were that being a member of the Commonwealth, Pakistan, where the newspaper was published, was not a Foreign State and could not therfore be regarded as a Foreign power, that the principles of natural justice where violated by the Advisory Board in considering the respondent 's case in his absence and that materials placed before the Advisory Board were not supplied to him.
Held, that on a correct interpretation of the expression foreign affairs " appearing in Item 9, List 1, Seventh Schedule of the Constitution and the words "the relations of India with foreign powers" in section 3 Of the Act, Pakistan must be regarded as a foreign power although that country might be a member of the Commonwealth like India.
Under article 367 (3) a country might not be regarded as a Foreign State for the purposes of the Constitution but that country might be a foreign power for other purposes.
The Commonwealth is an Association of Nations each having a sovereign status independent of the other in its internal and foreign affairs.
The provisions of section 10 of the Act did not offend against the principles of natural justice and the procedure adopted by the Advisory Board in the present case was not in Contravention thereof.
|
Civil Appeal Nos. 33763382 of 1988.
From the Judgment and Order dated 26.11.1987 of the Central Administrative Tribunal.
Delhi in T. Nos. 950, 961, 972, 986, 1049, 94 1198 of 1985 and T. No. 383 of 1986.
B.B. Barua, Aruneshwar Gupta and Ms. A. Subhashini for the Appellants.
Juse P. Verghese, K.N. Rai and N.N Sharma for the Re spondents.
These appeals arose out of the judgment and order dated November 26, 1987 passed by the Central Adminis trative Tribunal, Principal Bench, Delhi directing that the petitioners (respondents in these appeals) will be entitled to the same relief as was granted to the petitioners by Anand, J. in the writ petitions CWP Nos.
278 of 1978 and 937 of 1978.
The matrix of the case, in short, is that the services of the respondents who were appointed as constables in Delhi Police in the years 1964 66 were terminated because of their participation in the agitation along with other police constables in April 1967.
In view of the public controversy and in deference to the views expressed in Parliament, a large number of agitating constables were taken back in service as fresh entrants.
Later, in view of the assurance given in the Parliament by the then Home Minister, prosecu tions were withdrawn and the dismissed constables were reinducted into service.
Some of the dismissed constables filed Civil Writ Petition Nos. 26/69 and 106/70 in the High Court of Delhi and the High Court by its judgment dated October 1, 1975 quashed the order of termination and the petitioners in that case were declared to be throughout in service.
The Police Administration preferred separate ap peals being LPA Nos. 24 and 25 of 1976.
Both these appeals were dismissed as barred by time and the judgment of the High Court dated October 1, 1975 became final.
Subsequently, some other constables whose services were similarly terminated but were not reinstated in service even as fresh entrants, filed writ petitions in the High Court of Delhi being CWP Nos. 270 and 937 of 1978.
These writ peti tions were heard by Anand, J. who rejected the contention raised by the respondents in the writ petitions regarding the delay and latches in moving the writ petitions, allowed the writ petitions quashing the impugned order of termina tion declaring that the petitioners will be deemed to have been in service and would be treated as such subject to certain conditions.
The Police 95 Administration filed LPA against this judgment which was dismissed on August 29, 1983.
Thereafter the respondents herein filed the writ petitions in the High Court against the order of termination of their services praying for quashing of the orders of termination and for reinstating them in service with effect from the respective dates of their termination of services and to treat them as being in service throughout and to award them all consequential benefits.
These writ petitions were subsequently transferred to the Central Administrative Tribunal, Delhi.
The Tribunal while rejecting the plea of the respondents that the peti tioners should be denied any relief because of delay and latches held that the claims of the petitioners (respondents in these appeals) was identical to the claim of the peti tioners in CWP Nos. 270 and 937 of 1978 whose petitions were allowed by the High Court of Delhi.
The Tribunal further held that the petitioners were entitled to the same relief as was granted to the petitioners by Anand, J. in C W P Nos.
270 and 937 of 1978.
Against this judgment and order the instant appeals on leave have been filed before this Court.
We have heard learned counsel for the parties.
Consider ing facts and circumstances as well as the judgment rendered by Anand J. in CWP Nos. 270 and 937 of 1978, we dismiss the appeals and confirm the judgment and order dated November 26, 1987 of the Tribunal with the modification that the respondents, excepting respondent No. 24, Kanwal Singh who is dead, will file affidavits stating whether they had been gainfully employed or not during the period of the termina tion of service and if so employed, they will state further in the affidavits the period of such employment.
The appel lants may verify the same and will be at liberty to deduct the pay and allowances during the period such gainful em ployment while determining the arrears of salary and allow ances for the period of termination.
We, however, make it clear that for the purposes of seniority, promotion and retiral benefits, the entire period between termination and reinstatement shall be taken into account.
It has been stated by the learned counsel for the appel lants that all the respondents have already been reinstated in service and they are now working.
The respondent No. 24, however, has expired and the back wages have already been paid to his widow.
In the facts circumstances of the case there will be no order as to costs.
N.P.V. Appeals dis missed.
| Anandi Bai wife of Appellant No. 1 and mother of Appellant No. 2 had a lease of suit shop in Jaipur for a period of 11 months beginning May 1, 1964 wherein she was carrying on small kirana business.
The Respondent landlord terminated the lease by a notice issued under section 106 of the Transfer of Property Act at the end of the term of the lease.
However Anandi Bai continued to remain in possession and the landlord went on accepting the rent even after the termination of her tenancy and thus she became a statutory tenant.
She died sometime in September 1966.
Respondent landlord initiated action for ejectment of her heirs the appellants herein from the demised shop on the ground that on the death of Anandi Bai the appellants have no right to continue in occupation of the premises.
The trial court dismissed the suit on the finding that Anandi Bai paid and the respondent accepted the rent after the determination of the lease, so she was holding over.
The first appellate court confirmed the decree of the trial court though on different grounds.
Second appeal by the plaintifflandlord was allowed by the High Court holding that since the heirs of the tenant had not carried on the business with Anandi Bai during her life time as family business they were not entitled to the benefits of the definition of 'tenant ' as amended by Section 3(ii) of the Rajasthan Premises (Control) of Rent and Eviction) Amendment Act, 14 of 1976 and accord ingly reversing the decrees of the courts below, the suit for ejectment of the appellants from the demised shop was decreed.
Allowing the appeal by special leave against the Judg ment and Decree of the High Court preferred by the heirs of the tenant Anandi Bai, this Court, HELD: Under Hindu Succession Act the heirs of the de ceased tenant are entitled to succeed, not only to his/her business but also to his/her tenancy rights under the Rent Act which protects the 7 8 heirs from ejectment except in accordance with that Act.
Therefore, despite the termination of the tenancy, the tenancy rights are heritable and the heirs of the tenant are entitled to enjoy the protection of the Act.
[18A B] Admittedly Smt.
Anandi Bai was inducted into possession of the demised property under a contract of tenancy which was determined by issuance of a notice under Section 106 of Transfer of Property Act.
Even thereafter she continued to remain in possession as statutory tenant under the Act.
The finding of the Trial Court as affirmed by the First Appel late Court is that the respondent landlord after termination of tenancy received the rent from her and thereby she became tenant holding over till the date of her death.
[18F G] The appellants by virtue of intestate succession under Hindu Succession Act, being Class I heirs, succeeded to the heritable interest in the lease hold right of the demised premises held by Smt.
Anandi Bai.
They, thereby, stepped into the shoes of the tenant.
They continued to remain in possession as on the date of the suit as statutory tenants.
Thereby, they are entitled to the protection of their con tinuance as a statutory tenant under the Act.
[19B C] J.C. Chaterjee vs Sri Kishan, ; ; Damadi lal & Ors.
vs Parashram & Ors.
, ; Anand Niwas (Pvt.) Ltd. vs Anandji Kalyanji Pedhi & Ors., ; ; Smt.
Gian Devi Anand vs Jeevan Kumar & Ors., ; V. Dhanpal Chattiar vs Yesodai Ammal, ; Bhavarlal Labhchand vs Kanaivalal Nathalal Intawala, , referred to.
|
ins Matters.
A. Movement by Road: (a) WP.
Nos.2907 2908,3234, 3238 39,3164,3254, 3630 31,3686, 3783, 3816, 4816, 4929 31, 4836 38, 4996 5001, 5051 54, 5089 93, 5136 46, 5247, 3160, 3634, 4494,4616,4967, 5362 71, 5416 20, 5447 50,5716 17, 5840,6015,6587 89 & 6609 14/81.
(b) WP.
5062,5157 58,5451 & 5615 17/81.
(c) WP Nos.
5097,5042, 5098, 5017, 5214 & 6135 36/81 & 7003/81.
(d) WP. Nos.3421, 3407, 3408 13, 3422, 3536, 3561 64, 5238,13824, 5466, 5544, 6009, 6130 31, 6572 74 & 6582 83/81.
(e) WP.
4904 4905, 5080, 5094, 5239 45, 5358 59, 5395, 5483, 5484 88, 5489 92, 5734 39, 6584 86 & 6817 21/81.
(f) WP.
Nos.4960 62, 4958 59, 5129 33, 5219 20, 5331 33, 5518 19, 5526, 5428 31 & 5527/81.
(g) WP.
4526, 4926, 4995, 5046, 5048 50, 5100, 5101, 5136 46,5402 11, 5436 38, 5560, 5520 21, 5562,5558, 5556, 5559,5550,5546 47, 5552, 5555, 5553 54,5511, 5482, 5618 19,5809 20,6132 33, 6244, 6273 75,6267 72, 5512 14, 5515,6570 and 5562/81, 7027 29 and 7032 34/81.
(h) WP.
Nos.5221,5380 83,5129 33,5421 22,5440, 5507 10, 5662, 5806 5807, 6245, 6246, 6265, 6398 and 6684/81.
1145 (i) WP.
3592, 3353, 5396, 6016, 6247 48, 6616, 6668 and 6798/81.
(j) WP.
Nos.5003, 4453, 4455 56,5346 48,4955,5082 89, 5577 80, 5581 and 5724/81.
(k) WP.
Nos.3489 and 4293/82.
(l) WP.
No. 4818/81.
(m) WP.
Nos.2916,2932,3242, 3297 3302,3334 43, 3475, 4098 4100, 4136, 4304, 4187, 4777, 5007 17,5027 34, 5352 55, 5473 79, 5604 5608, 5740 42, 5743 44, 5821, 6012 13 and 5583 92/81.
(n) WP Nos.
5391 and 5525/81.
(o) WP No. 5443/81.
(p) WP.
Nos. 5444,5663 and 6266/81.
(q) WP.
No. 5464/81.
(r) WP.
5451 and 5564 66/81.
(s) WP.
No. 5807/81.
(t) WP.
Nos.5571 75, 5622 29 and 6014/81.
(u) WP.
Nos.5718 19/81 and 6943/81.
(v) WP.
No. 5568 69/81.
B. Restriction on Quantum of Food Grains which can be held: (a) WP.
2932, 3776 3780, 4140 45, 4326 28, 4876 4902, 4670 78 and 5473 79/81.
(b) WP.
No. 5480/81.
(c) WP.
4955 56,5330,5392,3823 and 6278/81.
(d) WP.
Nos. 5529 30/81.
(e) WP.
Nos.5531 32/81.
1146 (f) WP.
5841 50/81.
(g) WP.
5656 58/81.
(Under Article 32 of the Constitution of India) Hari Sarup, M.N. Phadke, Soli J. Sorabjee, J.P. Goyal and C.M. Lodha, (M/s. B. Datta, R.A. Gupta, Miss Kamini Jaiswal, Rajiv Dutta, Manoj Swarup and Miss Lalita Kohli, R.S. Sharma, R.K. Jain, Pankaj Jain, P.K. Jain, K.K. Jain, K.B. Rohatgi, B.R. Kapur, B.S. Tawakley, S.R. Srivastava, N.N. Sharma, A.K. Goel, Mitter and Mitter and Co., S.K. Jain, Rajesh Jain, Mukul Mudgal, M. Qamaruddin, Mrs. M. Qamaruddin, Anis Suhrawardhy, A.P. Mohanty, K.K. Gupta, Ravi Prakash Gupta, C.K. Ratnaparkhi, S.C. Birla, M.C. Dhingra, and S.K. Gambhir for the appearing Petitioners.
G.N. Dikshit, O.P. Rana, Mrs. Shobha Dixit, R.N. Poddar, G. Gopalakrishan, A.V. Rangam, B.D. Sharma, D.P. Mohanty and A. Shroff for the Respondents.
The Judgment of the Court was delivered by SEN, J.
The issue in this and the connected 505 petitions under article 32 of the Constitution is of far reaching significance.
It raises questions of the highest importance as to the scope and extent of the executive power of the State under article 162 of the Constitution, in relation to regulation and control of trade and commerce in food stuffs.
It necessarily involves a claim by the petitioners who are wholesale dealers of foodgrains that the exercise of such governmental power conflicts with the rule of law and is in flagrant violation of the freedom of trade, commerce and intercourse guaranteed under article 301 of the Constitution and the fundamental right to carry on trade and business guaranteed under article 19 (1) (g) of the Constitution.
These petitions fall into two distinct and separate categories, one by the wholesale dealers of foodgrains from the Union Territory of Delhi and the neighbouring States of Punjab and Haryana, and the other by the wholesale dealers of foodgrains from the State of Uttar Pradesh.
1147 The short question that falls for consideration in some of the writ petitions by wholesale dealers of foodgrains from the Union Territory of Delhi and the State of Punjab and Haryana is whether the action of the State Government of Uttar Pradesh in setting up check posts on its borders and the stoppage and seizure of wheat in transit through the State of Uttar Pradesh during the course of inter State trade and commerce to various destinations in the States of Madhya Pradesh and Maharashtra at the check post at Saiyan on the border between the States of Uttar Pradesh and Madhya Pradesh on the strength of its instructions conveyed by its teleprinter message dated March 31, 1981, was in violation of article 301 of the Constitution.
In a majority of the writ petitions by wholesale dealers from the State of Uttar Pradesh, two questions arise, (1) whether Notification No. P XXIX Food 5 5 (42)/80 dated April 21, 1981, issued by the State Government of Uttar Pradesh, in exercise of the powers conferred by section 3 read with section 5 of the (hereinafter referred to as the Act), by which cl.4 of the Uttar Pradesh Foodgrains (Procurement and Regulation of Trade) Order, 1978, has been amended, providing that no wholesale dealer, commission agent or retailer shall have in stock wheat more than 250 quintals, 250 quintals and 20 quintals respectively, at any time, Infringes the fundamental right to carry on trade or business guaranteed under article 19 (1) (g) and (2) whether the governmental instructions conveyed by its teleprinter message dated March 31, 1981, placing restrictions on movement of wheat by traders on private account from the State of Uttar Pradesh to various other States and on inter district movement of wheat within the State, were in breach of the fundamental right under article 19 (1) (g) read with article 301 of the Constitution.
The following are the facts and circumstances so far as necessary to show as to how the legal questions are presented.
It would be convenient first to deal with the writ petitions filed by the whole sale dealers of foodgrains from the Union Territory of Delhi and the States of Punjab and Haryana seeking a declaration that the impugned action of the State Government of Uttar Pradesh in setting up check posts on the borders of the State and directing seizure of wheat in transit through the State, on the strength of the impugned teleprinter message, conflicted with the guarantees of inter State trade and commerce dealt with by Art, 301 of the Constitution.
1148 Facts in all these cases are more or less similar.
The petitioners who are wholesale dealers of foodgrains from the Union Territory of Delhi and the States of Punjab and Haryana allege that between April 29 30, 1981, they, acting as commission agents, purchased wheat from the open market in Delhi and elsewhere and despatched the same by trucks to various destinations in the State of Maharashtra and to some places in the State of Madhya Pradesh.
According to them, the trucks laden with wheat were accompanied by relative bills, goods receipts, inter State transit passes etc.
, duly crossed the check post at Faridabad and were also allowed to cross the check post at Kotwan on the border between the Union Territory of Delhi and the State of Uttar Pradesh and were on their way to their respective destinations.
They allege that the Senior Marketing Inspector, Agra, intercepted the trucks in question at the check post at Saiyan on the border between the State of Uttar Pradesh and Madhya Pradesh between April 30, 1981, and May 2, 1981.
The seized trucks were brought back to the purchase point at Agra and the wheat was unloaded.
Thereupon, the petitioners rushed to Agra and made an application on May 4, 1981, under s.6A read with sections 3 and 7 of the Act before the Additional District Magistrate (Civil Supplies), Agra, for the release of the seized wheat.
In the said application, the petitioners, inter alia, claimed and unequivocally stated that there was no ban on export of wheat from the Union Territory of Delhi to other States, that the wheat in question was neither purchased at Agra, nor was it being transported from Agra to any other district in Uttar Pradesh, that Agra was a place in transit, and that the instructions of the State Government contained in the impugned teleprinter message dated March 31, 1981 did not constitute a validly notified order under sub section
(5) of section 3 of the Act.
The Chief Marketing Inspector, Agra, had in the meanwhile seized 42 trucks laden with wheat either at the check post at Saiyan or at Agra and lodged first information reports at the Saiyan police station or at the Civil Lines police station in respect of the consignments alleging that the movement of wheat was in contravention of the impugned teleprinter message and was therefore seized, and in three of them it was alleged that the wheat had been purchased at Agra.
On the report of the Chief Marketing Inspector, the Additional District Magistrate (Civil Supplies), Agra drew up proceedings under section 6A of the Act and directed the police to complete the investigation within 15 days.
1149 On May 23, 1981, the Additional District Magistrate (Civil Supplies), Agra under sub section
(2)(i) of section 6A of the Act passed interim orders for the sale of the seized wheat as it was subject to speedy and natural decay, at the request of the Senior Marketing Inspector, similar to the one reproduced below: These proceedings under s.6A of the started on the report of SMI Saiyan dated 30.4.1981 (Paper No. 1) whereby it was brought to the notice of this Court that truck nos. . were caught carrying 120 quintals. .of wheat respectively beyond Saiyan border outside the State in contravention of the orders issued by the Government vide telex No. 1061/29 Food 5 dated 31.3.1981 F.I.R. was lodged at P.S. Saiyan in respect of the above contravention.
Notice under section 6B of the EC Act was issued to the O.Ps. . who were driving the trucks at the time of search and seizure.
Replies were filed by the owners of the wheat contending that the said rules were not part of any Control Order under Section 3 of the EC Act nor they had any legal sanction for want of publication in the Official Gazette.
The O.Ps.
have pleaded that they were taking their goods in transit through Agra and in fact the movement of wheat so made by them was inter state movement which was not banned by the Central Government or State Government.
I heard the learned counsels on behalf of the O.Ps.
and the learned PO as well.
In these proceedings final orders cannot be passed at this stage as the matter is still under investigation.
PO directed to put up progress of investigation within 15 days from now.
In the meanwhile I order that the wheat seized by SMI Saiyan be got purchased at the Official Price so that the same does not get damaged.
The sale proceeds be got deposited in Government Treasury under proper Head of Account.
1150 This interim order is being passed under sub section
(2) (i) of s.6A of the .
File be put up after 15 days along with report of prosecuting office regarding progress of investigation.
Sd/ N.N. Varma Addl.
Collector, Agra 23.5.1981 The seized wheat has been purchased by the State Government on Government account at the procurement price and the sale proceeds credited into the Treasury.
The State Government has filed a counter affidavit of the Chief Marketing Officer, Lucknow, in all these cases as also the affidavits of the Senior Marketing Inspectors at Agra controverting the allegations made by the petitioners.
It is stated that the source of the power to effect the seizure was not the impugned teleprinter message, but the power of search and seizure conferred on an Enforcement Officer under cl. 6 of the U.P. Foodgrains Dealers (Licensing and Restriction on Hoarding) Order, 1976 and under cl.6 of the Uttar Pradesh Foodgrains (Procurement and Regulation of Trade) Order, 1978 (hereinafter called the 1976 Order and 1978 Order respectively), both of which were issued by the State Government, in exercise of the powers under section 3 of the Act, read with Government of India, Ministry of Agriculture (Department of Food) Notification No. G. S.R. 888 dated June 28, 1961, No. GSR 316 (E) dated June 20, 1972, No. GSR 452 (E) dated October 25, 1972, No. GSR 168 (E) dated March 13, 1973 and No. GSR 800 dated June 9, 1978 respectively, since it was of opinion that it was necessary or expedient so to do for securing the equitable distribution and availability of foodgrains at fair prices.
The State Government contends that the impugned teleprinter message dated March 31, 1981 was in the nature of an executive instruction issued by the State Government under its undoubted powers under article 162 of the Constitution for the due observance of the provisions of the two Control Orders.
It is said that no person can carry on business in foodgrains as a dealer or as a commission agent except under and in accordance with the terms and conditions of a valid licence issued in that behalf under cl. 4 of the 1976 Order.
It is also said that no wholesale dealer, commission agent or trader can have in stock more than 250 quintals, 250 quintals and 20 quintals respectively, at any time.
It is asserted that the State Govern 1151 ment has the right to set up check posts for the purpose of verification so that there is no contravention of the provisions of the two Control Orders, particularly with a view to ensure that excess quantity of wheat is not transported in violation of the 1978 Order to other districts or other States.
The State Government in the counter affidavit of the Chief Marketing Officer, Lucknow, specifically denies the allegations made by the petitioners that the 42 trucks laden with wheat seized at the check post at Saiyan on the border between the States of Uttar Pradesh and Madhya Pradesh or at Agra were in transit during the course of inter State trade and commerce.
With regard to the seizure of the wheat, it is averred in para 13 of the counter affidavit: "The correct fact is that the authority on the bona fide apprehension that the wheat so moved actually was purchased from the State of Uttar Pradesh from nearby places and the same was being moved to other States on the garb of outside wheat.
It is submitted that such traders who are exporting wheat alleged to have purchased from places other than the State of Uttar Pradesh and were/are carrying the same to other States, have only to satisfy the authorities concerned of the bona fides of such transactions.
However there is no ban on such movement from one State to another.
" As regards the check posts, it is submitted that the State Government is committed to provide price support in wheat to farmers at Rs. 130 per quintal.
This commitment also involves purchase of wheat directly from the farmers without interference from traders/middlemen, who try to purchase wheat from the farmers at lower prices and sell the same at Government purchase centres with substantial profits.
Such transactions are effected in fictitious names.
This not only frustrates the procurement policy of the Government but also prejudicially and financially affects the producers ' interests.
In para 5 it is accordingly averred: "In order to curb the above tendencies and preventing the activity of traders/middlemen the State Government have provided a simple system of verifying all transactions by traders.
1152 This procedure involves getting all transactions of wheat verified by the Deputy Regional Marketing Officer indicating inter alia the name of the persons to whom the stocks are sold, their licence numbers etc.
and quantum of stocks sold, price paid etc.
This process will make it simultaneously very difficult for traders to buy at low price from farmers and resell at high prices at the Government purchase centres.
" As regards the impugned teleprinter message it was stated that it was issued by the State Government in order to sustain and maintain and maximise the procurement of wheat by introducing a system of verification at the check posts.
The State Government contests the right of the petitioners falling in the first category, that is, wholesale dealers of wheat from the Union Territory of Delhi and the States of Punjab and Haryana, to relief under article 32 of the Constitution who question the legality and propriety of the seizures.
It is a matter for investigation which is pending before the Additional District Magistrate (Civil Supplies), Agra and, according to it, the question cannot be decided without full investigation into facts.
In support of the writ petitions, learned counsel appearing for the petitioners have, in substance, urged three grounds.
(1) There was nothing to prevent the State Government from making a law placing reasonable restriction on the freedom to carry on any occupation, trade or business guaranteed under article 19(1) (g) read with article 19(6) of the Constitution, or on the freedom of trade, commerce and intercourse, throughout the territory of India, guaranteed under article 301 of the Constitution, but the restriction must be by "law" or by an "order having the force of law" and not by recourse to the executive authority of the State under article 162 of the Constitution, i.e., by an executive action.
(2) The seizure of the consignments of the wheat, while they were in transit in the course of inter State trade and commerce from the Union Territory of Delhi and the States of Punjab and Haryana to various destinations in the States of Maharashtra and Madhya Pradesh, was without the "authority of law" and in violation of article 300A of the Constitution.
The seizure of the wheat being wrongful, the petitioners were entitled to an appropriate writ, direction or order for the return of the seized wheat or the price thereof.
(3) The impugned teleprinter message of the State Government dated March 31, 1981 on the basis of which the seizures were effected, in truth and 1153 substance, had no legal sanction and cannot be construed to be a notified order within the meaning of sub section
(1) read with sub section
(5) of section 3 of the Act; it was nothing but an executive direction.
No executive action which operates to the prejudice of a citizen can be taken without the authority of law.
It was asserted that the seizures effected were in compliance of the instructions contained in the impugned teleprinter message and not for breach of the two Control Orders and therefore it was nothing but a "colourable exercise" of power.
The real purpose of the seizure was procurement of wheat in furtherance of the directives of the Central Government, without any legal sanction since the farmers were not willing to sell their wheat at the procurement price.
Learned counsel for the petitioners also challenge the action of the Additional District Magistrate (Civil Supplies) Agra in passing an interim order in terms of sub section (2) (i) of section 6A of the Act for the sale of the seized wheat on Government account and for the sale proceeds to be credited into the treasury in an appropriate Head of Account; it is urged that under sub section
(2) (ii) of section 6A of the Act there being no control price for wheat, the wheat should have been sold by public auction.
In reply, learned counsel for the State has repelled all these contentions.
It is submitted that the source of power to effect the seizure was not the impugned teleprinter message, but the two Control Orders issued under section 3 of the Act.
He asserted that the wheat in question was not being transported during the course of inter State trade and commerce from the Union Territory of Delhi and the States of Punjab and Haryana to various other States.
The wheat had in fact been purchased at Agra and was being lifted from the State of Uttar Pradesh and had, therefore, to be seized at the check post at Saiyan and at Agra.
He points out that under cl. 3 of the 1976 Order, no person can carry on business as a dealer or commission agent, except and in accordance with the terms and conditions of a licence issued in that behalf by the licensing authority.
According to him, the seized wheat had been purchased at Agra in the course of trade, and they were not isolated transactions and, therefore, the Delhi traders committed contravention of cl. 3 of the 1976 Order.
It is also pointed out that cl. 4 of the 1978 Order, as amended, provides that no person who is a wholesale dealer, commission agent or retailer shall have in stock wheat in quantities exceeding 250 quintals, 250 quintals and 20 quintals at a time.
It is further pointed out, cl. 14 of the 1976 Order, and cl. 6 1154 of the 1978 Order confer the power of search and seizure on an enforcement officer or the licensing authority or any other officer authorised by the Government in that behalf, and the expression "enforcement officer" defined in cl. 2 (e) of the former Order and cl. 2(d) of the latter, includes the Chief Marketing Inspector.
According to the learned counsel the Government instructions conveyed in the impugned teleprinter message is merely in the nature of an executive instruction for the enforcement of the two Control Orders.
In support of the contentions, he also relies on the executive power of the State under article 162 of the Constitution.
In the premises, the contention on behalf of the State is that the question whether the seized wheat was liable to be confiscated or not under section 6A of the Act, was a matter pending adjudication before the Additional District Magistrate (Civil Supplies) Agra.
That depends on whether or not there was contravention by the petitioners of any of the Order issued under section 3 of the Act and, therefore, cannot be determined without full investigation into the facts.
The Inter Zonal Wheat (Movement Control) Order, 1976, issued by the Central Government, in exercise of the powers conferred by section 3 of the Act has been rescinded with effect from April 13, 1977.
The result of this is that the whole country constitutes a single zone for free movement of wheat except in such States where an order is issued under section 3 read with section 5 of the Act, placing a ban on export of wheat such as in the State of Rajasthan.
Admittedly, the State Government of Uttar Pradesh has not issued any order under section 3 read with section 5 of the Act, placing a ban on export of wheat from the State or any restriction on inter district movement of wheat within the State.
The State Government does not contest this position and indeed, the Chief Marketing Officer in his counter affidavit states: "The State of Uttar Pradesh has not banned the movement of wheat outside the State or from one district to another district within the State.
It is submitted that such traders who are transporting wheat alleged to be purchased from a place other than the State of Uttar Pradesh and were/are carrying the same to other States other than Uttar Pradesh have only to satisfy the authorities concerned of the bona fides of the transactions.
However, there is no ban on such movement from one State to another." 1155 The impugned teleprinter message dated March 31, 1981 runs as follows: "For: Regional Food Control, Agra/Bareilly/Dehradun/Faizabad/Gorakhpur Jhansi/Haldwani/Kanpur/Meerut/Varanasi Lucknow (by Hand) From: Secretary (Food) Lucknow.
No. TP 1061/XXIX Food 5 Dated: Lucknow: March 31, 1981.
Refer Tel TP 712/XXIX Food 5 5(1)/81 of 9th March 1981 regarding renewal of and issue of new licences to dealers(,) Government committed to provide benefits of support price to producers hence to ensure that maximum quantity of wheat is purchased by agencies (.) Para (.) After careful consideration Government have decided that with effect from first April 1981 till thirtieth June 1981 no repeat no fresh licences are to be issued to any person who wish to deal in wheat, wheat products or both as wholesaler commission agent retailer (.) Para (.) Government have also decided that during April 1981 to June 1981 movement of wheat by traders on private account to outside district shall be regulated only on the endorsement of Deputy Regional Marketing Officer concerned and hitherto this power being exercised by Senior Marketing Inspector shall not repeat not be used by them (.) Para (.) At the same time easy availability of wheat in open markets is to be ensured(.) Keeping all the relevant factors in view endorsement by Dy.
R.M.O. should be made judiciously on genuine and bonafide grounds(.) Para(.) Dy.
RMO will send daily report to RFC of the cases in which such permission is granted or endorsement made(. ) RFC will compile and send weekly report to Government(.) Permission to be given very sparingly and general impression made should be that they will not gain by doing any trading in wheat(.) Visit Mandis regularly and check quantities lying in traders premises(.) Presence of large stocks with trade means staff 1156 is not during their job properly(.
) Inform all concerned immediately for strict compliance(.) Dated: Lucknow; March 31, 1981 Sd/ M. Subrahmanyam Secretary Food & Civil Supplies Sec.
5 U.P. Secretariat, Lucknow.
" There can be no doubt that the aforesaid teleprinter message was in the nature of executive instructions of the State Government to the Regional Food Controllers of the various regions to secure compliance with the orders.
It may be mentioned that the State Government was committed to provide price support in wheat to producers and hence to maximise procurement of wheat, issued instructions that no fresh licences till June 30, 1981 were to be granted to any person who wished to deal in wheat, wheat products, or both, as well as a wholesale dealer, commission agent or a retailer.
It further conveyed the policy decision of the Government that during April 1981 movement of wheat by traders on private account to outside districts shall be regulated only on the endorsement of the Deputy Marketing Officer concerned and not by the Senior Marketing Inspectors as hitherto before.
The Government also directed the Regional Food Controllers to ensure easy availability of wheat in open market.
As regards the making of endorsement, they were advised that the powers should be exercised with due circumspection.
They were also asked to visit the mandis and keep a constant vigil on the stocks lying with the traders.
There appears to be nothing unusual on the State Government issuing such executive instructions.
Even assuming that the impugned teleprinter message is not relatable to the two Control Orders, the State Government undoubtedly could, in exercise of the executive power of the State, introduce a system of verification on movement of wheat from the State of Uttar Pradesh to various other States at the check posts on the border and place restrictions on inter district movement of wheat by traders on private account within the State.
The executive power of a modern State is not capable of any precise definition.
In Ram Jawaya Kapur vs State of Punjab, Mukherjea, C.J., dealt with the scope of articles 73 and 162 of the Constitution.
The learned Chief Justice observed that neither of the two Articles contains any 1157 definition as to what the executive function is or gives an exhaustive enumeration of the activities which would legitimately come within its scope.
It was observed: "Ordinarily the executive power con notes the residue of governmental functions that remain after legislative and judicial functions are taken away".
It is neither necessary nor possible to give an exhaustive enumeration of the kinds and categories of executive functions which may comprise both the formulation of the policy as well as its execution.
In other words, the State in exercise of its executive power is charged with the duty and the responsibility of carrying on the general administration of the State.
So long as the State Government does not go against the provisions of the Constitution or any law, the width and amplitude of its executive power cannot be circumscribed.
If there is no enactment covering a particular aspect, certainly the Government can carry on the administration by issuing administrative directions or instructions, until the legislature makes a law in that behalf.
Otherwise, the administration would come to a standstill.
In Ram Jawaya Kapoor 's case (supra) it was contended that the executive power of the State did not extend to the carrying on of trade of printing, publishing and selling of text books for schools unless such trade was authorised by law.
In repelling the contention, Mukherjea, C.J. speaking for the Court, observed : Our Constitution, though federal in its structure, is modelled on the British Parliamentary system where the executive is deemed to have the primary responsibility for the formulation of governmental policy and its transmission into law though the condition precedent to the exercise of this responsibility is its retaining the confidence of the legislative branch of the State.
The executive function comprises both of the determination of the policy as well as carrying it into execution.
This evidently includes the initiation of legislation, the maintenance of order, the promotion of social and economic welfare, the direction of foreign policy, in fact the carrying on or supervision of the general administration of the State.
The learned Chief Justice then went on to observe : The Indian Constitution is a written Constitution and even the legislature cannot override the fundamental rights 1158 guaranteed by it to the citizens.
Consequently, even if the acts of the executive are deemed to be sanctioned by the legislature, yet they can be declared to be void and in operative if they infringe any of the fundamental rights of the petitioners guaranteed under Part III of the Constitution.
On the other hand, even if the acts of the executive are illegal in the sense that they are not warranted by law, but no fundamental rights of the petitioners have been infringed thereby, the latter would obviously have no right to complain under article 32 of the Constitution though they may have remedies elsewhere if other heads of rights are infringed.
In Naraindas Indurkhya vs State of Madhya Pradesh & Ors Bhagwati, J., speaking for the Court, reiterated the principles laid down by Mukherjea, C.J. in Ram Jawaya Kapur 's case (supra) and held that the State Government could act in exercise of the executive power of the State under article 162 of the Constitution in relation to any matter with respect to which the State Legislature has power to make laws even if there was no legislation to support such executive action.
There is no denying the fact that the State Legislature is competent to enact a law on the subject covered by Entry 33, List III, which reads: 33.
Trade and commerce in, and the production, supply and distribution of, (b) foodstuffs, including edible oilseeds and oils.
The was enacted by Parliament in exercise of concurrent jurisdiction under Entry 33 List III of the Seventh Schedule to the Constitution as amended by the Constitution (Third Amendment) Act, 1954.
The exercise of such concurrent jurisdiction would not deprive the State legislature of its jurisdiction thereunder.
The State legislature, therefore, could still make a law on the subject regulating trade and commerce in, and the production, supply and distribution of 'foodstuffs ' and the only question that would arise is one of repugnancy dealt with in article 254 of the Constitution.
The executive power of the State being co extensive with its legislative power under Entry 33, List III, it relates to all matters covered by the subject 'foodstuffs ', 1159 trade and commerce in, and the production, supply and distribution thereof.
This is, of course, subject to the limitation contained in Proviso to article 162 which directs that in any matter with respect to which the legislature of a State and Parliament have power to make laws, the executive power of the State shall be subject to, and limited by, the executive power expressly conferred by the Constitution or by any law made by Parliament upon the Union or authorities thereof.
This leads us to another aspect of the problem of considerable difficulty and importance.
The subject 'search and seizure ', is a field which has not come before the court with considerable frequency, but this is a hard fact of life which the citizen does encounter very often.
The executive power of 'search and seizure ' is a necessary concomitant of a welfare State.
It tends to promote the well being of the nation.
Many questions arising in the field of search and seizure are factual in nature.
They involve varying degrees of difference among the infinitely diverse facts.
Every factual variation presents not only a new problem, but also a new constitutional question.
It is a limitless area in which different issues may arise with vast variations of facts which are involved in each individual case.
This is, indeed, a peculiar field in which the decisions of courts do not help in clarifying the law.
The decisions in the field are of little precedental value because, the more the cases that are decided, the more new issues arise, through possible factual variations.
The check posts and barriers on the borders of the State of Uttar Pradesh are set up under section 28 of the U.P. Sales Tax Act, 1948 and are designed and meant to prevent evasion of sales tax and other dues.
The constitutional validity of section 28 and its cognate provisions, sections 28A to 28C has, rightly, if we may say so, not been challenged before us.
From the point of view either of Entry 54, List II, or of article 301 of the Constitution, there is no question of any lack of competence in the State legislature to set up the checkposts and barriers on the State 's borders.
These provisions, read with the requirements of r. 83(4) of the U.P. Sales Tax Rules, 1948 require that the owner, driver or any other person in charge of the vehicle or vessel shall, in respect of such goods carried in the vehicle or vessel as are notified under sub section
(1) of section 28A, carry with him, a declaration in Form XXXI, a certificate in Form XXXII, a transit pass in Form XXXIV in duplicate, cash memo, bill of sale or challan and a trip sheet in triplicate.
The factual existence of these check 1160 posts or barriers on the State 's borders is not denied, nor their legality challenged.
It is not suggested that the setting up of these check posts is a restriction on the freedom of trade, commerce and intercourse guaranteed under article 301 of the Constitution, or is such as directly and immediately restricts or impedes the free flow or movement of goods.
It is also not suggested that these regulatory measures in setting up the check posts on the State 's borders are such as impede freedom of trade, commerce and intercourse.
Just as inter State trade and commerce must pay its way and be subject to taxation, persons engaged in such inter State trade or commerce are equally subject to all regulatory measures.
There is no reason why the check posts or barriers set up by the State Government under section 28 of the U.P. Sales Tax Act, 1948, cannot be utilised as a machinery for due observance of the laws, e.g. for verification and control of movement of wheat by traders on private account from the State of Uttar Pradesh to various other States.
The instructions conveyed by the State Government by the impugned teleprinter message dated March 31, 1981, were a direct sequel to the Centre 's directives contained in its earlier teleprinter message.
It was intended and meant to achieve three main objectives, namely, (1) to provide price support in wheat to purchasers with a view to sustain, maintain and maximise the procurement of wheat; (2) to prevent hoarding and blackmarketing; and (3) to provide for equitable distribution and availability of wheat at fair prices.
These directions were obviously meant to subserve the object of the legislation and were in public interest.
These cases were argued with much learning and resource particularly with reference to the rule of law and the consequent limitations on the executive power of the State under article 162 to 'trench ' upon the fundamental right to carry on trade or business guaranteed under article 19 (1) (g) and the freedom of trade, commerce and intercourse throughout the territory of India guaranteed under article 301 of the Constitution.
It necessarily involves a claim by the State that the measures taken by the State Government by the impugned teleprinter message were nothing but regulatory measures to ensure that the excess stock of wheat held by a wholesale dealer, commission agent or a retailer is not transported to a place outside the State or from one district to another within the State and therefore were not a 'restriction ' on the fundamental right to carry on trade or business guaranteed under article 19 (1)(g) or on the freedom of trade, commerce and intercourse under article 301.
1161 The quintessence of our Constitution is the rule of law.
The State or its executive officers cannot interfere with the rights of others unless they can point to some specific rule of law which authorises their acts.
In State of Madhya Pradesh vs Thakur Bharat Singh, the Court repelled the contention that by virtue of article 162, the State or its officers may, in the exercise of executive authority, without any legislation in support thereof, infringe the rights of citizens merely because the legislature of the State has power to legislate in regard to the subject on which the executive order is issued.
It was observed: "Every act done by the Government or by its officers must, if it is to operate to the prejudice of any person, be supported by some legislative authority.
" The same principle was reiterated by the Court in Satwant Singh Sawhney vs Dr. Ramarathnam, Assistant Passport Officer, Government of India, New Delhi & Ors, and Smt.
Indira Nehru Gandhi vs Shri Raj Narain.
There can be no doubt that the , is a 'law ' within the meaning of article 302 of the Constitution imposing reasonable restrictions on the right to carry on trade and commerce as guaranteed by article 19(1)(g) and article 301 of the Constitution.
The object of the Act is to provide, in the interests of the general public, for the control, production, supply and distribution of, and trade and commerce in, certain essential commodities.
To appreciate the points involved, it is necessary to set out the material statutory provisions.
Sub section
(1) of section 3 of the Act provides as follows: "3(1).
If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, or for securing any essential commodity for the defence of India or the efficient conduct of military operations, it may, by order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein.
1162 Sub section
(2) thereof provides that without prejudice to the generality of the powers conferred by sub section
(1) an order made thereunder may provide for any of the matters enumerated therein.
Sub section
(5) provides that any order made under this section shall in the case of an order of a general nature or affecting a class of persons, be notified in the Official Gazette.
By virtue of the delegation of powers under section 5 of the Act the State Government in relation to such matters and subject to such conditions as may be specified, may exercise the powers of the Central Government under section 3 Clause (j) of sub section
(2) of 3 provides that the Central Government or the State Government, as the case may be, may by order provide: "For any incidental and supplementary matters, including, in particular, the entry, search or examination of premises, aircraft, vessels, vehicles or other conveyance and animals, and the seizure by a person authorised to make such entry, search or examination. ' Sub sections
(1) and (2) of section 6A of the Act, insofar as material, provide as follows: "6A(1).
Where any essential commodity is seized in pursuance of an order made under section 3 in relation thereto, a report of seizure shall, without unreasonable delay, be made to the Collector of the district or the Presidency town in which such essential commodity is seized and whether or not a prosecution is instituted for the contravention of such order, the Collector may, if he thinks it expedient so to do, direct the essential commodity so seized to be produced for inspection before him, and if he is satisfied that there has been a contravention of the order, may order confiscation of (a) the essential commodity so seized; 6A(2).
Where the Collector, on receiving a report of seizure or on inspection of any essential commodity under sub section
(1), is of the opinion that the essential commodity is subject to speedy and natural decay or it is otherwise expedient in the public interest so to do, be may (i) order the same to be sold at the controlled price, if any, fixed for such essential commodity under this Act or under any other law for the time being in force; or 1163 (ii) where no such price is fixed, order the same to be sold by public auction: Provided that in case of foodgrains, the Collector may, for its equitable distribution and availability at fair prices, order the same to be sold through fair price shops at the price fixed by the Central Government or by the State Government, as the case may be, for the retail sale of such foodgrains to the public." Learned counsel for the State Government, in all fairness, does not assert that the impugned teleprinter message having regard to the requirements of sub section
(5), has the effect of a notified Order under section 3 of the Act placing a ban on export of wheat from the State or imposing a restriction on inter district movement of wheat.
It is submitted that it only conveyed the instructions of the State Government requiring the Regional Food Controllers to be more vigilant to secure due observance of the laws.
The question still remain whether the instructions conveyed by the teleprinter message had the force of law.
It is therefore to be considered whether the instructions conveyed by the State Government by the impugned teleprinter message were relatable to the two Control Orders and therefore could be considered to be 'law ' or an order having the force of law placing reasonable restriction on the freedom to carry on any occupation, trade or business guaranteed under article 19(1)(g) read with article 19(6) of the Constitution or on the freedom of trade, commerce and intercourse throughout the territory of India guaranteed under article 301 o the Constitution.
It is further to be considered whether the seizure of wheat in transit was with authority of law.
It is submitted that although the impugned teleprinter message dated March 31, 1981 was in the nature of executive instructions of the State Government to the Regional Food Controllers of the various regions to secure compliance with the two Control Orders, it had the force of law.
It is pointed out that under licence conditions Nos. 11, 12 and 13 of the licence issued in Form B under cl. 4 of the 1976 Order, a dealer is required to comply with any direction that may be given by the State Government in regard to purchase, sale or storage for sale of foodgrains, to furnish such information relating to his business as may be demanded of him and to carry out such instructions as may, from time to time, be given, 1164 by the State Government or the licensing authority, and to give all facilities at all reasonable times, to the enforcement officer or the licencing authority or any officer authorised by him or the State Government for the inspection of the stocks etc.
It is further pointed out that the State Government of Uttar Pradesh has by Notification No. P XXIX Food 5 5(42)/80 dated April 21, 1981, in exercise of the powers conferred by section 3 read with section 5 of the Act, with the prior concurrence of the Central Government, issued the Uttar Pradesh Foodgrains (Procurement and Regulation of Trade) (First Amendment) Order, 1981.
By cl. 2 thereof, a new cl. 4 has been substituted in the 1978 Order by which the stock limit of dealers in foodgrains has been re fixed, as it was of the opinion that it was necessary and expedient so to do for securing equitable distribution and availability of wheat at fair prices.
The new cl. 4 provides that no wholesale dealer, commission agent or retailer, shall have in stock, wheat more than 250 quintals, 250 quintals and 20 quintals respectively, at any time.
The re fixation of the stock limit of a wholesale dealers at 250 quintals, at any time, is to ensure that wholesale dealers in the State of Uttar Pradesh do not try to corner stocks of wheat for purposes of speculation.
The submission is that the State Government without placing any restriction on movement of wheat from the State of Uttar Pradesh to various other States, has virtually frozen the excess stock of wheat lying with wholesale dealers of foodgrains in the State.
There is, in our opinion, considerable force in these submissions.
The real question at issue is whether or not the seizure of wheat was with the authority of law.
The fundamental right to carry on trade or business guaranteed under article 19(1)(g) or the freedom of inter State trade, commerce and intercourse under article 301 of the Constitution, has its own limitations.
The liberty of an individual to do as he pleases is not absolute.
It must yield to the common good.
Absolute or unrestricted individual rights do not and cannot exist in any modern State.
There is no protection of the rights themselves unless there is a measure of control and regulation of the rights of each individual in the interests of all.
Whenever such a conflict comes before the Court, it is its duty to harmonise the exercise of the competing rights.
The Court must balance the individual 's rights of freedom of trade under article 19(1)(g) and the freedom of inter State trade and commerce under article 301 as against the national interest.
Such a limitation is inherent in the exercise of those rights.
1165 Under article 19(1)(g) of the Constitution, a citizen has the right to carry on any occupation, trade or business and the only restriction on this unfettered right is the authority of the State to make a law imposing reasonable restrictions under cl.
The principles underlying in cls.
(5) and (6) of article 19 are now well settled and ingrained in our legal system in a number of decisions of this Court, and it is not necessary to burden this judgment with citations.
The expression 'reasonable restriction ' signifies that the limitation imposed on a person in enjoyment of the right should not be arbitrary or of an excessive nature, beyond what is required in the interests of the public.
The test of reasonableness, wherever prescribed, should be applied to each individual statute impugned, and no abstract standard, or general pattern of reasonableness can be laid down as applicable in all cases.
The restriction which arbitrarily or excessively invades the right cannot be said to contain the quality of reasonableness and unless it strikes a proper balance between the freedom guaranteed in article 19(1)(g) and the social control permitted by cl.
(6) of article 19, it must be held to be wanting in that quality.
The nature of the right alleged to have been infringed is that wholesale dealers in foodgrains from the State of Uttar Pradesh or elsewhere are prevented from moving their stock of wheat to various other States or from one district to another without the transaction being verified and duly endorsed by the Deputy Marketing Officer or the Senior Marketing Officer concerned.
The other restriction on the enjoyment of their right placed by the impugned teleprinter message is that there should be physical verification at the checkposts on the State 's borders.
These steps were designed to prevent a price rise in wheat in the State of Uttar Pradesh and to prevent outflow of wheat from the State to various other States and from one district to another district within the State.
The whole object was to ensure that the wholesale dealers in foodgrains did not corner stocks of wheat for the purpose of speculation.
It cannot be said that they do not contain the quality of reasonableness or were not in the interests of the general public.
In judging the validity of these restrictions, the Court has to strike a proper balance between the freedom guaranteed under article 19(1)(g) and the social control permitted by article 19(6).
If, therefore, the seizure can be justified on the basis of any valid law, it cannot be held to be illegal.
This is equally true of article 301.
article 301 imposes a general limitation on all legislative 1166 power in order to secure that trade, commerce and intercourse throughout the territory of India shall be free.
Having placed a general limitation on the legislative powers of Parliament and the State Legislatures, article 302 relaxes that restriction in favour of Parliament by providing that authority may, by law, impose such restrictions on the freedom of trade, commerce and intercourse between one State and another and within any part of the territory of India in the public interest.
Likewise, article 304(b) provides that notwithstanding anything in article 301 or article 303, a legislature of a State may, by law, impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest, provided that no Bill or amendment for the purpose of cl.
(b) shall be introduced or moved in the legislature of a State without the previous sanction of the President.
Although article 301 guarantees that trade, commerce and intercourse throughout the country shall be free, the right to carry on inter State trade and commerce may be subject to reasonable restrictions in the interests of the general public.
The word 'free ' in article 301 does not mean freedom from laws or from regulations.
article 301 guarantees freedom of trade, commerce and intercourse throughout the country from any State barriers.
It declares that subject to the other provisions of Part XIII, trade, commerce and intercourse throughout the territory of India shall be free.
The whole object was to bring about the economic unity of the country under a federal structure, so that the people may feel that they are members of one nation.
One of the means to achieve this object is to guarantee to every citizen the freedom of movement and residence throughout the country.
That is achieved by article 19(1)(d) and (e).
No less important is the freedom of movement or passage of commodities from one part of the country to another.
The progress of the country as a whole also requires free flow of commerce and intercourse as between different parts, without any barrier.
This freedom of trade, commerce and intercourse throughout the country without any 'State barriers ' is not confined to inter State trade but also includes intra State trade as well.
In other words, subject to the provisions of Part XIII, no restrictions can be imposed upon the flow of trade, commerce and intercourse, not only between one State and another, but between any two points within the territory of India whether any State border has to be crossed or not.
It is now well settled that the regulatory measures or measures imposing compensatory taxes do not come within the purview of the 1167 restrictions contemplated by article 301.
The regulatory measures should, however, be such as do not impede the freedom of trade, commerce and intercourse.
It cannot be said that the instructions conveyed by the State Government by the impugned teleprinter message imposing the requirement for the making of an endorsement by the Deputy Marketing Officer or the Senior Marketing Officer or the physical verification of stocks of wheat during the course of transit, are a 'restriction ' on the freedom of trade, commerce and intercourse within the country, i.e, across the State or from one part of the State to another.
These are nothing but regulatory measures to ensure that the excess stock of wheat held by a wholesale dealer, commission agent or a retailer is not transported to a place outside the State or from one district to another.
Even if these requirements are construed to be a 'restriction ' on the inter State or intra State trade, the limitation so imposed on the enjoyment of the right cannot be considered to be arbitrary or of an excessive nature.
Nor can it be said that such restrictions do not satisfy the test of reasonableness.
The question whether or not the seizure of the wheat was for contravention of any order issued under section 3 of the Act is pending investigation before the Additional District Magistrate (Civil Supplies), Agra.
For the establishment of their rights the petitioners have still to establish that the wheat in question was bought by them in open market in Delhi and elsewhere and was being merely transported through the State of Uttar Pradesh in the course of inter State trade and commerce.
If that be so, then there was no contravention of any order issued by the Central Government under section 3 or by the State Government under section 3 read with section 5 of the Act.
If, on the contrary, the wheat had been purchased by them at Agra or nearby places within the State of Uttar Pradesh, the question would arise whether such purchase, storage or sale of wheat was in contravention of any of the two Control Orders.
In case there was such contravention of any of the provisions of the two Control Orders, then there was undoubtedly the power of search and seizure.
The case of the State Government before us was that the source of power to effect the seizure was the two Control Orders.
It was asserted that the wheat was not being transported during the course of inter State trade and commerce from the Union Territory of Delhi to various other States, but had, in fact, been purchased at Agra and was being lifted from the State of Uttar Pradesh and had therefore to be seized at the check post at Saiyan and at Agra.
Under cl. 3 of 1976 Order, no person can carry on business as a 1168 dealer or commission agent except and in accordance with the terms and conditions of a licence issued in that behalf by the licensing authority.
The term 'dealer ' is defined in section 2(c) of the Order to mean a person engaged in the business of purchase, sale or storage for sale of foodgrains.
According to the State, the seized wheat had been purchased at Agra in the course of trade and they were not isolated transactions and, therefore, the Delhi traders committed contravention of cl. 3 of the 1976 Order.
14 thereof confers the power of search and seizure on an enforcement officer or the licensing authority or any other officer authorised by the State Government in that behalf.
The expression 'enforcement officer ' is defined in cl. 2(e) of that Order and it includes the Chief Marketing Officer and in that capacity the Chief Marketing Officer, having reason to believe that contravention of the provisions of the Order had been, was being, or was about to be committed, had the power to seize the trucks at the check post at Saiyan and effect the seizure of the trucks laden with wheat and bring them to the purchase point at Agra.
Furthermore, under cl. 4 of the 1978 Order, as amended, no person who is a wholesale dealer, commission agent or a retailer, shall have in stock wheat in quantities exceeding 250 quintals, 250 quintals and 20 quintals respectively at a time.
6 confers the power of search and seizure on an enforcement officer which term as defined in cl.
2(d) likewise includes the Chief Marketing Inspector, Under cl. 6(d), the Chief Marketing Inspector, as an enforcement officer, had the power to seize any article in respect of which he had reason to believe that a contravention of the Order had been, was being, or was about to be committed.
The fixation of the maximum limits of stocks of wheat at 250 quintals 250 quintals and 20 quintals respectively, which a wholesale dealer, commission agent or a retailer may hold, at any one time, has necessarily the effect of freezing the excess stock of wheat lying with such dealer.
This also results in preventing the movement of such excess stock of wheat from the State of Uttar Pradesh to various other States or from one district to another.
The excess stock of wheat lying with such dealer, that is, a wholesale dealer, commission agent or a retailer, in truth and substance, became their 'unlicensed stock '.
If really the Delhi traders had purchased the excess stock of wheat from wholesale dealers, commission agents or retailers in the State of Uttar Pradesh, as is alleged, it is possible to contend that there was a contravention of the provisions of cl. 4 of the 1978 Order.
The question whether the seizure was for any contravention of any Order issued under 1169 section 3 of the Act has to be determined by the Additional District Magistrate (Civil Supplies), Agra, on the evidence adduced by the parties before him.
The facts being controverted, the petitioners have no right to relief under article 32 of the Constitution.
Each of the petitioners has filed a sheaf of documents showing that the wheat had been purchased in the open market in Delhi and elsewhere, that the trucks laden with their wheat were accompanied by the relevant bills, goods receipts, inter State transit passes etc., that the trucks in question were allowed to cross the check posts at Kotwan on the border between the Union Territory of Delhi and the State of Uttar Pradesh.
but were seized either at the check posts at Saiyan on the border between the States of Uttar Pradesh and Madhya Pradesh or at Agra, while they were in transit through the State of Uttar Pradesh.
It was also asserted that all the documents were seized and taken away by the Senior Marketing Inspector, and that he had given an acknowledgment of the same.
Learned counsel appearing for the State vehemently contends that these documents were not shown to the authorities concerned and it is for the petitioners to prove these documents before the Additional District Magistrate (Civil Supplies), Agra, in support of their claim We cannot act on the documents because the transactions are still to be proved.
It is asserted on behalf of the State Government that such documents could always be brought into existence, particularly when none of the transactions were effected through a Bank.
This Court cannot obviously pronounce upon the genuineness of the transactions or record any finding on the basis of the documents when the facts are in dispute.
There still remains the question whether the seizure of wheat amounts to deprivation of property without the authority of law.
article 300A provides that no person shall be deprived of his property save by authority of law.
The State Government cannot while taking recourse to the executive power of the State under article 162, deprive a person of his property.
Such power can be exercised only by authority of law and not by a mere executive fiat or order.
article 162, as is clear from the opening words, is subject to other provisions of the Constitution.
It is, therefore, necessarily subject to article 300A.
The word 'law ' in the context of article 300A must mean an Act of Parliament or of a State Legislature, a rule, or a statutory order; having the force of law, that is positive or State made law.
The decisions in Wazir Chand vs The State of Himachal 1170 Pradesh and Bishan Das and others vs The State of Punjab and others are an authority for the proposition that an illegal seizure amounts to deprivation of property without the authority of law.
In Wazir Chand 's case (supra), the police in India seized goods in possession of the petitioner in India at the instance of the police of the State of Jammu and Kashmir.
The seizure was admittedly not under the authority of law, inasmuch as it was not under the orders of any Magistrate; nor was it under sections 51, 96, 98 and 165 of the Code of Criminal Procedure, 1898, since no report of any offence committed by the petitioner was made to the police in India, and the Indian police were not authorised to make any investigation.
In those circumstances, the Court held that the seizure was not with the authority of law and amounted to an infringement of the fundamental right under article 31(1).
This view was reaffirmed in Bishan Das 's case (supra).
The effect of the Constitution (Fourth) Amendment Act, 1955, is that there can be no 'deprivation ' unless there is extinction of the right to property.
It is urged that the seizure of wheat was not with a view to extinction of the rights of the petitioners, but the property in the seized wheat was theirs.
No doubt, the wheat had to be sold, as it was subject to speedy and natural decay, but the petitioners are entitled to the sale proceeds, if ultimately it is found by the Additional District Magistrate (Civil Supplies), Agra, that there was no contravention by them of an order issued under section 3 of the Act.
It is not necessary for us to deal with the question whether an illegal seizure amounts to 'deprivation ' of property within the meaning of article 300A for purposes of this case, as the State Government does not dispute the right of the petitioners to the sale proceeds.
It is true that the seizure was with intent to confiscate under section 6A of the Act, but that would not make the seizure illegal, if, ultimately, it is found that there was contravention of an order issued under section 3 of the Act.
If the facts were not in controversy and if the petitioners were also able to prove that there was wrongful seizure of wheat by the State Government of Uttar Pradesh at the check post of Saiyan on the border, while in transit, in the course of inter State trade and commerce from the Union Territory of Delhi, perhaps, they would be entitled to the return of the seized wheat, or, in the alternative, 1171 to the payment of price thereof.
The State contests the right of the Court to investigate into the facts, particularly when the matter is a fact in issue in the aforesaid proceedings before the Additional District Magistrate (Civil Supplies), Agra.
Normally, it is not the function of this Court to investigate into facts in proceedings under article 32 of the Constitution when they are controverted with a view to discerning the truth.
The matter must, in a situation like this, be left to the fact finding body.
For the establishment of their right to relief under article 32, the petitioners must, in our opinion, establish the necessary fact before the said Additional District Magistrate in the proceedings under section 6A of the Act.
If they fail to get relief in such proceedings, their obvious remedy lies in a suit for damages for wrongful seizure.
The question that the seizures were in reality for procurement of wheat in furtherance of the directive of the Central Government, and not for breach of the two Control Orders and, therefore, were nothing but a 'colourable exercise of power ', is dependent on facts to be found on investigation.
Further, the question that there being no control price for wheat, the wheat should have been sold by public auction, is again a question that must be raised before the Additional District Magistrate (Civil Supplies), Agra, in the proceedings pending before him under section 6A of the Act.
Turning to the petitions under article 32 of the Constitution by wholesale dealers of foodgrains from the State of Uttar Pradesh, learned counsel appearing for these petitioners challenged the impugned teleprinter message dated March 31, 1981, and the Notification No. P. XXIX Food 5 5(42)/80 dated April 21, 1981, issued by the State Government of Uttar Pradesh, by which cl. 4 of the Uttar Pradesh Foodgrains (Procurement and Regulation of Trade) Order, 1978, has been amended, particularly on three grounds, namely, (1) the impugned notification fixing the maximum limit of wheat permitted to be possessed by a wholesale dealer at 250 quintals, at a time, is an unreasonable restriction on the freedom of trade guaranteed under article 19(1)(g) of the Constitution; (2) there is no distinction made between a wholesale dealer and a commission agent in as much as the maximum limit of wheat allowed to be possessed by them is the same, i.e., 250 quintals at a time and the fixation of such limit in the case of a wholesale dealer is arbitrary, irrational and irrelevant and thus violative of article 14 of the Constitution; and (3) the instructions conveyed by the State Government by its teleprinter message dated March 31, 1981, placing restrictions 1172 on movement of wheat by traders on private account from the State of Uttar Pradesh to various other States and on inter district movement of wheat within the State, were in breach of their fundamental right under article 19(1)(g) read with article 301 of the Constitution.
The first and second contentions may conveniently be dealt with together.
In order to appreciate these contentions, it is necessary to state a few facts: During the year 1979 80, the country was victim to a very serious drought which affected with Kharif as well as Rabi crops.
The Government of India, therefore, fixed a target of 9.5 million tonnes of wheat to be purchased in the summer months of 1981 for the national buffer stock.
It fixed the procurement price at Rs. 130 per quintal as against the support price of Rs. 127 per quintal recommended by the Agricultural Price Commission to provide a better incentive to the farmers.
The procurement was carried out as a measure of price support without any restriction on movement from one State to another.
However, some of the States were implementing local laws with regard to ensuring that the private trade adhered to the stock limit restrictions on them and did not try to corner stocks for speculation purposes.
The original target fixed for procurement was 9.5 million tonnes but at the end of June, only 6.5 million tonnes had been purchased, leaving a deficit of 3 million tonnes.
The result was that the Government of India was thus forced to buy 1.5 million tonnes of wheat in the world market.
The Government 's procurement drive was mainly frustrated by wholesale dealers of foodgrains cornering the stocks of wheat by paying a price higher than the procurement price to the farmers.
The imperatives of the situation demanded that the speculative tendencies of the trade were curbed by strictly enforcing the stock limits of traders.
Under original cl. 4 of the Uttar Pradesh Foodgrains (Procurement and Regulation of Trade) Order, 1978, a wholesale dealer, commission agent or a retailer could have in stock wheat not more than 750 quintals, 750 quintals and 100 quintals respectively, at any time.
In view of the worsening situation in the national buffer stock and in the light of the experience gained during the past few years, the State Government was of the opinion that it was necessary and expedient to re fix the stock limits of such dealers.
This was expected to maximise procurement of wheat to meet the requirement of public distribution, as well as, the buffer stock.
1173 It cannot be asserted that the restriction imposed by the State Government on wholesale dealers of wheat is either arbitrary or is of an excessive nature.
The fixation of the stock limit of wheat to be possessed by wholesale dealers, at any time, at 250 quintals is an important step taken by the State Government to obviate hoarding and black marketing in wheat which is in short supply.
It is hardly necessary to emphasise the extent and urgency of the evil sought to be remedied thereby.
Perhaps fixation of the minimum limit of wheat permitted to be possessed by a wholesale dealer at 250 quintals, at a time, is too low, but the restriction so imposed cannot be treated to be arbitrary or of an excessive nature, beyond what is required in the national interest.
It is a matter of common knowledge that wholesale dealers of foodgrains mainly operate in large cities and towns and have the means and capacity to manipulate the market by withholding stocks of a commodity.
There was need to check such speculative tendencies in the trade.
It was therefore felt expedient to re fix the stock limit of wheat for wholesale dealers at 250 quintals at a time, as in the case of a commission agent.
The underlying idea is that the wholesale dealers should be allowed to continue their trading activities within reasonable limits.
The fixation of stock limit at 250 quintals implies that wholesale dealers can have at any time, in stock, a wagon load of wheat.
In Krishan Lal Praveen Kumar & Ors. etc.
vs The State of Rajasthan, this Court has interpreted the words 'at any time ' as meaning 'at any given time '.
This means that a wholesale dealer should not have in stock more than 250 quintals at a time.
But there is nothing to prevent a wholesale dealer from entering into a series of transactions during the course of the day.
This Court in Krishan Lal Parveen Kumar 's case (supra) and Suraj Mal Kailash Chand & Ors.
vs Union of India & Anr., has upheld the validity of a similar notification dated March 23, 1981, issued by the State Government of Rajasthan in exercise of the powers conferred by cl. 18 of the Rajasthan Trade Articles (Licensing and Control) Order, 1980, fixing the maximum limit of wheat to be possessed by a dealer at any one time at 200 quintals, on the ground that it is a reasonable restriction by the State Government within the meaning of article 19(6) of the Constitution.
In view of these decisions, it is difficult to conceive as to how the contention based on article 19(1)(g) of the Constitution can survive.
1174 True it is, if the governmental action is arbitrary or there is no rational nexus to the object sought to be achieved it is liable to be struck down as violative of article 14 of the Constitution.
The State Government has adopted various measures in the interest of the general public for the control of production, supply and distribution of, and trade and commerce in, essential commodities.
To obviate hoarding and blackmarketing in foodstuffs, it has promulgated the Order.
It introduces a system of checks and balances to achieve the object of the legislation, i.e., to ensure equitable distribution and availability of essential commodities at fair prices.
It cannot be said that looking to the prevailing conditions, the imposition of such restrictions does not satisfy the test of reasonableness.
Nor can it be said that the fixation of such stock limit is arbitrary or irrational having no nexus to the object sought to be achieved and is, therefore, violative of article 14.
On the contrary, the limitation imposed fixing a stock limit for a wholesale dealer at 250 quintals is a reasonable restriction within the meaning of article 19(6) of the Constitution.
One further point requires to be noticed.
The contention that the action taken by the State Government in issuing the impugned teleprinter message amounts to an 'intrusion ' on the fundamental right to carry on trade or business under article 19(1)(g) or on the freedom of trade, commerce and intercourse under article 301 of the Constitution appears to be wholly misconceived.
As already stated the instructions conveyed by the State Government by the impugned teleprinter message imposing the requirement for the making of an endorsement by the Deputy Marketing Officer or the Senior Marketing Officer or the physical verification of stocks of wheat during the course of transit, are not a 'restriction ' on the fundamental right to carry on trade or business guaranteed under article 19(1)(g) or on the freedom of trade, commerce and intercourse under article 301.
These are nothing but regulatory measures to ensure that the excess stock of wheat held by a wholesale dealer, commission agent or a retailer is not transported to a place outside the State or from one district to another.
Even if these requirements are considered to be a 'restriction ' on inter State or intra State trade, that is, across the State or from one part of the State to another, the limitation so imposed on the enjoyment of the right cannot be considered to be arbitrary or of an excessive nature and thus violative of article 19(1)(g) or article 301 of the Constitution.
The State Government in its return has stated that there is no ban on the export of wheat from the State of Uttar Pradesh to various other States or from one 1175 district to another within the State, subject to the making of an endorsement by the Deputy Marketing Officer or the Senior Marketing Officer concerned.
The petitioners who are wholesale dealers of foodgrains in the State of Uttar Pradesh are, therefore, free to carry on their business within the permissible limits, i.e., they may carry on their trade or business or enter into inter State or intra State transactions of wheat subject to the stock limit of 250 quintals at a time.
In the result, the writ petitions must fail and are dismissed.
The stay orders passed by the Court, from time to time, stand vacated.
Formal orders for vacating stay granted in those matters need not be issued.
There shall be no order as to costs.
S.R. Petitions dismissed.
| Under an agreement the Government placed certain lands belonging to it at the disposal of the Improvement Trust for the construction of a market.
The Trust constructed the market with funds advanced by the Government by way of loan at interest.
Under the agreement the Trust had to pay a certain fixed sum by way of revenue on the property; the income from the market had to be applied to the payment of interest on the money advanced by Government, and to the payment of expenses for the management of the market and the surplus had to be placed at the disposal of, Government to be spent according to its directions.
The lessee of the market from the Trust filed a suit for a declaration that it was protected from ejectment by the provisions of the Delhi and Ajmer Rent Control Act.
It was contended by the lessee that the market was the property of the Trust to which the Act applied.
It was further contended by the lessee relying upon the language of section 54A(2) of the U. P. Town Improvement Act, that the market vested in the Trust for otherwise it could not upon transfer by the Trust vest in the Chief Commissioner as provided by this section.
Held, that upon a proper construction of the terms of the agreement between the Trust and the Government, the Trust was in the position of a statutory agent of the Government and that the market was Government premises to which the provisions of the Delhi and Ajmer Rent Control Act were not applicable by virtue Of section 3(a).thereof, and consequently the lessee was liable to ejectment upon termination.
of the period of the lease.
The word 'vest ' has not got a fixed connotation, meaning in all cases that the property is owned by the person or authority in whom it vests.
It may vest in title, or it may vest in possession or it may vest in a limited sense.
|
ivil Appeal Nos.
2263 to 2268 of 1984.
From the Judgment and Order dated 2nd April , 1982, of the High Court of Karnatka in Writ Appeal Nos. 662 to 667 of 1982.
663 Writ Petition Nos.
394 405 of 1984.
(under Article 32 of the constitution).
K. Srinivasan , Raghvendra Rao , V. Kumar for the Appellants.
in the C.A. Nos.
2263 68 of 1984.
R.P. Bhatt , Swaraj Kaushal for the Respondents in C.A. Nos.
2263 68 of 1984.
B Krishnamani , Lalit Kumar Gupta , Subash Dutt , K.K Pargal and Pankaj Kalra , for the Petitioner in W.P. No. 391 405/84.
K.L. Sharma , S.L. Benadikar and M. Veerappa for the Respondents in W.P. No. 394 405/84.
C The Judgment of the Court was delivered by KHALID , J.
The above appeals , by special leave, are directed against the common Judgment rendered by a Division Bench of the Karnataka High Court in writ appeal Nos.
662 668 of 1982.
In the writ petitions , the prayer is to strike down Section 7 of Karnataka Act No. 13 of 1982, Sections 2 and 3 of Karnataka Act No. 10 of 1984 and for a writ of mandamus to restrain the State of Karnataka from enforcing the said provisions against the Petitioners in the writ petitions.
This Judgment will dispose of the appeals and the writ petitions.
The facts , in brief , necessary to understand the genesis of the cases are as follows: Consequent upon the abolition of octroi by the State of Karnataka , which was the main source of revenue for the local bodies , the said State enacted the Karnataka Tax on Entry of Goods into local areas for Consumption , use or salt therein Act , 1979 (for short the 1979 Act) in order to augment the resources of the local bodies.
This Act came into force with effect from 1.6.1979 on which date it was gazetted.
3.A batch of 1590 writ petitions were field in the Karnataka High Court by a large number of traders challenging the constitutional validity of this Act.
Writ Petition No , 7039 of 1979 was one of them which was by Messrs Hansa Corporation , Bangalore.
These writ petitions, on reference by a learned Single Judge , were heard by a Division Bench , which by a common 664 Judgment dated 24.8.1979(T) struck down the Act , allowed the writ petition and issued writs of mandamus against the State Government forbearing it from taking any proceeding under the Act.
The State took the matter in appeal to this Court.
However only one appeal was filed , numbered as 3049 of 1979 against writ petition No. 7039 of 1979 filed by Messrs Hansa Corporation , in , pleading this Corporation alone as respondent , This Court by its Judgment dated 25.9.1980 allowed the appeal , set aside the Judgment of the Karnataka High Court and upheld the validity of the Act.
This decision is reported in ; 4.
While Civil appeal No. 3049 of 1979 was pending before this Court , the Governor of Karnataka promulgated the Karnataka Tax on Entry of Goods into a Local Area for Consumption , use or Sale therein Ordinance of 1980 (Karnataka Ordinance No. 5 of 1980) on 8.6.1980 providing for levy of entry tax on registered dealers , removing the infirmities in the 1979 Act , that were pointed out by the High Court in its Judgment while striking down the Act.
This ordinance was replaced by Act No. 21 of 1980 giving it retrospective effect from 8 6.1980 , the date of the ordinance .
After this Court rendered its Judgment in the Hansa Corporation case , the Governor of Karnataka promulgated another ordinance , Ordinance No. 11 of 1980 on 25.10.l980 re pealing the Entry Tax Act , 1980 , from its inception with certain other directions regarding adjustment of tax if any paid.
This was followed by Karnataka Tax on Entry of Goods into Local Areas , Use or Sale therein (repeal) Act, of 1981 , and Karnataka Act No. 10 of 1981 , repealing the 1980 Act.
This Act , however , did not repeal ordinance No. 11 of 1980.
In the meantime , Karnataka Ordinance No. 3 of 1981 , came into force which was followed by Karnataka Act 12 of 1981 which repealed Ordinance No. 11 of 1980.
As a result of the combined operation of ordinance No. 3 of 1981 and Act No. 12 of 1981.
the 1979 Act was made to be operative but only from 1 10.1980 and not from 1.6.1979 a originally enacted.
6 After the Judgment of this Court in the Hansa Corporation ease , upholding the validity of the 1979 Act, the authorities appointed under the Act , issued notices under the Act (1) I.T.R. 1980 (1) Karnataka 165 665 to all the dealers including those who had filed writ petitions earlier , calling upon them to register themselves under the Act , to file returns and to pay the amounts of tax due by them under the original Act of 1979.
Aggrieved by the said notices , the original writ petitioners again filed writ petitions before the High Court of Karnataka contending that the notices issued to them were bad inasmuch as the writ of mandamus issued in their favour by the High Court in the earlier Judgment survived and Was effective since the State had not filed appeals against them , and that the Judgment of this Court could rescue the State from taking proceedings only against the Hansa Corporation and not against them.
The State met this contention with the plea that the Judgment of this Court was binding on all and no one could escape from it.
The writ petitions were heard by a learned Single Judge.
He dismissed them holding , among other things , that Section 3 of the Act No. 10 of 1981 revived the 1979 Act and that action taken against the petitioners in the writ petitions , was therefore , valid.
Appeals were filed against this Judgment.
A Division Bench of the Karnataka High Court dismissed the appeals holding that Section 3 of the repealing Act of 1981 re enacted the 1979 Act and that , therefore , the appellants were not well founded in their challenge against the action taken by the State.
The learned Single Judge and the Division Bench had to consider the effect of the two decisions of this Court for deciding the questions argued before them.
The decisions are the State of Punjab vs Joginder Sinnh(1) and Makhanlal Waza vs J & K ' State.(2) Strong reliance was placed by the petitioners on Joginder Singh , s case and equally strong reliance by the State on Makhanlal 's case.
The learned Single Judge and the Division Bench understood the principle enunciated in the two decisions differently.
They were under the impression that the action taken by the State would have been invalid , but for the saving provision contained in the repealing Act , notwithstanding the Judgment in Hansa Corporation ' case.
What falls for decision in these appeals is the resolution of the conflict between the approach made by the learned Single (l) ; (2) [l971] 3 S.C.R. 832.
666 Judge and the Division Bench to the two cases referred to above and to examine the ratio of the two decisions , since , in our opinion , these appeals can be disposed of on the short ground whether the Hansa Corporation Judgment validated the action taken by the State We will now briefly set out the facts of the two cases: In Juginder Singh 's case , four employees who were absorbed in Government service filed four separate writ petitions before the High Court of Punjab challenging certain executive powers and rules as being violative of Article 14 of the Constitution.
All the four petitions were allowed by the High Court by a common order by which the rules challenged were struck down.
The State of Punjab filed only one appeal before this Court against this common order and that against Joginder Singh.
At the hearing of the appeal , a preliminary objection was raised on his behalf that the appeal was incompetent since the State had not filed appeals against the three other petitioners and that, therefore , any variation by this Court of the Judgment in the appeal would result in inconsistent decisions in respect of the same matter.
In Makhanlal 's case , an order made by the Government of Jammu and Kashmir providing for reservation of posts for certain communities was challenged before this Court as violative of Article 16 of the Constitution.
This Court accepted the challenge and invalidated the promotions of respondents 3 to 83 in that case.
By its Judgment , this Court directed the State Government to devise a scheme consistent with the constitutional guarantee for reservation of appointment to posts and to pass appropriate orders.
The State Government instead of complying with the directions given by this Court , attempted to circumvent the same by continuing those whose promotions were invalidated , giving the posts a different name.
The same petitioners again moved this Court under Article 32 of the Constitution questioning the action of the State Government.
The State Government justified its action contending that there were many persons who were not parties to the earlier writ petitions and who had been promoted prior to and/or subsequent to this Court 's decision and that they were not bound by the earlier Judgment.
This contention was repelled by this Court.
It was held that the law declared by this Court was binding on the respondent State and its 667 Officers irrespective of the fact whether those who would be affected by its pronouncement were parties to the Judgment A or not.
Now we will see how the learned Single Judge and the Division Bench understood the two Judgments of this Court.
The learned Single Judge extracted the relevant portions from Joginder Singh 's case and observed that the said Judgment , according to him , settled two firm propositions which in his words are as follows: "(i) An appeal filed against only one person, though his writ petition was disposed of by common order along with other cases filed by others notwithstanding the fact that appeals arc not filed against some cases , would be competent: and (ii) an order made by the Supreme Court in such an a appeal would bind the parties to appeal and would not affect the validity of the order made in the other cases.
" He , then , distinguished that case from the case before him by R stating thus: "But that is not the position in these cases.
The precise question that arises for determination in these cases is whether an Act of Legislature struck down by the High Court on certain grounds is reversed by the Supreme Court and the Act declared to be constitutionally valid , thereafter a validation Act is also passed rendering the Judgment of the High Court in the other cases as ineffective , (sic).
On that , the enunciation made in Joginder Singh 's case does not bear on the point and assist the Petitioner. " , 11.
After considering the facts of the Makhan Lal 's case , the learned Single Judge observed thus "This later enunciation by a larger Bench however, without noticing the earlier decision in Joginder Singh 's 668 case , in unmistakable terms , has ruled that the declaration made by it or enunciation made by it , is binding on all authorities courts and persons whether they are parties or not.
Shri Srinivasan urged that the above enunciation in Makhanlal Waza 's case was made by the Supreme Court in the context of a binding order made against Government and not against those who were not parties to its earlier order and, therefore , the principles stated in that case has no principles stated in that case has no application to the question that arises for determination.
In my view the attempt made by Shri Srinivasan to distinguish the enunciation made in Makhanlal Waza 's case is without a d difference and has no merit at all.
The enunciation made is not based on any such distinction and difference.
On the application of the principles enunciated in Makhanlal Waza 'section case it follows that the declaration made by the Supreme Court in Messrs Hansa Carporation 's case upholding the validity of the Act is binding on all Courts, authorities and persons in the State of Karnataka notwithstanding the fact that the State had filed only one appeal and had not filed appeals in the other cases. " From the above discussion , it would appear that the learned Single Judge felt that Joginder Singh 's case indicated a different view.
Now we will see how the Division Bench understood the above propositions.
After considering the facts of the case and extracting the relevant portions of this Court`s Judgments , the Division Bench observed as follows: "In our opinion , there is no conflict between the aforesaid two decisions of the Supreme Court.
As rightly pointed out by Shri Srinivasan , in Makhanlal Waza 's case, the decision.
turned on the fact that the direction in the earlier Judgment of the 669 Supreme Court was made against the State Government and not against promotees who were not parties in the earlier writ petition.
The State Government which was a party in the earlier writ petition , was bound by the Judgment of the Supreme Court therein and could not disregard the direction of the Supreme Court on the ground that the promotees were not parties in the earlier writ petition.
Thus , the decision of the Supreme Court in Makhanlal Waza 's case is distinguishable on facts.
As the material facts of the present cases are similar to those in Joginder Singh 's case, the law laid down by the Supreme Court in that case , is squarely applicable to these cases.
" From the above conclusion , it appears that the Division Bench felt that the law laid down in Joginder Singh 's case applied to the appeals before it and that the decision of the Supreme Court in Makhanlal 's case was distinguishable on facts.
As indicated above , the appeals were dismissed relying upon 1 Section 3 of the repealing Act of 1981.
We will now consider the submissions made before us with reference to the above two decisions of this Court and examine the correctness of the findings entered by the learned Single Judge and the Division Bench.
The main thrust of the submission made by the learned counsel for appellants in these appeals is that the writ of mandamus issued by the High Court in their favour was effective since the Judgment in their favour was not challenged by filing appeals before this court.
It is submitted that the law laid down by this Court would apply only against the Hansa Corporation , against whom alone the State had filed an appeal In support of this contention the following passage at page 177 in Joginder Singh 's case was relied upon: "All the four petitions were delt with together and were disposed of by a common Judgment so that relief according to Joginder Singh , the respondent before us , in Writ application No. 1559 of 1960 was also granted to the other three petitioners.
The State , however , has preferred no appeal against the orders in the other three 670 petitions , and Mr. Agarwal , learned counsel for the respondent , raises the contention that as the orders in the other three petitions have become final , any order passed in this appeal at variance with the relief granted in the other three petitions would create inconsistent degree in respect of the same matter and so we should dismiss the present appeal as incompetent.
We , however , consider that this would not be the legal effect of any order passed by this Court in this appeal and that there is no merit in this objection as a bar to the hearing of the appeal.
In our opinion , the true position arising , if the present appeal by the State Government should succeed , would be that the finality of the orders passed in the other three writ petitions by the Punjab High Court would not be disturbed and that those three successful petitioners would be entitled to retain the advantages which they had secured by the decisions in their favour , not being challenged by an appeal being filed.
That however , would not help the present respondent , The respondent would be bound by our Judgment in this appeal and besides , so far as the general law is concerned as applicable to everyone other than the three writ petitioners (who would be entitled to the benefit of the decisions in their favour having attained finality), the law will be as laid down by this Court.
We , therefore, overrule the preliminary objection.
In our opinion , reliance on this passage by the appellants in support of their contention is not justified.
The only question that fell to be decided in Joginder Singh 's case was whether the appeal filed by the State was competent in the adsence of appeals against the other petitioners.
This was answered by the Court in the affirmative as follows: ".
We , however , consider that this would not be the legal effect of any order passed by the Court in this appeal and that there is no merit in this objection as a bar to the hearing of the appeal.
" It is this observation that disposes of the preliminary objec 671 tion and the finding of the Court on this objection is contained in the above passage.
The sentences that followed , relating to the effect of the orders passed by the High Court in the other three writ petitions can only be treated as obiter and therefore cannot be relied upon by the appellants to press a case that the law declared by this Court in Hansa Corporation 's case did not bind them.
The same principle is laid down in Makhanlal Waza 's case.
In that case , the State of Jammu and Kashmir attempted to circumvent the law declared by this Court in Trilok Nath and another vs State of Jammu Kashmir and others(1) by which the State policy of reservation to certain communities was declared bad by this Court with the plea that the vice of that Judgment operated only so far as the parties to the Judgment was concerned and not against those who were not parties thereto.
This Court repelled the contention and held as follows: ".
As regards the other respondent teachers who did not figure in the earlier petition , they were all promoted to the gazetted cadre prior and subsequent to the previous decision in complete defiance of the law laid down by this Court.
Such a course has been sought to be justified on the tenuous ground that they were not parties to the previous petition and therefore their cases would not be governed by the decision given in that petition.
It may be observed immediately that such a position is wholly untenable and misconceived.
The Judgment which was delivered did not merely declare the promotions granted to the respondents in the petition filed at the previous Stage as unconstitutional but also laid down in clear and unequivocal terms that the distribution of appointments , posts or promotions made in implementation of the communal policy was contrary to the constitutional guarantee of Articie 16.
The law so declared by this Court was binding on the respondent State and its officers and they were bound to follow it whether a majority of the present respondents were parties or not to the previous petition.
In our opinion , both these decisions lay down identical (1) [1969] I S.C.R. 103.
672 principles and there is nothing to distinguish between the two.
In the earlier case , this Court , on its facts , overruled the preliminary objection that absence of appeals against the three petitioners left out , would not render the appeal before this Court incompetent , holding thereby that the effect of the decision in that appeal would be binding on the appellant therein.
In the latter case , this Court in unmistakable terms laid down that the law laid down in the earlier case , namely , Triloknath 's case , applied even to those who were not parties to the case.
These two decision were given by two Constitution Benches of this Court.
We find that Joginder Singh 's case was not noted by the Bench that decided Makhanlal Waza 's case.
This does not create any difficulty.
As we have already held , the two decisions , on the principles laid down by them , speak the same voice , i.e. that the law laid down by the Supreme Court is binding on all , notwithstanding the fact that it is against the State or a private party and that it is binding on even those who were not parties before the Court.
Since it is necessary to make the position of law clear and free from ambiguity , we would set out our reasons for our conclusion clearly.
Though a large number of writ petitions were filed challenging the Act , all those writ petitions were grouped together , heard together and were disposed of by the High Court by a common Judgment.
No petitioner advanced any contention peculiar or individual to his petition , not common to others.
To be precise , the dispute in the cause or controversy between the State and each petitioner had no personal or individual element in it or anything personal on peculiar to each petitioner.
The challenge to the constitutional validity of 1979 Act proceeded on identical grounds common to all petitioners.
This challenge was accepted by the High Court by a common Judgment and it was this common Judgment that was the subject matter of appeal before this Court in Hansa Corporation 's case.
When the Supreme Court repelled the challenge and held the Act constitutionally valid , it in terms disposed of not the appeal in Hansa Corporation 's case alone , but all petitions in which the High Court issued mandamus on the none existent ground that the 1979 Act was constitutionally invalid.
It is , therefore , idle to contend that the law laid down by this Court in that Judgment would bind only the Hansa Corporation and not the other petitioners against whom the State of Karnataka had not filed any appeal.
To do so is to ignore the binding nature of a Judgment of this Court under Article 141 of the Constitution.
673 Article 141 reads as follows: A "The law declared by the Supreme Court shall be binding on all courts within the territory of India " A mere reading of this Article brings into sharp focus its expanse and its all pervasive nature.
In cases like this , where numerous petitions are disposed of by a common Judgment and only one appeal is filed , the parties to the common Judgment could very well have and should have intervened and could have requested the Court to hear them also.
They cannot be heard to say that the decision was taken by this Court behind their back or profess a ignorance of the fact that an appeal had been filed by the State against the common Judgment.
We would like to observe that , in the fitness of things , it would be desirable that the State Government also took out publication in such cases to alert parties bound by the Judgment , of the fact that an appeal had been preferred before this Court by them.
We do not find fault with the State for having filed only one appeal.
It is , of course , an economizing procedure.
The Judgment in the Hansa Corporation case rendered by one of us (Desai , J.) concludes as follows "As we are not able to uphold l the contentions which found favour with the High Court in striking down the impugned Act and the notification issued thereunder and as we find no merit in other contentions canvassed on behalf of the respondent for sustaining the Judgment of the High Court , this appeal must succeed.
Accordingly , this appeal is allowed and the Judgment of the High Court is quashed and set aside and the petition filed by the respondent in the High Court is dismissed with costs throughout.
" To contend that this conclusion applies only to the party before this Court is to destroy the efficacy and integrity of the Judgment and to make the mandate of Article 141 illusory.
By setting aside the common Judgment of the High Court , the mandamus issued by the High Court is rendered ineffective not only in one case but in all cases.
674 19.A writ or an order in the nature of mandamus has always been understood to mean a command issuing from the Court , competent to do the same , to a public servant amongst others , to perform a duty attaching to the office , failure to perform which leads to the initiation of action.
In this case , the petitioners appellants assert that the mandamus in their case was issued by the High Court commanding the authority to desist or forbear from enforcing the provisions of an Act which was not validly enacted.
In other words , a writ of mandamus was predicated upon the view that the High Court took that the 1979 Act was constitutionally invalid.
Consequently the court directed the authorities under the said Act to forbear from enforcing the provisions of the Act qua the petitioners.
The Act was subsequently declared constitutionally valid by this Court.
The Act , therefore , was under an eclipse , for a short duration; but with the declaration of the law by this Court , the temporary shadow cast on it by the mandamus disappeared and the Act revived with its full figure , the constitutional invalidity held by the High Court having been removed by the Judgment of this Court.
If the law so declared invalid is held constitutionally valid , effective and binding by the Supreme Court , the mandamus for bearing the authorities from enforcing its provisions would become ineffective and the authorities cannot be compelled to perform a negative duty.
The declaration of the law is binding on everyone and it is therefore , futile to contend that the mandamus would survive in favour of those parties against whom appeals were not filed.
The fallacy of the argument can be better illustrated by looking at the submissions made from a slightly different angle.
Assume for arguments sake that the mandamus in favour of the appellants survived notwithstanding the Judgment of this Court.
How do they enforce the mandamus ? The normal procedure is to move the Court in contempt when the parties against whom man damus is issued disrespect it.
Supposing contempt petitions are filed and notices are issued to the State.
The State 's answer to the Court will be: "Can I be punished for disrespecting the mandamus , when the law of the land has been laid down by the Supreme Court against the mandamus issued , which law is equally binding on me and on you ?".
Which Court can punish a party for contempt under these circumstances ? The answer can be only in the negative because the mandamus issued by the High Court becomes ineffective 675 and unenforceable when the basis on which it was issued falls , by the declaration by the Supreme Court , of the validity of 1979 Act.
In view of this conclusion of ours , we do not think it necessary to refer to the other arguments raised before the High Court and which the learned counsel for the appellants attempted to raise before us also.
The appeals can be disposed of on this short point stated above.
The Judgment of this Court in the Hansa Corporation 's case is binding on all concerned whether they were parties to the Judgment or not.
We would like to make it clear that there is no inconsistency in the finding of this Court in Joginder Singh 's case and Makhanlal Waza 's case.
The ratio is the same and the appellants cannot take advantage of certain observations made by this Court in Joginder Singh 's case for the reasons indicated above.
In the writ petitions the challenge is against Section 7 of Act No. 10 of 1981 and they contain certain other prayers also.
We do not think it necessary to deal with the contentions raised in them since it would be an unnecessary exercise , in view of the revival of the parent Act of 1979 by the Judgment of this Court.
In the result , the appeals and the writ petitions are dismissed with costs; cost quantified at Rs. 2,000 in each case.
S.R. Appeals & Petitions dismissed.
| Under Section 12(2) of the Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (for short, the Act), a tenant of a non residential building carrying on business in the said building is deemed to have ceased to occupy the premises on his admitting as a partner or a new partner a person who was not a member of his family.
The definition of "family" given in clause (g) of Section 3 of the Act does not expressly include a son in law or a daughter in law.
In each of the two appeals, the appellant/tenant admitted into his partnership firm his son in law and 'or daughter in law, as the case may be.
There upon, the landlord respondent in each appeal filed an application for release of his non residential building in his favour on the ground that there was a deemed vacancy under Section 12(2) of the Act.
The Rent controller held that there were deemed vacancies in respect of the two premises and ordered such deemed vacancies to be notified.
The appellants/tenants filed applications to set aside the said orders directing notification of deemed vacancy and for permission to urge their objections and to contest the said applications for release.
The Rent Controller negatived the contentions of the appellants and ordered such vacancies to be notified.
The appellants/tenants filed writ petitions in the High Court under Article 226 of the Constitution challenging the two orders notifying deemed vacancies under sub Section (2) of Section 12 of the Act.
The High Court, relying upon a judgment of a two Judge Bench of the Supreme 385 Court in Trilok Singh & Co. vs District Magistrate, Lucknow, the amendment of the Act by Uttar Pradesh Urban Buildings (regulation of Letting, Rent and Eviction) Amendment Act 1976 (for short, the 1976 Amendment Act), dismissed both the petitions as pre mature holding that where a release of a building is sought, the matter lies only between the District Magistrate and the landlord and no other person has a right to object to the release of the premises to the landlord.
Hence these appeals.
Allowing the appeals and directing the High Court to `rehear on merits the writ petitions filed by the appellants.
the Court.
^ HELD: 1(i) Under the proviso to Section 16(1), in the case of a vacancy referred to in Section 12(4), the District Magistrate is to give an opportunity to the landlord or the tenant, as the case may be, of showing that the said Section is not attracted to his case before making an order under clause (a) of Section 16(1), that is, before making an allotment order; This proviso was inserted by the 1976 amendment Act.
Strangely enough, in the case of release of the premises to the landlord, the proviso does not require any such opportunity to be given to the tenant who would be the person affected by that order.
Sub section (2) of Section 16 sets out the circumstances in which a building or any part thereof may be released to the landlord.
Under Sub section (7) every order made under that Section, subject to any order made under Section 18, is to be final.
Under Section 18 as substituted by the 1976 Amendment Act, no appeal lies against any order of allotment, re allotment or release but any person aggrieved by a final order of allotment, re allotment or release may, within fifteen days from the date of such order, prefer a revision to the District Judge.
On such application being made, the revising authority may confirm or rescind the final order of allotment, re allotment or release or may remand the case to the District Magistrate for rehearing and, pending revision, may stay the operation of such order on such terms as he thinks lit Prior to the substitution of Section 18 by the 1976 Amendment Act, that Section provided for an appeal to the District Judge by a person aggrieved by an order of allotment, re allotment or release and where such order was varied or rescinded in appeal, the District Magistrate had the power, on p an application made to him in that behalf, to place the parties back in the position which they would have occupied but for such order or such part thereof as was varied or rescinded and to use or cause to be used for that purpose such force as may be necessary.
[393H; 394A B; H; 395A; D P] 1(ii).
The Uttar Pradesh Urban Buildings.
(Regulation of Letting, Rent and Eviction) Rules, 1972, prescribe the procedure for ascertainment of vacancy and for allotment or release of premises.
Under Rule 8, before he makes any order of allotment or release in respect of any building which is alleged to be vacant under S.12 or to be otherwise vacant or to be likely to fall vacant, the District Magistrate is required to get the building inspected.
The facts mentioned in the inspection report are, wherever practicable, to be elicited from at least two respectable persons in the locality and the conclusion of the inspection report is to be posted on the notice board of the office of the District Magistrate for the information of the general public, and an order of allotment is not to 386 be passed before the expiration of three days from the date of such posting, and if in the meantime any objection is received, not before the disposal of suck objection.
Any objection received is to be decided after consideration of any evidence which the objector or any other person concerned may adduce [396A D] 2(i) The position under the Act as amended in 1976 is greatly changed and the right of appeal which was granted by S.18 has been substituted by a right of revision on the grounds set out in the substituted Section 18 and which are the same as those on which a revision lies to the High Court under Section 115 of the Code of Civil Procedure, 1908.
While in an appeal, findings of fact can also be challenged on the ground that the evidence was not properly appreciated, in revision the only question would be whether the District Magistrate had exercised a jurisdiction not vested in him by law or had failed to exercise a jurisdiction vested in him by law or had acted in the exercise of his jurisdiction illegally or with material irregularity.
The scope of revision under Section 18 is.
therefore.
much narrower than in the case of an appeal [400E F] 2(ii).
Under the proviso to Section 16(1), which was inserted by the 1976 Amendment Act, the District Magistrate is required in the case of a vacancy referred to in sub Section (4) which includes a deemed vacancy under Section 12(2) to give an opportunity to the landlord or the tenant, as the case may be, of showing that Section 12(4) is not attracted to his case before he makes an order of allotment under clause (a) of Section 16(1).
Thus, this proviso gives a right of hearing to the tenant before an order of allotment is made.
The proviso, however, does not apply in the case of an order of release made under clause (b) of Section 16(1).
Even in the case of an application for allotment, it is doubtful whether a tenant whose objections to notification of a deemed vacancy have been negatived and thereafter the vacancy has been ordered to be notified could be permitted to reagitate the same contentions because such contentions would be barred by principles analogous to res judicata.
In such an event, it would be difficult to say that he can exercise his right of review on the ground that there was no p vacancy.
This would apply equally where an order of release is made.
Further, the revision which is provided for under Section 18 is against an order of allotment or release and not against a notification of vacancy and an issue, which was concluded earlier and on the basis of the finding on which the District Magistrate had proceeded to allot or release the premises, cannot be reagitated in revision.
Thus, the scheme of the Act would show that a tenant of premises in whose case it is found that there is a deemed vacancy has no efficacious or adequate remedy under the Act to challenge that finding.
A petition under article 226 or 227 of the constitution of India filed by such a tenant in order to challenge that finding cannot, therefore, be said to be pre mature.
|
Appeals Nos. 2116, 2217, 2218, 2126 to 2128 of 1970 , 33, 144 ,157, 159 to 163 and 164 to 166 of 1971.
Appeals from the judgments and orders dated the September 5, 1970 of the Andhra Pradesh High Court in Writ Petitions Nos.
2720 of 1970 etc.
section V. Gupte and G. Narayana Rao for the appellants (in 2116 of 1970).
C.A. No. M. Natesan and G. Narayana Rao for the appellants (in C.A. No. 2217 of 1970).
G. Narayana Rao for the appellants (in C. As.
2218 of 1970, 144, 157, 159 to 163 and 164 to 166 of 1971).
M. C. Setalvad and W. C. Chopra, for the appellants (in C.As.
No. 2126, of 1970).
Polesseti Ramachandra Rao and W. C. Chopra for the appel lants (in C.As.
2127 and 2128 of 1970).
section T. Desai and K. Rajendra Chowdhary, for the appellants, (in C.A. No. 33 of 1971).
P. Ram Reddy and P. Parameshwara Rao, for the respon dents (in all the appeals).
369 The Judgment of the Court was delivered by p. Jaganmohan Reddy, J.
This batch of Appeals is by Cer tificate against a common Judgment of the Andhra Pradesh High Court dismissing the Writ Petitions filed by several dealers in jaggery who challenged the vires and constitutionality of Sections 2, 5, 8 and 9 of the Andhra Pradesh, General Sales Tax Amendment Act 9 of 1970 (hereinafter called the "Amendment Act").
The Appellants are Commission Agents carrying on trade in jaggery.
Agriculturists who prepare jaggery out of surplus sugarcane which they are unable to sell to the Sugar factories employ the Appellants as their Commission Agents to sell that jaggery.
We will take the facts in Civil Appeal No. 2116 of 1970 as typical of the common question arising in all these Appeals.
The Appellants carry on business of Commission Agent in jaggery in Anakapalli, Visakhapatnam and at varies places in West Godavari.
In the course of their business the Appellants arrange, for the sale of jaggery charging a small commission for their services and renders an account to the respective principals in respect of these sales.
In the pattis issued to the Agriculture the name of the persons to whom jaggery is sold is specifically mentioned.
The baskets of each principal are separately marked.
The stock register also indicates the number of baskets of jaggery held in the name of the Commission Agents.
Every buyer is fully ap prised of the fact that he is purchasing the jaggery of specified agriculturist principals and not that of the Appellants.
This procedure it is said has been in vogue for a long time.
Till about 1963 under Section 11 of Madras General Sales Tax Act as well as under the Andhra Pradesh General Sales Tax Act 1957 (hereinafter called the "Principal Act") Commission Agents were required to obtain and were being issued licences and if they conformed to the conditions of those licences they were not subjected to tax.
In 1963 the Principal Act was amended by Andhra Pradesh General Sales Tax Amendment Act 16 of 1963 which substituted a new Section II for that which was in force fill then.
The new Section II changed the preexisting structure of assessment in that, the Agents of Resident Principals were made liable for assessment and collection of Tax through the liability of the Agent was made co extensive with that of the Principal.
The Sales Tax authorities however were making assessments of the turn over of the Agents in respect of the purchase and sales of jaggery of several principals notwithstanding the fact that the turnover upto Rs. 10000/ of each was not exigible to tax.
These assessments were challenged in a batch of writ petitions in Irri Raju & Ors.
vs The Commercial Tax Officer, Tedeplalligudem & Anr.(1) in which the, High Court of Andhra Pradesh hold that the (1) Sales Tax Cases Vol.
XX (1967) p. 501.
24 1 SC India/71 370 provisions of the principal Act indicated that the Agent is a dealer in respect of each of the principals, that he is deemed to be as many dealers as there are principals and therefore the total turn over of the Agent in respect of the several principals could not be computed for assessing him when in fact the turnover of each of the principals was below the limit i.e. Rs. 10.000/ .
As a consequence of this.
decision, the Andhra Pradesh General Sales Tax Amendment Act 5 of 1968 was enacted and a new Section 1 1 was substituted for the then existing Section.
This Section II was given retrospective effect from the 1st August 1963.
The object of this Amendment was to enable the 'Taxing authorities to assess, levy and collect tax or penalty under the Sales Tax Act from the Agent irrespective of the fact that such principal is not liable to pay the tax or penalty in respect of that transaction on account of the turn over of the principal being less than the minimum turnover specified in sub section of section 5.
The proviso to the new Section II however authorised the Tax or penalty assessed or levied on or due from the Agent to, be, recovered by the Assessing authorities from the Principals instead of from the Agents, only if the principal is liable to pay tax or penalty.
This new Section was also challenged on various grounds in a batch of writ petitions in Sri Konathala Venkata Ramana & Budha Apparao vs State of Andhra Pradesh & Anr.(1).
The High Court held that even after the amendment the liability of the Agent continues to be based on the principal of representation and whether he is a dealer in respect of an the principals or only one principal, his liability is co extensive with that of the principal.
It also held that while there is no conflict between Section 5 and Section II of the Act, Section II which authorises the imposition of a tax independently of the liability of the principal or which takes away or limits the rights of the Agent to reimburse himself or withhold moneys due to the principal only where the principal is liable is discriminatory and is hit by Article 14.
In view of this Judgment, which in fact restored the legal position to that prevailing prior to the Amendment, large sums of money in which assessments had been made and tax collected became refundable To meet this situation the Legislature enacted the Andhra Pradesh General Sales Tax Amendment Act 9 of 1970.
The effect of the.
Amendments made by Sec.
2. 5, 8 and 9 of the Amendment Act is that a proviso was added to Section 5(1), a new Section II was substituted for the old Section II with retrospective effect from 1 8 63.
The, amended Section 11 it may be noticed (1) Sales Tax Cases Vol.
371 was identical with Section 1 1 as it stood on 1 8 1963.
The first schedule to the principal Act was also amended by adding jaggery as item 77 which was made taxable at the point of first sale at 5 paise in the Rupee.
It was further provided that as soon as this entry came into force on the date fixed by a Notification the proviso to Section 5 (A) added by Section 2 of the Amending Act would cease to have effect.
Section 8 of the Amending Act purported to validate the assessments already made while Section 9 granted exemption from liability to pay tax in certain cases.
We have already noticed that jaggery was being taxed at the point of the first purchase of its sale between 1 2 6o and 31 7 63 but by reason of the Amendment introduced by Act 16 of ' 1963 a multiple point tax on safe subject to an exemption of a turn over of Rs. 10000/ became leviable at 2 paise pet Rupee from 1 8 63 which rate was enhanced to 3 paise from 1 4 1966 by Amendment Act 7 of 1966.
A single point taxation was however levied on items in Schedule 1 and 2 of the Act which became chargeable as such under Section 5(2).
We are not concerned with schedule 3 which deals with declared goods but schedule 4 specified the goods which are exempt in terms of Section 8.
All other sales which do not fall within the schedules are as earlier stated exigible to multiple point tax under Section 5(1) of the Act subject to the minimum of Rs. 10,000/ .
The Appellants had before the High Court of Andhra Pradesh raised several contentions but the principal attack was confined to 3 aspects of the Amendment Act.
Firstly that Section II read with the new proviso to Section 5 (1) makes an invidious distinction between dealers in jaggery on the one hand and dealers in other commodities on the other by perpetuating an unreasonable classification which is based on no intelligible differentia nor can any reasonable nexus be discerned with the object that the Amendment seeks to achieve.
Secondly that Section 9 has to be read as part of Section 2 of the Amendment Act by which a new proviso is added to Section 5(1) of the Principal Act and is a part of Section 11 substituted by the Amendment Act.
If so read the new proviso to Section 5(1) and the new Section II would be violative of article 14 inasmuch as the dealers in jaggery similarly situated have been invidiously discriminated by levying tax from those, dealers who have collected the tax and the dealers who have not collected the tax.
Thirdly that the basis of the amendment is an imposition of a tax not on the transaction of sale or purchase of jaggery but on the, collection or non collection of the tax by the dealers, as such it is also bit by Article 14 of the Constitution.
The High Court rejected all these contentions except the one relating, to the validity of Section, 9.
the State of Andhra Pradesh as well as the Appellants in Civil Appeal No. 33 of 1971 had 372 contended that that provision which granted an, exemption from.
payment of tax to, dealers who bad not, in fact collected the tax from their principal was, valid and did, not suffer from the vice of discrimination under article 14 because not only was the classification reasonable but that it was based on an intelligible differentia having a nexus with the object of the impugned Act.
We shall however deal with last mentioned aspect presently but before we do so on the threshold of the argument of them Appellants there is a valid objection to the maintainability of the Writ Petitions filed by the dealers who as Agents of the Principals had collected tax from the purchasers which as a consequence of the two decisions, of the High Court referred to earlier was illegal.
After the, amendment Act the levy and collection by the dealers became prima facie legal.
In so, far as jaggery is concerned there was also no question of any, exemption of the minimum turnover of the principal of Rs. 10,000, so That the hardship which a Corn mission Agent dealer had to undergo in trying to determine whether the, turn over of each of his principals was below Rs. 10,000 before he could collect Sales Tax was no longer there.
After the Amendment by removing the exemption of Rs 10,000 on sale of jaggery which was given retrospective effect, the dealer agents could not now complain, which complaint had been held by the High Court to be justified, that while the principals were exempted from tax upto Rs. 10,000 the tax is being levied on the agents turn over irrespective of that exemption.
In any case whatever objections the principals may have to the constitutional validity of the provisions introduced by the amending Act under Article 14 the Agent dealers certainly have no locus standi to complain about discrimination between Principals inter se.
That apart the dealers are not expected to and in fact do not pay any money of their own towards the tax which is levied.
The tax so levied and paid to the assessing authorities by the dealer agent is, under the provisions of the Act, not returnable nor can the principal under the provisions of the Act make any claim against such dealer Agents.
Shiri Gupte on behalf of the Appellants was unable to tell us that there were among the Appellants any principals who had a direct interest in challenging the validity of the provisions on the ground of discrimination.
Shri Motilal Setalvad on behalf of the Appellants in Civil Appeals Nos.
2126 to 2128 of 1970 strenuously contended that the Appellants have an interest and can maintain the Writ Petitions because they were dealers within the meaning of Section 2(e) and are persons who are aggrieved because of the assessment made or likely to be made and tax recovered from them.
He has further contended that this Court has in several cases hold that even a notice issued to any person under the provisions of an impugned Act which is likely to cause prejudice will 373 entitle him to challenge the Constitutional Validity of the law under which the notice is given.
If so, where an assessment has been made the assessee has a right to challenge the provisions of the Amendment Act under which the levy and Collection of tax have been given retrospective validity.
Apart from the question that 'this argument does not take into account the distinction between an at tack under article 14 and an attack under article 19 it overlooks the fact that what is sought to be recovered from the Appellant is in respect of a tax collected on the past dealings and not with respect to the future transactions.
We had pointed ' out that tax had already been collected no doubt at first illegally but due to the amendment Act that collection has become legal and has also dealer be is liable to pay that amount to the State la. respect of the Asses sments made.
As there is nothing to show that what is sought to be recovered from the dealer is more than what he hits collected, he 'has not suffered any loss nor any disadvantage which would entitle him to seek a remedy under article 226 of the Constitution.
Shri P. RamchandraTao in Civil Appeal No. 2127 of 1970 had nothing now to add to the arguments advanced by the learned Advocates for the Appellants.
On this short ground alone we dismiss all the Appeals except Civil Appeal No. 33 of 1971 but in the circumstances without costs.
Appeal in Civil Appeal No. 33 of 1971: In this Appeal Shri section T. Desai contends that the High Court had erroneously struck down Sec. 9 of the Amendment Act.
of the Amendment Act is as follows: "9(1) where any sale of jaggery has been effected during the period between the 1st August 1963 and the commencement of Section 5 of this Act in so far as it relates to item 77, and the dealer effecting such sale has not collected ally amount by way of tax under the principal Act ,on the ground that no such tax could have been levied or collected in respect of such sale, or any portion of the turnover relating to such sale, and where no such tax could also have been levied or collected if the amendments made in the principal Act by this Act had not been made, then, notwithstanding anything contained in Section 8 or the said amendments, the dealer shall not be liable to pay any tax under the principal Act, as amended by this Act, in respect of such sale or such part of the turnover relating to such sale.
(2)For the purposes of sub section (1), the burden of proving that no amount by way of tax was collected under the principal Act in respect of any sale referred to in sub section (1) or in respect of any portion of the 374 turnover relating to such sale, shall be on the dealer effecting such sale".
This Section is enacted by the legislature with the object of removing short comings in the principal Act which were found wanting by judicial interpretation.
The interregnum between the declaration by the High Court of certain provision of the Act as being unconstitutional and the attempt of the legislature to remedy the defects and to give retrospective effect thereto created two distinct categories between the same class of dealers namely those who had collected the tax whether they were assessed or not and those who had not collected the tax.
This classification is certainly reasonable and is related to the object which the Amendment Act seeks to achieve.
The dealers who had not collected the tax could not have collected it as the law stood and therefore the legislature did not think it just or proper to collect tax from those who were not liable.
Even this exemption as can be seen is given to only those persons who can establish that they have not in fact collected it, the burden of which is upon those who claim the exemption.
It is unnecessary to deal with hypothetical cases.
The mere fact that in many cases it was not collected because the assessment could not be completed cannot be a valid ground nor can it even now be made in regard to those assessments which are now pending (a matter upon which we do not pronounce) cannot be valid grounds to declare the classification as arbitrary or unreasonable, which reason seems to have weighed with the High Court.
We think not only the classification reasonable but there is an intelligible differentia furnishing a nexus with the object the Amendment Act seeks to achieve.
In this view we set aside the Judgment of the High Court declaring Section 9 as unconstitutional and allow the appeal, but in the circumstances without costs.
G. C. Appeal allowed.
| The appellant was a public limited company.
It carried on the business of raising coal from coal mines and selling the same.
It had taken on lease several mines from the owners of the coal bearing lands.
As lessee of the mines the appellant incurred liability for payment of (i) Road and Public Works cess under the Bengal Cess Act of 1880; (ii) Education Cess levied under the Bengal (Rural) Primary Education Act, 1930.
The amounts payable by the assessee on account of the aforesaid cesses were claimed by it as a deduction under section 10 of the Income tax Act, 1922.
The Income tax authorities disallowed that claim relying on section 10(4) of the Act.
The Tribunal and the High Court decided against the appellant.
In appeal to this Court by special leave, the question for determination was whether the cesses levied under the aforesaid Bengal Acts fell within the mischief of section 10(4) of the Act.
It was common ground that these cesses were not levied on the profits or gains of any business, profession, or vocation but it was claimed on behalf of the Revenue that the cesses were assessed on the basis of such profits and gains and therefore they would be covered by the said provision.
HELD : (i) The words 'profits and gains of any business, profession, or vocation which are employed in section 10(4) can, in the context, have reference only to profits or gains as determined under section 10 and cannot cover the net profits or gains arrived at or determined in a manner other than that provided by section 10.
The whole purpose of enacting sub section
(4) of section 10 appears to be to exclude from the permissible deduction under cis.
(ix) and (xv) of sub section
(2) such cess, rate or tax which is levied on the profits or gains of any business profession or vocation or is assessed at a proportion of or on the basis of such profits or gains.
In other words sub section
(4) was meant to exclude a tax or a cess or a rate the assessment of which would follow the determination or assessment of profits or gains of any business.
profession or vocation in accordance with section 10 of the Act.
[514 D E] (iii) The road cess and public works cess are to be assessed on the annual net profits under sections 72 and 76 of the Cess Act 1880.
The net annual profits have to be calculated on the average of the net profits for the last three years of the mine or the quarry and if the annual net profits of the property cannot be ascertained in the aforesaid manner then it is left to the Collector to determine the value of the property first in such manner as he considers expedient and determine 6 per cent on that value which would be deemed to be the annual net profits.
The Cess Act of 1930 follows the same pattern so far as the ascertainment of annual net profits is concerned.
These profits arrived at according to the provisions of the two Cess Acts can by no stretch of reasoning be equated to the profits which are determined under section 10 of the Act.
It is not possible to see, therefore, how section 10(4) could be applicable at all in the 511 present case.
Thus on the language of the provisions both of the Act and the two Cess Acts the applicability of section 10(4) cannot be attracted.
[514 F H] Commissioner of Income tax, Bengal vs Gurupada Datta , applied.
Simbholi Sugar Mill Ltd. vs Commissioner of Income tax, U.P. & Rajasthan vs Banarsi Dass & Sons, , approved.
Commissioner of Income tax, West Bengal vs West, Bengal Mining Co. , disapproved.
|
Appeal No. 278 of 1959.
Appeal by special leave from the judgment and order dated April 2, 1957, of the Punjab High Court, in Civil Revision No. 239 of 1956.
C. K. Daphtary, Solicitor General of India, section N. Andley, Rameshwar Nath and P. L. Vohra, for the appellant.
section T. Desai and Naunit Lal, for the respondents.
May 2.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
The appellant Dr. Gopal Das Varma owns a double storeyed house known as 28, Barakhamba Road, New Delhi.
The ground floor of this house consists of a block of offices and the first floor consists of four flats; three of these are in the occupation of the appellant while the fourth has been let out to respondent 1, Dr. Bhardwaj.
Dr. Bhardwaj is an ear, nose, throat specialist, and in one of the four rooms of the flat be and his wife, respondent 2, reside, while the, three other rooms are used by him for the purpose of his profession.
Respondent 1 ap.
pears to have taken the premises on lease as early as 1934 although he executed an agreement of tenancy in favour of the appellant on November 8, 1935.
This agreement shows that the appellant agreed to let out his flat to respondent 1 on a rent of Rs. 90 per month payable in advance.
The tenancy was to commence from October 1, 1935, and was intended to continue up to _September 30, 1936.
Parties agreed that the said 680 tenancy could be renewed on terms to be settled later.
In fact the tenancy has been renewed from year to year and the flat is still in possession of respondent 1.
In October 1953 the appellant sued the two respondents for ejectment on two grounds.
He alleged that he required the premises in question for occupation as residence for himself and for the members of his family and that respondent 1 had recently built a suitable residence for himself in Golf Link Area, New Delhi.
The first plea was made under section 13(1)(e) of the Delhi and Ajmer Rent Control Act, 1952 (Act XXXVIII of 1952) (hereafter called the Act), while the second was raised by reference to section 13(1)(h) of the Act.
According to the appellant, since both the requirements of the Act were satisfied he was entitled to obtain a decree for ejectment against the respondents.
The claim thus made by the appellant was denied by the respondents.
Respondent 2 pleaded that she was not the tenant of the appellant and she alleged that it was she and not respondent 1 who had built the house in Golf Link Area.
Respondent 1 admitted that he was a tenant under the appellant.
He, however, contended that the appellant did not require the premises bona fide for his personal use, and he urged that he was using the premises for carrying on his medical profession and as such the appellant was not entitled to eject him.
He supported his wife in her plea that the house built in Golf Link Area belonged to her and not to him.
On these pleadings the learned trial judge framed appropriate issues.
He found that respondent 1 alone was the tenant of the appellant and that the premises in question had been let to respondent 1 for residential purpose.
According to the trial judge the premises in suit had been constructed for residential purposes and the flat in question was let out to respondent exclusively for that very purpose.
The trial judge further held that the fact that a portion of the premises was used by respondent 1 for his profession or business would not make the tenancy one for nonresidential purposes.
In that view he rejected the 681 argument raised by respondent 1 on the explanation to section 13(1)(e) of the Act.
The trial judge also held that it was respondent 1 who had built a house in Golf Link Area and since the said house was suitable for his residence the requirements of section 13(1)(h) were satisfied.
On the question about the bona fide requirements of personal residence pleaded by the appellant under section 13(1)(e) the trial court made a finding against him.
Even so, as a result of his conclusion under section 13(1)(h) the trial judge passed a decree for ejectment in favour of the appellant.
Both the respondents challenged this decree by preferring an appeal before the Senior Sub Judge at Delhi.
The appellate Court held that on the facts proved in the case it cannot be inferred that the premises in suit were built for residential purposes alone, and that evidence did not show that the premises in question had been lot to respondent 1 for residence alone.
The appellate judge examined the conduct of the parties and held that it was proved beyond any shadow of doubt that respondent 1 was using the premises both for his residence and his professional work since the inception of the tenancy without any objection on behalf of the appellant, and so in his opinion the premises could not be said to have been let for residence alone.
He also found that under the proviso to section 13(1)(e) it cannot be said that the premises were used incidentally for profession without the consent of the appellant; in that view section 13(1)(e) did not apply to the case.
Since the appellant had failed to prove that the premises were residential premises within the meaning of section 13(1)(e) and (h) the appellate Court held that respondent 1 could not be ejected.
In the result the appeal preferred by the respondents was allowed and the decree for ejectment passed by the.
trial Court against them was set aside.
The appellant then took the dispute before the High Court of Punjab by his revisional application.
The High Court has in substance agreed with the view taken by the appellate Court, confirmed its main findings and has dismissed the revisional application.
The High Court has observed that in its opinion the 682 appellate judge was fully justified in holding that the premises were let out to the tenant for the purpose of residence and for the purpose of his work as a member of the medical profession.
It has made an alternative finding that even if it was assumed that the premises were let out to respondent 1 for the purpose of residence the plea of bona fide requirement made by the appellant was not proved and the argument based upon section 13(1)(h) was not available to the appellant because the Golf Link building which respondent 1 had acquired cannot be said to be suitable for the conduct of business if the neighborhood or the locality in which it is situated is not suitable for that purpose.
In the result the High Court dismissed the appellant 's revisional application It is against this decision that the appellant has come to this Court by special leave.
It is relevant to refer to the material provisions of the Act before dealing with the points raised for the appellant by the learned Solicitor General in the present appeal.
The Act applies to premises which are defined by section 2(g) as meaning, inter alia, any building or part of a building which is, or is intended to be, let separately for use as a residence or for commercial use or for any other purpose.
Section 13(1) provides that notwithstanding anything to the contrary contained in any other law or any contract, no decree or order for the recovery of possession of any promises shall be passed by any Court in favour of the landlord against any tenant including tenant whose tenancy is terminated.
This provision is, however, subject to the exceptions provided under the several clauses of the proviso.
We are concerned with two of these.
Section 13(1)(c) allows a decree for ejectment to be passed if the Court is satisfied that the premises let for residential purposes are required bona fide by the landlord who is the owner of such premises for occupation as a residence for himself or his family and that he has no other suitable accommodation.
The explanation to this clause provides that for the purpose of this clause residential premises include any premises which having been let for use as a residence are, without the 683 consent of the landlord, used incidentally for commercial or other purposes; and section 13(1)(h) provides for ejectment in a case where the Court is satisfied that the tenant has whether before or after the commencement of this Act built, acquired vacant possession of, or has been allotted, a suitable residence.
It is with these three provisions that we are concerned in the present appeal.
It would be noticed that as soon as it is found that the premises in question have been used by respondent 1 incidentally for professional purposes and it is further established that this use is made with the consent of the landlord then the case goes outside the purview of section 13(1)(e) altogether.
In the present case it has been found by the appellate Court and the High Court that right from the commencement of the tenancy a substantial part of the premises is used by respondent 1 for his professional purpose, and they have also found that this has been done obviously with the consent of the landlord.
It is unnecessary to refer to the evidence on which this finding is based.
Even the trial Court was apparently inclined to take the same view about this evidence but it did not fully appreciate the effect of the explanation; otherwise it would have realised that the professional use of a substantial part of the premises with the consent of the appellant clearly takes the case outside section 13(1)(e).
In other words, where premises are let for residential purposes and it is shown that they are used by the tenant incidentally for commercial, professional or other purposes with the consent of the landlord the landlord would not be entitled to eject the tenant even if he proves that he needs the premises bona fide for his personal use because the premises have by their user ceased to be premises let for residential purposes alone.
This position cannot be seriously disputed.
Faced with this difficulty the learned Solicitor General attempted to argue that the very finding made by the Courts below about the nature of the tenancy takes the premises outside the purview of section 2(g) of the Act.
The argument is that the premises cannot 684 then be said to have been let for use as a residence or for a commercial use and so they ceased to be premises under the Act.
It is suggested that any other use which is specified by section 2(g) would not include a combination of residence with commercial or professional purposes.
The other use there referred to may be use for charity or something of that kind which is different from use as residence or commercial use.
In our opinion this argument is not well founded.
The three kinds of user to which the definition refers are residence, commerce and any other purpose which necessarily must include residence and commerce combined.
It may also include other purposes as suggested by the learned Solicitor General.
As soon as it is shown that the premises have been let both for the use of residence and for commercial purposes it does not follow that the premises cease to be premises under section 2(g); they continue to be premises under the last clause of section 2(g).
This position is wholly consistent with the division of the premises made with reference to their user in paragraphs 3, 4 and 5 of Part A in the Second Schedule to the Act.
Therefore, in our opinion, the argument urged by the learned Solicitor General on the construction of section 2(g) cannot be sustained.
It will be recalled that the present suit has been filed by the appellant himself praying for the respondent 's ejectment under the provisions of the Act, and so the argument that the Act does not apply to the premises in question can be justly characterised as an argument of desperation.
Then it is contended that even if the appellant may not be entitled to claim ejectment under section 13(1)(e) he would be justified in claiming a decree for ejectment against the respondent independently under section 13(1)(h).
It is urged that as soon as it is shown that respondent 1 has acquired a suitable residence he can be ejected even though section 13(1)(e) may not apply to his tenancy.
In our opinion, even this argument is fallacious.
Section 13(1)(h) applies to tenancies which are created for essential purposes, and it provides that in the case of such tenancies even if the landlord may not be able to prove his case under section 13(1)(e) he would nevertheless be entitled to eject the tenant once it is shown 685 that the tenant has acquired another suitable residence.
The requirement is that the tenant must have suitable residence.
Both words of the requirement are significant; what he has acquired must be residence, that is to say the premises which can be used for residence and the said premises must be suitable for that purpose.
If the promises from which ejectment is sought are used not only for residence but ' also for profession how could section 13(1)(h) come into operation? One of the purposes for which the tenancy is acquired is professional use, and that cannot be satisfied by the acquisition of premises which are suitable for residence alone, and it is the suitability for residence alone, which is postulated by section 13(1)(h).
Therefore, in our opinion, it would be unreasonable to hold that tenancy which has been created or used both for residence and profession can be successfully terminated merely by showing that the tenant has acquired a suitable residence.
That is the view taken by the High Court and we see no reason to differ from the conclusion of the High Court.
The last argument urged by the learned Solicitor General is that respondent 1 should not be allowed to approbate and reprobate as he has done in the present case.
This argument is based on the conduct of the respondent at the previous stages of the dispute.
It is true that in 1941 and onwards respondent 1 has successfully urged that the tenancy was for residence, and in consequence has secured the extension of tenancy under cl.
11A of the New Delhi House Rent Control Order, 1939, issued under r. 81(2)(bb) of the Defence of India Rules.
The statements made by respondent 1 in that behalf indicate that he exercised his option of obtaining extension of the lease on the ground that the premises were let out to him for residence.
The argument is that since by the said representations he had actually obtained an advantage he cannot be permitted now to contend that the lease is not only for residence.
On the other hand the conduct of the appellant himself is also inconsistent with the stand taken by 87 686 him in the present proceedings.
In 1942 when he demanded an increased rent from respondent 1 he made out a case which is inconsistent with his present story that the premises were let out to respondent 1 only for residence.
The case then made out by him appears to be that the tenancy fell under paragraph 4 of Part A in the Second Schedule to the Act, and that would mean that the premises had not been let only for residence.
Indeed the conduct of both the parties has been actuated solely by considerations of expediency and self interest in this case, and so it would prima facie be idle for the appellant to contend that respondent 1 should not be allowed to approbate and reprobate.
But, apart from this fact, it is obvious that the appellant cannot be allowed to raise this contention for the first time before this Court.
The plea sought to be raised can be decided only after relevant evidence is adduced by the parties, and since this plea has not been raised by the appellant at the proper stage respondent 1 has had no opportunity to meet the plea and that itself precludes the appellant from contending that though the lease may not be one for residence alone respondent 1 should not be permitted to urge that it is not for residence but for residence and profession, It is the settled, practice of this Court that new pleas of this kind which need further evidence are not allowed to be raised in appeals under article 136 of the Constitution.
The result is the appeal fails, but in the circumstances of this case we direct that the parties bear their own costs throughout.
Appeal dismissed.
| The Singer Sewing Machine Company, respondent 2 in the appeal, was the tenant in respect of a shop under the appellant and informed him that the company had closed its premises, that respondent I will conduct his business in the shop, and that he will be personally responsible for payment of rent, and in spite of the appellant 's protest and without his consent delivered possession of the said shop room to respondent 1.
Thereupon the appellant applied to the Controller under section 13 of the East Punjab Urban Rent Restriction Act, 1949, for eviction of the respondents and the Controller directed the company to deliver possession to the appellant.
The District Court confirmed the Controller 's order but the High Court set aside the order, in a petition under article 227 of the Constitution, as having been made without jurisdiction, holding that the company had no interest in the tenancy after August 31, 1954, and nothing had passed to the respondent 1.
Held, that the High Court was in error on both the points and its order must be set aside.
One of the obligations of a tenant under section 108(q) of Transfer of Property Act, on the determination of the tenancy, is to put the landlord in possession.
If the tenant fails to do so before the expiry of the period of notice, his tenancy continues and cannot be terminated by an assignment in favour of another.
W. H. King vs Republic of India, , referred C.to.
In the instant case, the company had not admittedly served the notice as required by law and, therefore, did not cease to be the tenant and since the respondent I was let into possession as assignee he was not a trespasser and, consequently, the proceeding before the Controller was maintainable against both.
|
Appeal No. 34 of 1957.
Appeal from the judgment and order dated August 31, 1955, of the Labour Appellate Tribunal of India, Calcutta in Appeal Nos.
Cal 187 & Cal 188 of 1954, arising out of the Award dated May 15, 1954, of the 328 Industrial Tribunal, Assam in Reference No. 20 of 1953 published in the Assam Gazette dated June 16, 1954.
C.B. Aggarwala and K. P. Gupta for the appelants.
P.K. Goswami, section N. Mukherjee and B. N. Ghosh, for the respondent.
March 31.
The Judgment of the Court was delivered by KAPUR J.
In this appeal brought by special leave against the order of the labour Appellate Tribunal, Calcutta dated August 31, 1955, the controversy between the parties is confined to the question of bonus.
The appellants are the workmen including members of the Indian staff and artisans employed by the respondent, the Assam Co. Ltd., a company incorporated in the United Kingdom and engaged in tea, industry in the State of Assam.
The appellants claimed bonus for the years 1950, 1951 and 1952 at the rate of 6 months ' wages per year.
The respondent offered to the Indian staff excluding the artisans Rs. 51,061 as bonus for 1950, Rs. 48,140 for 1951 and Rs. 15,493 for 1952 which works out at 2.3% of the net profit for the year 1950, 3.1 % for the year 1951 and 3.9 % for the year 1952.
This dispute was referred to the Industrial Tribunal by a notification of the Assam Government dated August 27, 1953.
The Industrial Tribunal allowed depreciation as given in the company 's balance sheets for the three years and allowed as return on the paid up capital and on the reserve 7% and 5% respectively and held the artisans also to be entitled to bonus.
For the purpose of mode of payment the Industrial Tribunal accepted the " unit scheme" under which the company had been paying bonus since the year 1926.
It was of the opinion that the scheme was fair and rational and gave incentive to industrial efficiency and to production.
Both the appellants and the respondent appealed against this order, the former as to the correctness of 329 the accounts, the amount of the return on capital and reserves and the " unit scheme " and again claimed six months ' wages per year as bonus.
The latter appealed against the percentages allowed on the capital and the reserves and claimed 10% and 8% respectively as a fair return.
It objected to the inclusion of the artisans amongst the workmen eligible for bonus and also to the application of what is known as the Bombay formula to Tea industry.
The Labour Appellate Tribunal varied the Tribunal 's award and allowed depreciation at the rate allowable under the Indian Income Tax Act, confirmed 7% on the paid up capital but raised the return on the reserves from 5% to 6% in order to meet the claim of the company for rehabilitation which though not claimed before the Industrial Tribunal, was put forward before it as a basis for increase in return on reserves.
In this Court the appellants again repeated their objection to the amount of depreciation, the return on capital and on reserves and to the " unit scheme " but were prepared to confine their claim to two months ' was as bonus.
Counsel for the respondent objected to the applicability of the formula to an industry like the 'tea industry, his contention being that circumstances and considerations applicable to the textile industry cannot apply to Tea industry which, being connected with agriculture, is affected by various factors which must be taken into consideration in the matter of depreciation, return oil capital and return on reserves.
The principles on which the ascertainment of the surplus on the basis of which bonus becomes determinable and distributable have been laid down by this Court in Sree Meenakshi Mills vs Their Workmen The formula there laid down is: " Distributable surplus has to be ascertained after providing from the gross profits for (1) depreciation, (2) rehabilitation, (3) return at 6 per cent.
on the paid up capital (4) return on the working capital at a lesser but reasonable rate, and (5) for an estimated amount in respect of the payment of income tax." (1) ; 42 330 Under this formula the depreciation allowable in cases arising under the Industrial Disputes Act is the normal depreciation including shift depreciation.
We did not understand counsel for the respondent to contend that there was anything in the formula which was wrong in principle but that it had to be adjusted to suit the circumstances of the Tea industry.
No circumstances, were however, given by him which would make it unfair to apply the formula nor were any figures or particulars furnished for varying it in regard to depreciation.
The Industrial Tribunal allowed 7% return on capital as against 6% held allowable under the formula.
Its reasons for this increase were : That the tea industry here may have often to face various adverse circumstances more adverse than those that may come upon other industries and may have more risks than other industries.
It may however be noted that the company in the instant case is more than a Century old one faring well all through and has thus been so far a prosperous one and on a sound footing and as such it is expected to have built up a substantial reserve.
" The Labour Appellate Tribunal maintained this higher rate of return on capital on the ground " of its being exposed to greater risks than any other industry namely weather, pests in the plants and gradual deterioration of the soil over which no man has any control These additional risk factors are no doubt present in an industry connected with agriculture like the tea industry and in our opinion they justify the giving of a higher rate of return on capital.
Instead of 4% allowed by the formula the industrial Tribunal fixed the return on reserves at 5% on the ground of its being sufficient to guard the interests of the company but the Labour Appellate Tribunal increased it to 6% to meet replacements and rehabilitation charges since the " usual method of calculating these charges is not possible in the present case " and, " we are to see that the industry does not.
suffer for want of replacement and rehabilitation funds and must 331 provide such funds in some other way, namely, by allowing a return on the working capital at higher rates ".
In the absence of any claim in the respondent 's Written Statement for rehabilitation or any figures for determining this amount, this extra one per cent.
is insupportable.
It is not a case where a claim could not be made or figures could not have been given at the proper stage.
The additional one per cent.
cannot therefore be allowed.
In our opinion the reasons given by the Industrial Tribunal sufficiently support the giving of 5% on the reserves as being fair considering the risks of the tea industry which is exposed to various adverse circumstances and elements.
The Industrial Tribunal has not acted unreasonably nor in disregard of any accepted principles in calculating the return on reserves at 5% and we see no cogent 'reason for varying this rate.
The respondent has, since 1926, been paying bonus to its employees according to a scheme called the " unit scheme " which according to the Industrial Tribunal has the merit of being more rational and gives incentive to industrious habits and efficiency loading to more production.
The Labour Appellate Tribunal did not go into the merits of the scheme but ordered payment according to it.
Under this scheme units are credited to each workman, taking into consideration the importance of the job he holds, the wages he gets and the number of years he has been employed in that particular job.
The value of units so awarded thus vary commensurate with considerations of efficiency and experience.
The establishment is divided into twelve categories and the medical staff into three each based on the relative importance of the nature of work done by a workman.
Thus in the descending order of their importance the jobs are classified as: 1.
Head Mohori; 2.
Head Clerk; 3.
Divisional Mohori ; 4.
Land Mohori; Hazaria Mohori; 5.
Kamjari Mohori; 6.
Godown Mohori; 7.
2nd Tea House Mohori; 2nd Kerani; 2nd Hazaria Mohori; 8.
2nd Godown Mohori; 9.Gunti Mohori; 10.
3rd Tea House Mohori; 11.Mondal; 12.
Apprentices.
Units would thus be awarded to workmen in the 332 particular category they are in and the more qualified the worker the better his work and the higher his wage, the higher the number of units he would be entitled to.
The amount available for distribution as bonus is divided by the aggregate number of units of all the workmen participating in the scheme and each worker would be entitled to a multiple of the amount payable on one unit and the units to his credit.
It appears to us that the estimate of the Industrial Tribunal as to the suitability of the scheme was fully justified and payment of bonus in accordance with this scheme will not only result in fair distribution of bonus but would also lead to improvement in the quality and quantity of work.
This scheme is not to be confused with production bonus though it has the merit of combining the fair distribution of the surplus available and the maintenance of efficiency in the establishment.
Taking the figures on the basis of the award made by the Industrial Tribunal we find that Rs. 7,64,608 would be the surplus for the year 1950, Rs. 77,823 for 1951 and a deficit of Rs. 10 lacs for the year 1952.
The total sum available for three years will be nil.
On the basis of the claim which counsel for the appellant has made before us, i. e., two months ' wages, we find that the amount of bonus required for the members of the staff for the year 1950 will be one sixth of Rs. 4,63,095 and for the year 1951, one sixth of Rs. 4,83,893 and for 1952 one sixth of Rs. 5,31,202 which works out to Rs. 77,182 for 1950, Rs. 80,647 for 1951 and Rs. 88,533 for 1952.
The amounts required for the artisans further increase these figures.
No doubt on the calculations which have now been made the appellant may justify the claim of two months ' bonus for the year 1950 but the same cannot be said in regard to It )he claim for the years 1951 and 1952 because of the available surplus which is only Rs. 77,823 for 1951 and there is a deficit of about 10 lacs of rupees for the year 1952.
Taking all these figures into consideration, we are of the opinion that the amounts awarded by the Industrial Tribunal are fair and proper.
As the Labour Appellate Tribunal 333 allowed depreciation and rehabilitation on an erroneous basis, we would set aside the order of the Labour Appellate Tribunal and would restore that of the Industrial Tribunal with this modification that the Respondent shall make available the additional amount required for payment of the proportional bonus to the artisans.
The appeal is, therefore, allowed to this extent, the order of the Labour Appellate Tribunal set aside and the award of the Industrial Tribunal restored with this modification that the respondent shall also provide an additional amount for these three years for payment to the artisans of proportionate bonus on the basis of the " Unit System ".
As neither of the parties have succeeded in their main contentions, the fair order in regard to costs should be that the parties do bear their respective costs throughout.
| The appellants claimed bonus for the years 1950, 1951 and 1952 at the rate of six months ' wages per year.
The Industrial Tribunal to which the dispute was referred allowed, in calculating the surplus available for payment of bonus, inter alia return on paid up capital and on the reserves at 7% and 5% respectively and accepted the " unit scheme " of payment of bonus which the company had been following since 1926.
Under this scheme units were credited to each workman taking into consideration the importance of the job he held, the wages he got and the number of years he had been employed in that particular job, and each workman was paid bonus in proportion to the units to his credit.
On appeal the Labour Appellate Tribunal modified the award and raised the return on the reserves from 5% to 6% : Held, that the formula laid down in Sree Meenakski Mills vs Their workmen, ([1958] S.C.R. 878 at 884) for ascertaining the surplus on the basis of which bonus becomes determinable and distributable could be applied to the tea industry with suitable adjustments.
The allowing Of 7% return on capital as against 6% held allowable under that formula was justified by the additional risk factors in the tea industry.
The allowing Of 5% return on reserves by the Industrial Tribunal as against 4% allowed by the formula was not unreasonable, it being sufficient to safeguard the interests of the company.
But the increasing of this to 6% by the Appellate Tribunal was insupportable in the absence of any claim in the respondent 's written statement for rehabilitation or ,of any figures for determining this amount.
The " unit scheme " was suitable for the payment of bonus and would result not only in the fair distribution of bonus but would also lead to improvement in the quality and quantity of work.
|
pt Petition Nos. 130 & 195 of 1991.
IN Civil Appeal No. 2054 of 1990 From the Judgment and Order dated 23.1.87 of the Central Administrative Tribunal, Calcutta in T.A. No. 1263/86.
G.S. Chatterjee and Avijit Bhattacharjee for the Appellants.
Dr. Anand Prakash, P. Narasimhan for B.K. Prasad, for the Respondents.
The Judgment of the Court was delivered by R.M. SAHAI, J.
Why the appellants should have been forced to file these contempt applications for enforcement of the order passed by this Court as far back as on 30th April 1990 in Civil Appeal No.2054 of 1990, is not without reason.
Grievance of the applicants is that despite clear findings recorded by this Court, opposite parties are going back on it and persisting in the implementation of the order in a manner which frustrates the entire purpose for which the applicants approached this Court and is a clear violation of directions of this Court issued on 30th April 1990.
Entire dispute centered round the practice of exercising option by Assistant Station Masters who were recruited directly.
Were they left any choice in the matter or was it compulsory.
It was held by this Court, that various letters issued made it clear that the option had to be exercised at the time of appointment and where no option was exercised it was deemed to have been exercised.
This Court found that the applicants were those persons who had to exercise option at the time of appointment and their options were irrevocable.
Effect of this was that they had 758 to wait till 1983 when restructuring was done.
The Court further found that the cadre of Assistant Station Master/Station Master in South Eastern Railway was separate and not combined.
But the Chief Personnel Officer applied alternative1, which under restructuring was to be applied to a zone where combined cadre was in vogue, as it was acceptable to leaders of the Union and was beneficial to large number of employees.
The Court therefore did not interfere with implementation of the alternatives, but protected the interest of the applicants by holding thus "But both the employees unions have accepted the implementation of the letter of Chief Personal Officer as it is beneficial to a majority of the employees.
Therefore, it may not be disturbed.
At the same time all those 204 employees who had opted before 1983 must be entitled to the benefit which would have been available to them on their options.
" What remained thereafter, which could not be clear to opposite parties, cannot be appreciated.
The order left no ambiguity that these employees shall be treated separately and would be granted benefit which would have been available to them.
That was possible and obvious if alternative 11 was applied to them.
It was for this reason that the Court directed to create even additional posts.
Attempt was made by the learned senior counsel to urge that it shall disturb seniority and may result in extending it to many others.
We are afraid that this Court in these applications is concerned with the implementation of the order passed by it and not whether the order passed by it was correct or not.
Neither of these submissions were raised earlier and if had been raised, they should be deemed to have been rejected.
Even earlier it had been made clear that no one promoted shall be disturbed.
We, therefore, direct opposite parties to implement the order of this Court in respect of 204/206 employees by applying altemative II to them for purposes of determining their placement and promotion.
After their placements and promotions are so determined under alternative II then they may be governed by the present alternative for future promotions.
Six months ' time was granted in 1990.
The opposite parties have delayed it by nearly two and half years.
We direct the opposite parties to finalise it within two months from today.
The promotions and all benefits shall be given retrospectively.
No application for further extension by opposite parties shall be entertained.
Failure to comply with the directions shall not be treated lightly in future.
759 We are not taking any action in the circumstances for the present.
The contempt applications are disposed of accordingly.
But the respondents shall pay a sum of Rs. 5,000 as costs to the applicants.
U.R. Contempt Petition disposed of.
| The dispute was about whether the exercise of option by Assistant Station Masters, directly recruited, was a matter of choice or was compulsory.
The order of this court of 30 April 1990 inter alia protected the interests of the applicants by holding that the 204/206 employees who had opted before 1983 must be entitled to the benefit which would have been available to them on their options.
The order was not implemented.
It was argued for the condemner that the order of this court would disturb seniority and may result in extending it to many others.
Disposing of the contempt petition, this court, HELD : 1.
The order dt.
30.4.90 left no ambiguity that these employees shall be treated separately and would he granted the benefit that would have been available to them.
(758 D) 2.
The Court in contempt applications is concerned with the implementation of an order passed by it, and not whether such order is correct or not.
3.Neither the submission regarding seniority, nor that it may extend to others was raised earlier, and if raised, they should be deemed to have been rejected.
Even earlier it had been made dear that no one promoted shall be disturbed.
(758 F) 757 4.Within 2 months, alternative 11 to be applied to 204/206 employees for their placement and promotion.
Future promotions may be governed by the present alternative.
Promotions and all benefits shall be given retrospectively.
(758 H) Cost to the applicants of Rs. 5,000
|
iminal Appeals Nos. 159 and 160 of 1965.
Appeals by special leave from the judgment and order dated July 28, 1965 of the Patna High Court in Criminal Appeal Nos. 533 and 534 of 1963.
R. K. Garg, D. P. Singh, section C. Agarwala, section P. Singh and K.M. K. Nair, for the appellants (in both the appeals).
B. P. Jha, for the respondent (in both the appeals.) The Judgment of the Court was delivered by Hegde, J.
In these connected appeals by special leave the legality of the convictions of the appellants appellant Mohar Rai under section 324 of the Indian Penal Code and appellant Bharath Rai under section 324/109 of the Indian Penal Code is challenged.
In the trial court the former was convicted under section 307 of the Indian Penal Code and the latter under section 307/109 of the Indian Penal Code.
The High Court of Patna, in appeal, altered their convictions as set out above.
In order to appreciate the contentions advanced on behalf of the appellants, it is necessary to state briefly the prosecution as 527 well as the defence version.
The case made out by the prosecution is that because of previous enmity Mohar Rai shot and injured P.W. I Balli Ahir, at the instigation of Bharath Rai,, on the evening of October 8, 1961, in Natwar Bazar.
The existence of enmity between the appellants and most of the prosecution witnesses who speak to the occurrence, is satisfactorily established.
Many of the prosecution witnesses appear to have been proceeded against under section 107 of the Code of Criminal Procedure at the instance of the appellants.
The plea of the appellants was that on the day of incident when they were returning to their house in the evening they were way laid by P.W.1 and several others; one of those persons fired shots at Mohar Rai, but it missed him; to save himself he (Mohar Rai) ran away from the scene, subsequently two more shots were fired; meanwhile he got into the house of Lal Bahadur Mistri (P.W.9), but his assailants pursued him, forced their entry into the house of P.W.9 and there assaulted him; thereafter with a view to foist a false case against him forcibly thrust into his hands the revolver (Ex II) and then handed him over with exhibit
III to Janardan Singh (P.W. 15), the police constable.
ThE plea of Bharath Rai was that during the incident mentioned by Mohar Rai, he was caught hold of and assaulted by some of the prosecution witnesses.
The High Court and the trial court have rejected the plea of the appellants and relying on the prosecution evidence convicted the appellants as mentioned earlier.
This Court being a Court of special jurisdiction does not reassess the evidence in a case except under exceptional circumstances.
It was urged on behalf of the appellants that they did not have a fair trial, the High Court as well as the trial court on an erroneous view of the law refused to take into consideration their defence, they ignored important circumstances appearing in their favour and further some of the conclusions reached by them are unsupported by any evidence on record.
We have to see how far these submissions are well founded.
Out of the incident mentioned above, the State came to ini tiate as many as three prosecutions.
G. R. Case 1370/TR 20 of 61/63 in the Court Of the Munsif Magistrate I Class, Sasaram was instituted on the basis of the complaint lodged by Mohar Rai.
G.R. 506 of 1962 on the file of the Munsif Magistrate I Class, Sasaram was a case under section 19(f) of the Indian Arms Act against Mohar Rai for being armed with a revolver at the time of the incident mentioned earlier.
The third case is the one with which we are concerned in these appeals.
The case instituted on the basis of the complaint made by Mohar Rai was acquitted on February 1, 1963.
The Arms Act case ended in acquittal on May 13, 1964.
The appeal against that order was dismissed by the High Court of Patna on September 5, 1966.
A copy of the judgment in that appeal was produced at the hearing of these 528 appeals and received as additional evidence with our permis sion.
The trial court as well as the High Court refused to examine the defence of the appellants solely on the ground that the case pleaded by them had been rejected by the learned Munsif Magistrate I Class, Sasaram in the prosecution commenced at the instance of Mohar Rai.
The prosecution case was that immediately after the occur rence, Mohar Rai was chased and caught and at that time he had in his hands the revolver (Ex.III).
Very soon thereafter he was produced before Audeshwar Prasad Singh (P.W.19) with the revolver in question.
The further case of the prosecution was that P.W. 19 seized that revolver; later during investigation he seized the three cartridges said to have been fired by Mohar Rai as well as a misfired cartridge; the revolver as well as the seized cartridges were sent to the ballistic expert for examination.
These facts were spoken to by the prosecution witnesses, in particular by P.W. Janardhan Singh, the constable to whom Mohar Rai was handed over immediately after the occurrence and P.W. 19 the investigating officer.
P.W. 19 deposed that the number of the revolver seized is 545465.
He is positive that the revolver seized from Mohar Rai is exhibit 111, though in his report to the ballistic expert he had given the number of the revolver sent for examination as 545466, but in that report itself he had added a note to say that the last two digits were not clear,.
The prosecution proceeded on the basis there is no ambiguity about it that exhibit III was the weapon that was used in the commission of the offen ce.
The ballistic expert who was examined as D.W. 1 was positive that the seized empties as well, as the misfired cartridge could not have been fired from EX.III.
The evidence of this witness has been accepted both by the trial court as well as by the High Court.
From that it follows that the prosecution case that Mohar Rai fired three shots from exhibit
III cannot be accepted as true.
If this part of the prosecution case fails then very little remains in the prosecution case.
The trial court and the High Court have brushed aside this important aspect on a wholly untenable basis.
They opined that by some mistake a revolver different from that seized from Mohar Rai might have been sent to the ballistic expert.
The conclusion has no basis on the material on record.
It is just a speculation a process not open to courts.
Evidently overwhelmed by the evidence of the large number of )Witnesses who deposed in favour of the prosecution case, forgetting the fact that most of them belong to the faction opposed to the appel lants.
the trial court and the High Court ignored the probabilities and lost sight of the evidence afforded by the circumstances appearing in the case.
Both those courts failed to realise that the fact that exhibit III was not the revolver that was used during the 529 incident went to probablise the plea taken by Mohar Rai.
At this stage we may recall the fact that both the trial Magistrate as well as the High Court rejected the prosecution case and acquitted Mohar Rai in the case against him under section 19(f) of the Arms Act.
It is true that the decision of the trial court in that case was rendered after the Assistant Sessions Judge, Sasaram, convicted the appellants in the present case and therefore it may be that the appellants cannot take the benefit of the rule laid down by this Court in Pritam Singh vs The State of Punjab(1) and affirmed in Manipur Administration vs Thokchom, Bira Singh(2).
But even without the assistance of that rule, on the basis of the prosecution evidence itself the prosecution version stands discredited.
Once it is proved that the empties recovered from the scene could not have been fired from exhibit
III the prosecution case that those empties were fired from exhibit
III by Mohar Rai stands falsified.
The trial court as well as the High Court wholly ignored the significance of the injuries found on the appellants.
Mohar Rai had sustained as many as 13 injuries and Bharath Rai 14.
We get it from the evidence of P.W. 15 that he noticed injuries on the person of Mohar Rai when he was produced before him immediately after the occurrence.
Therefore the version of the appellants that they sustained injuries at the time of the occurrence is highly probabilised.
Under these circumstances the prosecution had a duty to explain those injuries.
The evidence of Dr. Bishun Prasad Sinha (P.W. 18) clearly shows that those injuries could not have been self inflicted and further, according to him, it was most unlikely that they would have been caused at the instance of the appellants themselves.
Under these circumstances we are unable to agree with the High Court that the prosecution had no duty to offer any explanation as regards those injuries.
In our judgment the failure of the prosecution to offer any explanation in that regard shows that evidence of the prosecution witnesses relating to the incident is not true or at any rate not wholly true.
Further those injuries probabilise the plea taken by the appellants.
Both the trial court as well as the High Court refused to take into consideration the plea of the appellants on the ground that that plea did not commend itself to the trial Magistrate in the case instituted on the complaint of Mohar Rai.
They were erroneously of the view that the plea in question was barred by the rule laid down by this Court in Pritam Singh 's case(1).
In that case, this Court accepted as correct the following statement of (1) A.I.R. 1956 S.C. 415.
(2) ; 530 the law made by the Judicial Committee in Sambasivam vs Public Prosecutor, Federation of Malaya(): "The effect of a verdict of acquittal pronounced by a competent court on a lawful charge and after a lawful trial is not completely stated by saying that the person acquitted cannot be tried again for the same offence.
To that it must be added that the verdict is binding and conclusive in all subsequent proceedings between the parties to the adjudication.
The maxim 'res judicata pro vetitate accipitur ' is no less applicable to criminal than to civil proceedings.
Here, the appellant having been acquitted at the first trial on the charge of having ammunition in his possession, the prosecution was bound to accept the correctness of that verdict and was precluded from taking any step to challenge it at the second trial.
" Dixon J., of the Australian High Court in the King vs Wilkes(2) explained the legal position in these words : "Whilst there is not a great deal of authority upon the subject, it appears to me that there is nothing wrong in the view that there is an issue estoppel, if it appears by record of itself or as explained by proper evidence, that the same point was determined in favour of a prisoner in a previous criminal trial which is brought in issue on a second criminal trial of the same prisoner.
That seems to be implied in the language used by Wright, J. in R. vs Ollis [1960] II Q.B. 758, at p. 769) which, in effect I, have adapted in the fore going statement.
There must be a prior proceeding determined against the Crown necessarily involving an issue which again arises in a subsequent proceeding by the Crown against the same prisoner.
The allegation of the Crown in the subsequent proceeding must itself be inconsistent with the acquittal of the prisoner in the previous proceeding.
But if such a condition of affairs arises I see no reason why the ordinary rules of issue estoppel should not apply.
Such rules are not to be confused with those of res judicata, which in criminal proceedings are expressed in the pleas of autrefois acquit and autrefois convict.
They are pleas which are concerned with the judicial determination of an alleged criminal liability and in the case of conviction with the substitution of a new liability.
Issue estoppel is concerned with the judicial establishment of a pro (1) (2) (77)C.L.R.511, at pp.518 519.
531 position of a law or fact between parties.
It depends upon well known doctrines which control the relitigation of issues which are settled by prior litigation." This Court endorsed that statement in Manipur Administra tion 's case( ').
But the law laid down in those cases has no application to the facts of the present case.
In both the prosecution in the complaint made by Mohar Rai as well as in tie complaint made by P.W. the prosecutor before the court was the State.
Therefore, the decision in the former case cannot operate as an issue estoppel against the appellants in the present case, because they were not parties in the former case.
In other words the plea taken by the appellants in this case was never before litigated between them and the State, the opposite party in the present case.
All that can be said is that the case put forward by the State in the one case is inconsistent with that put forward by it in the other.
In those circumstances it was wrong to hold that the appellants were estopped from putting forward their defence.
That apart, it is doubtful though for the purpose of this case it is unnecessary to express any final opinion on this point whether the rule in question could be pressed against an accused, the reason being that while a prosecution cannot succeed unless it proved its case beyond reasonable doubt, the nature of the proof required of an accused in substantiating the plea taken by him is different it is sufficient if he proves that plea taken by him is reasonable and probable.
In that event he is entitled to the benefit of doubt.
This aspect was noticed by this Court in Manipur Administration 's(1) case, where it was observed: "Before parting, we think it proper to make one observation.
The question has sometimes been mooted as to whether the same principle of issue estoppel could be raised against an accused, the argument against its application being that the prosecution cannot succeed unless it proved to the satisfaction of the Court trying the accused by evidence led before it that he is guilty of the offence charged.
We prefer to express no opinion on this question since it does not arise for examination.
" For the reasons mentioned above, we are satisfied that the trial court as well as the High Court erred in summarily rejecting the defence of the appellants on the sole ground that the version put forward by them having been rejected by the court in G.R. case 13761TR 20 of 61/63 in the court of the Munsif Magistrate I Class, Sasaram the same cannot be again considered.
We think that the defence of the appellants is highly probabilised by (1) ; 532 three important circumstances, namely (i) the same was put forward immediately after the occurrence, (ii) it satisfactorily explains the injuries found on the persons, of the appellants while the prosecution evidence fails to explain those injuries,.
and (iii) the prosecution evidence itself shows that Mohar Rai could not have used exhibit III and therefore his version that that weapon was thrust on him is probablised.
The last contention taken by Mr. Garg is that admission of exhibit 4, an inadmissible document, has greatly prejudiced the case of the appellants.
According to him, the admission of that document is hit by section 162 of the Code of Criminal Procedure.
In the alternative, he contended that that document could not have been used to discredit the plea taken by Mohar Rai,, We have earlier noted the two divergent versions given by P.W.1 and Mohar Rai in respect of the incident that took place on the evening of October 8, 1961.
Quite naturally, both these complaints were investigated simultaneously.
The statement given by P.W.1 was recorded as first information in one case and the statement given by Mohar Rai as first information in the other.
Appellant Bharath Rai was questioned during the investigation.
His statement is exhibit 4.
The trial court came to the conclusion that it was not hit by section 162 as the same was not recorded in the course of investigation in the case against Bharath Rai.
The High Court justified the admission of that document on the basis of the rule laid down by this Court in Faddi V. State of Madhya Pradesh( '), namely where the person who lodged the first information report regarding one offence is himself subsequently accused of that offence and tried and the report lodged by him is not a confessional first information report but is an admission by him of certain facts which have a bearing on the question to be determined by the Court, viz., how and by whom the offence was committed or whether the statement of the accused in the court denying the correctness of certain statements of the prosecution witnesses is correct or not, the first information report is admissible to prove against him, his admissions which are relevant under section 21 of the Evidence Act.
It was contended on behalf of the appellants that whether that statement is held to have been taken during the investigation of the complaint made by P.W. 1 or during the investigation of the complaint made by Mohar Rai, in either case it is hit by section 162 of the Code of Criminal Procedure '.
It was also urged that the rule laid down in Faddi 's case() has no application to the facts of the present case, In the instant case no portion of exhibit 4 was relied on as an admission of Bharath Rai.
Hence the rule laid down in Faddi 's case( ') could not have been called into aid.
The trial court and the High Court relied on Bharath Rai 's statement that it was Naulakh Rai who fired a pistol (1) ; 523 to contradict the statement of Mohar Rai in his complaint that a pistol was fired by Dudhnath.
No portion of exhibit 4 could have been used for that purpose either under section 157 or section 145 of the Evidence, Act.
As Bharath Rai was not examined as a witness in the present case his previous statement could not have been used either to contradict his evidence or corroborate it even if it is to be held that it is a statement coming under section 154 of the Code of Criminal Procedure : see Nazir Ali vs State of U.P.(1).
The circumstances noticed above, in our opinion, not merely affect the value and weight to be attached to the prosecution evidence, but they persuade us to doubt the prosecution version.
In the circumstances, we are unable to resist the conclusion that there has been a miscarriage of justice.
We accordingly allow these appeals and acquit the appellants.
Their bail bonds do stand cancelled.
R.K.P.S. Appeals allowed.
(1) A.I.R. 1957 S.C. 366.
| The first appellant was convicted under.s.
324 IPC for shooting and injuring PW 1, at the instigation of the second appellant, who was himself convicted of an offence under section 324 read with section 109 IPC.
The existence of enmity between the appellants and most of the prosecution witnesses who spoke to the occurrence was satisfactorily established.
The plea of the appellants in their defence was that on the date of the incident when they were returning home in the evening, they were way laid by PWI and several others and were assaulted; thereafter with a view to foist a false case against them, a revolver was forcibly thrust into the hands of the first appellant.
In connection with this incident, the State came to initiate three prosecutions : One case was instituted on the basis of a complaint by the first appellant; a second case was commenced against the first appellant under section 19(f) of the Indian Arms Act for being armed with a revolver; and the third was the present case.
The case instituted on the first appellant 's complaint as well as the case against him under the Arms Act were both dismissed.
The trial court as well as the High Court refused to examine the defence of the appellants solely on the ground that the case pleaded by them had been rejected by the Magistrate in the prosecution commenced on these basis of the complaint by the first appellant.
In appeal to this Court it was contended on behalf of the appellants that they did not have a fair trial; the High Court as well as the trial court on an erroneous view of the law refused to take their defence into consideration; they ignored important circumstances appearing in favour of the appellants; and furthermore, some of the conclusions reached by them were unsupported by any evidence on record.
It was also contended that an inadmissible document, namely a statement made by, the 'second appellant in the course of the investigation was wrongly admitted; this admission was hit by a. 162 of the Code of Criminal Procedure which bad also greatly prejudiced the case of the appellants.
HELD : The appeals must be allowed and the appellants acquitted.
(i) The trial court as well as the High Court erred in summarily ejecting the defence of the appellants on the sole ground that the version put forward by them having been rejected by the Magistrate in the case filed on the complaint of the first appellant, it could not be considered again.
The defence of the appellants was highly Probabilised by three important circumstances, namely, (1) it was put forward immediately after the occurrence, (2) it satisfactorily explained the injuries found on the persons of the appellants while the prosecution evidence failed to 526 explain those injuries; and (3) the prosecution evidence itself showed that the first appellant could not have used the revolver exhibited and therefore his version that weapon was thrust on him was probabilised.
[531 H 532 B] In both the prosecutions in the complaint made by the first appellant as well as in the complaint made by P.W.I the prosecutor before the court was the State.
Therefore, the decision in the former case could not operate as an issue estoppel against the appellants in the present case, because they were not parties in the former case.
In other words, the plea taken by the appellants in this case was never before litigated between them and the State, the Opposite party in the present case.
All that ran be said is that the case put forward by the State in the one case was in consistent with that put forward by it in the other.
In those circumstances it was wrong to hold that the appellants were estopped from putting forward their defence.
1531 B D] Pritam Singh vs The State of Punjab, A.I.R. 1956 S.C. 415; Manipur Administration vs Thokchom, Bira Singh, (1964] S.C.R. 123; Sambasivam vs
Public Prosecutor, ; and King vs Wilkes; ; at pp.
518 519, referred to.
(ii) The trial court and the High Court relied on the second appellant 's statement in the document admitted in evidence to the effect that it was a particular person who fired a pistol to contradict the statement of the first appellant in his complaint that a pistol was fired by some other person.
No portionof this statement could have been used for that purpose either section 157 ors.
145 of the Evidence Act.
As the second appellant was not examined as a witness in the present case, his previous statement could not have been used either to contradict his evidence or corroborate it even if it were to be held that it was a statement falling under s.154 of the Code of Criminal Procedure.
[532 H 533 B] Nazir Ali, vs State of U.P.
A.I.R. 1957 S.C. 366; distinguished.
|
Civil Appeal No. 515 (NCE) of 1983.
From the Judgment and Order dated the 7th January, 1983 of the Himachal Pradesh High Court in Election Petition No. 6 of 1982.
V. K.Chitre and B. R. Agrawala for the Appellant.
Dr. N. M. Ghatate for the Respondent.
The Judgment of the Court was delivered by BALAKRISHNA ERADI, J.
This being an election appeal filed under section 116A of the Representation of the People Act, 1951 (hereinafter called 'the Act ') calling for urgent determination, as soon as the hearing of arguments in the appeal was completed we announced our decision by passing the following order: 65 "We are of the view that for reasons which we shall state later, the nomination paper of the appellant was validly accepted by the Returning Officer and we accordingly allow the appeal and set aside the order of the High Court invalidating the election of the appellant.
There will be no order as to costs of the appeal.
" We now proceed to set out our reasons for reaching the aforesaid conclusion.
General Elections to the Himachal Pradesh Vidhan Sabha were held in May, 1982.
Ganu Ram, the appellant herein, Rikhi Ram Kaundal (first respondent) and three others had contested the 23 Gehrwin Assembly Constituency seat which is a seat reserved for scheduled caste candidates only.
The nominations filed by all these five candidates had been accepted as valid by the Returning Officer and the polling took place on May 19, 1982.
The result of the election was announced on May 22, 1982 and the appellant was declared elected form the said reserved constituency by reason of his having secured 7477 votes as against his nearest rival Rikhi Ram Kaundal (first respondent) who had polled only 6901 votes.
On July 3, 1983 Rikhi Ram Kaundal filed an election petition in the High Court under sections 81, 100 and 101 of the Act challenging the validity of the election of the appellant on three grounds.
The first ground urged was that the nomination paper filed by the appellant was not in order inasmuch as it did not contain any declaration by the appellant specifying the particular caste of which he is a member and the area in relation to which the said caste has been declared to be a scheduled caste in the State.
On this basis it was contended that the nomination paper of the appellant had been improperly accepted by the Returning Officer.
The second ground of objection raised was that since the appellant had not made any declaration in the nomination paper regarding the particular scheduled caste to which he belonged, he should be deemed to be disqualified for being chosen to fill the seat in question 23 Gehrwin reserved constituency in view of the mandatory provisions contained in sub section (2) of section 33 of the Act.
The third ground of objection put forward was that the appellant did not as a matter of fact, belong to any of the castes which had been declared as scheduled castes in relation to the State of 66 Himachal Pradesh and hence he was not qualified to stand sa a candidate from the aforesaid reserved constituency.
The High Court upheld the first two objections raised by the election petitioner which related to the question of validity of the nomination paper and set aside the election of the appellant holding that the nomination paper of the appellant could not be regarded as valid in view of the fact that it did not contain a declaration by the appellant specifying the particular caste of which he is a member and the area in relation to which he said caste is a scheduled caste in the State.
The third contention by the respondent election petitioner was however, rejected by the High Court since the Court found on a consideration of the evidence adduced in the case that the appellant did, in fact, belong to the 'Lohar ' caste which has been declared as a schedule caste in the State of Himachal Pradesh.
Aggrieved by the judgment of the High Court setting aside his election and unseating him, the appellant has come up to this Court with this appeal.
Section 33 of the Act deals with the topic of presentation of nomination paper and requirements for a valid nomination.
Sub section (2) of the said section which alone is relevant for our present purpose reads: "(2) In a constituency where any seat is reserved, a candidate shall not be deemed to be qualified to be chosen to fill that seat unless his nomination paper contains a declaration by him specifying the particular caste or tribe of which he is a member and the area in relation to which that caste or tribe is a Scheduled Caste or, as the case may be, a Scheduled Tribe of the State.
" It is not disputed that in the nomination form filed by the appellant and his proposer, no written declaration had been made specifying the caste to which the appellant belongs and the area in relation to which that caste is a scheduled caste of the State.
But it is common ground that along with the nomination paper the appellant had filed as annexure thereto a certificate issued by the Sub Divisional Magistrate, Ghumarwin certifying that the appellant belonged to a scheduled caste namely 'Lohar '.
The said certificate was appended to the nomination paper obviously with the sole purpose and intention of making it known to the Returning Officer and all others concerned that the appellant is filing his nomination 67 as a candidate belonging to a scheduled caste namely 'Lohar ' and it was in proof of that assertion and for eliminating doubt or controversy in the matter that the Sub Divisional Magistrate 's certificate was produced.
The High Court has taken the view that since section 33 of the Act requires that the nomination paper must be in the prescribed form and Form 2B is a self contained one, the filing of any enclosure or certificate along with the Form is not contemplated.
We are unable to agree with this view.
When the nomination paper has been made in the prescribed form there is no legal prohibition against the other requisite particulars being furnished in a separate paper appended to the form instead of writing them out in the form itself.
This is very often done in the matter of filing returns of Income tax, Wealth tax etc.
In such cases the annexure appended to the form should be treated as part of the nomination paper.
We are therefore of opinion that the certificate which was produced by the appellant as an annexure to the nomination paper has to be treated as forming part of the nomination paper and the declaration contained therein that the appellant belongs to the scheduled caste of 'Lohar ' must be understood and treated as a declaration by the appellant in the nomination form within the meaning of sub section (2) of section 33.
We have to remember that we are dealing with nomination papers pertaining to candidates belonging to scheduled castes and scheduled tribes, who, for well known historical reasons, are unfortunately, extremely backward socially, economically and educationally in comparison with other sections of our people.
In such a context we consider that the Court has to place a liberal and benevolent interpretation on the provisions contained in section 33 (2) of the Act rather than adopt a narrow, rigid, technical and purely literal construction In section Sivaswami vs V. Malaikannan and others, which was also a case arising under the Act, one of us speaking on behalf of a three Judge Bench of this Court had occasion to make the flowing observations which are apposite to the present context also: "In this context it is necessary to remember that nearly 90 per cent of the electorate in this country consists of illiterate and uneducated rural folk totally unacquainted with the intricacies of the rules & technicalities of procedure pertaining to elections.
Even if the best of endeavour is made explain to them such complicated rules and procedures they may not be capable of grasping and fully understanding all the implications and actually carrying them into effect 68 while exercising their franchise.
If the right conferred on the people to choose their representatives to the State Legislatures and the Parliament through the process of free and fair elections is to be meaningful the will of the illiterate and unsophisticated voter expressed through a marking on the ballot paper which though not strictly inside the column of the particular candidate is clearly indicative of the identity of the candidate for whom the vote is cast has to be respected and given its full effect.
" It is manifest that the legislative purpose underlying subsection (2) of section 33 of the Act is that when a nomination paper is filed in respect of a reserved seat in any constituency there must be a clear specification by the candidate of the particular caste or tribe to which he belongs and the area in relation to which that caste or tribe is a scheduled caste or scheduled tribe of the State.
This requirement is fully satisfied in the present case because by producing the certificate of the Sub Divisional Magistrate as an annexure to his nomination paper the appellant had clearly made it known that he was filing the nomination as a candidate belonging to the 'Lohar ' caste, which is admittedly a scheduled caste in the entirety of the area of the State of Himachal Pradesh.
It is also significant that no objection whatever was raised against the nomination filed by the appellant at the time of scrutiny.
The Returning Officer had published a notice of nominations under section 35 of the Act and in the said notice it was expressly stated that the appellant had filed his nomination as a candidate belonging to the scheduled caste namely 'Lohar '.
Having regard to all the facts and circumstances of the case and the legal position as explained above, we consider that the High Court was in error in holding that the nomination paper filed by the appellant was not valid and its acceptance by the Returning Officer was improper.
A faint attempt was made before us by the learned counsel appearing on behalf of the first respondent to make out that the finding entered by the High Court that the appellant does, in fact, belong to the scheduled caste 'Lohar ' is erroneous and unsupported by the evidence but we see no merit at all in the said contention.
69 The said finding recorded by the High Court is hereby confirmed.
The conclusion that emerges from the foregoing discussion is that the High Court was not justified in setting aside the election of the appellant on the ground that the nomination paper filed by the appellant was invalid.
It follows that this appeal has to be allowed and the order of the High Court invalidating the election of the appellant has to be set aside.
H.S.K. Appeal allowed.
| The petitioner in their writ petitions to this Court contested the ban on sale within the State of Maharashtra, of tickets of lottories organised by the Indian Red Cross Society, Dadra and Nagar Haveli branch and authorised by the administration of Dadra and Nagar Haveli.
Dismissing the writ petitions, ^ HELD: (1) (i) The Bombay Lotteries (Control and tax) and Prize Competition (Tax) Act, 1958 is an Act to control and tax lotteries and prize competition in the State of Maharashtra.
The Act contains detailed provisions for the licensing, regulation and control of lottery within the State of Maharashtra.
Section 32(c), provides that nothing in the Act shall apply to "a lottery specially authorised by the State Government." [203G H] (ii) In the case of lotteries authorised by the Government of Maharashtra, the Government of Maharashtra may retain to itself all necessary powers for the regulation and control and the prevention of misuse of fund and exploitation of guileless members of the public.
In the case of lotteries authorised by the Government of other States it may be difficult and even impossible for the Government of Maharashtra to take adequate regulatory steps to prevent abuse of the authority given by Governments of other States to non Governmental agencies to organize lotteries.
It may be equally difficult for the Governments of other States to take 202 adequate measures for prevention of abuse of such authority within the State of Maharashtra.
[204C D] 2.
No hostile discrimination whatever is involved in not extending the exemption from the applicability of the Bombay Lotteries (Control and Tax) and Prize Competition (Tax) Act, 1958 'to lotteries authorised but not organized by the Government of other States '.
[204D] 3.
Lotteries organised by the Government of India or the Government of the State have been taken out from Entry 34 of List II of Schedule VII by Entry 40 of List 1.
There is, therefore no question about the competence of the Legislature of Maharashtra to legislate in respect of the sale or distribution, in the State of Maharashtra, of tickets of all lotteries organized by any agency whatsoever other than the Government of India or the Government of a State.
[203E F] H. Anraj and others vs State of Maharashtra, explained.
|
Civil Appeal No. 11 IS(NT) of 1975.
WITH Civil Appeal Nos, 1226 & 1227(NT) of 1975.
From the Judgment and Order dated 18.9.1974 and 11.10.74 of the Andhra Pradesh and Calcutta High Court.
In case referred No. 15 of 1973 and matter No. 7 10 of 1970 respec tively B.B. Ahuja, Ms. A. Subhashini, K.C. Dua for the Appel lant in C.A. No. 1118 of 1975.
159 Harish N. Salve, Vivek Gambhir and Preveen Kumar for the Appellant in C.A. No. 1226 27 of 1975.
A. Subba Rao for the Respondent in C.A. No. 1118 of 1975.
B.B. Ahuja, K.C. Dua and Miss. A. Subhashini for the Re spondent in C.A. Nos.
1226 27 of 1975.
1226 & 1227/NT/1975, on a certificate, under Sec.
29(1) of the , (Act) by the assessee raise a question as to the proper construction of the proviso to Sec.
4(1)(a) of the Act, which provides for exemption respecting transferred assets which would other wise be includible in the wealth of the assessee under sec.
4(1)(a) of the Act.
The condition for the grant of the exemption under the proviso is that the transfer of the asset is either charge able to gift tax or is not chargeable under sec.
5 of the .
The particular point for consideration is whether, on the language of the proviso, the exemption is attracted only to such gifts as were chargeable to tax for any assessment year commencing "after the 31st day of March, 1964," as understood by the Revenue or whether the gifts even made earlier would attract the benefit of the exemption as claimed by the assessees.
There appears a divergence of judicial opinion on the point in the High Courts.
In C.W.T. vs Smt.
Sarala Debi Birla, ; T. Saraswathi Achi vs C.I.T., ; C.W.T. vs Seth Nand Lal Ganeriwala, ; M.G. Kollankulam vs C.I.T., Malti Harseey vs C.W.T., and C.W.T. vs Rasesh N. Mafatlal, several High Courts have construed the provision in the manner suggested by the Revenue.
C.W.T. vs Hashmatunnisa Begum, has taken the opposite view extending a wider benefit of the exemption.
The opinion of the Calcutta High Court in 1011TR 488, which is representative of the view in favour of Revenue, is under appeal in CA 1226 and 1227 of 1985 and the opinion of the Andhra Pradesh High Court in which is favour able to the assessee is under appeal 160 No. CA 1118 of 1975 preferred by the Revenue.
In CA 1118 of 1975 the assessee Smt.
Hashmatunnisa Begam, the legal representative of the late Nawab Zabeer Yar Jung Bahadur, claimed in respect of the assessment year 1967 68, that the value of the immovable properties gifted by the late Nawab to his wives before 1.4.
1964 should not be included in the net wealth of the Nawab as on the valua tion dated 31.9.1966.
The Nawab under three deeds of gift one dated 25.5.1962, in favour of Smt.
Hashmatunnisa Begum, his first wife, and two other deeds dated 17.8.1962 and 26.4.1962, in favour of Smt.
Fareed Jehan Begum his second wife, gifted in their favour certain lands and buildings of a total value of Rs. 1,96,950.
The gifts were chargeable to gift tax and were accordingly assessed to gift tax in the assessment year 1963 64.
On behalf of the estate of the Nawab who later dies on 16.12.1968 it was claimed in the proceedings for assessment to wealth for the Assessment Year 1967 68.
That though the gifts were otherwise includible as belonging to the Nawab under sec.
4(I)(a)(i), as the trans fers made to the spouses otherwise than for adequate consid eration, however, as the gifts were chargeable to gifttax, the proviso to sec.
4(I)(a) was attracted and that the assets so transferred were not includible in the net wealth of the Nawab "for any assessment year commencing after the 3 1st day of March 1964".
The Wealth tax Officer rejected this claim.
The Appellate Asst.
Commissioner, in the assessee 's appeal, confirmed the assessment.
In the assessee 's further appeal before the Appellate Tribunal, the Tribunal, on a particular construction of the proviso, allowed the appeal and held that the assets transferred, which had attracted gift tax, were not includible in the net wealth of the Nawab for the assessment year 1964 65 onwards.
At the instance of the Revenue, the following question of law was referred to the High Court for its opinion: "Whether, on the facts and in the circum stances of the case, the assessee was entitled to exclude, under the proviso to section 4(1)(a) of , the value of the assets gifted to his wives in the Wealth tax assessment for the assessment year 1967 68?" The High Court agreed with the construction placed on the proviso by the Tribunal and answered the question in the affirmative and against the revenue.
The revenue has come up in appeal by special leave.
In CA 1226 and 1227 of 1975 the assessment years concerned are 1964 65 and 1965 66 corresponding to the valuation dates 161 31.3.
1964 and 31.3.1965.
On 7.10.1959 Smt.
Sarladevi Birla, the assessee, made a gift of Rs.l,O0,011, to her minor daughter Smt.
Manju Rani Birla.
The assets so transferred were included in the assessee 's wealth for the two assess ment years 1964 65 and 1965 66 under sec.
4(I)(a)(ii) of the .
The claim of the assessee that the proviso to sec.
4(I)(a) operated to exclude the asset from the net wealth of the assessee as the transfer was chargeable to gift tax was not accepted by the Wealth tax Officer, who completed the assessment including the transferred asset in the assessee 's net wealth.
The assessee 's appeal before the Appellate Asst.
Commissioner was unsuccessful.
However, the Appellate Tribunal accepted the contention of the assessee and by its appellate order dated 11.5.1970 allowed the assessee 's appeal holding that on a true con struction of the proviso, so long as the gift was chargeable to or exempt under sec.
5 from gift tax to that extent sec.
4(I)(a) ceased to have operation and the statutory fiction embodied in it was not attracted and that as at the relevant time the gift was chargeable to gift tax.
The exemption was to operate from the assessment year commencing after 31.3.1964.
At the instance of the revenue, the Appellate Tribunal referred the following question of law for the opinion of the High court: "Whether on the facts and in the circumstances of the case and on a proper interpretation of section 4(1)(a) of the as amended by the Wealth tax (Amendment) Act, (Act 46) of 1964, the sum of Rs. 1,00,011 gifted by the assessee to her minor daughter could be included in computing her net wealth"? The High Court of Calcutta in reversal of the view taken by the Tribunal answered the question in the affirmative and against the assessee.
The assessee has come up in appeal by certificate.
We have heard Shri B.B. Ahuja, learned counsel for the revenue and Shri Harish Salve and Shri Subba Rao, for the assessees.
The controversy generated on the point leading to the divergence of the judicial opinion on the point is at tributable to the somewhat inelegant and inappropriate phraseology of the provision.
To appreciate the relevant contentions it is necessary to notice the words of the proviso: 162 "Provided that where the transfer of such assets or any part thereof is either charge able to gift tax under the (18 of 1958), or is not chargeable under Section 5 of that Act, for any assessment year commencing after the 3 1st day of March, 1964, (but before the 1st day of April, 1972), the value of such assets or part thereof, as the case may be, shall not be included in comput ing the net wealth of the individual;" The words "but before the 1st day April 1972" was later introduced by the Financee (No. with effect from 1.4.
This was introduced by the amending Act of 1964, but given effect to from 1.4.1965 by the notification.
Under the various clauses of Sec.
4(1)(a) certain transfers of assets made by an individual in favour or for the benefit of the spouse or a minor child, not being a married daughter, of such individual, are required to be ignored and the trans ferred assets included in the wealth of the assessee, as belonging to him.
Section 4(1)(a) aims at foiling an indi vidual 's attempt to avoid or reducing the incidence to wealth tax by transferring the assets to or for the benefit of the spouse or the minor child of the individual by re quiring the inclusion of such transferred assets in comput ing the net wealth of the individual.
However, the proviso makes the provision inoperative where and in so far as the transferred asset is either chargeable to gift tax under or is exempt under sec.
5 of the .
The controversy surrounds the question whether the expression "for any assessment year commencing after 31st day of March 1964", occurring in the proviso should be read with the first part and as referring to the eligibility of the gifts for exemption with reference to the point of time at which the gifts were made or whether that expression does not condition the identity of the eligible gifts but only signifies the starting point for the exemp tion from wealth tax.
Assessees contend that the date of the gift is immaterial and as long as the transfer is chargeable to gifttax or is exempt under sec.
5, whatever may be the year in which the gift was made, the exemption from gift tax must commences "for any assessment year commencing after the 31st day of March 1964".
If the expression "for any assessment year commencing after the 31st day of March, 1964" is intended to qualify and determine the gifts, the subject matters of which are eligible for exemption, then the literal construction, would be that the gifts made earlier to that period, 163 though chargeable to gift tax would not attract the benefit of exemption.
But the assessees say that the clause must be read as part of the second part of the proviso which contem plates the exemption.
So read, the clause would qualify the commencement of the benefit of the exemption and not the point of time when the Gift is required to be made to be eligible for the exemption from wealth tax.
The learned Judges of the High Court of Andhra Pradesh in the course of the Judgment under appeal in CA 1118 of 1975 observed: " . .
The words 'for any assess ment year commencing after the 31st day of March, 1964 ' are referrable to the assessment to be made under the .
They render the provisions of section 4(1)(a) inoperative irrespective of the fact whether the transferred asset was chargeable to gift tax or not chargeable to gift tax.
The proviso specifies the period of exemption upto 31st March, 1964.
Irrespective of the year of the gifts when the assets were gifted, they will not be included in the computation of the net wealth of the individual till the assessment year 1964 65.
We are, therefore, of the view that the intention of Parliament was to exempt transfers made under clauses (i) to (iv) of section 4(1)(a) from being computed in the net wealth of the individual upto the wealth tax assessment year commencing after 3 1st day of March, 1964 . . " 7.
Sri Ahuja submitted that the words "for any assess ment year commencing after the 31st day of 1964" could, in the context, only refer to the gift and gift tax assess ments.
The proviso, he said, which was introduced by way of an amendment, was brought into force with effect from 1.4.1965 by a notification which specified the commencement of the operation of the proviso and that, quite obviously, it would be redundant to read the clause under consideration as again referring to the commencement of the operation of the proviso.
While the clause under consideration related to and qualified the Gift tax assessments, the commencement of the exemption of the subjectmatter of the Gifts for purposes of wealth tax was controlled and determined by the commence ment of the operation of the proviso, which, by notification was specified as 1.4.1965.
Sri Ahuja submitted that the proviso was intended to effectuate the legislative policy that in respect of certain gifts made in favour of a spouse or a minor child, during a specified period, the assets transferred under the Gifts would have the benefit of exemption from the 164 operation of Section 4(1)(a).
This was because the legisla ture took into consideration that from 1.4.1964 onwards there was a sharp ascent in the rates of gift tax and that the assets which constituted the subject matter of such gifts attracting such high rates of gift tax should not also be included in the net wealth of the donor for wealth tax purposes which would otherwise be the consequence under Section 4(1)(a) of the Act.
As the proviso originally stood, gifts chargeable to gift tax for any assessment year com mencing after 3 1st March, 1964, attracted the benefit of exemption.
The outer limit for the period of such eligible gifts was later fixed by the amendment made by Finance (No. , w.e.f. 1.4.1972 which introduced the words 'but before the 1st day of April, 1972 '.
Accordingly, Sri Ahuja contends that only that class of gifts that were chargeable to gift tax for any assessment year 1964 65 or thereafter (but subject to the limit fixed by the 1971 amendment) which would otherwise fall under Section 4(1)(a) were eligible for the benefit of the exemption.
According to Sri Ahuja the plain words of the proviso leave no room for doubt and where the enactment is clear and admits of only one meaning and does not admit of two or more meanings, it would be the plain meaning that should be given effect to.
When the meaning is plain, says counsel, no resort could be had to any rules of construction which would denude the provision of its plain and ordinary meaning.
Sri Harish Salve presenting the case of the assessees sought to point out the intrinsic anomaly of the cases between a gift made, say, on 3 1st of March 1963 and one made the very next day i.e. 1st of April, 1963 on the other, to show that while in the first case even for the assessment year 1965 66 the transferred asset is includible in the wealth of the assessee, in the latter case it is exempt for all time to come thereafter.
Learned counsel pointed out that the criterion of higher rates of Gift tax as a justifi cation supporting the classification also fails in view of the fact that under the proviso it is not only the gifts chargeable to tax but also those exempt under sec.
5 that attract the exemption with the result that between two gifts which are both exempt under sec.
5 of the , one is for ever exempt from wealth tax in the hands of the donor while the other is includible in his wealth for purposes of wealth tax depending solely on the criterion of the date of gift whether the gift was made prior to 31st March 1963 or thereafter.
Here the criterion of classification of gifts on the basis of the exigibility for higher rates of tax, says Sri Salve, collapses and the cut off date determining the difference in consequences in the two different class of cases become wholly arbitrary.
Shri Salve submitted that a construction which promotes its constitutionality has to be pre 165 ferred to the one which, if accepted, would expose the provision to the vice of discrimination and unconstitution ality.
The essential basis of Sri Salve 's suggested construc tion rests on the requirement that the words "for any as sessment year commencing after the 31st day of March 1964" should not be read as part of the first part of the proviso relating to gift tax assessments but as part of the second part denoting the commencement of the operation of exemption from wealth tax.
This, we are afraid, will imboggle itself in the quagmire of irreconcilable constructional contradictions.
The amendment introducing the proviso was brought about by an amending Act of 1964; but the date of the commencement of its operation was left to be fixed by a Notification.
The effect of the Notification issued bringing the proviso into effect from 1.4.1965 would be wholly ignored by the con struction suggested by Sri Salve.
Secondly, the introduction of the words "but before the 1st day of April, 1972" would, if the construction suggested by Sri Salve is accepted, operate to take away the benefit of the exemption after 1.4.1972 and the exemption confined only to the assessment years between 1964 65 and 1972 73.
On a reading of the plain words of the proviso, the clause "for any assessment year commencing after 31st day of March, 1964" can only be read as relating to gift tax assessments and not to the wealth tax assessments.
But, Sri Salve contends that this literal construc tion would expose the provision to an attack on its consti tutionality on the ground that it brings about a discrimina tion between two classes of assessees on nothing more than an arbitrary cut off date.
The cases of gifts exempted under sec.
5, he says, illustrate the point as according to Sri Salve there could be no rational basis for discriminating between a gift exempted under sec.
5 made on 31.3.1963 on the one hand and 1.4.1963 on the other.
One of the pillars of statutory interpretation viz., the literalrule, demands that if the meaning of the Statuto ry Interpretation is plain and the Courts must apply regard less of the result.
The very concept of interpretation connotes the introduction of elements which are necessarily extrinsic to the words in the statue.
Though the words "interpretation" and "construction" are used interchangeably, the idea is somewhat different.
Dr. Patrick Devlin says: 166 " . .
A better word, I think, would be construction, because construction, although one often used it alternatively with interpre tation, suggests that something more is being got out in the elucidation of the subject matter than can be got by strict interpreta tion of the words used.
In the very full sense of the word 'construction ' the judges have set themselves in this branch of the law to try to frame the law as they would like to have it . . ".
[See: Samples of Law Making Oxford University Press p.70 71] "A statute" says Max Radin "is neither a literary text nor a divine revelation.
Its effect is, therefore, neither an expression laid on immutable emotional over tones nor a permanent creation of infallible wisdom.
It is a statement of situation or rather a group of possible events within a situation and as such it is essentially ambiguous.
" [See "Statutory Interpretation" 43 Har.
L.R. 863 (868)].
The observations of Lord Russel of Killowen in Attorney General vs Carlton Bank, though an early pronouncement, is refreshing from its broad common sense: "I see no reason why special canons of construction should be applied to any Act of Parliament, and I know of no authority for saying that a Taxing Act is to be construed differently from any other Act.
The duty of the Court is, in my opinion, in all cases the same, whether the Act to be construed relates to taxation or to any other subject, namely to give effect to the intention of the Legisla ture, as that intention is to be gathered from the language employed, having regard to the context in connection with which it is em ployed . .
Courts have to give effect to what the Legislature has said.
" The rule of construction that if the statutory provision is susceptible or admits of two reasonably possible views then the one which would promote its constitutionality should be preferred on the ground that the legislature is presumed not to have intended an excess of its own jurisdic tion, is subject to the further rule that it applies only where two views are reasonably possible on the statutory language.
If the words of the statute, on a proper construc tion, can be read only in a particular way, then it cannot be read in another way by a court of construction anxious to avoid its unconstitutionality.
In a case, as here, 167 a reference arises under 'Act ', the question of the consti tutionality of the 'Act ' cannot be examined and pronounced upon.
In State of Punjab vs Prem Sukhdas, ; this Court made the point clear: " . .
This amounts to nothing short of legislation.
We think that the view is an impossible one.
The principle that, where a provision is capable of one of two interpretations, the interpretation which validates rather than one which may invalidate a provision applies only where two views are possible.
It cannot be pushed so far as to alter the meanings of the clear words used in an enactment and to, in effect, repeal statu tory provisions by making them useless without holding them to be void." [p. 410] (Emphasis Supplied) Even in regard to constitutionality of the classifica tion, it is not possible to rule out arguments as to the validity of classification as wholly unstateable.
In a taxing measure the legislature enjoys a wider latitude and its dispensations are based on an interaction of diverse economic, social, and policy considerations.
Further, if the proviso is bad for discrimination, it would follow that the converse situation brought about by the later amendment, a discrimination as between gifts made as between the 31st of March 1972 and on 1st April, 1972 might also become bad.
It is true that we are required to notice the provision as it stood at the relevant time.
We, however, should not be understood to have pronounced on the question of constitutionality.
That is the task of the Court in judicial review but the rule of preference of a particular construction amongst the alternatives, in order to avoid unconstitutionality is unavailable here.
Accordingly, while Civil Appeal No. 1226 and 1227 of 1975 preferred by the assessee are dismissed, CA No. 1118 of 1975 of the revenue is allowed and in reversal of the order dated 18.9.1974 of the Andhra Pradesh High Court the ques tion referred is answered in the negative and in favour of the revenue.
In the circumstances, the parties are left to bear and pay their own costs in these appeals.
N.P.V. C.A. Nos.
1226 & 1227/75 are dismissed C.A. No. 1118/75 is allowed.
| The appellants owned an industrial concern and sought aid from the State Government under the Mysore State Aid to Industries Act, 1951 with a view to improve the industry and develop it further.
An application for aid was made to the concerned authorities and the competent authority granted the financial assistance by way of loan.
This financial assistance was secured from the Bank of Mysore and the State Government agreed to stand as surety and also to guarantee the repayment of the loan with interest to the Bank.
The appellants who received the aid executed a deed of simple mortgage in favour of the State Government of their proper ties in consideration of their promise to guarantee the repayment of the loan.
The State Government in turn executed a deed of guarantee in favour of the Bank.
The appellants in addition also executed a promote in favour of the Bank agreeing to repay the said sum with interest.
The appellants were not in a position to pay the loan within the stipulated period as the concern had become financially unsound.
The State Government started compelling the appellants to pay off the loan to the Bank and as it was not paid the State Government got the properties of the appellant sold under the proceedings for recovery of land revenue and got the money recovered.
The appellants filed a civil suit and contended that the sale of the properties was without the authority of law, and that the money could only be recovered from the appellant if the State Government had paid the loan of the Bank first and even thereafter the only course open to the State Government was to file a suit for reimbursement on the basis of the mortgage.
109 The suit was dismissed by the trial court and the order was confirmed by the High Court in appeal.
The Trial Court and the High Court came to the conclu sion that the Government of Karnataka was entitled to recov er the amount which they secured as an aid to the respond ents under the scheme of the Act and for that purpose law fully resorted to the sale of the properties by following the procedure of recovery of arrears of land revenue as provided for in Section 19 of the Act.
In the appeal to this Court, it was contended on behalf of the appellants that the view taken by the High Court that if any sum was payable under the Act, the State Government could take steps under Section 19 of the Act was not justi fied.
Dismissing the Appeal, HELD: 1.
The scheme of the Mysore State Aid to Indus tries Act, 1951 indicate that whether the aid has been provided for by the State or has been secured by the State from other financial agencies, it was contemplated that the State would secure the repayment of the loan or recovery of whatever aid was given, and with a view to secure those repayments Section 19 was specifically enacted.
[113D E] 2.
Legislature in its wisdom therefore did not use the words 'payable to the State ' but used 'all moneys payable under this Act ' in the Section, it appears with a clear intention that whenever money becomes payable which was secured to the industry under the scheme of the Act, it will be open to the State Government to follow the procedure for recovery as has been provided for in clause (1) of Section 19.
[113E F] 3.
It is only in respect of the moneys payable under the scheme of this Act that section 19(1) comes into operation and it appears that it was in accordance with the scheme of the Act that the Legislature in its wisdom chose not to use the further phrase payable to the Government under Section 19(1).
[114B] section Peer Mohammed vs B. Mohan Lal Sowcer, [1988] 2 S.C.C. 513, referred to.
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No. 665 of 1988 (Under Article 32 of the Constitution of India).
Sanjay Parikh, M.L. Sachdev, C.S. Vaidyanathan, S.R. Bhat, S.R. Setia, S.C. Dhanda, H.K. Puri, Harish N. Salve, Rajiv Dutta, Anil Kumar and Sultan Singh for the Petition ers.
Raja Ram Agarwal, S.C. Manchanda, G.L. Sanghi, A.S. Nambiar, Ashok K. Srivastava, R.S. Rana, P.G. Gokhale, B.R. Agarwala, R.B. Hathikhanawala, C.M. Nayar, P.K. Manohar, P.N. Misra, Ms. Halida Khatoon and Santhanam for the Respondents.
G.L. Sanghi, Ms. Vrinda Grover, Miss Seita Vaidialingam, Kailash Vasudev and A.C. Gulathi for the Intervenor.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ.
In these several writ petitions, we are concerned with the question of harmonising the power of different States in the Union of India to legislate and/or give 735 appropriate directions within the parameters of the subjects in list II of the 7th Schedule of the Constitution with the principle of economic unity envisaged in Part XIII of the Constitution of India.
We are also concerned with the provi sions of exemption, encouragement/incentives given by dif ferent States to boost up or help economic growth and devel opment in those States, and in so doing the attempt of the States to give preferential treatment to the goods manufac tured or produced in those States.
The question essentially is the same in all the matters but the question has to be appreciated in the context of the provisions and the fact situation of the different States involved in these writ petitions.
It would, therefore, be appropriate to first deal with writ petition No. 803/88 (Niksin Marketing Associate & Ors.vs Union of India & Anr.) which is under article 32 of the Constitution by four petitioners.
Petitioner No. 1 in W '.P.
No. 803/88 is a partnership firm carrying on business in New Delhi.
Petitioner No. 2 is its partner and petitioner No. 3 is another partnership business carrying on business at Kanpur in U.P. consisting of petitioner No. 4 and other partners.
The petition chal lenges the constitutional validity of notification No. ST II7558/X 9(208) 1981 U.P. Act XV 48 order 85 dated 26th December, 1985 issued by Uttar Pradesh Govt.
u/s 4A of the Uttar Pradesh Sales Tax Act, 1948.
A prior notification No. ST II/604 X 9(208) 198 1 U.P. Act XV 48 Order 85 dt. 29th January, 1985 was superseded by the aforesaid notification dt. 26th December, 1985.
It also challenges the constitu tional validity of notification No. ST II/8202/X 9(208) 1981 issued by Uttar Pradesh Govt. u/s 8(5) of the which superseded a previous notification.
It also challenges the constitutional validity of section 4A of the Uttar Pradesh Sales Tax Act, 1948 as substituted by U.P. Act 22 of 1984 and also section 8(5) of the and consequentially all actions and proceedings taken by the respondent u/s 5A of the said Act.
The respondents to this application are the State of Uttar Pradesh, the Union of India, and the Commissioner of Sales Tax, Uttar Pradesh.
It is stated that the petitioners carry on the business of selling cinematographic films and other equipments like projectors, sound recording and reproducing equipment, industrial X ray films, graphic art films, Photo films etc.
in the State of Uttar Pradesh and in Delhi.
The petitioners sell the goods upon receiving these from the manufacturers from outside the State of U.P.
They are dealers on behalf of those manufacturers.
The petitioners are dealers of Hindu stan Photo Films Mfg. Co. Ltd., a Government of India under taking.
In 736 U.P. there is a single point levy of sales taX.
The State of U.P. had issued two notifications u/s 4A of the U.P. Sales Tax Act and u/s 8(5) of the exempting new units of manufacturers as defined in the Act in respect of the various goods for different periods ranging from 3 to 7 years as the case may be, from payment of any sales tax.
These notifications are annexed and terms thereof are set out in annexures A 1 & B 1 to the writ petition.
The notification dated 26th December, 1985 stated, inter alia: "The Governor is pleased to direct that in respect of any goods manufactured in an indus trial unit, which is a new unit as defined in the aforesaid Act of 1948 established in the areas mentioned in column 2 of the Table given below, the date of starting production whereof falls on or after the first day of October, 1982 but not later than 31st March, 1990, no tax under the aforesaid Act of 1956 shall be payable by the manufacturer thereof on the turnover of sales on such goods for the period specified in column 3 against each, which shall be reckoned from the date of first sale if such sale takes place not later than 6 months from the date of starting production subject to certain conditions mentioned.
" It is not necessary to set out the conditions.
In the annexure several districts have been mentioned.
In column 2 categories have been made for exemption and have been divid ed in 2 categories, one in case of units with capital in vestment not exceeding 3 lakhs of rupees and another in cases of the units with capital investment exceeding 3 lakhs of rupees.
For one the period of exemption is 5 years while for the latter it is 7 years.
Period of exemption various from 3 to 7 years in different districts.
More or less similar were the terms of notification dated 29th January 1985.
The case of the petitioners is that they did not ini tially feel the adverse effects or discrimination on account of these notifications.
Petitioners point out that the manufacturers covered by the said notification are entitled to sell the articles manufactured by them without liability to pay sales tax while the manufacturers in other States and non manufacturers of the same article selling the same goods in the State are liable to pay sales tax under the local Sales Tax Act as well as under the .
The petitioners found that they had become liable to pay sales tax on their sales at 12% + 10% surcharge 737 (13.2%) under the U.P. Sales Tax Act on photographic and graphic arts material and @ 8% + 10% surcharge (8.8%) on medical x ray films and chemicals and a minimum of 10% on their inter State turnover whereas the manufacturers in the State of U.P. and their dealers had no tax liability by virtue of the exemption granted under the impugned notifica tions.
Thus the petitioners contend that the goods sold by them became costlier by 8.8% to 13.2% depending on the item sold compared to the goods of manufacturers in the State of U.P.
They had given a chart illustrating the position.
They, hence, contended that they became subject to gross discrimi nation and their business was crippled and wanted to sustain the said contention by referring to a chart showing gross sale prices of the products in diverse States.
In the prem ises the petitioners challenge these provisions as ultra vires of the Constitution of India, the rights guaranteed under part XIII as also under articles 14 & 19(l)(g) of the Constitution.
The question is, are these notifications valid, proper and sustainable in the light of part XIII of the Constitu tion of India judged in the background of the said articles.
Appearing in support of the petition, Mr. Sanjay Parikh in writ petitions Nos.
790,665 and 1939 40/88, Mr. C.S. Vaidy nathan and Mr. S.C. Dhanda in writ petition No. 761/88, Mr. Harish N. Salve for the petitioners in writ petition No. 803/88.
Miss Seita Vaidialingam, Mr. G.L. Sanghi, Kailash Vasudev for the intervenors.
These petitions have been heard together.
Apart from the submission that the provisions impugned violate articles 19(l)(g) and 14 of the Constitution, and are in violation of the principles of natural justice, the main challenge to these provisions by Mr. Salve was that they violated the provisions of articles 301 to 305 of Part XIII of the Constitution of India.
The contention of the petitioners was that, subject to other provisions of Part XIII, trade, commerce and intercourse throughout the terri tory of India was enjoined to be free.
Article 302 of the Constitution empowers the Parliament by law to impose such restrictions on the freedom of trade, commerce or inter course between one State and another or within any part of the territory of India as may be required in the public interest.
Article 303 indicates the restrictions on the legislative powers of the Union and the States with regard to trade and commerce, and stipulates that, notwithstanding anything contained in article 302, neither Parliament nor the legislature of the States shall have power to make any law giving or authorising the giving of any preference to one State 738 over another or making or authorising the making of any discrimination between one State and another by virtue of any entry relating to trade and commerce in any list of the 7th Schedule.
Sub clause (2) of article 303 enjoins that nothing in clause (1) shall prevent Parliament from making any law giving, or authorising the giving of, any preference or making, or authorising the making of, any discrimination if it is declared by such law that it is necessary to do so for the purpose of dealing with a situation arising from scarcity of goods in any part of the territory of India.
Article 304 deals with restrictions on trade, commerce and intercourse among States, which is as follows: "304.Restrictions on trade, commerce and intercourse among States.
Notwithstanding anything in Article 301 or Article 303, the Legislature of a State may by law (a) impose on goods imported from other States or the Union territories any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced; and (b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest; Provided that no Bill or amendment for the purposes of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President.
" Article 305 saves certain existing laws and laws provid+ing for State monopolies.
Our attention was drawn to the decision of this Court in Atiabari Tea Co. Ltd. vs The State of Assam & Ors., ; There this Court was concerned with the Assam Taxation (on goods carried by Roads and Inland Waterways) Act, 1954 which was passed under entry 56 of list II of the 7th Schedule to the Constitution.
The appellants therein contended that the Act had violated the freedom of trade guaranteed by article 301 of the Constitution and as it was not passed after obtaining the previous sanction of the President as 739 required by article 304(b), it was ultra vires.
The respondent therein had urged that taxing laws governed only by Part XII and not Part XIII (which contained articles 301 & 304) and in the alternative that the provisions of Part XIII applied only to such legislative entries in the 7th Schedule as dealt specifically with trade, commerce and intercourse.
Gajendragadkar, Wanchoo and Das Gupta, JJ. held that the Act violated article 301 and since it did not comply with the provisions of article 304(b) it was ultra vires and void.
On the contrary, Chief Justice Sinha held that the Assam Act did not contravene article 301 and was not ultra vires.
According to the learned Chief Justice, neither the one extreme position that article 301 included freedom from all taxation nor the other that taxation was wholly outside the purview of article 301 was correct; and that the freedom conferred by article 301 did not mean freedom from taxation simpliciter but only from the erection of trade barriers, tariff walls and imposts which had a deleterious effect on the free flow of trade, commerce and intercourse.
Justice Shah on the other hand expressed the view that the Assam Act infringed the guarantee of freedom of trade and commerce under article 301 and as the Bill was not moved with the previous sanction of the President as required by article 304(b) nor was it validat ed by the assent of the President under article 255(c), it was ultra vires and void.
In construing the provisions with which we are concerned herein, in our opinion, it is instructive to remind our selves, as was said in James vs Commonwealth of Australia, [19361 AC 578 at 613, that the relevant provision of the Constitution has to be read not in vacuo but as occurring in a single complex instrument in which one part may throw light on another, and therefore, Gajendragadkar, J. as the learned Chief Justice then was, at p. 860 of the said re port, rightly in our opinion posed the problem as follows: "In construing article 301 we must, therefore, have regard to the general scheme of our Constitution as well as the particular provi sions in regard to taxing laws.
The construction of article 301 should not be determined on a purely academic or doctrinaire considerations; in construing the said Article we must adopt a realistic approach and bear in mind the essen tial features of the separation of powers on which our Constitution rests.
It is a federal constitution which we are interpreting, and so the impact of article 30 1 must be judged accordingly.
Besides, it is not irrelevant to remem ber in this connection that the Article 23 are construing imposes a constitutional limitation on the power of 740 the Parliament and State Legislatures to levy taxes, and generally, but for such limitation, the power of taxation would be presumed to ,be for public good and would not be subject to judicial review or scrutiny.
Thus considered we think it would be reasonable and proper to hold that restrictions freedom from which is guaranteed by article 301, would be such restric tions as directly and immediately restrict or impede the free flow or movement of trade.
Taxes may and do amount to restrictions; but it is only such taxes as directly and immedi ately restrict trade that would fall within the purview of article 30 1.
The argument that all taxes should be governed by article 301 whether or not their impact on trade is imme diate or mediate, direct or remote, adopts, in our opinion, an extreme approach which cannot be upheld.
If the said argument is accepted it would mean, for instance, that even a legisla tive enactment prescribing the minimum wages to industrial employees may fall under Part XIII because in an economic sense an addition al wage bill may indirectly affect trade or commerce.
We are, therefore, satisfied that in determining the limits of the width and ampli tude of the freedom guaranteed by article 301 a rational and workable test to apply would be: Does the impugned restriction operate directly or immediately on trade or its movement?"
It is in that light we must examine the impugned provision.
It is necessary to bear in mind that taxes may and sometimes do amount to restrictions but it is only such taxes as directly and immediately restrict trade that would fall within the mischief of article 301.
Mr. Salve, however, rightly reminded us that regulatory measures or measures imposing compensatory taxes for using trading facilities do not come within the purview of restrictions contemplated under article 301.
Here, it is necessary to refer to the deci sion of this Court in the Automobile Transport (Rajasthan) Ltd. vs The State of Rajasthan & Ors., [1963] 1 SCR 491 which was a decision of a bench of this Court consisting of 7 learned Judges, and was concerned with the Rajasthan Motor Vehicles Taxation Act, 1951.
Sub section (1) of section 4 of that Act provided that no motor vehicle shall be used in any public place or kept for use in Rajasthan unless the owner thereof had paid in respect of it, a tax at the appropriate rate specified in the schedules to that Act within the time allowed.
The appellants therein were carrying on the busi ness of plying stage carriages in the State of Ajmer.
They held permits and plied their buses on diverse routes.
There was one route which lay 741 mainly in Ajmer State but it crossed narrow strips of the territory of the State of Rajasthan.
Another route, Ajmer to Kishangarh, was substantially in the Ajmer State, but a third of it was in Rajasthan.
Formerly, there was an agree ment between the Ajmer State and the former State of Kishan garh, by which neither State charged any tax or fees on vehicles registered in Ajmer or Kishangarh.
Later, Kishan garh became a part of Rajasthan.
On the passing of the Rajasthan Motor Vehicles Taxation Act, 1951, and the promul gation of the rules made thereunder, the Motor Vehicles Taxation Officer, Jaipur, demanded of the appellants payment of the tax due on their motor vehicles for the period from April 1, 1951 to March 31, 1954.
The appellants challenged the legality of the demand on the grounds that section 4 of the Act read with the Schedules constituted a direct and immedi ate restriction on the movement of trade and commerce with and within Rajasthan inasmuch as motor vehicles which car ried passenger and goods within or through Rajasthan had to pay tax which imposed a pecuniary burden on commercial activity and was therefore hit by article 301 of the Constitu tion and was not saved by article 304(b) inasmuch as the provi so to article 304(b) was not complied with, nor was the Act assented to by the President within the meaning of article 255 of the Constitution.
It was held by Das, Kapur, Sarkar and Subba Rao, JJ. as the learned Judges then were, that the Rajasthan Motor Vehicles Taxation Act, 1951 did not violate the provisions of article 301 of the Constitution of India and that the taxes imposed under the Act were compensatory or regulatory taxes which did not hinder the freedom or trade, commerce and intercourse assured by that article.
Das, Kapur and Sarkar, JJ. held that the concept of freedom of trade, commerce and intercourse postulated by article 301 must be understood in the context of an ordinary society and as part of a Constitution which envisaged a distribution of powers between the States and the Union, and if so understood, the concept must recognise the need and legitimacy of some degree of regulatory control, whether by the Union or the States.
Mr. Justice Subba Rao, as the learned Chief Justice then was, observed that the freedom declared under article 30 1 referred to the right of free movement of trade without any obstructions by way of barriers, inter State or intra State, or other impediments operating as such barriers; and the said freedom was not impeded, but on the other hand, promot ed, by regulations creating conditions for the free movement of trade, such as, police regulations, provisions for services, maintenance of roads, provision for aerodromes, wharfs etc., with or without compensation.
Parliament may be law impose restrictions, it was stated, on such freedom in the public interest, and the States also, in exercise of their legislative power, may impose similar restrictions, 742 subject to the proviso mentioned therein.
Laws of taxation were not outside the freedom enshrined either in article 19 or 301.
Mr. Justice Hidayatullah, as the learned Chief Justice then was, and Rajagopala Ayyangar and Mudholkar, JJ.
held that section 4(1) of the Rajasthan Motor Vehicles Taxation act, 195 1 offended article 301 of the Constitution, and as resort to the procedure prescribed by article 304(b) was not taken it was ultra vires the Constitution.
The pith and substance of the Act was the levy of tax on motor vehicles in Rajasthan or their use in that State irrespective of where the vehi cles came from and not legislation in respect of inter State trade or commerce.
A tax which is made the condition prece dent of the right to enter upon and carry on business is a restriction on the right to carry on trade and commerce within article 30 1 of the Constitution.
The act was not, in its true character, regulatory.
In judging the situation it would be instructive to bear in mind the obser vations of Mr. Justice Das at p. 5 12 of the report, where he observed that in evolving an integrated policy on this subject our Constitution makers seem to have kept in mind three main considerations which may be broadly stated thus: first, in the larger interests of India there must be free flow of trade, commerce and intercourse, both inter State and intra State; second, the regional interests must not be ignored altogether; and third, there must be a power of intervention by the Union in any case of crisis to deal with particular problems that may arise in any part of India.
At p. 523 of the report, it was reiterated that for the tax to become a prohibited tax it has to be a direct tax the effect of which is to hinder the movement part of trade.
Dealing with wide interpretation Justice Das observed at p. 523 5 of the said report as follows: "The widest view proceeds on the footing that article 301 imposes a general restriction on legislative power and grants a freedom of trade, commerce and intercourse in all its series of operations, from all barriers, from all restrictions, from all regulation, and the only qualification that is to be found in the article is the opening clause, namely, subject to the other provisions of Part XIII.
This in actual practice will mean that if the State Legislature wishes to control or regu late trade, commerce and intercourse in such a way as to facilitate its free movement, it must yet proceed to make a law under article 304(b) and no such bill can be introduced or moved in the Legislature of a State without the previous sanction of the President.
The practi 743 cal effect would be to stop or delay effective legislation which may be urgently necessary.
Take, for example, a case where in the inter ests of public health, it is necessary to introduce urgently legislation stopping trade in goods which are deleterious to health, like the trade in diseased potatoes in Australia.
If the State Legislature wishes to introduce such a bill, it must have the sanction of the President.
Even such legislation as imposes traffic regulations would require the sanction of the President.
The learned Judge reiterated that the Court will have to ascertain whether the impugned law in a given case affects directly the said movement or indirectly and remotely affects it.
Mr. Salve, however, sought to contend that as regards the local sales tax, there were broadly two well accepted propositions, namely, sales tax was a tax levied for the purpose of general revenue.
Secondly, it was neither a compensatory tax nor a measure regulating any trade.
Reli ance was placed on the observations of Mr. Justice Raghubar Dayal, J. in Firm A.T.B. Mehtab Majid & Co. vs State of Madras & Anr., ; but the context in which the said observations were made has to be examined.
That case dealt with a petition under article 32 of the Consti tution.
The petitioners therein were dealers in hides and skins in the State of Madras.
The main contention was that the tanned hides and skins imported from outside and sold inside the State were, under r. 16 of the Madras General Sales Tax Rules, subject to a higher rate of tax than the tax imposed on hides and skins tanned and sold within the State and this discriminatory taxation offended article 304 of the Constitution.
The contentions of the respondents therein were that sales tax did not come within the purview of article 304(a) as it was not a tax on the import.
of goods at the point of entry, that the impugned rule was not a law made by the State legislature, that the im pugned rule by itself did not impose the tax but fixed the single point at which the tax was imposed by sections 3 & 5 of the Act was to 744 be levied; and that the impugned rule was not made with an eye on the place of origin of the goods.
It was held that taxing laws can be restrictions on trade, commerce and intercourse, if they hamper the flow of trade and if they are not what can be termed to be compensatory taxes or regulating measures.
Reliance was also placed by Mr. Salve on the observa tions of Justice Raghubar Dayal in A. Hajee Abdul Shakoor & Co. vs State of Madras, 17 at 225.
See also the observations in State of Madras vs N.K. Nataraja Mudali ar; , at 847 and Andhra Sugars Ltd. & Anr.
vs State of Andhra Pradesh & Ors., ; where at p. 7 18 of the report it was reiterated that a sale tax which discriminates against goods imported from other States may impede the free flow of trade and is then invalid unless protected by article 304(a).
It is, however, necessary to bear in mind that in N.K.N. Mudaliar 's, case (supra) at p. 850 Mr. Justice Bachawat after referring to several cases observed as follows: "But, there can be no doubt that a tax on such sales would not normally offend Article 301.
That Article makes no distinction between movement from one part of the State to another part of the same State and movement from one State to another.
Now, if a tax on intra State sale does not offend Article 301, logically, I do not see how a tax on inter State sale can do so.
Neither tax operates directly or imme diately on the free flow of trade or the free movement of the transport of goods from the part of the country to the other.
The tax is on the sale.
The movement is incidental to and a consequence of the sale.
" There was a reference in the said judgment to the obser vations of Jagannathadas, J. in The Bengal Immunity Co. Ltd. vs State of Bihar, at 754 wherein it was stated: "Now it is not disputed that a tax on a purely internal sale which occurs as a result of the transportation of goods from a manufacturing centre within the State to a purchasing market within the same State is clearly permissible and not hit by anything in the Constitution.
If a sale in that kind of trade can bear the tax and is not a burden on the freedom of trade, it is difficult to see why a single point tax on the same kind of sale where a State boundary intervenes bet 745 ween the manufacturing centre and the consum ing centres need be treated as a burden, especially where that tax is ultimately to come out of the residents of the very State by which such sale is taxable.
Freedom of trade and commerce applies as much within a State as outside it.
It appears to me again, with great respect, that there is no warrant for treating such a tax as in any way contrary either to the letter or the spirit of the freedom of trade, commerce and ' intercourse provided under Article 301.
" It was contended that the ex hypothesi violates article 301 of the Constitution since it is a tax on inter State movement of goods.
Shah, J. in Mudali ar 's case (supra) at p. 84 1 of the report observed that tax under the on interState sales, it must be noticed, is in its essence a tax which encumbers movement of trade or commerce, if it (a) occasions the movement of goods from one State to another; (b) is effected by a trans fer of documents of title to the goods during their movement from one State to another.
It was contended by Mr. Salve that by exempting the local manufacturers from both local and central sales tax, the State Govt. has clearly made the imposition of both local and central sales tax discriminato ry and prejudicial to outside goods.
The goods of the local manufacturer, when sold by him, do not bear any tax whereas the goods imported from outside the State have to bear the burden of sales tax.
It was also contended that similarly, the goods of a 'local manufacturer, when exported from the State of U.P. do not have to bear tax, while goods brought into the State of U.P. and further ex , ported in competi tion with the local goods have to bear the tax, so there is clear discrimination against goods produced by manufacturers situated outside the State.
The discrimination within the meaning of article 301 read with article 304 arises where there is a difference in the rates of sales tax levied, it was sought to be emphasised by Mr. Sanjay Parikh for some of the peti tioners.
This proposition has been reiterated by this Court in a large number of cases, according to counsel, and we were referred to the observations in State of Madhya Pradesh vs Bhailal Bhai & Ors., ; at 268 9 and Mudal iar 's case (supra) where at p. 847 Shah, J. reiterated that imposition of differential rates of tax by the same State on goods manufactured or produced in the State and similar goods imported in the State is prohibited under article 304(a).
It was also reiterated by this Court in Rattan Lal & Co. & Anr.
vs The Assessing Authority & Anr.
, ; at 557 dealing with the Punjab General Sales Tax Act that when a taxing State was not imposing rates of tax on imported goods different from the rates of 746 tax on goods manufactured or produced, article 304 had no application.
So long as the rate was the same, article 304 was satisfied.
Reference was made to India Cement & Ors.vs State of Andhra Pradesh & Ors. whereas at p. 759 this Court observed that variation of the rate of inter state sales tax did affect free trade and commerce and created a local preference which was contrary to the scheme of Part XIII of the Constitution.
To similar effect are the observations to which Mr. Sanjay Parikh has referred us in Weston Electronics & Anr.
vs State of Gujarat & Ors.
Mr. Salve strongly relied on the observations of Justice Cardozo in C.A.F. Seeling Inc. vs Charles H. Baldwin, at 1038 where the learned Judge observed while he was dealing with article (1) section 8, clause (3) of the American Constitution which is known as the 'Commerce Clause ' "This part of the Constitution was framed under the dominion of a political philosophy less parochial in range.
It was framed upon the theory that the peoples of the several States must sink or swim together and that in the long run prosperity and salvation are in union and not division".
This passage has been cited with approval in this Court in Atiabari 's case (supra) by Gajendragadkar, J. as aforesaid.
We were referred to the observations of Firm A.T.B. Mehtab Majid & Co.s case ; at 445.
It was contended that the acceptance of the petitioner 's case would not conflict with the plenary power of the State to grant exemptions under the Act because statutory powers have to yield to constitutional inhibitions and, therefore, article 304(a) & (b) being envisaged to safeguard the eco nomic unity of the country, these must have precedence.
It was also contended that the petitions under article 301 read with 304(a) are clearly maintainable.
Reliance was placed in Smt.
In light of these, it was contended by the petitioners that the petition under article 32 is clearly maintainable.
The question as we see is, how to harmonise the con struction of the several provisions of the Constitution.
It is true that if a particular provision being taxing provi sion or otherwise impedes directly or immediately the free flow of trade within the Union of India then it will be violative of article 301 of the Constitution.
It has further to be borne in mind that article 301 enjoins that trade, commerce and 747 intercourse throughout the territory of India shall be free.
The first question, therefore, which one has to examine in this case is, whether the sales tax provisions (exemption etc.) in these cases directly and immediately restrict the free flow of trade and commerce within the meaning of article 30 1 of the Constitution.
We have examined the scheme of article 30 1 of the Constitution read with article 304 and the observations of this Court in Atiabari 's case (supra), as,also the observations made by this Court in Automobile Transport, Rajasthan 's case (supra).
In our opinion, Part XIII of the Constitution cannot be read in isolation.
It is part and parcel of a single constitutional instrument envis aging a federal scheme and containing general scheme confer ring legislative powers in respect of the matters relating to list II of the 7th Schedule on the State.
It also confers plenary powers on States to raise revenue for its purposes and does not require that every legislation of the State must obtain assent of the President.
Constitution of India is an organic document.
It must be so construed that it lives and adapts itself to the exigencies of the situation, in a growing and evolving society, economically, politically and socially.
The meaning of the expressions used there must, therefore, be so interpreted that it attempts to solve the present problem of distribution of power and rights of the different States in the Union of India, and anticipate the future contingencies that might arise in a developing organism.
Constitution must be able to comprehend the present at the relevant time and anticipate the future which is natural and necessary corollary for a growing and living organism.
That must be part of the constitutional adjudica tion.
Hence, the economic development of States to bring these into equality with all other States and thereby devel op the economic unity of India is one of the major commit ments or goals of the constitutional aspirations of this land.
For working of an orderly society economic equality of all the States is as much vital as economic unity.
The taxes which do not directly or immediately restrict or interfere with trade, commerce and intercourse throughout the territory of India, would therefore be excluded from the ambit of article 301 of the Constitution.
It has to be borne in mind that sales tax has only an indirect effect on trade and commerce.
Reference may be made to the Constitution bench judgment of this Court in Andhra Sugar Ltd. & Anr.vs State of A. P. & Ors., where this Court observed that normally a tax on sale of goods does not directly impede the free movement of transport.
See also the observations in Mudaliar 's case (supra) where at p. 851 it was observed that a tax on sale would not normally offend article 301.
That 748 article made nO distinction between movement from one part of State to another part of the same State and movement from one State to another.
In this connection, reference may also be made to the observations in Bengal Immunity 's case (supra).
Both the preceding cases clearly establish that if a taxing provision in respect of intra State sale does not offend article 30 1, logically it would not affect the freedom of trade in respect of free flow and movement of goods from one part of the country to the other under article 301 as well.
It has to be examined whether difference in rates per se discriminates so as to come within articles 301 and 304(a) of the Constitution.
It is manifest that free flow of trade between two States does not necessarily or generally depend upon the rate of tax alone.
Many factors including the cost of goods play an important role in the movement of goods from one State to another.
Hence the mere fact that there is a difference in the rate of tax on goods locally manufac tured and those imported would not amount to hampering of trade between the two States within the meaning of article 301 of the Constitution.
As in manifest, article 304 is an excep tion to article 30 1 of the Constitution.
The need or taking resort to exception will arise only if the tax impugned is hit by articles 301 and 303 of the Constitution.
If it is not then article 304 of the Constitution will not come into picture at all.
See the observations in Nataraja Mudaliar 's case (supra) at pp.843 6 of the report.
It has to be borne in mind that there may be differentiations based on consid eration of natural or business factors which are more or less in force in different localities.
A State might be allowed to impose a higher rate of tax on a commodity either when it is not consumed at all within the State or if it is felt that the burden falling on consumers within the State, will be more than that and large benefit is derived by the revenue.
The imposition of rates of sales tax is influenced by various political, economic and social factors.
Preva lence of differential rate of tax on sales of the same commodity cannot be regarded in isolation as determinative of the object to discriminate between one State and another.
Under the Constitution originally flamed revenue from sales tax was reserved for the States.
In V. Guruviah Naidu & Sons.vs State of Tamil Nadu & Anr.
The object is to prevent discrimination against imported goods by imposing tax on such goods at a rate higher than that borne by local goods since the difference between the two rates would constitute a tariff wall or fiscal barrier and thus impede the free flow of inter State trade and commerce.
The ques tion as to when the 'levy of tax would consti tute discrimination would depend upon a varie ty of factors including the rate of tax and the item of goods in respect of the sale of which it is levied.
The scheme of items 7(a) and 7(b) of the Second Schedule to the State Act is that in case of raw hides and skins which are purchased locally in the State, the levy of tax would be at the rate of 3 per cent at the point of last purchase in the State.
When those locally purchased raw hides and skins are tanned and are sold locally as dressed hides and skins, no levy would be made on such sales as those hides and skins have already been subjected to local tax at the rate of 3 per cent when they were purchased in raw form.
As against that, in the case of hides and skins which have been imported from other States in raw form and are thereafter tanned and then sold inside the State as dressed hides and skins, the levy of tax is at the rate of 1 1/2 per cent at the point of first sale in the State of the dressed hides and skins.
This levy cannot be considered to be discriminatory as it takes into account the higher price of dressed hides and skins com pared to the price of raw hides and skins.
It also further takes note of the fact that no tax under the State Act has been paid in respect of those hides and skins.
The Legisla ture, it seems, calculated the price of hides and skins in dressed condition to be double the price of such hides and skins in raw state.
To obviate and prevent any discrimina tion of differential treatment in the matter of levy of tax, the Legislature therefore prescribed a rate of tax for sale of dressed hides and skins which was half of that levied under item 7(a) in respect of raw hides and skins.
" The object is to prevent discrimination against the imported goods by imposing tax on such goods at a rate higher than that borne by local goods.
The question as to when the levy of tax would constitute discrimination would depend upon a variety of factors including the rate of tax and the item of goods in respect of the sale on which it is levied.
Every differentiation is not discrimination.
The word 'discrimination ' is not used in article 14 but is used in articles 16, 303 & 304(a).
When used in article 304(a), it involves an element of inten tional and purposeful differentiation thereby creating economic barrier and involves an element of an unfavorable bias.
Discrimination implies an unfair classification.
Reference may be made to the observations of this Court in Kathi Raning Rawat vs The State Of Saurashtra, ; where Chief Justice Shastri at p. 442 of the report reiterated that all legislative differentiation is not necessarily discriminatory.
The whole doctrine of classification is based on this and on the well known fact that the circumstances covering one set of provisions or objects may not necessarily be the same as these covering another set of provisions and objects so that the question of unequal treatment does not arise as between the provisions covered by different sets of circumstances.
Where the general rate applicable to the goods locally made and on those imported from other States is the same nothing more normally and generally is to be shown by the State to dispel the argument of discrimination under article 304(a), even though the resultant tax amount on imported goods may be different.
Here, reference may be made to Ratan Lal 's case (supra).
In the instant writ petition, in the State of U.P. those producers or manufacturers who do not come within the ambit of notifications, have to pay tax on their goods at the general rate described and there is no differentiation or discrimination qua the imported goods.
The question naturally arises whether the power to grant exemption to specified class of manufacturers for a limited period on certain conditions as provided by section 4A of the U.P. Sales Tax Act is violative of article 304(a).
It was contended by the petitioners that Part XIII of the Constitu tion was envisaged for preserving the unity of India as an economic unit and, hence, it guarantees free flow of trade and commerce throughout India including between State and State and as such article 304(a), even though an exception to article 301, yet applies where an exemption is granted by one State to a special class of manufacturers for a limited period on certain conditions.
It was so submitted that either a State should grant exemption to all goods irrespec tive of the fact that the goods are locally manufactured or imported from other States, else it would be violative of article 304 and 304(a).
It was submitted by the respondents that this is not the correct position.
This argument ignores the basic feature of the Constitution and also the fact that the concept of economic unity may not necessa 751 rily be the same as it was at the time of Constitution making for establishing new industries so as to be economically de veloped.
It was also submitted that if all the parts of India i.e. to say all the States are economically strong or developed then only can economic unity as a whole be assured and strengthened.
Hence, the concept of economic unity is ever changing with very wide horizons and cannot and should not be imprisoned in a strait jacket of the concept and notion as advocated by the petitioner.
Economic unity of India is one of the constitutional aspirations of India and safeguarding the attainment and maintenance of that unity are objectives of the Indian Constitution.
It would be wrong, however, to assume that India as a whole is already an economic unit.
Economic unity can only be achieved if all parts of whole of Union of India develop equally, economi cally.
Indeed, in the affidavits of opposition various grounds have been indicated on behalf of the respondents suggesting the need for incentives and exemptions, and these were suggested to be absolutely necessary for economic viability and survival for these industries in these States.
These were based on cogent and intelligible reasons of economic encouragement and growth.
There was a rationale in these which is discernible.
The power to grant exemption is always inherent in all taxing Statutes.
If the suggestions/submissions as advanced by the petitioners are accepted, it was averted, and in our opinion rightly, that it will destroy completely or make nugatory the plenary powers of the States.
If the exemption is based on natural and business factors and does not involve any intentional bias, the impugned notifications to grant exemption for limited period on certain specific conditions cannot be held to be bad.
Judged by that yardstick, the present notifica tions cannot be held to be violative of the constitutional provisions.
An examination of article 304(a) would reveal that what is being prohibited by this article which is really an exception to article 30 1 will not apply if article 301 does not apply.
In the instant case the general rate applicable to locally made goods is the same as that on imported goods.
Even supposing without admitting that sales tax is covered by article 301 as a tax directly and immediately hampering the free flow of trade, it does not follow that it falls within the exemption of article 304 and it would be hit by article 301.
Still the general rate of tax which is to be compared under article 304(a) is at par and the same qua the locally made goods and the imported goods.
752 Concept of economic barrier must be adopted in a dynamic sense with changing conditions.
What constitutes an economic barrier at one point of time often cease to be so at another point of time.
It will be wrong to denude the people of the State of the right to grant exemptions which flow from the plenary powers of legislative heads in list II of the 7th Schedule of the Constitution.
In a federal polity, all the States having powers to grant exemption to specified class for limited period, such granting of exemption cannot be held to be contrary to the concept of economic unity.
When all the States have such provisions to exempt or reduce rates the question of economic war between the States inter se or economic disintegration of the country as such does not arise.
It is not open to any party to say that this should be done and this should not be done by either one way or the other.
It cannot be disputed that it is open to the States to realise tax and thereafter remit the same or pay back to the local manufacturers in the shape of subsidies and that would neither discriminate nor be hit by article 304(a) of the Constitution.
In this case and as in all constitutional adjudications the substance of the matter has to be looked into to find out whether there is any discrimination in violation of the constitutional mandate.
Exercise of power under article 304(a) can be effective only if the tax or duty on goods imported from other States and the tax or duty imposed on similar goods manufactured or produced in that State is such that there is no discrimination.
Hidayatullah, J. as the learned Chief Justice then was, observed, at p. 883 of the report, that article 304(a) imposes no ban but lifts the ban imposed by articles 30 1 & 303 subject to one condition.
That article is enabling and prospective.
Counsel for the respondents drew out attention to articles 38 & 39 of the Constitution.
The striving for the attainment of the objects enshrined in these Articles is enjoined.
For achieving these objects the States have neces sarily to develop themselves economically so as to 753 secure economic unity and to minimise the inequalities and imbalances between State and State and region and region.
If the power to grant exemption has been conferred for achiev ing these objects on all, it is not possible to assail these as violative of article 304 as the latter article has to be interpreted in conjunction with others and not in isolation could validly classify new units producing edible oil as distinct and separate from other units and validly withdraw the exemption in relation to such units only.
It is true that the afore said observations were made in the context different from article 304(a) but basically the concept of equality embodied in articles 304(a) & 16 are the same.
article 14 enjoins upon the State to treat every person equal before the law while article 304(a) enjoins upon the State not to discriminate with respect to imposition of tax on imported goods and the locally made goods.
vs State of Andhra Pradesh & Ors., (supra); Weston Electronics vs State of Gujarat, (supra) and West Bengal Hosiery Assn.
& Ors.
vs State of Bihar & Anr.
, ; wherein it has been reiterated that difference in rate of sales tax is hit by articles 301 & 304 but the said conclusions were arrived at in the context of a controversy not in the present form and the question of exemption as such did not arise in these cases, as explained later.
These cases were not at all concerned with granting of exemption to a special class for a limited period on specific conditions of main taining the general rate of tax on the goods manufactured by all those producers in the State who do not fall within the exempted category at par with the rate applicable to import ed goods as we have read these cases.
Hence, it was not necessary in those decisions to consider the problem in its present aspect.
If, however, the said power is exercised in a colourable manner intentionally or purposely to create unfavorable bias by prescribing a general lower rate on locally manufactured goods either in the shape of general exemption to locally manufactured goods or in the shape of lower rate of tax, such an exercise of power can always be struck down by the courts.
That is not the situation in the instant cases.
The aforesaid decisions, therefore, are not authorities for the general proposition that while, main taining the general rate at par, special rates for certain industries for a limited period could not be prescribed by the States.
754 There was another subsidiary question in these matters as to whether the legislation in the shape of notification is law within the meaning of article 304 of the Constitution.
In The State of U.P. & Ors.vs Babu Ram Upad hya, [196] 12 SCR 679 at 702 this Court relied on a passage from Maxwell "On the Interpretation of Statutes" and held that a rule framed in the absence of any specific provision in the Act shall be deemed to be a part of the Act itself.
In the State of Tamil Nadu vs Hind Stone etc.; , at 757 this Court relied upon the aforesaid dictum in the case of Babu Ram Upadhya, (supra) and distinguished the decision in State of Mysore vs H. Sanjeeviah, ; cited on behalf of the petitioner.
This Court in Kailash Nath & Anr.vs State of U. P. & Ors., AIR 1957 SC 790 at 791 has held that the notification having been made in accord ance with the power conferred by the Statute has statutory force and validity and, therefore, exemption is as if con tained in the Act itself.
The U.P. Sales Tax Act by section 24(4) confers rule making powers on the State Government.
Section 25 confers powers on the State Government to issue notifications with retrospective effect.
Hence, it cannot be disput ed that the exemption notification is the exercise of the legislative power.
This Court in State of U.P. & Ors.vs Renusagar Power Co. & Ors., ; at 100 has held that the power to grant exemption is quasi legislative.
In M/s Narinder Chand Hem Raj & Ors.vs Lt. Governor, Adminis trator, U.T., Himachal Pradesh & Ors., at 751 it was held that the exercise of the power is legisla tive whether it is by the legislature or by the delegate.
In respect of the decisions aforesaid relied on behalf of the petitioner, on examination of the observations in India Cement 's case (supra) to the contrary to which stated hereinbefore on this aspect must be confined to the facts of that case alone as the said decision had no occasion to consider it in the full light.
In the aforesaid view of the matter the challenge in these petitions to the aforesaid exemptions cannot, in our opinion, be upheld.
The writ petitions dealing with the U.P. matters on the same conten tions, therefore, fail.
Writ petition No. 665/88 being M/s Video Electronics Pvt. Ltd. & Anr.
By that notification the State Government has differentiated between the manufacturers of electronics goods outside the State and within the State.
Under section 5 of the Punjab General Sales Tax Act (hereinafter referred to as 'the Act '), the State of Punjab had been imposing sales tax @ 10% + 2% surcharge on electronics goods sold within the State irrespective of their manufacture.
The State Govt. in pursuance of the powers conferred on it u/s 5 of the Act issued the notification date 11.12.1986 stating that the rate of sales tax payable by an electronic manufac turing unit existing in Punjab in cases of electronic goods specified in Annexure A of the petition within the State will be 1%.
Thus the rate of sales tax was brought down from 10% (+ 2% surcharge) to 1% while for similar goods manufac tured outside the State and sold within the respondent State, the rate of sales tax remained 10% (+ 2% surcharge).
It was contended that there was differentiation.
In support of this contention the petitioners reiterate more or less the same submissions, as indicated before.
It is true that there was difference in rate yet there was reason for this differentiation.
The State Government in its counter affida vit has stated that a lower rate of tax i.e. to say 1% in the case of new units and 2% in the case of existing units has been levied to boost this industry and to stop the existing industry shifting to neighboring States.
The pre vailing peculiar circumstances of Punjab were one of the factors indicated for the same.
The lower rate, it was reiterated, was imposed in view of the peculiar circum stances and also to attract new entrepreneurs from other States and from within the State.
It was contended that the said notification was issued in public interest in view of the peculiar position; and that while the States of Gujarat and Maharashtra are fully developed States, on the other hand, Punjab is comparatively a backward State in industry.
Unless some incentives are given, the industries which have already shifted to other States, will have further deterring effects.
Hence, in view of the situation the concessional rate was introduced and was not discriminatory.
As mentioned hereinbefore, reliance was placed mainly on H. Anraj vs Govt of Tamil Nadu, (supra) to which one of us was a party.
That was a decision dealing with lottery tick ets, and dealt with the question whether lottery tickets amounted to movable property so as to be within the purview of the Sale of Goods Act.
But in relation to the question relevant to the present purpose it was reiterated that the real question is, whether direct and immediate result of the impugned notification was to impose an unfavourable and discriminatory tax burden on the imported goods (in those cases lottery tickets of other 756 States) when they are sold within the State of Tamil Nadu as against indigenous goods (Tamil Nadu Government lottery tickets) when these are sold within the State, from the point of view of the purchaser and this question had to be considered from the normal business of commercial point of view.
It has to be reiterated that more or less all States used to issue and sell lottery tickets, hence, the lottery tickets from other States were specifically discriminated against in the sense that there was differentiation without any valid or justifiable reason.
That would certainly work as deterrent.
Trade, commerce and intercourse throughout the territory of India, come within article 301 of the Constitu tion.
It prevents imposing on goods imported from other States a tax to which similar goods in the State are not subject so as to discriminate between the goods so imported and goods produced locally.
In that light the decision in Anraj 's case has to be understood.
The cases of India Cement & Ors. vs State of Andhra Pradesh & Ors., (supra); Weston Electronics vs State of Gujarat & Ors., (supra) and West Bengal Hosiery Assn. & Ors.vs State of Bihar & Anr., (supra) were cases where there was a naked blanket preference in favour of locally manufactured goods as against goods coming from outside the State.
These cases, as we read these, dealt with a conferment of exemp tion without any reason or concession in favour of indige nous manufactured goods which was not available in respect of the goods imported into that State.
In case, however, of U.P. as well as State of Punjab the provisions which we have examined, proceeded on a different basis.
In these cases, it cannot be suggested, in our opinion, that there is discrimi nation against goods manufactured outside the State.
In case of Punjab an Overwhelmingly large number of local manufac turers of similar goods are subject to sales tax and, there fore, the general statement that the manufacturers within the State are favoured against the manufacturers outside the State, is incorrect.
Under the notifications in case of Punjab, only newly set up units are eligible to claim the benefits thereunder for a limited period of 5 years and that also only if they strictly comply with the terms and condi tions set out in the notification.
It has to be reiterated that sales tax laws in all the States provide for exemption.
It is well settled that the different entries in lists I, II and III of the 7th Schedule deal with the fields of legislation, and these should be construed widely, liberally and harmoniously.
And these entries have been construed to include ancillary or inciden tal power.
Power to grant exemption is inherent in all taxing legislations.
Economic unity is a desired goal, economic equilibrium and prosperity 757 is also the goal.
Development on parity is one of the com mitments of the Constitution.
Directive principles enshrined in articles 38 & 39 must be harmonised with economic unity as well as economic development of developed and under developed areas.
In that light on article 14 of the Constitu tion, it is necessary that the prohibition in article 301 and the scope of article 304(a) & (b) should be understood and construed.
Constitution is a living organism and the latent meaning of the expressions used can be given effect to only if a particular situation arises.
It is not that with chang ing times the meaning changes but changing times illustrate and illuminate the meaning of the expressions used.
The connotation of the expressions used takes its shape and colour in evolving dynamic situations.
A backward State or a disturbed State cannot with parity engage in competition with advanced or developed States.
Even within a State, there are often backward areas which can be developed only if some special recentives are granted.
If the incentives in the form of subsidies or grant are given to any part of units of a State so that it may come out of its limping or infancy to compete as equals with others, that, in our opinion, does not and cannot contravene the spirit and the letter of Part XIII of the Constitution.
If there is none, it will amount to hostile dis crimination.
Judge in this light, despite the submissions of Mr. Sanjay Parikh and Mr. Vaidyanathan, we are unable to accept the contentions that the petitioners sought to urge in this application.
The next petition is W.P. No. 1124/88 Computer Graphics (P) Ltd. & Anr.
vs Union of India & Ors., which challenges the concession given in favour of manufacturers in U.P. and Goa.
The same contentions were reiterated for the reasons discussed hereinbefore.
We are unable to accept this peti tion.
It may be relevant to refer to Associated Tanners Vizianagram, A. P. vs C.T. 0.
, Vizianagram, Andhra Pradesh & Ors., ; where it was stated that when a taxing statute was not imposing rates of tax on imported goods different from rates of tax on goods manufactured locally, article 304 had no application.
In case an exemption was granted applying the same rate the resulting tax might be somewhat higher but that did not contravene the equality clause contemplated by article 304.
In the instant writ petition in view of the terms of the notification impugned and the facts and the circumstances stated in the affidavit of the State Government as well as the interveners, Goa and Pondicherry, being comparatively under developed in electronic industry, in 758 our opinion, it cannot be said that there was violation of either Part XIII of the Constitution or Article 14 of the Constitution.
This application must also, therefore, fail.
Writ petition No. 70/89 Spartek Ceramics India Ltd. vs Union of India & Ors., under article 32 also challenges the notification under the and the U.P. Act as mentioned hereinbefore.
In the state of facts as appearing, this petition also fails.
We have considered the submissions and the statements made by the interveners in these matters.
Writ Petition No. 761/89 Weston Electronics Ltd. & Anr. vs State of Punjab & Anr., dealing with the notifications issued by the State of Karnataka and writ petition No. 1140/88 M/s Survo Udyog Pvt. Ltd. & Anr. vs State of Bihar & Anr., deal with the same controversy and with similar notification.
In view of the averments made which we have examined in detail on behalf of the concerned State Governments in the light of the principles we have reiterated before, we are of the opinion that the notifications impugned cannot be challenged and the petition cannot succeed.
We have also considered writ petition No. 10 16/88 M/s Disco Electronics Ltd. & Anr.vs State of U.P. & Others, and in light of the facts and the circumstances and the aver ments made in the background of the principles reiterated, we are unable to sustain the challenge to the impugned notifications.
In these matters we had the advantage of having the views of the interveners and we have considered the submissions made on their behalf.
In the aforesaid light the intervention applications are allowed, submissions considered and the aforesaid writ petitions are dismissed but in the facts and the circum stances of the case, there will be no order as to costs.
Y. Lal Petitions dismissed.
| The question is whether the property in dispute was the private property owned by the Ruler or State property? On August 25, 1948 the then Maharaja of erstwhile Chhatarpur State made a gift of the house in dispute in favour of his father in law Dewan Shankar Partap Singh, now deceased and represented by his legal representative appellant.
This gift became the subject matter of dispute in the suit filed by the State of Madhya Pradesh in 1962.
The Trial Court 's clear findings were that the property in dispute was not that of the Maharaja as it had been gifted away by him to the de fendant and was mistakenly shown later as 'State Property '.
The High Court allowed the appeal of the State of Madhya Pradesh on the view taken by it that the property in dispute had vested in the United State of Vindhya Pradesh on May 1, 1948 and thereafter no valid gift could be made by the Ruler in favour of the defendant; and whatever rights and power the Ruler had as a sovereign ceased to exist after May 1, 1948 and the gift made thereafter could not give the defend ant a valid title to the property.
Allowing the appeal, this Court, HELD: The Ruler of Chhatarpur lost none of his sover eignty by integrating his State with other States except to the extent in which it was arranged or re distributed on some of its aspects.
It is in exercise of that sovereign power that the Ruler, had set apart the property in dispute as one of his private properties in the list submitted on July 5, 1948.
[52F] The High Court committed an error that the Ruler had lost his sovereign right to earmark the property in dispute as his private property after May 1, 1948 or that the said property vested in the State with effect from that date or that the letter Exhibit P 9 of Shri N.M. Buch 44 and the lists attached thereto had the effect of divesting the appellants of the title to the property in dispute in favour of the State with effect from that date.
[53E] Virendra Singh & Ors.
vs State of Uttar Pradesh, [1955] I SCR 415, referred to.
|
ION: Civil Appeal No. 1574 of 1980.
Appeal by Special leave from the Judgment and Order dated the 27.7.1979 of the Allahahad High Court in C.M.W. No. Nil of 1979.
Anil Dev Singh, S.L. Aneja and K.L. Taneja for the Appellant.
M.C. Manchanda, Mrs. Shobha Dikshit and Pramod Swarup for the Respondent.
His attempts to get the said decree executed were stalled sometimes by objections filed by the tenant appellant and sometimes by amendments made 745 in the law with the result that even after 13 years of litigation the landlord respondent was not able to get possession of the premises.
This was because of a statutory amendment which made the decree obtained by him inexecutable and was, therefore, Lying dormant and ineffective.
The legislature having realised the hardship of such landlords came to their rescue by an amendment in 1976 to the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act 1972 (for short, to be referred to as the '1972 Act ') which was expressly given retrospective operation so as to revive the decrees which had become inexecutable.
When the appeal was heard and the arguments were concluded the respondents had made a good gesture in agreeing to allow the tenant two years ' time to vacate the premises on giving the usual undertaking and accordingly we adjourned the case to enable the parties to come to a settlement.
However, we were informed by counsel for the parties that no settlement could be reached; hence we have now to decide the case on merits.
And now to the facts of the case.
The respondent landlord filed a suit for ejectment in the year 1971 and obtained a decree for ejectment against the appellant tenant.
By virtue of the provisions of 1972 Act, the case was transferred to the court of the Judge, Small Causes who tried the case and passed a decree in favour of the respondent on 4.4.1973.
It may be noted that the tenant did not object to the jurisdiction nor did he prefer and appeal or revision against the said judgment dated 4.4.73 and the same became final.
Thereafter, the decree holders filed an execution petition being Execution Case No. 4 of 1973.
The appellant, however, raised a jurisdictional objection on the basis of a judgment of the Allahabad High Court reported in 1975 A.L.R. 360 that the transfer of a suit before conferment.
Of jurisdiction to the Judge, Small Causes Court was not competent and, therefore, the decree was not executable.
Counsel for the respondents under some misconception conceded that the suit would have to be tried all over again and the Execution Case was, therefore, disposed of by an order dated 31.1.1976 passed by the Executing Court.
The Court held that the decree was without jurisdiction.
The respondents, however, took the stand that a concession on a point of law was not binding on him nor was his Advocate authorised to make such a concession.
However, the decree 746 remained inexecutable but by virtue of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Amendment) Act, 1976 (hereinafter referred to as the '1976 Amendment Act '), section 9 of the 1972 Act was made applicable with retrospective effect to remove the injustice and remedy the mischief which had been caused to the decree holders.
The relevant portion of the said amendment may be extracted thus: "26.
Transitory Provision XX XX XX (6) The provision of section 9 of the Uttar Pradesh Civil Laws Amendment Act, 1972 shall apply and shall be deemed always to have applied in relation to suits of the nature referred to therein which before the commencement of that Act had been transferred to a competent court and were pending immediately before the date of commencement of that Act in such transferee court as they apply in relation to suits which were pending in the court in which they were instituted: Provided that any such suit decided by the transferee court between the commencement of the said Act and the commencement of this Act on the assumption that the said Section 9 did not apply to such suits shall be deemed to have been validly decided as if the said section did not apply to such suits.
" As a result of the amendment extracted above, the judgment of the Allahabad High Court reported in 1975 A.L.R. 360 stood overruled and effaced.
In view of this amendment, the respondents filed an application before the Executing Court for revival of the suit and the decree which was accepted by the court and a civil revision filed against the said order was dismissed by the High Court; hence this appeal by special leave in this Court.
In order to understand the implication of the 1976 Amendment Act, it may be necessary to peruse section 26(5) of the said Amendment, which is extracted thus: 747 "(5) Notwithstanding any judgment, decree or order of any court or authority, the provisions of Rule 16 of the Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction) Rules, 1972 shall be deemed to have been made under the provisions of the principal Act as amended by this Act as if this Act were in force on all material dates.
" A close analysis of the above reveals that the intention of the legislature was to remove the injustice done to the landlords whose decrees became inexecutable.
The logical consequence which flows from an interpretation of clauses (5) and (6) of section 26 of the 1976 Amendment Act would be that all decrees which hitherto had been Lying dormant would revive and the landlord could get the decree executed.
The Executing Court as also the High Court upheld the contention of the respondents and directed execution of the decree.
The sheet anchor of the arguments of the counsel for the appellant was that in view of the Allahabad High Court decision (supra) and the 1972 Act, the decree stood set aside and could not be revived or made executable even by the 1976 Amendment Act.
It is, however, impossible for us to accept this contention because the dominant purpose of the 1976 Amendment Act was to remedy the injustice done to the landlords by the 1972 Act.
Another flaw in the argument of the counsel for the appellant is that it presumes that the decree became completely without jurisdiction and stood set aside.
That, however, could not be the position in law.
Even if the 1972 Act were to apply, the utmost consequence would be that the decree would remain inexecutable but could not be struck off from the records of the case.
This is a clear case where the doctrine of eclipse would apply and in view of the 1976 Amendment Act, the decree will revive and become executable.
This principle has been applied by this Court in several cases and flows from the well known doctrine of eclipse which has been enunciated not only in India but in other countries also.
In Sutherland Statutory Construction by Horack (Vol.
I, 3rd Edn.), the following passages may be noted: "In a majority of the jurisdictions the courts recognise 748 the mistake of the legislature and try to determine and give effect to its intent.
If the legislature has expressed its purpose intelligibly in the amendatory act and provided fully upon the subject considered, a majority of courts hold that it is a reasonable conclusion that the legislature did not intend to make the enforcement of the statute contingent on the continued existence of the repealed statute. (p. 329) The unconstitutional act physically exists in the official statutes of the state and is there available for reference, and as it is only unenforceable, the purported amendment is given effect.
If the law as amended is constitutional, it will be enforced." (p. 335) It is true that the American Constitution as also the American courts have been most reluctant to apply the doctrine of eclipse but this Court has pointed out in more than one case that the American view cannot be applied to our Constitution.
The matter first came up for consideration before this Court in Bhikaji Narain Dhakras & Ors.
vs State of Madhya Pradesh & Anr.
where in a similar situation the doctrine of eclipse was fully applied and the court observed thus: "The true position is that the impugned law became, as it were, eclipsed, for the time being, by the fundamental right.
The effect of the Constitution (First Amendment) Act, 1951 was to remove the shadow and to make the impugned Act free from all blemish or infirmity.
Such laws were not dead for all purposes.
They existed for the purposes of pre Constitution rights and liabilities and they remained operative, even after the Constitution, as against non citizens.
In our judgment, after the amendment, of clause (6) of Article 19 on the 18th June 1951, the impugned Act ceased to be unconstitutional and became revivified and enforceable against citizens as well as against non citizens.
But after the amendment of clause (6) the impugned Act immediately became fully operative even as against the citizens." In Deep Chand vs State of U.P. & Ors.
similar observations 749 were made by this Court which may be extracted thus: "As, however, our learned Brother has thought fit to embark upon a discussion of these questions, we desire to guard ourselves against being understood as accepting or acquiescing in the conclusion that the doctrine of eclipse cannot apply to any post Constitution law.
A post Constitution law may infringe, either a fundamental right conferred on citizens only or a fundamental right conferred on any person, citizen or non citizen.
In the first case the law will not stand in the way of the exercise by the citizens of that fundamental right and, therefore, will not have any operation on the rights of the citizens, but it will be quite a effective as regards non citizens.
In such a case, the fundamental right will, qua the citizens, throw a shadow on the law which will nevertheless be on the Statute Book as a valid law binding on non citizens and if the shadow is removed by a constitutional amendment, the law will immediately be applicable even to the citizens without being re enacted.
In other words, the doctrine of eclipse as explained by this Court in Bhikaji Narain Dhakras vs The State of Madhya Pradesh ; also applies to a post Constitution law of this kind.
A pre Constitution law, stating in the words of Das, J., as he then was, exists notwithstanding that it does not exist with respect to the future exercise of the fundamental rights.
That principle has been extended in this decision, by invoking the doctrine of eclipse.
As the law existed on the statute book to support pre Constitution acts, the Court held.
that the said law was eclipsed for the time being by one or other of the fundamental rights and when the shadow was removed by the amendment of the Constitution, the impugned Act became free from all blemish or infirmity." (Emphasis ours) In Mahendra Lal Jaini vs The State of Uttar Pradesh & Ors.
this Court held as follows: "The pre Constitution laws which were perfectly valid when they were passed and the existence of which is recognised in the opening words of article 13(1) revive by the removal of the inconsistency in question.
This in effect is 750 the doctrine of eclipse, which, if we may say so with respect, was applied in Bhikaji Narain 's case So far as pre Constitution laws are concerned, the amendment of the Constitution which removes the inconsistency will result in the revival of such laws by virtue of the doctrine of eclipse, as laid down in Bhikaji Narain 's case, for the pre existing laws were not still born and would still exist though eclipsed on account of the inconsistency to govern pre existing matters." (Emphasis supplied) In two recent decisions, this Court has applied the doctrine of eclipse in similar situations.
In section Anbalagan vs B. Devarajan the following observations were made: "Unless the practice of the caste makes it necessary no expiatory rites need be performed and, ordinarily, he regains his caste unless the community does not accept him.
The practice of caste however irrational it may appear to our reason and however repugnant it may appear to our moral and social sense, is so deep rooted in the Indian people that its mark does not seem to disappear on conversion to a different religion.
If it disappears, it disappears only to reappear on reconversion." (Emphasis ours) Similarly, in the case of Kailash Sonkar vs Smt.
Maya Devi, to which one of us (Fazal Ali, J.) was a party, this Court made the following observation: "In our opinion, when a person is converted to Christianity or some other religion the original caste remains under eclipse and as soon as during his/her life time the person is reconverted to the original religion the eclipse disappears and the caste automatically revives." Thus, applying the rule of law laid down by this Court, there would be no difficulty in upholding the judgments of the courts below in this particular appeal.
By virtue of the 1972 Act, the decree could not have been set aside or invalidated and the only consequence which would ensue is that the decree would be lying dormant and could not be executed.
Once the bar placed by the 1972 Act is 751 removed, by virtue of the doctrine of eclipse the decree will revive and become at once operative and executable.
The courts below have rightly decided that after the 1976 Amendment Act the decree became legally executable.
Some other arguments were also advanced on behalf of the appellant but in view of the express language of the 1976.
Amendment Act and the doctrine of eclipse, they seem to be futile.
For the reasons given above, we uphold the decree for ejectment passed by the courts below against the appellant and dismiss the appeal with costs.
As the litigation has taken more than a decade, it is not possible for us to give any time to the tenant for a vacating the premises and the decree may now be executed forthwith and the landlord put into possession.
N.V.K. Appeal dismissed.
| The respondent landlord filed a suit for ejectment in the year 1971 and obtained a decree for ejectment against the appellant tenant.
By virtue of the provisions of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972, the case was transferred to the court of the Judge, Small Causes, who tried the case and passed a decree in favour of the respondent.
No appeal or revision was filed against the said judgment.
Thereafter, the decree holders filed an execution petition.
The appellant, raised a jurisdictional objection on the basis of the judgment of the Allahabad High Court, (K.K. Saksena vs S.N. Misra to the effect that the transfer of the suit before conferment of the jurisdiction to the Judge, Small Causes Court was not competent and therefore, the decree was not executable.
The respondent 's counsel contended that the suit would have to be tried all over again and the Court held that the decree was without jurisdiction.
Tho decree remained inexecutable, but by virtue of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) (Amendment) Act, 1976 section 9 of the 1972 Act was made applicable with retrospective effect to remove The injustice and remedy the mischief which had been caused to the decree holders.
As a result of the amendment, the aforesaid judgment of the Allahabad High Court stood over ruled and effaced.
In view of the aforesaid amendment, the respondents filed an application before the Executing Court for revival of the suit and the decree, which was accepted by the Court, and a Civil Revision filed against the said order was dismissed by the High Court.
744 In the appeal to this Court, it was contended on behalf of the appellant, that in view of the Allahabad High Court decision and the 1972 Act, the decree stood set aside and could not be received or made executable even by the 1976 Amendment Act.
Dismissing the appeal, ^ HELD: 1.
The courts below have rightly decided that after the 1976 Amendment Act the decree became legally executable.
[747A] 2.
By virtue of the 1972 Act the decree could not have been set aside or invalidated and the only consequence which would ensue is that the decree would be lying dormant and could not be executed.
Once the bar placed by the 1972 Act is removed, by virtue of the doctrine of eclipse the decree will revive and become at once operative and executable.
[750H; 751A] 3 Even if the 1972 Act were to apply, the utmost consequence would be that the decree would remain inexecutable but could not be struck off from the records of the case.
This is clear case where the doctrine of eclipse would apply, and in view of the 1976 Amendment Act, the decree will revive and become executable.
This principle has been applied by this Court in several cases and flows from the well known doctrine of eclipse which has been enunciated not only in India but in other countries also.
[747G H] Bhikaji Narain Dhakras & Ors.
vs Stats of Madhya Pradesh & Anr; ; , Deep Chand vs State of U.P of Uttar Pradesh & Ors; [1963] 1 Supp.
SCR 912, section Anbalagan vs B. Devarajan; , Kailash Sonkar vs Smt.
Maya Devi; , referred to.
|
CIVIL Appeal No. 4160 of 1985.
852 From the Judgment and Order dated 25.6.1984 of the Kerala High Court in T.R.C. No. 19 of 1984.
V. J. Francis for the Appellant.
T. M. Ansari, Markose Vellapally and D. N. Misra for the Respondent.
The Judgment of the Court was delivered by BHAGWATI, J.
The sole question which arises for determination in this appeal is as to what is the rate at which the goods which had been purchased earlier and which were in stock with the assessee on 30 6 74 were assessable to purchase tax when the purchases were found to be last purchases as a result of events which took place subsequent to 30.6.1974.
This question has become material since the rate of purchase tax was increased from 3% to 5% with effect from 1st July, 1974.
Now it is not disputed in the present case that the purchases of goods effected by the assessee prior to 30 6 74 were last purchases within the State because the goods purchased which were in stock on 30.6.74 were subsequently sold by the assessee in the course of inter state trade or commerce which means that they were not sold within the State and hence the assessee was clearly the last purchaser within the State and as such was liable to pay purchase tax under Item 71 of the First Schedule to the Kerala General Sales Tax Act.
Equally it is clear that the assessee could not be made liable to tax on the purchases made by it prior to 30th June 1974, unless the purchases acquired the quality of being last purchases in the State.
It was pointed out by this Court in State of Madras vs Shri T. Narayanaswami Naidu & Anr.(1) when the assessee "files a return and declares the stock in hand, the stock in hand cannot be said to have been acquired by last purchase because he may still during the next assessment year, sell it or he may consume it himself or the goods may be destroyed, etc.
He would be entitled to claim before the assessing authorities that the character of acquisition of the stock in hand was undermined; in the light of subsequent events it may or may not become the last purchase inside the State.
" There can therefore be no doubt that the assessee in the present case became liable to pay tax on the purchases made by it prior to 30th June, 1974, as soon as it became determined though subsequent to 30th June 1974, that these purchases were last purchases inside the State and were consequently exigible to tax.
(1) ; 853 But the question remains as to what is the rate at which the A assessee was liable to be taxed in respect of these purchases.
Since the purchases took place before 30th June 1974, the assessee would, in our opinion, liable to be taxed at the rate prevailing at the time when the purchases were made and since the rate at the time was 3% of the sale price, the High Court was right in taking the view that the purchases made by the assessee prior to 30th June 1974 were taxable at the rate of 3%.
We may point out that a similar view has been taken by the Kerala High Court in Seaso Rubbers vs State of Kerala(1).
We find ourselves in agreement with the reasoning adopted by the Full Bench of the High Court in that case.
We accordingly reject the appeal but with no order as to costs.
| The respondent was a company carrying on life, fire, marine and general insurance business, and the question for determination related to the assessment of excess profits tax on its income other than life insurance.
The method adopted by the company with respect to fire insurance policies was that while the premiums received were all of them included in the assets of the year, a portion thereof, 40 per cent., was treated as reserve for unexpired risks on the outstanding policies, and shown as a liability.
The appellant, the Commissioner for Excess Profits Tax, claimed that the sum set apart as reserve for unexpired risks was liable to be deducted under r. 2 of Sch.
II of the Excess Profits Tax Act, 1940, from out of the capital employed in business for that year.
The respondent, while maintaining that all the premiums received must be treated as capital under r. 1 of Sch.
II to the Act, contended that the provision for unexpired risks was only a contingent liability and that a liability under a contract of insurance where under risk had not materialised could not be held to be a debt and was therefore not an accruing liability within r. 2 of Sch.
II to the Act.
Held, that the reserve liability for unexpired risk, unlike borrowed money and debts, cannot be treated as part of the real trading assets of the business so as to have an effect on the running of the business or the earning of profits, and consequently, as it cannot be included as capital under r. i, it cannot be deducted as an accruing liability within r. 2 of Sch.
II of the Excess Profits Tax Act, 1940.
Sun Insurance 0Office vs Clark; , and Southern Railway of Peru Ltd. vs Owen, (1956) 2 All E.R. 728, distinguished.
Northern Aluminium Co., Ltd. vs Inland Revenue Commis sioners, and Inland Revenue Commissioners vs Northern Aluminium Co. Ltd. (1947) 1 All E. R. 608, relied on. 1003
|
minal Appeal No. 129 of 1970.
Appeal by Special leave from the Judgment and order dated the 24th July, 1969 of the Calcutta High Court in Criminal Misc.
Case No. 179 of 1969.
D. Mukherjee, and DN.
Mukherjee, for the appellant.
S.B. Wad, for the respondent.
The Judgment of the Court was delivered by DWIVEDI, J.
Seemingly it is a small case.
It has not hit the headlines in the news media.
Nor it has gripped the public mind.
The pecuniary stake is trivial.
A tiny sum of Rs. 200/ is payable as costs by the appellant.
However, this case brings in to the flash point an issue of great consequence to liberty of contract: Where to draw the dividing line between the area of contempt of court and the are of opration of contractual rights.
The appellant is the Chairman of the Hindustan Steel Limited (hereinafter referred to as the Company).
The respondent was employed in the Company on a contract of service.
The contract provided for termination of his service by giving three months ' notice or three months ' pay in lieu thereof and without assigning any cause.
On February 21, 1968, the Company gave him this notice : "It is found that your performance and conduct in this plant have not been good and that you have not proved useful for the Company.
You are hereby advised to note this position and also to try for alternative employment elsewhere.
You may be released from this company at your request on payment of the amount required under the bond executed by you on pro rota basis as a very special case taking into account the period of service that may be rendered by you at the time of release.
in other words, if you choose to leave the service of the company before expiry of bond period, you will be required to pay the company a sum not exceeding Rs. 20,000/ reduced by the amount calculated on pro rota basis in respect of the service you may render after completion of your training.
" Soon thereafter he rushed to the Court.
On May 27, 1968 he instituted a suit in the Court of the Second Munsif, Asansol.
The material reliefs claimed in the plaint are: (1) a declaration that the notice dated February 21, 1968 is illegal, bad, mala fide, without jurisdiction, void and inoperative and is not binding on the plaintiff; (2) a declaration that the charge sheet dated July 1, 1966, confidential character report, dated April 27, 1967, are ultra vires, unenforceable, illegal, unsustainable, mala fide and opposed to rules and natural justice and are not binding on the plaintiff; (3) a declaration that the plaintiff is entitled to promotion to the next higher grade, namely, foreman, from October 10, 1966; 652 (4) a mandatory injunction directing the defendant to promote the plaintiff to the grade of foreman; and (5) a permanent injunction restraining the defendant from giving effect to the notice dated February 21, 1968.
He did not ask the Munsif to grant an interim injunction restraining the appellant and the Company from terminating his service during pendency of his suit.
So no such interim injunction was operating at the relevant time.
Nor did the appellant and the Company give an undertaking to refrain from terminating his service during pendency of the suit.
Forgetting the suit for a moment, there was no impediment in their way of terminating his service according to the contract.
And on February 26, 1968, the Company gave him this notice; "(T)he services of the ( respondent) are hereby terminated with effect from the date of service of this order on him and payment of three months ' pay in lieu of notice in terms of clause (vi) of his appointment letter. dated January 29, 1962.
" The Calcutta High Court (R.N. Dutt and B. Banerji JJ.). has held that the act of giving this notice amounts to, contempt of court.
The learned Judges said: "It seems that he (plaintiff) was more or less non suited.
There is no doubt that since his services have been terminated, some of the reliefs which were prayed for in the suit could become infructuous.
On these considerations, we think that the action of the Chairman in terminating the services of the (plaintiff) . does amount to obstruction or interference with due course of justice in the petitioner 's suit before the Munsif . and so it amounts to contempt of the said court.
" When asked, counsel for the respondent could not cite any decision holding a Muslim husband 's act of divorcing his wife during pendency of her suit for future maintenance as contempt of court.
The divorce completely aborts her suit.
It is true that the law of contempt of court is essential for keeping the administration of justice pure and undefiled.
It is also well to remember that our society is also interested in the fulfillment of a man 's expectations under a contract.
To that end we have a law of contract in our country.
Assigning an unlimited and undefined area to either of them would unduly curtail the area of the other.
Each should have a viable area so that ' justice may hold high her head and contract is not cribbed and cramped.
But what is the yardstick to measure their area of operation.
It has been held that 'initiation in good faith ' of a departmental ' enquiry under the Customs Act by the Custom authorities on the basis of facts which are the subject of a criminal prosecution under that Act against the appellant would not amount to contempt as the authorities ' are acting bona fide and discharging their statutory duties. ' (Ruka Ram G. Geokar vs R. N. Shukla.1 see also Jang Bahadur Singh vs Baij Nath Tewari).2 In another case it was held that the issue of a notification under the Abolition of Jagirs Act for resumption of Jagirs during pendency of a jagirdar 's writ petition for restraining such resumption is not contempt, because the Government was acting bona fide in the exercise of its statutory rights.
(See (1) ; (2) ; 653 Malojirao Shitole vs C. G. Matkar)(1) These cases establish that bona fide exercise of a statutory right by a party to a proceeding is not contempt in the absence of an interim injunction against or undertaking by that party.
There appears to be so sound ' reason why this principle should not extend to the exercise of rights under a contract.
The rights of a party under a contract are his legal rights.
In our view bonafide or honest exercise of a right under a contract should be the yardstick for allocating their respective area to contempt and it gives to each its proper sphere.
So where a party to a suit,, as here,.
terminates the service of the adversary party in the honest exercise of his rights under the contract of service and in the absence of any interim injunction or undertaking, his act would not constitute contempt of court.
We are satisfied from a combined reading of the two notices relating to termination of service that the appellant had terminated the service of the respondent in the honest exercise of the right vested in the Company by the contract of service.
So he has not committed contempt of the Munsif 's Court.
The order terminating his service does not threaten the respondent to withdraw the whole or part of his suit.
The mere circumstance that one or more of the reliefs claimed in the plaint have become infructuous on account of the termination order would not establish contumacy.
The respondent is free to amend his plaint and ask for a relief against the termination order.
Counsel for the respondent has relied on Pratap Singh V. Gurbakah Singh(4) and Gobind Sahai vs State of U.P.(5) These cases are clearly distinguishable on facts.
In the first case a Government employee had instituted a suit as well as a writ petition against the Government in respect of his service conditions.
Thereupon the appropriate authority started a departmental proceeding against the employee.
The charge sheet stated that he had gone to a court of law before exhausting all his departmental remedies and that his action was contrary to official propriety and subversive of good discipline.
This charge was framed on the strength of a circular letter issued by the Chief Secretary of the Government on June 25, 1953.
It emphasised that "any attempt by a Government servant to seek a decision on such issues in a court of law without first exhausting the normal official channels of redress could only be regarded as contrary to official propriety and subversive of good discipline and could well justify the initiation of disciplinary action against him.
This Court held that the authorities have committed contempt of court.
In the second case while the respondent 's suit challenging the election of his opponent to a committee of a political party was pending, the appellant letters expelling him from the party on the strength of an earlier resolution of the party which barred reference of such disputes to a law court and provided for summary removal of any member who initiated a suit.
This Court held that the action of expulsion amounted to contempt of court.
It 'should be observed that in both cases the complainant had a right to institute a legal proceeding in a law court for redress of his grievance.
This legal right (1) A.I.R. 1953 MB 245.
(2) [1962] Supp. 2 SCR 838.
(3) [1969] 1 SCR.
654 could be taken away only by a valid law.
But there was no such law in operation.
So neither the officers of the Government nor the political party had a legal right to take any action for punishing the /suitor for his mere 'act of instituting a legal proceeding in a law court.
In our case the appellant had a right under the contract to terminate, the service of the respondent.
Counsel for the respondent has submitted that as the appellant had tendered an unconditional apology.
in the High Court, we should not interfere with the High Court 's order.
We are unable to appreciate the submission.
Apology goes to sentence and may be accepted only upon a finding that contempt has been committed.
The High Court has in fact held that the appellant has committed contempt.
But it has accepted his apology and refrained from awarding any punishment.
Moreover, the appellant has been directed to pay Rs. 200/as costs to the respondent.
So the appellant is entitled to have the order of the High Court set aside.
We allow the appeal and set aside the order of the High Court.
V.P.S. Appeal allowed.
A02SCI/74 2500 28 5 75 GIPP.
| The appellant and the deceased who were friends, came to Delhi to purchase a motor cycle and stayed in a hotel.
The deceased fell short of money and the appellant promised to get it, from someone known to him.
Two prosecution witnesses saw the deceased and the appellant entering the room of the 'hotel ,on the night of the occurrence and the appellant leaving the hotel room in the morning on the following day.
Two days later the room was broken open and the dead body of the deceased was recovered.
The appellant was arrested at Gaya in his sister 's house and an attache case containing clothes, a spanner set, an allenkey set and a connecting rod were recovered from him.
The appellant was convicted under section 302 Penal Code.
by the Sessions Judge.
In appeal the High Court reduced the sentence to life imprisonment.
Dismissing the appeal to this Court, HELD : In a case of circumstantial evidence it is necessary to find whether the circumstances on which the prosecution relies are capable of supporting the sole inference that the appellant is guilty of the crime of which he is charged.
The circumstances have to be established by the prosecution by clear and cogent evidence and those circumstances must not be consistent with the innocence of the accused.
For determining whether the.
circumstances established on evidence raise but one inference consistent with the guilt of the accused, regard must be had to the totality of the circumstances.
Individual circumstances considered in isolation and divorced ' from the context of the overall picture emerging from a consideration of the diverse circumstances and their conjoint ,effect may by themselves appear innocuous.
It is only when the various circumstances are considered conjointly that it becomes possible to understand and appreciate their true effect. ' [696G H] In the instant case, the circumstances that, the appellant and the deceased who occupied a room in the hotel were seen entering the room together at midnight on the night of the occurrence, the appellant was seen locking the room and leaving.
the hotel, the dead body was recovered from the room, the appellant was found indulging in what for a man of his means was a spree of extravagance, and a blood stained connecting rod was recovered from the house of the appellant 's sister where he was found, all point to , the guilt of the accused.
|
Appeal No. 230 of 1956.
Appeal by special leave from the judgment and order dated April 12, 1955, of the Orissa High Court in 0.
J. C. No. 60 of 1952.
C. K. Daphtary, Solicitor General of India, R. Ganapathi Iyer and R. H. Dhebar, for the appellants.
section N. Andley, J. B. Dadachanji and Rameshuar Nath, for the respondent.
April 15.
The Judgment of Das C. J. and 523 Venkatarama Aiyar J. was delivered by Das C. J.
The Judgment of section K. Das and Vivian Bose JJ.
was delivered by section K. Das J. Sarkar J. delivered a separate judgment.
DAS C. J.
We agree that this appeal must be allowed in part but we prefer to rest our judgment on one of the material points on a ground which is different from that adopted by our learned Brother section K. Das J. in the judgment which has just been delivered by him and which we have had the advantage of perusing.
The Orissa Sales Tax Act, 1947 (Orissa XIV of 1947), hereinafter referred to as the said Act received the assent of the Governor General on April 26, 1947, when section I of 'the Act came into force.
On August 1, 1947, a Notification was issued by the Government of Orissa bringing the rest of the said Act into force in the Province of Orissa, as it was then constituted.
Section 4, as it stood at all times material to this appeal, ran as follows: " 4(1) Subject to the provisions of sections 5, 6, 7 and 8 and with effect from such date as the Provincial Government may, by notification in the Gazette, appoint, being not earlier than thirty days after the date of the said notification, every dealer whose gross turnover during the year immediately preceding the commencement of this Act exceeded Rs. 5,000 shall be liable to pay tax under the Act on sales effected after the date so notified: Provided that the tax shall not be payable on sale involved in the execution of a contract which is shown to the satisfaction of the Collector to have been entered into by the dealer concerned on or before the date so notified.
(2)Every dealer to whom subsection (1) does not apply shall be liable to pay tax under this Act with effect from the commencement of the year immediately following that during which his gross turnover first exceeded Rs. 5,000.
(3)Every dealer who has become liable to pay tax under this Act shall continue to be so liable until the expiry of three consecutive years, during each of 524 which his gross turnover has failed to exceed Rs. 5,000 and such further period after the date of such expiry as may be prescribed and on the expiry of this latter period his liability to pay tax shall cease.
(4)Every dealer whose liability to pay tax has ceased under the provisions of sub section (3) shall again be liable to pay tax under this Act with effect from the commencement of the year immediately following that during Which his gross turnover again exceeds Rs. 5,000.
" On August 14, 1947, a notification was issued by the Government of Orissa appointing September 30, 1947, as the date with effect from which that sub section was to come into force in the then province of Orissa.
On January 1, 1948, by a covenant of merger executed by its ruler, the feudatory State of Pallahara merged into the province of Orissa.
In exercise of the powers delegated to it by the Government of India under what was then known as the Extra Provincial Jurisdiction Act, 1947, the Government of Orissa on December 14, 1948, issued a notification under section 4 of that Extra Provincial Jurisdiction Act, extending the Orissa Sales Tax Act to the territories of the erstwhile feudatory States, including Pallahara which had merged into the province of Orissa.
On March 1, 1949, a notification under section 1(3) was issued by the Government of Orissa bringing sections 2 to 29 of the said Act into force in the added territories.
On the same day another notification was issued under section 4(1) of the Act, which was in the following terms: In exercise of the powers conferred by Sub section (1) of Section 4 of the Orissa Sales Tax Act, 1947 (Orissa Act XIV of 1947) as applied to Orissa State, the Government of Orissa are pleased to appoint the 31st March, 1949, as the date with effect from which every dealer whose gross turnover during the year ending the 31st March, 1949, exceeded Rs. 5,000 shall be liable to pay tax under the said Act on sales effected after the said date.
" It was after this notification had been.
issued that the respondents were sought to be made liable to tax.
The respondents were assessed under the said Act 525 for five quarters ending respectively on September 30, 1949, December 31, 1949, June 30, 1950, September 30, 1950, and December 31, 1950.
It will be noticed that the first two quarters related to a period prior to the commencement of the Constitution and the remaining three quarters fell after the Constitution came into force.
The Sales Tax Officer, Cuttack having assessed the respondents to Sales Tax under the said Act for each and all of the said five quarters and the respondent 's several appeals against the said several assessment orders under the said Act having been dismissed on April 12, 1952, the respondents filed a petition under article 226 of the Constitution in the Orissa High Court praying, inter alia, for a writ in the nature of a writ of certiorari for quashing the said assessment orders and for prohibiting the appellants from realising the tax so assessed or from making assessments on them in future.
The contention of the respondents before the High Court was that the notification issued by the Government of Orissa on March 1, 1949, under section 4(1) being invalid in that it ran counter to the provisions of that sub section, no part of the charging section came into force and consequently they were not liable to tax at all for any of the five quarters.
As regards the three quarters following the commencement of the Constitution, they urged an additional plea, namely, that the assessment orders for those three quarters were invalid by reason of the provisions of article 286 of the Constitution.
The High Court accepted both these contentions and by its judgment and order pronounced on April 12, 1955, cancelled the assessments.
The Sales Tax Officer, Cuttack, and the Collector of Commercial Taxes.
Cuttack, have appealed against the judgment and order of the High Court.
As regards the assessment orders for the three post ' Constitution quarters, the decision of the High Court purports to have proceeded on the decision of this Court in the State of Bombay vs United Motors (India) Ltd. (1).
We find ourselves in complete agreement with (1) ; 67 526 our learned Brother section K. Das J. for reasons stated by him that the assessment orders for the three post Constitution quarters were hit by cl.
(1) of article 286 and also section 30 (1) (a) (1) of the Act and were rightly held by the High Court to be without jurisdiction.
It is with regard to the assessment orders for the two pre Constitution quarters that we have come to a conclusion different from that to which our learned Brother has arrived.
We proceed to state our reasons.
The impugned notification, as hereinbefore stated, was issued on March 1, 1949, under section 4 (1) of the said Act.
Under that sub section every dealer whose gross turnover during the year immediately preceding the commencement of the Act exceeded Rs. 5,000 would be liable to pay the tax under the Act on sales effected after the date " so notified ", that is to say, the date which the provincial Government might by notification in the Gazette appoint.
It is clear, therefore, that section 4 (1) by its own terms determined the persons on whom the tax liability would fall but left it to the provincial Government only to appoint the date with effect from which the tax liability would commence.
It follows, therefore, that the only 'power conferred by section 4 (1) on the Government was to appoint, by a notification in the Official Gazette, a date with effect from which the tax liability would attach to the dealers described and specified in the sub section itself as the persons on whom that liability would fall.
The Government of Orissa issued the notification, hereinbefore quoted, " in exercise of the powers conferred by sub section (1) of section 4 " and appointed March 31, 1949, as the date with effect from which the tax liability would commence.
It was none of the business of the Government of Orissa to say on what class of dealers the tax liability would fall, for that had been already determined by the sub section itself Therefore, by the notification the Government of Orissa properly exercised its powers under sub section
(1) in so far as it appointed March 31, 1949, as the date, but it exceeded its powers by proceeding to say that all dealers whose gross turnover during the year ending 527 March 31, 1949, exceeded Rs. 5,000 should be liable to pay tax under the Act.
This part of the notification clearly ran counter to the sub section itself, for under that sub section it is only those dealers whose gross turnover exceeded Rs. 5,000 " during the year immediately preceding the commencement of this Act " that became liable to pay the tax.
For the purposes of the five assessment orders it made no difference whether the Act is taken to have commenced on December 14, 1948, when it was extended to the feudatory States by notification under section 4 of the Extra Provincial Jurisdiction Act, 1947, or on March 1, 1949, when the notification under section 1 (3) was issued, for in either case the year immediately preceding the commencement of this Act was April 1, 1947, to March 31, 1948.
The position, therefore, is that by the earlier part of the impugned notification the Government of Orissa properly and rightly exercised its power in appointing March 31, 1949, as the date with effect from which the liability to pay tax under the Act would commence, but by its latter part did something more which it had no business to do, i. e., to indicate, contrary to the sub section itself, that those dealers whose gross turnover during the year ending on March 31, 1949, would be liable to pay tax under the Act.
The notification in so far as it purports to determine the class of dealers on whom the tax liability would fall, was certainly invalid.
The question that immediately arises is as to whether the whole notification should be adjudged invalid as has been done by the High Court and as is proposed to be done by my learned Brother section K. Das J. or the two portions of the notification should be severed and effect should be given to the earlier part which is in conformity with section 4(1) and the latter part which goes beyond the powers conferred by the subsection to the Government of Orissa should be rejected.
Immediately the question of severability arises.
Are the two portions severable ? We find no difficulty in holding that the portion of the notification which went beyond the powers conferred on the Government of Orissa is quite clearly and easily severable from that 528 which was within its powers.
It cannot possibly be said that had the Government of Orissa known that it had no power to determine the persons on whom the tax liability would fall it would not have appointed a date at all.
In our view there is no question of the two parts being inextricably wound up.
We, therefore, hold that the notification, in so far as it appointed March 31, 1949, as the date with effect from which liability to pay tax would commence was valid and the rest of the notification was invalid and must be treated as surplus without any legal efficacy.
The result, therefore, is that the charging section was effectively brought into force and the entire charging section became operative and dealers could be properly brought to charge under the appropriate part of the charging section.
It is true that the notification having also stated that the dealers, whose gross turnover exceeded 5,000 (luring the year ending March 31, 1949, would be liable to pay the tax, the sales tax authorities naturally applied their mind to the question whether during the year ending March 31, 1949, the gross turnover of the respondents exceeded the requisite amount, but did not inquire into the question whether the respondent 's gross turnover exceeded Rs. 5,000 during the year immediately preceding the commencement of the Act which in this case was the financial year from April 1, 1947 to March 31, 1948.
If the matter stood there, it would have been necessary to send the case back to the Sales Tax Officer to enquire into and ascertain whether the quantum of the gross turnover of the respondents during the last mentioned financial year ending on March 31, 1948, exceeded Rs. 5,000 or it did not.
But a remand is not called for because it appears from the judgment under appeal that it was conceded that for the period April 1, 1949, till the commencement of the Constitution on January 26, 1950, the respondents would have been liable to pay sales tax provided a valid notification had been issued, under sub section
(1) of section 4.
This concession clearly amounts to an admission that the gross turnover of the respondents during the financial 529 year ending on March 31, 1948, which was the year immediately preceding March 31, 1949, exceeded Rs. 5,000.
We have already held that the notification ' issued under section 4(1) in so far as it appointed March 31, 1949, as the date with effect from which the liability to pay sales tax would commence was good and valid in law.
That finding coupled with the concession mentioned above relieves us from the necessity of remanding the case to the sales tax authorities.
Even if we assume, contrary to the aforesaid concession, that the gross turnover of the respondents during the financial year ending on March 31, 1948, did not exceed Rs. 5,000 and, therefore, section 4 (1) did not apply to them the respondents will still be liable to pay the sales tax for the two pre Constitution quarters under section 4 (2).
For reasons stated above we hold that the assessment orders for the three post Constitution quarters were invalid and we accordingly agree that this appeal, in so far as it is against that part of the order of the High Court which cancelled the assessment orders for those three post Constitution quarters, should be dismissed.
We further hold that the assessments for the two pre Constitution quarters were valid for reasons stated above and accordingly we agree in allowing this appeal in so far as it is against that part of the order of the High Court which cancelled the assessment orders for the two pre Constitution quarters Oil the ground that the notification issued under section 4 (1) of the Act was wholly invalid.
Under the circumstances of this case we also agree that the parties should bear their own costs in the High Court as well as in this Court.
section K. DAS J.
This appeal on behalf of the assessing authorities, Cuttack, has been brought pursuant to an order made on January 17, 1956, granting them special leave to appeal to this Court from the judgment and order of the High Court of Orissa dated April 12,1955, by which the High Court quashed certain orders of assessment of sales tax made against the respondent.
The short facts are these.
The respondent, Messrs.B. C. Patel and Co., is a partnership firm carrying on 530 the business of collection and sale of Kendu leaves.
The firm has its headquarters at Pallahara, which was formerly one of the Feudatory States of Orissa and merged in the.
then province of Orissa by a merger agreement dated January 1, 1948.
The Sales Tax authorities, Cuttack, in the State of Orissa, assessed the respondent to sales tax in respect of sales of Kendu leaves which took place for five quarters ending on September 30, 1949, December 31, 1949, June 30, 1950, September 30, 1950 and December 31, 1950.
It should be noted that two of the aforesaid quarters related to a period prior to the commencement of the Constitution, and the remaining three quarters were post Constitution.
The facts which the Sales Tax authorities found were (I.) that the respondent collected Kendu leaves in Orissa and sold them to various merchants of Calcutta, Madras and other places on receipt of orders from them, (2) that the goods were sent either f. o. r. Talcher or f. o. r. Calcutta, and (3) the sale price was realised by sending the bills to the purchasers for payment.
The admitted position was that the goods were delivered for consumption at various places out side the State of Orissa.
The Sales Tax authorities proceeded on the footing that all the sales took place in Orissa even though the goods were delivered for con sumption at places outside Orissa.
By five separate assessment orders dated May 31, 1951, the Sales Tax Officer, Cuttack, held that the sales having taken place in Orissa, the respondent was clearly liable to sales tax for the pre Constitution period and, for the post Constitution period, though the sales came within cl.
(2) of article 286 of the Constitution, the respondent was liable to sales tax under the Sales Tax Continuance Order, 1950, made by the President.
These findings were affirmed by the Assistant Collector of Sales Tax, Orissa, on appeal, by his order dated April 12, 1952.
The respondent assessee then filed a petition under article 226 of the Constitution in the High Court of Orissa and prayed for the issue of a writ of certiorari or other appropriate writ quashing the aforesaid orders of assessment.
The case of the respondent before the High Court was that the assessment orders.
, both with 531 regard to the pre Constitution and post Constitution periods, were invalid and without jurisdiction.
The High Court accepted the case of the respondent and held that the assessment orders for the entire period were invalid and without jurisdiction.
The present appeal has been brought from the aforesaid judgment and order of the High Court of Orissa dated April 12, 1955.
Though before the Sales Tax authorities and in the High Court, an attempt was made on behalf of the respondent assessee to show that there were no completed sales in Orissa and what took place in Orissa was a mere agreement to sell, that question is no longer at large before us.
The Sales Tax authorities found against the respondent on that question and the High Court did not consider it necessary to decide it on the petition filed by the respondent.
The High Court proceeded on certain other grounds pressed before it by the respondent, and we proceed now to consider the validity of those grounds.
The grounds are different , in respect of the two periods, pre Constitution, and post Constitution, and it will be convenient to take these two periods separately.
But before we do so, it is necessary to state some facts with regard to the enactment and enforcement of the Orissa Sales Tax Act, 1947 (Orissa XlV of 1947), hereinafter referred to as the Act, in the old province of Orissa and the ex Feudatory State of Pallahara.
The Act received the assent of the Governor General on April 26, 1947, and was first published in the Orissa Gazette on May 14,1947.
Section I came into force at once in the old province of Orissa and sub section
(3) of that section said that " the rest of the Act shall come into force on such date as the Provincial Government may, by notification in the Gazette, appoint ".
The Provincial Government of Orissa notified August 1, 1947, as the date on which the rest of the Act was to come into force in the province of Orissa.
It is neces sary at this stage to refer to the charging section, namely section 4 of the Act, which is set out below as it stood at the relevant time: " 4.
(1) Subject to the provisions of sections 5, 6, 7 532 and 8 and with effect from such date as the Provincial Government may, by notification in the Gazette, appoint, being not earlier than thirty days after the date of the said notification, every dealer whose gross turnover during the year immediately preceding the commencement of this Act exceeded Rs. 5,000 shall be liable to pay tax under the Act on sales effected after the date so notified.
(2) Every dealer to whom subsection (1) does not apply shall be liable to pay tax under this Act with effect from the commencement of the year immediately following that during which his gross turnover first exceeded Rs. 5,000.
(3)Every dealer who has become liable to pay tax under this Act shall continue to be so liable until the expire of three consecutive years, during each of which his gross turnover has failed to exceed Rs. 5,000 and such further period after the date of such expiry as may be prescribed and on the expiry of this latter period his liability to pay tax shall cease.
(4)Every dealer whose liability to pay tax has ceased under the provision of sub section (3) shall again be liable to pay tax under this Act with effect from the commencement of the year immediately following that during which his gross turnover again exceeds Rs. 5,000.
" It is to be noticed that for a liability to arise under sub section (1) of section 4, a notification by the Provincial Government is necessary, and the notification must fix the date from which every dealer whose gross turnover during the year immediately preceding the commencement of the Act exceeded Rs. 5,000 shall be liable to pay tax under the Act on sales effected after the date so notified.
Such a notification was issued for the old province of Orissa on August 30, 1947, and September 30,1947, was fixed as the date with effect from which every dealer whose gross turnover during the year ending March 31, 1947, exceeded Rs. 5,000 was made liable to pay tax under the Act on sales effected after the said date.
This was the position in the old province of Orissa.
We have already stated that the 533 ex Feudatory State of Pallahara was merged into the old province of Orissa by a merger agreement dated January 1, 1948.
After the merger of Pallahara in the old province of Orissa, the Government of Orissa under the delegated authority of the Central Government and exercising the powers under section 4 of the Extra Provincial Jurisdiction Act, 1947 (XLVII of 1947) (as it was then called) applied the Act to the former Orissa States including Pallahara by a notification dated December 14, 1948.
The only modification made in applying the Act to the Orissa States was to substitute the words " Orissa States "for the words " Province of Orissa ", wherever they occurred in the Act.
, By merely applying the Act to the Orissa States on December 14, 1948, all sections of the Act did not come into force in that area at once, since a notification under sub section
(3) of section 1 was necessary to bring into force sections 2 to 29.
Such a notification was issued on March 1, 1949.
The notification was in these terms: " In exercise of the powers conferred by sub section (3) of section 1 of the Orissa Sales Tax Act, 1947 (Orissa Act XIV of 1947), as applied to Orissa States, the Government of Orissa are pleased to appoint the 1st day of March, 1949, as the date on which sections 2 to 29 of the said Act shall come into force The position therefore was this.
Section 1 of the Act came into force in Pallahara on December 14, 1948, and the remaining sections came into force on March 1, 1949, namely, those sections which dealt with the liability of a dealer to pay sales tax, set tip a machinery for collection of the tax and dealt with other ancillary matters.
A notification under sub section
(1) of section 4 was also necessary for a liability to arise under that sub section in the said area, and such a notification was issued on March 1, 1949.
That notification must be quoted in full, as one of the points for our decision is the validity of the notification.
The notification read: " In exercise of the powers conferred by sub section (1) of section 4 of the Orissa Sales Tax.
Act, 1947 (Orissa Act XIV of 1947), as applied to Orissa States, the Government of Orissa are pleased to 68 534 appoint the 31st March, 1949, as the date with effect from which every dealer whose gross turnover during the year ending the 31st March, 1949, exceeded Rs. 5,000 shall be liable to pay tax under the said Act on sales effected after the said date ".
Two other provisions of the Act must be referred to here.
The word "dealer" is defined in section 2(c) in these terms : " 'dealer ' means any person who carries on the business of selling or supplying goods in Orissa, whether for commission, remuneration or otherwise and includes any firm or a Hindu joint family, and any society, club or association which sells or supplies goods to its members; ".
The word " year " is defined ins.
2(j) and means the financial year.
Now, with regard to the pre Constitution period the High Court has found that the notification under subs.
(1) of section 4 dated March 1, 1949, was an invalid notification and therefore the respondent was not liable to tax under that subsection in respect of the transactions which took place in the pre Constitution period.
The reason why the High Court has held that the notification in question was invalid must now be stated.
The scheme of sub section
(1) of section 4 is, firstly, to fix a date, not earlier than thirty days after the date of the notification, from which the liability is to commence; and, secondly, to impose a liability on, every dealer whose gross turnover during the year immediately preceding the commencement of the Act exceeded Rs. 5,000.
The tax liability is on transactions of sale which take place after the notified date (which must necessarily be after the commencement of the Act); but in determining on which class of dealers, the incidence of taxation will fall, the crucial period as mentioned in the sub section itself is the year immediately preceding the commencement of the Act.
Therefore, the subsection contemplates two.
matters, one of which may be called the 'relevant date ', and the other 'relevant period '.
So far as the old province of Orissa was concerned, there was no difficulty.
The notification fixed September 30, 1947, as the relevant date, and the year immediately preceding 535 the commencement of the Act in the old province of Orissa was the relevant period, viz., the financial year 1946 47, i. e., April 1, 1946 to March 31, 1947.
Therefore dealers whose gross turnover exceeded Rs. 5,000 in 1946 47, became liable under sub section
(1) of section 4 to tax on transactions of sale after September 30, 1947, in the old province of Orissa.
The notification for the Orissa States, however, fixed March 31, 1949, as the relevant date ; but in determining the class of dealers who would be subject to the liability, it took the year ending March 31, 1949, as the relevant period.
This was clearly a mistake, because under sub section
(1) of section 4 the crucial year is the year immediately preceding the commencement of the Act.
The Act commenced in the Orissa States either on December 14, 1948, or on March 1, 1949, and the financial year immediately preceding was the year 1947 48, i. e., April 1, 1947 to March 31, 1948.
The notification would have been in consonance with the subsection, if it had mentioned the year ending March 31, 1948, (instead of March 31, 1949) as the crucial year for determining the class of dealers who would be subject to the liability under sub section
(1) of section 4.
This mistake in the notification is the ground on which the High Court held that the assessments for the two quarters of the pre Constitution period were invalid and without jurisdiction.
The learned Solicitor General who has appeared for the appellants has conceded that a mistake was made in the notification.
However, lie has argued firstly, that the mistake was immaterial and secondly, that the assessment orders for the pre Constitution period were justified under sub section
(2) of s: 4.
As to the first argument that the mistake was immaterial, he has submitted that the liability to tax arose tinder the sub section and not under the notification, and any mistake in the notification did not affect such liability; lie has also submitted that the words and figures which gave rise to the mistake were mere surplusage and could be severed from the rest of the notification.
We are unable to accept this argument.
For a liability to arise under sub section (1) of section 47 the issue of a; 536 notification is an essential prerequisite, and unless the notification complies with the requirements of the subsection, no liability to tax can arise under it.
The notification not only fixed the relevant date, but fixed the relevant period for determining the class of dealers who would be subject to the liability.
In doing so, it made a mistake, the result of which was that the notification was not in conformity with the law.
We do not think that it can be severed in the way suggested by the learned Solicitor General.
Now, we come to the second argument whether the pre Constitution assessment orders are justified under sub section
(2) of section 4.
The High Court held that they were not, and gave two reasons for its view: one was that, subsections (1) and (2) were mutually exclusive and the other was based on the opening words of sub section
(2), which says that " every dealer to whom sub section (1) does not apply etc.
" The High Court expressed the view that if the notification under sub section (1) were correctly drawn up, the subsection would have applied to the respondent ; therefore, the opening words of sub section
(2) barred the application of the sub section to the respondent.
At first sight, there appears to be some force in this view.
But on a closer examination we do not think that the view expressed by the High Court is correct.
Sub sections (1) and (2) are mutually, exclusive only in the sense that they do not operate in the same field ; that is, the relevant periods for their application are different.
The relevant period for the application of sub section
(1) is " the year immediately preceding the commencement of the Act.
" Sub section (2) however does not require any notification, and under it every dealer is liable to pay tax under the Act with effect from the commencement of the year immediately following that during which his gross turnover first exceeded Rs. 5,000.
Obviously, the relevant period for the application of sub section
(2) is the year immediately following that during which the gross turnover of a dealer first exceeded Rs. 5,000.
The contrast between the two subsections is this: for sub section
(1) the crucial year is the year immediately preceding the commencement of 537 the, Act; but for sub section
(2) the crucial, year is the year in which the dealer 's gross turnover first exceeded Rs. 5,000.
We agree that for the same relevant year both sub sections (1) and (2) cannot apply, because sub section
(2) says " Every dealer to whom subs.
(1) does not apply etc." Let us, for example, take the year 1946 47 in the old province of Orissa.
That was the year immediately preceding the commencement of the Act in that area, and sub section
(1) applied to all dealers whose gross turnover exceeded Rs. 5,000, first or otherwise, in that year; sub section
(2) did not apply to such dealers even if their gross turnover exceeded Rs. 5,000 for the first time, in that year; because where sub section
(1) applies, sub section
(2) does not apply.
But what is the case before us? The year immediately preceding the commencement of the Act in the Pallahara area was 1947 48, and sub section
(1) would have applied to the respondent if the notification had mentioned that year.
But it did not, and the result was that it was not necessary to find if the respondent 's gross turnover exceeded Rs. 5,000 in 1947 48.
What was found was that the respondent 's gross turnover exceeded Rs. 5,000 in 1948 49, that is, the year ending March 31,, 1949, which was not the year immediately preceding the commencement of the Act in the Pallahara area.
Obviously, therefore, sub section
(1) did not apply to the respondent; but he clearly came under sub section
The Act came into force in the Orissa States on March 1, 1949.
By March 31, 1949, the respondent 's gross turnover exceeded Rs. 5,000.
He was, therefore, liable to pay tax under sub section (2 ) with effect from the commencement of the year immediately following March 31, 1949, that is, from April 1, 1949.
It has been argued for the respondent that the word `first ' in sub section
(2) means ` first ' after the commencement of the Act.
Assuming this to be correct, the respondent still comes under sub section
(2) because even if the Act came into force on March 1, 1949, the respondent 's gross turnover first exceeded Rs. 5,000 in the year ending March 31, 1949 which was after the commencement of the Act.
538 We are, therefore, of the view that all the requirements of sub section
(2) are fulfilled in this case, and the two assessment orders made against the respondent for the pre Constitution period were validly made under sub section
(2) of section 4 of the Act.
The effect of the invalid notification under sub section
(1) was that there was no liability thereunder, and no dealers were liable to pay tax under that sub section.
But that did not mean that any dealer who properly came under sub section
(2) was free to escape his liability to pay tax.
Surely, the position cannot be worse than what it would have been if the Provincial Government had failed to issue a, notification under sub section
We now turn to the post Constitution period.
The short ground on which the High Court held the assessment orders for this period to be invalid was based on the decision of this Court in The State of Bombay vs The United Motors (India) Ltd. (1) Said the High Court: " Clause (1) of Article 286 prohibited a State from taxing a sale unless such sale took place within the State as explained in the Explanation to the clause of the Article.
Similarly, clause (2) of that Article restricted the power of a State to tax a sale which took place in the course of inter State trade or commerce '.
Doubtless, by virtue of the proviso to that clause an Order by the President may save taxation on such inter State sales till the 31st March, 1951.
The recent S.C. p. 252 hap, settled the law regarding the true scope of these two clauses of the Article.
Where a transaction of sale involves inter State elements if the goods are delivered for consumption in a particular State that State alone can tax the sale by virtue of clause (1) of that Article and by a legal fiction that sale becomes `intra State sale '.
Clause (2) of Article 286 applies to those transactions of sale involving inter State elements which do not come within the scope of clause (1) of that Article.
On the admitted facts of the present case, clause (1) of Article 286 would apply.
The sales involve inter State elements inasmuch as the buyers are outside Orissa, price is paid outside Orissa and (1) ; 539 goods are delivered for consumption outside Orissa.
Hence, by virtue of clause (1) of Article 286 as explained by their Lordships of the Supreme Court, the State of Orissa is not competent to tax such transactions of sale.
" The learned Solicitor General has rightly pointed out that in a later decision of this Court in The Bengal Immunity Company Limited vs The State of Bihar and Others (1), which was, not available to the High Court when it delivered its judgment, the view expressed in the United Motors, case (2) was departed from in so far as the earlier decision held that cl.
(2) of article 286 of the Constitution did not affect the power of the State in which delivery of goods was made to tax inter State sales or purchases of the kind mentioned in the Explanation to cl.
(1) and the effect of the Expla nation was that such transactions were saved from the ban imposed by article 286 (2).
The learned Solicitor General, therefore, contends that on the basis of the later decision, the assessments made should be held to be valid under the Sales Tax Continuance Order 1950, made by the President, even though the sales took place in course of inter State trade or commerce.
It is necessary to state here that by the Adaptation of Laws (Third Amendment) Order, 1951, made by the President in exercise of the power given by cl.
(2) of article 372 of the Constitution, section 30 was inserted in the Act to bring it into accord with the Constitution, from January 26, 1950.
Section 30 which in substance reproduced article 286 of the Constitution, as it then stood, was in these terms " 30.
(1) Notwithstanding anything contained in this Act (a) a tax on sale or purchase of goods shall not be imposed under this Act, (i) where such sale or purchase takes place outside the State of Orissa; 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 (1) (2) ; 540 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 clause (1) of Article 286 of the Constitution shall apply for the interpretation of sub clause (i) of clause (a) of sub section (1).
We are of the view that the Bengal Immunity decision (1) does not really help the learned Solicitor General to establish his contention that the assessments for the post Constitution period were valid.
The admitted position was that the goods sold were delivered for consumption at various places outside the State of Orissa.
Therefore, under cl.
(1) (a) of article 286 read with the Explanation as also under section 30 of the Act, the sales were outside Orissa.
It is true that the Bengal Immunity decision (1) took a view different from that of the earlier decision in so far as it held that inter State sales were converted into intra State sales by the Ex planation; but it was pointed out that the States ' power with respect to a sale or purchase might be hit by one or more of the bans imposed by article 286.
With reference to the different clauses of article 286, it was observed in the majority judgment of the Bengal Immunity decision(1): " These several bans may overlap in some cases but in their respective scope and operation they are separate and independent.
They deal with different phases of a sale or purchase but, nevertheless, they are distinct and one has nothing to do with and is not dependent on the other or others.
The States ' legislative power with respect to a sale or purchase may be, hit by one or more of these bans.
Thus, take the case of a sale of goods declared by Parliament as essential by a smaller in West Bengal to a purchaser in Bihar in which goods are actually delivered as a direct result of such sale for consumption in the State of Bihar.
A law made by West Bengal without the assent of the President taxing this sale will be unconstitutional because (1) it will offend Article 286 (1) (a) as the gale has taken place outside the territory by virtue of the (1) 541 Explanation to clause (1) (a), (2) it will also offend Article 286 (2) as the sale has taken place in the course of inter State trade or commerce and (3)such law will also be contrary to Article 286 (3) as the goods are essential commodities and the President 's assent to the law was not obtained as required by clause (3) of Article 286.
This appears to us to be the general scheme of that article.
" (see pp.
638 639 of the report).
At p. 647 of the report, it was further observed " The operative provisions of the several parts of Article 286, namely, clause (1) (a), clause (1) (b), clause (2) and clause (3) are manifestly intended to deal with different topics and, therefore, one cannot be projected or read into another.
On a careful and anxious consideration of the matter in the light of the fresh arguments advanced and discussions held oil the present occasion we are definitely of the opinion that the Explanation in clause (1) (a) cannot be legitimately extended to clause (2) either as an exception or as a proviso thereto or read as curtailing or limiting the ambit of clause (2).
" As to the President 's order, it was stated at p. 656: " It will be noticed that under that proviso the President 's order was to take effect " notwithstanding that the imposition of such tax is contrary to the provisions of this clause ".
This non obstante clause does not, in terms, supersede clause (1) at all and, therefore, prima facie, the President 's order was subject to the prohibition of clause (1) (a) read with the Explanation.
" Obviously, therefore, even on the Bengal Immunity decision.
(1) the assessments for the post Constitution period in this case were hit by cl.
(1) (a) of article 286 as also section 30 (1) (a) (i) of the Act and were rightly held to be without jurisdiction.
The result, therefore, is that in our view this appeal should succeed in part, as we hold that the assessments for the two quarters of the pre Constitution period were valid under sub section
(2) of section 4 of the Act and the (1) 69 542 assessments for the post Constitution period were invalid.
In view of the divided success of the parties we further think that they should bear their own costs in the High Court and in this Court.
SARKAR J.
The respondents are a firm of merchants carrying on business in a part of the State of Orissa which was formerly the feudatory State of Pallahara.
This State of Pallahara had merged in the Province of Orissa under an agreement with the Government of India, dated January 1, 1948.
On December 14, 1948, the Government of Orissa under the powers conferred by section 4 of the Extra Provincial Jurisdiction Act, 1947, and with the permission of the Government of India, issued a Notification applying the Orissa Sales Tax Act, 1947 (Orissa XIV of 1947), passed by the Legislature of Orissa, to the areas which previously constituted the feudatory States including Pallahara, then merged in Orissa.
The respondents were assessed to sales tax under this Act in respect of their sales which took place during five quarters between July 1, 1949 and December 31, 1950.
They had appealed under the provisions of the Act to higher authorities from the original orders of assessment, but were unsuccessful.
They then applied to the High Court of Orissa on November 11.
1952, for an appro priate writ directing the Sales Tax Officer the assessing authority and one of the appellants herein, to refrain from realizing the tax or from giving effect to the assessment orders in any manner whatsoever and quashing such orders and also prohibiting future assessment.
By its judgment delivered on April 12, 1955, the High Court allowed the petition and cancelled the assessment orders.
From that judgment the present appeal has come to this Court.
The question that I propose to discuss in this judgment is whether the respondents are liable to pay tax under the provisions of the Act in the circumstances which existed in this case and to which, I shall refer a little later.
The sections of the Act under which the tax is sought to be levied are set out below: S.1.
(1) This Act may be called the Orissa Sales Tax Act, 1947.
543 (2) It extends to the whole of the Province of Orissa.
(3)This section shall come into force at once and the rest of this Act shall come into force on such date as the Provincial Government may, by notification in the Gazette, appoint.
In this Act, unless there is anything repugnant in the subject or context, (j) " year " means the financial year.
section 4.
(1) Subject to the provisions of sections 5, 6, 7 and 8 and with effect from such date as the Provincial Government may, by notification in the Gazette, appoint, being not earlier than thirty days after the date of the said notification, every dealer whose gross turnover during the year immediately preceding the commencement of this Act exceeded Rs. 5,000 shall be liable to pay tax under the Act on sales effected after the date so notified: Provided that the tax shall not be payable on sale involved in the execution of a contract which is shown to the satisfaction of the Collector to have been entered into by the dealer concerned on or before the date so notified.
(2)Every dealer to whom sub section (1) does not apply shall be liable to pay tax under this Act with effect from the commencement of the year immediately following that during which his gross turnover first exceeded Rs. 5,000.
(3)Every dealer who has become liable to pay tax under this Act shall continue to be so liable until the expiry of three consecutive years, during each of which his gross turnover has failed to exceed Rs. 5,000 and such further period after the date of such expiry as may be prescribed and on the expiry of this latter period his liability to pay tax shall cease.
(4)Every dealer whose liability to pay tax has ceased under the provisions of sub section (3) shall again be liable to pay tax under this Act with effect from the commencement of the year immediately following that during which his gross turnover again exceeds Rs. 5,000.
544 It is conceded that the respondents are dealers within the meaning of the Act.
The term " turnover " is defined in the Act but for the purpose of this judgment it can be taken in its popular sense.
It is also unnecessary to consider sections 5, 6, 7 and 8 of the Act, for nothing turns on them in this appeal.
Section I of the Act came into force in the Pallahara area on December 14, 1948, by virtue of the notification of that date mentioned earlier.
Oil March 1, 1949, the Government of Orissa issued under section 1 (3) of the Act a notification, being Notification No. 2267/F appointing that date as the date on which the, rest of the Act would come into force in the Pallahara area.
It is not in dispute that March 1, 1949, has to be considered as the date of the commencement of the Act in the Pallahara area.
That is the result of the definition of the commencement of an Act given in section 2 (8) of the Orissa General Clauses Act, 1937.
As will have been noticed section 4 (1) of the Act required a date to be appointed before liability under it could arise.
Such a date had been appointed by the Government of Orissa before the Act was applied to the areas previously belonging to the feudatory States and the Government felt that this appointment of a date would not be an appointment for these areas.
The case before us has proceeded oil the basis that appointment was not a proper appointment under this section for these areas.
In fact, the Government of Orissa had oil March 1, 1949, issued a Notification No. 2269/F, purporting to appoint a date under section 4 (1) for the areas previously covered by the feudatory States including the Pallahara State, then merged in Orissa.
That Notification is in these terms: In exercise of the powers conferred by sub section (1) of Section 4 of the Orissa ,Sales Tax Act, 1947 (Orissa Act XIV of 1947), as applied to Orissa States, the Government of Orissa are pleased to appoint the.
31st March, 1949, as the date with effect from which every dealer whose gross turnover during the year ending the 31st March, 1949, exceeded Rs. 5,000 shall be liable to pay tax under the said Act on sales effected after the said date.
601 might have retired from the contest on a re appraisement of his prospects at the election as compared with those of the deceased contesting candidate.
When death removed that contesting candidate from the field, a person who had given notice of retirement from the contest as aforesaid may as well re consider his position and feel that as compared with the other surviving candidates he would have fair prospects of success at the election and if an election is held after the countermanding of the poll by the returning officer, he might just as well put forward his candidature and it is provided that in that event he shall not be ineligible for being nominated as a candidate for election after such countermanding ; and there is perfectly good reason for the same, because otherwise, withdrawal or retirement might possibly be considered a disqualification or refusal to seek election.
This brings us to the provisions as to retirement front contest under section 55A.
A candidate might not have withdrawn his candidature within the period prescribed and his name might have been included in the list of contesting candidates published by the returning officer under section 38.
Being thus a contesting candidate duly declared as such he would be entitled to go to the poll.
He may, however, as a result of the election campaign find himself in the predicament that his prospects at the election are meagre and he might even have to face the situation of having to forfeit his security deposit if he went to the poll.
There may be a number of motives operating in his mind which it is not necessary to discuss and be may just as well withdraw his candidature and retire from the field.
A locus poenitentiae is therefore given to him under section 55A to retire from the contest by giving notice in the prescribed form which has to be delivered to the returning officer on any day not later than 10 days prior to the date fixed for the poll.
If a candidate thus retires from the contest, he decides not to go to the poll and the provision is made in the rules for the correction of the list of contesting candidates so that no elector shall in the absence of necessary information waste his vote upon him.
A 602 copy of such notice is to be affixed by the returning officer to his notice board and in the polling station "and each of the remaining, contesting candidates or his agent is to be supplied with such copy and the notice has also got to be published in the official gazette.
Such retirement from contest might result in the number of remaining contesting candidates becoming equal to the number of seats to be filled and section 55A (6) and (7) work out the situation as it would then obtain with reference to sections 53 and 54 and provide that in that event the returning officer is to forth with declare such candidates to be duly elected to fill those seats and countermand the poll a fresh election being necessary only in the event of filling the remaining seat or seats, if ' any.
If, however, a poll has to be taken under section 53(1) in spite of the retirement of a contesting candidate or candidates from contest is aforesaid the process of election continues in spite of such retirement and the question any arise as to what would happen if any of the contesting candidates who has thus retired dies before the commencement of the poll.
If there was nothing more, section 52 would apply and the returning officer upon being satisfied of the fact of the death of the candidate Would have to countermand the poll and report the fact to the Election.
Commission and also to the appropriate authority.
Provision is therefore made in section 55A (5) that any person who has given a notice of retirement under section 55A (2) is deemed not to be a contesting candidate for the purposes of section 52.
This is a deeming provision and creates a legal fiction.
The effect of such a legal fiction however is that a position which otherwise would not obtain is deemed to obtain under those circumstances.
Unless a contesting, candidate who had thus retired from the contest continued to be a contesting candidate for the purposes of election and the effect of the death of such contesting (Candidate was " contemplated in section 52, it would not have been found necessary to enact section 55A (5).
It is because such a contesting, candidate who retires from the 603 contest under section 55A (2) continues to be a. contesting candidate for the purposes of election that it has been considered necessary to provide for the consequence of his death and to exclude such a candidate from the category of contesting candidates within the meaning of the term as used in section 38 of ' the Act, that is to say, candidates who were included in the list of validly nominated candidates and who had not with drawn their candidature within the period prescribed and who had been included in the list of ' candidates prepared and published by the returning, officer in the manner prescribed.
This provision, therefore warrants the conclusion that a contesting candidate whose name was included in the list under section 38 but who retires from the contest under section 55A (2) continues to be a contesting candidate for the purpose of the Act though by reason of such retirement it would be unnecessary for the constituency to cast its votes in his favour at the poll.
Such candidate continues to be contesting candidate for the purposes of the Act, notwithstanding his retirement from the contest under section 55A (2).
When we come to the provisions of Part VI of the Act relating to disputes regarding election, we find that there is no definition given in section 79 of the expression " contesting candidate ", though there are definitions of " candidate " and " returned candidate " to be found therein.
An election petition calling in question any election can be presented by any candidate at such election or any elector on one, or more of the grounds specified in sections 100 (1) and 101 to the Election Commission and a petitioner in addition to calling in question the election of the returned candidate, or candidates may further claim a declaration that he himself or any other candidate has been duly elected.
Where the petitioner claims such further declaration, he must join as respondents to his petition all the contesting candidates other than the petitioner and also any other candidate against whom allegations of any corrupt practices are made in the petition.
The words " other than the petitioner " are meant to exclude the petitioner when he happens to be one of 604 the contesting candidates who has been defeated at the polls and would not apply where the petition is filed for instance by an elector.
An elector filing such a petition would have to join all the contesting candidates whose names were included in the list of contesting candidates prepared and published by the returning officer in the manner prescribed under section 38, that is to say, candidates who were included in the list of validly nominated candidates and who had not withdrawn their candidature within the period prescribed.
Such contesting candidates will have to be joined as respondents to such petition irrespective of the fact that one or more of them had retired from the contest tinder section 55A (2).
If the provisions of section 82 which prescribes who shall be joined as respondents to the petition are not complied with, the Election Commission is enjoined under section 85 of the Act to dismiss the petition and similar are the consequences of noncompliance with the provisions of section 117 relating to deposit of security of costs.
If the Election Commission however does not do so and accepts the petition, it has to cause a copy of the petition to be published in the official gazette and a copy thereof to be served by post on each of the respondents and then refer the petition to an election tribunal for trial.
Section 90 (3) similarly enjoins the Election Tribunal to dismiss an election petition which does not comply with the provisions of section 82 or section 117 notwithstanding that it has not been dismissed by the Election Commission under section 85.
Section 90 (3) is mandatory and the Election Tribunal is bound to dismiss such a petition if an application is made before it for the purpose.
Turning now to section 117, we find that it is a provision relating to the deposit of security for the costs of the petition.
When a petitioner presents an election petition to the Election Commission under section 81 he is to enclose with the petition a Government Treasury receipt showing that a deposit of one thousand rupees has been made by him either in a Government Treasury or in the Reserve Bank of India in favour of the Secretary to the Election Commission as security 605 for the costs of the petition.
The Government Treasury receipt must show that such deposit has been actually made by him either in a Government Treasury or in the Reserve Bank of India; it must also show that it has been so made in favour of the Secretary to the Election Commission and it must further show that it has been made as security for the costs of the petition.
These are the three requirements of the section which have to be fulfilled.
The question, however, arises whether the words " in favour of the Secretary to the Election Commission " are mandatory in character so that if the deposit has not been made in favour of the Secretary to the Election Commission as therein specified the deposit even though made in a Government Treasury or in the Reserve Bank of India and as security for the costs of the petition would be invalid and of no avail.
If, for instance, the petitioner made the deposit either in a Government Treasury or in the Reserve Bank of India in favour of the Election Commission itself and obtained a Government Treasury receipt in regard to the same, could it be contended that in spite of such a deposit having been made, the said Government Treasury receipt was not in conformity with the requirements of section 117 and the petitioner could be said not to have complied with the requirements of that section so as to involve a dismissal of his petition under section 85 or section 90 (3) ? The extreme case illustrated above has been taken by us only in order to demonstrate to what lengths a literal compliance with the provisions of section 117 can be pushed.
The petition is to be presented to the Election Commission, the security for the costs of the petition has to be given to the Election Commission and section 121 provides for an application to be made in writing to the Election Commission for payment of costs by the person in whose favour the costs have been awarded and yet, even though the deposit may have been made by a petitioner in favour of the Election Commission and a Government Treasury receipt evidencing the same be enclosed along with his 77 606 petition the provisions of section 117 of the Act can be said not to have been complied with merely because the deposit was made in favour of the Election Commission and not in favour of the Secretary to the Election Commission.
The relationship between the Election Commission on the one hand and the Secretary to the Election Commission on the other need not be scrutinized for the purposes of negativing this contention.
It is enough to say that such a contention has only got to be stated in order to be negatived.
It would be absurd to imagine that a deposit made either in a Government Treasury or in the Reserve Bank of India in favour of the Election Commission itself would not be sufficient compliance with the provisions of section 117 and would involve a dismissal of the petition under section 85 or section 90 (3).
The above illustration is sufficient to demonstrate that the words " in favour of the Secretary to the Election Commission " used in section 117 are directory and not mandatory in their character.
What is of the essence of the provision contained in section 11.7 is that the petitioner should furnish security for the costs of the petition, and should enclose along with the petition a (Government Treasury receipt showing that a deposit of one thousand rupees has been made by him either in a Government Treasury or in the Reserve Bank of India, is at the disposal of the Election Commission to be utilised by it in the manner authorised by law and is under its control and payable on a proper application being made in that behalf to the Election Commission or to any person duly authorised by it to receive the same, be he the Secretary to the Election commission or any one else.
If, therefore it can be shown by evidence led before the Election Tribunal that the government Treasury receipt or the chalan which was obtained by the petitioner and enclosed by him along with his petition presented to the Election Commission was such that the Election Commission could on a necessary application in that behalf be in a position to realise the said sum of rupees one thousand for payment of the costs to the successful party it would be sufficient compliance 607 with the requirements of section 117.
No such literal compliance with the terms of section 117 is at, all necessary as is contended for on behalf of the appellant before us.
As regards the amendment of a petition by deleting the averments and the prayer regarding the declaration that either the petitioner or an other candidate has been.
duly elected, so as to cure lie defect of nonjoinder of the necessary parties as respondents, we may only refer to our judgment * about Io be delivered in Civil Appeal No. 76 of 1958, where the question is discussed at considerable length.
Suffice it to say here that the Election Tribunal has no power to grant such an amendment, be it by way of withdrawal or abandonment of a part of the claim or otherwise, once, an Election Petition has been presented to the Election (commission claiming such further declaration.
Considering Civil Appeal No. 763 of 1957 in the light of the observations made above, we find that sundararaja Pillai whose name was included in the list of contesting candidates prepared and published by the returning officer under section 38 but who retired from the contest under section 55A (2) before the commencement of the poll was included in the expression " contesting candidate " used in section 82 and was by reason of the first respondent claiming a further declaration that the second respondent had been duly elected, a necessary party to the petition.
Inasmuch as he was not joined as a respondent, the petition was liable to be dismissed under section 90(3) of the Act.
This defect could not be cured by any amendment of the petition seeking to delete the claim for such further declaration and the Election Tribunal was clearly in error in allowing such amendment on the grounds disclosed in 1.
A. No. 3 of 1957 or otherwise.
In regard to the deposit of security, however, the position was quite different.
According to the evidence given by K. Nataraja Mudaliar, head accountant in.
charge of the Madurai Taluk sub Treasury, the amount was kept in the Election Revenue deposit and the monies were at the disposal of the Election Commission ; also that the Election Commission or anyone * Basappa vs Ayyappa, see p. 6ii, post. 608 authorised by the Election Commission in that behalf could draw the said monies and no one else could withdraw the same without such authority.
If that was so, there was sufficient compliance with the requirements of section 117 and there could be no question of dismissing the petition for noncompliance with the provisions of that section.
Having regard therefore to the conclusion reached above in regard to the non compliance with the provisions of section 82, Civil Appeal No. 763 of 1957 will be allowed, the orders of dismissal made by the High Court on the writ petitions Nos. 531 of 1957 and 532 of 1957 will be set aside, the orders passed by the Election Tribunal dated July 5, 1957, will be vacated and the Election Petition No. 147 of 1957 will be dismissed with costs.
As the appellant has failed in his contention in regard to the provisions of section 117, we feel that the proper order for costs should be that each party do bear and pay his own costs here as well as in the High Court.
Civil Appeal No. 764 of 1957 also shares a similar fate.
The first respondent therein did not join as party respondents to his petition the two candidates whose names had been included by the returning officer in the list of contesting candidates but who had subsequently retired from the contest before the commencement of the poll.
They were necessary parties to the petition in so far as the first respondent had claimed a further declaration that he himself be declared duly elected under section 101.
The Election Petition No. 74 of 1957 filed by him, was thus liable to be dismissed for non joinder of necessary parties under section 90(3) of the Act.
This appeal will also be accordingly allowed, the orders passed by the High Court in Writ Petitions Nos. 573 and 574 of 1957 will be set aside, the orders passed by the Election Tribunal on July 13,1957, will be vacated and Election Petition No. 74 of 1957 will be, dismissed.
The first respondent will pay the appellants costs throughout.
So far as Civil Appeal No. 48 of 1958 is concerned, the difficulty which faces the appellant is that we 609 have nothing on the record of the appeal to show what were the exact terms of the deposit made by the second respondent under section If 7.
The copy of the chalan which is cyclostyled at p. 45 of the record is deficient in material particulars and does not throw any light on the question.
The appellant no doubt made an application to the Election.
Tribunal to try his objection as regards the non compliance with the provision, , of that section as a preliminary objection and determine whether the second respondent had complied with the provisions of section 117 and if not to dismiss his petition.
The Election Tribunal, however, did not decide this preliminary objection but ordered that the trial of the petition (lo proceed.
The High Court before whom the Writ Petition M. J. No. 480 of 1957 was filed also came to the same conclusion as it thought that the matter could be decided at the time of hearing itself and dismissed the application.
We are of opinion that both the Election Tribunal and the High Court were wrong in the view they took.
If the preliminary objection was not entertained and a decision reached thereupon, further proceedings taken in the Election Petition would mean a full fledged trial involving examination of a large number of witnesses on behalf of the and respondent in support of the numerous allegations of corrupt practices attributed by him to the appellant.
his agents or others working on his behalf; examination of a large member of witnesses by or on behalf of the appellant controverting the allegations made against him; examination of witnesses in support of ' the recrimination submitted by the appellant against the 2nd respondent; and a large number of visits by the appellant from distant places like Delhi and Bombay to Ranchi resulting in not only heavy expenses and loss of time and diversion of the appellant from his public duty in the various fields of ' activity including those in the House of the People.
It would mean unnecessary harassment and expenses for the appellant which could certainly be avoided if the preliminary objection urged by him was decided at the initial stage by the Election Tribunal, 610 We are therefore of the opinion that the orders passed by the High Court in M. J. C. No. 480 of 1957 and by the Election Tribunal in Election Petition No. 341 of 1957 were wrong and ought to be set aside.
The Election Tribunal will decide the preliminary objection in regard to the non compliance with the provisions of section 117 by the 2nd respondent in the light of the observations made above and deal with the same according to law.
The parties will be at liberty to lead such further evidence before the Election Tribunal as they may be advised.
The costs of both the parties, here, as well as in the courts below will be costs in the Election Petition to be dealt with by the Election Tribunal hereafter and will abide the result of its decision on the preliminary objection.
Appeal,s allowed.
Appeal No. 48 of 1958 remanded.
| The appellant, Jawaharlal Nehru University, had set up a Centre of Post Graduate Studies at Imphal under section 5(2) of the University Act.
The Respondent while he was working as a temporary research Assistant in the School of International Studies of the University was offered the post of Associate Fellow at the Centre of Post graduate Studies, Imphal, on ad hoc basis which offer was accepted by him on 3 December, 1973.
His term of appointment was extended from time to time.
On 21st March, 1979 the University offered him the post of Assistant Professor in the Political Science Divi sion at the Centre at Imphal for a period of two years.
The respondent joined the post on 29 August, 1979.
Later, he was appointed as such on a regular basis from the date of his initial appointment, and was confirmed with effect from the same date.
The Centre of Post graduate Studies at Imphal was to be merged with the Manipur University as provided in the Mani pur University Act, 1980.
On 3 February, 1981 the Syndicate of the Jawaharlal Nehru University provided for the transfer of the Centre to the Manipur University and resolved that the members of the faculty employed by the Jawaharlal Nehru University Centre of Post graduate Studies, Imphal, immedi ately 'before its merger into the Manipur University would on and from that date become members of the staff of the Manipur University.
The respondent filed a writ petition in the Delhi High Court praying for the quashing of the Resolution of the Jawaharlal Nehru University whereby his services were trans ferred to the Manipur University.
The learned Single Judge allowed the writ petition holding that the respondent could not be obliged to join the Manipur University, and that he was confirmed as Assistant Professor in the employment of the 274 Jawaharlal Nehru University in its Imphal Centre and was entitled to continue in service until he attained the age of 60 years.
In appeal, the Division Bench upheld the view that the services of the respondent could not stand automatically transferred with the transfer of the Centre at Imphal, from the Jawaharlal Nehru University to the Manipur University.
Dismissing the appeal, this Court, HELD: (1) The Centre of Post graduate Studies was set up at Imphal as an activity of the appellant Jawaharlal Nehru University.
To give expression to that activity, the Univer sity set up and organised the Centre at Imphal and appointed teaching and administrative staff to man it.
Since the Centre represented an activity of the University the teach ing and administrative staff must be understood as employees of the University.
[279H; 280A] (2) The contract of service entered into by the respond ent was a contract with the appellant University and no law can convert that contract into a contract between the re spondent and the Manipur University without automatically making it, either expressly or by necessary implication, subject to the respondent 's consent, notwithstanding any statutory provision to that effect whether in the Manipur University Act or otherwise.
The position of law is clear that no employee can be transferred, without his consent, from one employer to another.
The consent may be express or implied.
[280B C, E] (3) The transfer of the Centre of Post graduate Studies to the Manipur University may be regarded as resulting in the abolition of the post held by the respondent in the appellant University.
In that event, if the post held by the respondent is regarded as one of a number of posts in a group, the principle "last come, first go" will apply, and someone junior to the respondent must go.
If the post held by him constitutes a class by itself, it is possible to say that he is surplus to the requirements of the appellant University and is liable to be retrenched.
Since.
however, the respondent has been adjusted against a suitable post in the appellant University during the pendency of the litiga tion, the appellant cannot be permitted to retrench him.
[280F H; 281A]
|
Appeal No. 756 of 1964.
Appeal from the judgment and decree dated November 19, 1957 of the Patna High Court in Appeal from Original Decree No. 258 of 1848.
Sarjoo Prasad, D. P. Singh, R. K. Garg, section C. Agarwal and M.K Ramamurthi, for the appellants.
D. Goburdhun, for the respondent.
The Judgment of the Court was delivered by Shah J.
This appeal with certificate under article 133 (1)(a) of the Constitution arises out of suit No. 17 of 1942 of the file of Subordinate Judge, Purnea, filed by Bijendra Narain son of Ishwari Narain against Mode Narain, Hari Narain and Rajballav Narain, sons of Bidya Narain, and others for a decree for partition and separate possession of a half share in the properties described in schedules A, B & C to the plaint.
The suit was decreed by the 95 Trial Court and in appeal to the High Court of Judicature at Patna the decree was confirmed with a slight modification.
The defendants in the suit have appealed to this Court.
One Mankishun had four sons: Talebar, Indra Narain, Chandra Narain and Shyam Narain.
Talebar had two sons Hanuman and Raghu Nandan.
Hanuman died leaving him surviving no lineal descendant and Raghu Nandan adopted Udit Narain grandson of his uncle Shyam Narain.
In 1923 Udit Narain and the sons of Shyam Narain instituted suit No. 27 of 1923 in the court of the Subordinate Judge, Purnea, impleading as defendants the descendants of Indra Narain and Chandra Narain as parties thereto for partition and separate possession of a half share in the properties of the joint family.
Bijendra Narain, son of Ishwari Narain who was at the date of the suit a minor was impleaded as the 8th defendant, by his guardian ad litem Bidya Narain his uncle, who was impleaded as the 4th defendant, Mode Narain, Hari Narain and Rajballav Narain, sons of Bidya Narain, were impleaded as defendants 5, 6 & 7.
A preliminary decree was passed in the suit on July, 1924 by consent of parties.
By paragraph (a) of the decree the adoption of Udit Narain as a son by Raghu Nandan was admitted and it was agreed that Udit Narain was entitled in the property in suit to a fourth share as adopted son of Raghu Nandan, and a twelfth share as heir of his natural father Shyam Narain.
The decree further provided. " (b) That the parties agree that the family estate is still joint and that the entire family estate except those that have already been partitioned as detailed below in schedule D will be partitioned by metes and bounds (according) to the shares as defined above (c) That the parties agree that a preliminary decree be passed declaring the shares of the parties as follows: Plaint No. 1 Four annas share Plaintiffs Nos.
1 3 One anna four piece share Plaintiffs Nos.
4 & 5 One anna four piece share Plaintiffs Nos.
6, 7 & 8 One anna four piece share Defendants I & 2 Two annas share Defendant No. 3 Two annas share Defendants Nos.
4, 5, 6 & 8 Two annas share Defendant No. 8 Two annas share (1) That the parties agree that at the time of partition by the arbitrators one allotment should be made for defendants Nos. 1 to 3 's four annas share, and one allotment should be made for defendants 4 to 8 's four annas share, i.e. three allotments will be made as aforesaid.
" 96 Then followed schedules setting out detailed descriptions of the properties.
A decree final was made on February 15, 1937 and the properties of the family were divided in three lots: the first lot representing an eight anna share of Udit Narain and the sons of Shyam Narain, the second representing a four anna share of the branch of Indra Narain, and the third a four anna share of defendants 4 to 8 of the branch of Chandra Narain.
Bijendra Narain attained the age of majority in 1934, and on July 10, 1942 commenced the present action for partition of a half share in the properties which were in the possession of Bidya Narain, his sons and grandsons alleging that he, Bijendra Narain came to learn in 1938 that taking advantage of his minority and inexperience his uncle Bidya Narain and the sons of Bidya Narain had purchased in their own names many properties with the aid of joint family funds and had acquired certain other properties in the name of Bashisht Narain (twentyfourth defendant in the suit), who was daughter 's son of Bidya Narain that in September, 1941 certain respectable residents of the village consented to lend their good offices to settle the dispute and to act as panchas, that at the meeting before the panchas, Bidya Narain and his sons admitted that the properties held by them including the properties acquired in their names and of Bashisht Narain were joint family estates, but they later demurred to give to the plaintiff a separate share, and hence the suit.
Sons of Bidya Narain and Bashishta Narain were the principal contesting defendants.
They submitted 'that by the decree in suit No. 27 of 1923 the joint family status between the plaintiff Bijendra Narain and Bidya Narain had come to an end, that since the decree passed in the earlier suit the parties had been holding the properties as tenants in common and not as joint tenants, that the members of the branch of Bidhya Narain were living and carrying on their business separately, and the share of the plaintiff Bijendra Narain was looked after and managed by his mother and his maternal uncle Rudra Narain, that the private properties, of the plaintiff Bijendra Narain and the defendants had also been ascertained by the compromise petition in suit No. 27 of 1923, that the defendants had been in exclusive possession of the properties purchased in their names since the date of acquisition, and that the plaintiff Bijendra Narain was never in possession of those properties.
Bashisht Narain the 24th defendant submitted that the properties purchased in his name were obtained with the aid of his own funds and that he had "no concern with the other defendants".
The trial Judge held that by the decree in suit No. 27 of 1923 there was no severance of status between the plaintiff Bijendra Narain on the one hand and Bidya Narain and his sons on the other and that the properties in suit had at all material times 97 remained joint and Bijendra Narain was on that account entitled to a decree for partition and separate possession of a half share in the immovable properties in Sch.
In regard to the movable properties described in Sch.
B to the plaint, the learned Judge directed that the Commissioner appointed by the Court do ascertain the properties and divide the same in equal shares and do award one half to the plaintiff Bijendra Narain and the other half to the defendants.
The learned Judge negatived the contention of the 24th defendant that the properties in his possession did not belong to the joint family.
He directed that an account be taken of the assets and liabilities of the family since the date of demand for partition by the plaintiff Bijendra Narain in 1941.
In appeal, the High Court agreed with the view of the Trial Court on all the questions in dispute, and confirmed the decree, subject to a modification about the direction for determination of movable properties described in Sch.
B and ordered that the case be remanded for determining the existence or otherwise of the properties mentioned in Sch.
B. It is common ground that the estate held by the four sons of Man Kishun was till the date of institution of suit No. 27 of 1923 joint family estate.
By the institution of the suit there was undoubtedly severance of status between the plaintiffs of that suit on the one hand and the defendants on the other, but counsel for the appellants contended that by the specification of shares in the preliminary decree, there was severance of status not only between the descendants of Indra Narain and the descendants of Chandra Narain but also between Bijendra Narain plaintiff in this suit and Bidya Narain.
In support of this plea he relied upon specification in the decree of the share of Bijendra Narain.
On behalf of Bijendra Narain it is contended that by this mode of specification of shares there was no severance of the joint family status, since the terms of cl.
(1) of the decree clearly provided that the division of the property was to be made in three shares one for the plaintiffs in suit No. 27 of 1923, another for the descendants of Indra Narain, and the third for the descendants of Chandra Narain.
In a Hindu undivided family governed by the Mitakshara law, no individual member of that family, while it remains un divided, can predicate that he has a certain definite share in the property of the family.
The rights of the coparceners are defined when there is partition.
Partition consists in defining the shares of the coparceners in the joint property; actual division of the property by metes and bounds is not necessary to constitute partition.
Once the shares are defined, whether by agreement between the parties or otherwise, partition is complete.
The parties may thereafter choose to divide the property by metes and bounds, or may continue to live together and enjoy the property in common 98 as before.
If they live together, the mode of enjoyment alone remains joint, but not the tenure of the property.
Partition may ordinarily be effected by institution of a suit, by submitting the dispute as to division of the properties to arbitrator 's, by a demand for a share in the properties, or by conduct which evinces an intention to sever the joint family: it may also be effected by agreement to divide the property.
But in each case the conduct must evidence unequivocally intention to sever the joint family status.
Merely because one member of a family severs his relation, there is no presumption that there is severance between the other members; the question whether there is severance between the other members is one of fact to be determined on a review of all the attendant circumstances.
In the present case, Udit Narain, adopted son of Raghu Nandan and the sons of Shyam Narain claimed collectively a half share in the property of the joint family and instituted a suit for that purpose.
By that demand, there was severance between the branches of Talebar, and Shyam Narain from the joint family and because of the specification of shares, and a direction of allotment of shares in separate lots to the descendants of Indra Narain and Chandra Narain, severance between those two branches may also be inferred, But severance between the members of the branches inter se may not in the absence of expression of unequivocal intention be inferred.
There is no evidence of expression of any such intention by Bidya Narain and his sons to divide themselves from Bijendra Narain: they made no such claim in the suit.
It is true that a compromise preliminary decree was passed in the suit.
But Bijendra Narain was a minor at the date of that decree and was represented in the suit by his uncle Bidya Narain.
There could evidently be no agreement between Bidya Narain acting in his own personal capacity and acting as a guardian ad litem of Bijendra Narain to sever the joint family status.
Specification by the decree of the shares of Bidya Narain and his sons on the one hand and of Bijendra Narain on the other, does not by itself constitute severance of Bidya Narain and his sons from Bijendra Narain.
The specification of shares must be read in the context of cl.
(1) of the decree which directed division of the estate in three lots only.
The Judicial Committee of the Privy Council observed in Palani Ammal vs Muthuvenkatacharla Moniagar & others(1) that: "In coming to a conclusion that the members of a Mitakshara joint family have or have not separated, there are some principles of law which should be borne in mind when the fact of a separation is denied.
A Mitakshara (1) L.R. 52 I. A. 83.
99 family is presumed in law to be a joint family until it is proved that the members have separated.
That the coparceners in a joint family can by agreement amongst themselves separate and cease to be a joint family, and on separation are entitled to partition the joint family property amongst themselves, is now well established law.
But the mere fact that the shares of the coparceners have been ascertained does not by itself necessarily lead to an inference that the family had separated.
There may be reasons other than a contemplated immediate separation for ascertaining what the shares of the coparceners on a separation would be.
" Counsel for the appellants submitted that the last two observations made by the Judicial Committee were unnecessary for the purpose of the decision of the case and did not correctly state the law.
Whether the observations were strictly germane to the decision of the case before the Judicial Committee is immaterial, since in our judgment they enunciate a correct statement of the law relating to the principles to be borne in mind in determining when the fact of severance is denied.
It is from the intention to sever followed by conduct which seeks to effectuate that intention, that partition results; mere specification of shares without evidence of intention to sever does not result in partition.
By cl.
(c) of the preliminary decree the shares of the various parties were specified, but by cl.
(1) a division by metes and bounds was directed between the branches of Telebar and Shyam Narain on the one hand, of Indra Narain on the second and Chandra Narain on the third.
Clause (1) did not evidence an intention to bring about severance between the members of the four branches; it is inconsistent with such intention.
Certain other pieces of evidence on which reliance was placed by counsel for the appellants in support of his claim that there was under the preliminary decree severance of the joint family status may also be referred to.
Girdhar Narain, 'grandson of Indra Narain was appointed, in suit No. 27 of 1923, receiver of the properties and he continued to hold that office till 1936.
Girdhar Narain said that he was maintaining accounts during the period of his management as receiver, and that out of the surplus which remained with him he paid to Bijendra Narain in 1944 Rs. 1,500 for his two anna share.
It was claimed that this was strong evidence indicating that Bijendra Narain 's share was not only specified but was also separated from that of Bidya Narain and his sons.
It is difficult to believe that a receiver of property could be discharged before he submitted his accounts and handed into court the collections made by him, and that Girdhar Narain was permitted to retain the surplus collections with him for eight 100 years after he ceased to be the receiver of the estate.
But assuming that the statement was true, the circumstance that he paid the plaintiff Bijendra Narain a share in the surplus collections equivalent to his share in the joint family property, after this suit was instituted in 1942, does not evidence severance by the preliminary decree in suit No. 27 of 1923.
Reliance was also placed upon certain recitals in Ext. 29 (c)a certified copy of the preliminary decree in suit No. 27 of 1923 produced by the appellants.
Under the heading "Bithnouli Khemchand Khewat Several Khasra Nos. are set out in the remarks column there is a recital "purchased from Ajab Lall Jha and others by virtue of Kewala" dated the 23rd Phagun 1329 M.S. in the name of Mode Narain Chaudhry.
Properties purchased in the name of defendants Nos. 5 and 6, are their private and separate properties.
The rest of properties are held by each of the defendants 4 to 8 in equal shares.
" It was urged that this recital also evidenced severance between Bijendra Narain and Bidya Narain of the joint family status by the preliminary decree.
But the trial court held that the recital commencing from "Properties purchased" to equal shares is an interpolation and with that view the High Court agreed.
It appears that there are several certified copies of the preliminary decree on the record, and in some of these certified copies the recital on which reliance was placed is not found incorporated.
The Trial Court on a review of the evidence came to the conclusion that this recital which is said to be made in the handwriting of Mode Narain who is a party to this litigation could not be relied upon since it was not found in the certified copies of the same decree furnished on earlier occasions.
Before the Trial Court, it appears Exts.
29 & 29(b) the certified copies of the same decree Ext.
29 obtained by Narendra Narayan Chaoudhary (defendant No. 12.
in the suit) Ext.
29(b) obtained by the Darbhanga Raj on September 19, 1934 and May 24, 1940 respectively, were produced, and they did not contain the recital.
It is true that there are certain omissions in the certified copy exhibit 29(b) obtained by the Darbhanga Raj.
That may be an infirmity in that certified copy, but Ext. 29 (at least in the parts which arc material on the point under consideration) appears to be a complete copy.
No explanation was sought to be given before the Trial Court and the High Court as to why the portion relied upon was not found in Ext.
It is admitted that the recital relied upon is in the handwriting of Mode Narain, and Mode Narain has not chosen to enter the witness box and to explain the circumstances in which that writing was made.
It was urged by counsel for the appellants that the plaintiff should have pleaded in the plaint that the certified copy of the decree which incorporated the recital relied upon by the appellants was a fabrication, and since no such plea was raised, the appellants were prejudiced by trial of that question.
It was the case of Bijendra 101 Narain, the plaintiff, that the came to know after the plaint was filed that there had been interpolations in the original decree.
This he claimed to have learnt when he obtained a certified copy on October 5, 1942, after the suit was filed.
In any event, we are unable to agree with counsel for the appellants that where the plaintiff sets up a case that a document relied upon by the defendants in support of their case is a fabrication, it is necessary for him either by his original plaint or by amendment therein to formally plead that the document is a fabrication and that unless he does so he is not entitled to ask the Court to try that plea.
The Trial Court had to try the issue of severance of the joint family status by the decree in suit No. 27 of 1923.
Whether partition had taken place had to be determined on evidence produced at the trial.
Whether evidence in support of a party 's case is reliable may be raised by the other party without incorporating the contention relating thereto in his pleading.
If the rule suggested by counsel for the appellants were to be followed, trial of suits would be highly inconvenient, if not impossible, because at every stage where a party contends that the evidence relied upon by the other side is unreliable he would in the first instance be required to amend his pleading and to set up that case.
The Code of Civil Procedure does not contemplate any such procedure and in practice it would, if insisted upon, be extremely cumbersome and would lead to great delay and in some cases to serious injustice.
The Trial Court, as we have already observed, on a consideration of the entire evidence and the subsequent conduct of the parties came to the conclusion that there was no severance of Bijendra Narain from his uncle Bidya Narain and with that view the High Court agreed.
It is true that the High Court did not enter upon a reappraisal of the evidence, but it generally approved of the reasons adduced by the Trial Court in support of its conclusion.
We are unable to hold that the learned Judges of the High Court did not, as is contended before us, consider the evidence.
It is not the duty of the appellate court when it agrees with the view of the Trial Court on the evidence either to restate the effect of the evidence or to reiterate the reasons given by the Trial Court.
Expression of general agreement with reasons given by the Court decision of which is under appeal would ordinarily suffice.
We may advert to the issue whether the properties which stood in the name of the 24th defendant belonged to the joint family of the parties.
As found by the Court of First Instance and affirmed by the High Court many items of property were acquired in the name of the twentyfourth defendant by Bidya Narain.
Some of these properties were acquired by purchases at court auctions.
The Trial Court has held that these properties were acquired with the aid of joint family funds by Bidya Narain and his sons, and with that view the High Court agreed.
Counsel for the appellants concedes 102 that on the findings recorded by the High Court, in the properties which were acquired by private treaty the plaintiff Bijendra Narain has established his claim to a share, but he contends that a share in the properties which had been purchased at court auctions cannot be given to Bijendra Narain because of section 66 of the Code of Civil Procedure.
Section 66(1) of the Code of Civil Procedure provides: "No suit shall be maintained against any person claiming title under a purchase certified by the Court in such manner as may be prescribed on the ground that the purchase was made on behalf of the plaintiff or on behalf of some one through whom the plaintiff claims." Transactions which are called 'benami ' rea lawful and are not prohibited.
When it is alleged that a person in whose name the property is purchased or entered in the public record is not the real owner, the Court may, if the claim is proved, grant relief upholding the claim of the real owner.
But section 66(1) seeks to oust the jurisdiction of the Court to give effect to real as against benami title.
The object of the clause is to prevent claims before the civil court that the certified purchaser purchased the property benami for another person.
Thereby the jurisdiction of the civil court to give effect to the real as against the nominal title is restricted and the section must be strictly construed.
Where a person alleges that a property purchased at a court auction was purchased on his behalf or on behalf of some one through whom he claims, the suit is clearly barred.
But the suit filed by Bijendra Narain is not of that nature.
By paragraph 13 of the plaint it was averred that "the defendant No. I and his brothers and their father admitted before the panchas that all the properties held by the parties (the group of the plaintiff and the defendants 1st party) including those acquired in the names of the defendants 1,3,6 and Bidya Narain Choudhary as also those acquired in the name of the defendant 24, who is the son of the sister of the defendants 1,2 and 6, were the joint properties of the plaintiff and themselves, and they also admitted that the plaintiff 's share in all the properties was half and it was suggested that a fist of all the joint properties should be drawn up for the purpose of partition and accounts and it should be looked", and by paragraph 19 the plaintiff Bijendra Narain claimed a share in the properties including the properties standing in the name of the 24th defendant.
It was not alleged by Bijendra Narain that any property was purchased by the 24th defendant on his behalf or on behalf of another person through whom he, Bijendra Narain claimed.
Bijendra Narain claimed that all properties standing in the name of Bidya Narain and his sons and also of Hashistha Narain (dependent No. 24) were joint family properties, and that properties were acquired in the name of the 24th defendant by Bidya Narain and his sons with 103 a view to defeat his claim.
He did not set up the case that the 24th defendant acquired the properties for him, nor did he plead that the properties were acquired for some person through whom he was claiming.
His claim was that the properties belonged to the joint family, because they were purchased by Bidya Narain and his sons with the aid of joint family funds in the name of the 24th defendant.
Such a claim does not fall within the terms of section 66(1).
The judg ment of this court Addanki Venkatasubbaiah vs Chilakamarthi Kotaiah(1) does not assist the case of the appellants.
The decision of the case turned on the true interpretation of section 66(2).
It was found in Addanki Venkatasubbaiah 's case by the Trial Court and by a single Judge of the High Court of Madras that the property in dispute was purchased at a court auction by the defendant as agent for the plaintiff and with the funds belonging to the plaintiff, but it was purchased in the defendant 's name without the consent of the plaintiff 's father who was the real purchaser.
The case fell squarely within the terms of sub section
(2) of section 66.
A Full Bench of the High Court of Madras on a reference made in an appeal under the Letters Patent held that such a suit was not maintainable.
This Court pointed out that on the facts proved, there was no doubt that the auction purchaser had acted as agent of the plaintiff and had taken advantage of the fact that the plaintiff 's mother placed confidence in him and had entrusted to him the management of the plaintiff 's estate and the suit could not be dismissed under section 66(1), for it was expressly covered by the terms of section 66(2) which provides that nothing in sub section
(1) shall bar a suit to obtain a declaration that the name of any purchaser certified as mentioned in cl.
(1) was inserted in the certificate fraudulently or without the consent of the real purchaser.
The contention raised by the appellants must therefore fail.
Finally, it was urged that since defendants Mode Narain and Rajballav Narain had died during the pendency of the proceedings,, the High Court was incompetent to pass a decree for account against their estates.
Rajballav who was defendant No. 6 died during the pendency of the suit in the Trial Court and Mode Narain who was, defendant No. 1 in the suit died during the pendency of the appeal in the High Court.
But a claim for rendition of account is not a personal claim.
It is not extinguished because the party who claims an account, or the party who is called upon to account dies.
The maxim "actio personalis moritur cum persona" a personal action dies with the person has a limited application.
It operates in a limited class of actions ex delicto such as actions for damages for defamation, assault or other personal injuries not causing the death of the party, and in other actions where after the death of the party the relief granted could not be enjoyed or granting it would be nugatory.
An action for account is not an action for damages, (1) C.A. No. 120 of 1964 decided on August 12, 1965.
104 ex delicto, and does not fall within the enumerated classes.
Nor is it such that the relief claimed being personal could not be enjoyed after death, or granting it would be nugatory.
Death of the person liable to render an account for property received by him does not therefore affect the liability of his estate.
It may be noticed that this question was not raised in the Trial Court and in the High Court.
It was merely contended that because the plaintiff Bijendra Narain was receiving income of the lands of his share no decree for accounts could be made.
The High Court rejected the contention that no account would be directed in favour of the plaintiff on that account.
They pointed out that the mere fact that the plaintiff was in possession of some portion of properties of the joint family since 1941 cannot possibly absolve the defendants, who were in charge of the management of the properties, from rendering accounts of their dealings with the joint family estate.
The plaintiff was since September 1941 severed from the joint family in estate and also in mess and residence, and he was entitled to claim an account from the defendants from September 1941, but not for past dealings.
The fact that the plaintiff is in possession of some of the properties will, of course, have to be taken into account in finally adjusting the account.
The appeal fails and is dismissed with costs.
G.C. Appeal dismissed.
| The appellant 's mother executed a gift deed in favour of the appellant claiming that she inherited the property in 1920 on the death of her husband, who had inherited it from her father in law.
The respondents claiming title to the property filed a suit challenging the gift deed on the ground that the father in law of the donor (mother) had survived the husband and therefore she could not have inherited the property under the Hindu Law as then prevailing.
For this purpose the respondents relied upon a statement, that the father in law had survived the husband, made by the donor in a mortgage suit in 1925, to establish her case.
When this statement was made there was no dispute in the faimly.
On the questions whether, (i) this statement in the mortgage suit was admissible in evidence and (ii) the statement made by the donor in the gift deed was admissible to contradict the statement she made in the mortgage suit, HELD : (i) This statement in the mortgage suit, which was against proprietary interest of the mother would be admisible in evidence under section 32(3) of the Evidence Act, as she was dead.
It could not be an admission.
so far the appellant was concerned, butit would certainly be a piece of evidence to be taken into consideration, The admissibility of statements under s.32 (3) of the Evidence Act does not arise unless the party knows the statementto be against his interest.
But the question whether the statement was made consciously with the knowledge that it was against the interest of the person making it would be a question of fact in each case and would depend in most cases on the circumstances in which the statement was made.
[158 F G; 159 A B] Srimati Savitri Debi
Raman Bijoy, L.R. (1949) LXXVI I.A. 255,Tucker vs Oldburry UrbanDistrict Council, L.R. [19121 2 K.B. 317 and Ward vs H. section Pitt , relied on.
The statement in question was made by the mother consciously and not at the instance of any one and she must, in the circumstances of the case, be presumed to know that the statement was against her proprietary interest, for thereby she became the widow of the predeceased son of her father in law.
[159 G] (ii) Assuming that the statements in the gift dead would be admissible under section 158 of the Evidence Act the statement made in the mortgage suit in 1925 carries greater weight as it was made at a time when there was no dispute in the family.
[160 E F]
|
Appeal No. 535 of 1958.
Appeal from the judgment and order dated March 29,1955, of the Assam High Court in I.T.R. No. 1 of 1954.
A.V. Viswanatha Sastri and D. N. Mukherjee, for the appellants.
Hardayal Hardy and D. Gupta for the respondent.
March 13.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
This appeal which has been filed with a certificate under section 66(A)(2) granted by the High Court of Assam against its judgment and order dated March 29, 1955, concerns the assessment of the appellants, a Hindu undivided family, for the assessment years, 1945 1946 and 1946 1947.
The appellants owned a tea garden called the Sewpur Tea Estate in Assam.
They had on the Estate, factories, labour quarters, staff quarters etc.
On February 27, 1942, the Military authorities requisitioned all the factory buildings, etc., under R. 79 of the Defence of India Rules.
Possession was taken sometime between March land March 8, 1942.
The tea garden was, however, left in the possession of the appellants.
The possession of the military continued till the year 1945, and though the appellants looked after their tea garden the manufacture of tea was completely stopped.
Under the Defence of India Rules, the Military authorities paid compensation.
For the year 1944, corresponding to the assessment year, 1945 1946, they paid a total sum of Rs. 2,22,080 as compensation including a sum of Rs. 10,000 for repairs to quarters for labourers and Rs. 144 which represented the assessor 's fee.
For the year 1945, corresponding to the assessment year, 1946 1947, the Military authorities paid a sum of Rs. 2,46,794 which included a sum of Rs. 15,231 for other repairs.
The sums paid for repairs appear to have been admitted as paid on capital account, and rightly so.
The question was whether the two Sums paid in the two 259 years minus these admitted sums, or any portion thereof, were received on revenue or capital account.
The assessments for the two years were made by different Income tax Officers.
For the assessment year, 1945 1946, the Income tax Officer deducted from Rs. 2,22,080, a sum of Rs. 1,05,000 on account of admissible expenses.
He then applied to the balance Rs. 1,17,080, R. 24 of the Indian Income tax Rules, 1922, and brought to tax 40 per cent of that sum amounting to Rs. 46,832.
The assessment was made under section 23(4).
For the assessment year, 1946 1947, the assessment was made under section 23(3) of the Incometax Act.
The Income tax Officer excluded the sum paid on account of repairs and treated the whole of the amount as income taxable under the provisions of the Income tax Act, after deduction of admissible expenditure.
The appeals filed by the appellants to the Appellate Assistant Commissioner against both the assessments were unsuccessful.
On further appeal, the Income tax Appellate Tribunal (Calcutta Bench) was divided in its opinion.
The Judicial Member held that the receipts represented revenue but on account of "use and occupation" of the premises requisitioned.
He, therefore, computed the not compensation attributable to such use and occupation at 20 per cent of the total receipts in both the years.
He however, observed that if the receipts included income from the tea estate he would have been inclined to apply R. 24 in the same way as the first Income tax Officer.
The Accountant Member was of the opinion that the appellants were liable to pay tax on 40 per cent of their receipts in both the years after deduction of the sums paid for repairs of buildings and the admissible expenditure.
He accepted the estimate of expenditure for the account year, 1944,.
at RE;. 1,05,000, and directed that the admissible expenditure for the succeeding year be determined and deducted before the application of R. 24.
It appears that through some inadvertence these two orders which were not unanimous, were sent to the appellants and the Department.
The Commissioner of Income tax filed an application under section 66(1) for a 260 reference, while the appellants filed an application under section 35 for rectification of the orders, since many other matters in appeal were not considered at all.
When these two applications came before the Tribunal, it was realised that the matter had to go to a third Member for settling the difference.
The President then heard the appeal, and agreed with the Accountant Member.
Though he expressed a doubt whether the appellants were entitled to the benefit of rr. 23 and 24, he did not give an opinion, because this point was not referred to him.
The Tribunal then referred the case to the High Court of Assam on the following two questions: "(1).
Whether the sums of Rs. 2,12,080 and RE;. 2 31,563 paid by the Government to the assessee in 1945 and 1946 respectively (exclusive of the sums paid specifically for building repairs) were revenue receipts in the hands of the assessee comprising any element of income? (2).
If so, whether the whole of the said sums less the expenses incurred by the assessee in tending the tea bushes constituted agricultural income in his hands exempt from tax under the Indian Income tax Act, 1922?" The reference was heard by Sarjoo Prasad, C.J., and Ram Labhaya, J., along with two writ petitions, which had also been filed.
They delivered separate judgments, but concurred in their answers.
The High Court answered both the questions against the appellants.
The writ petitions were also dismissed.
Before we deal with this appeal, we consider it necessary to state at this stage the method of calculation of compensation adopted by the Military authorities.
It is not necessary to refer to both the years, because what was done in the first year was also done in the following year except for the change in the amounts.
This method of calculation is taken from the order of the Judicial Member, and is as follows: 261 Rs. A. P. Crop 211120 1bs.
at 17.85d (half) and at 18.35d (half) 2,12,292 14 0 15480 1bs.
at Rs. 0 11 10 11, 449 12 0 52600 1bs.
at Rs. 0 15 6 50,956 4 0 2,74, 698 14 0 Less Saving of plucking and manufacturing: Rs. (a) Expenses at annas 3 per lb.
49,209 (b) Sale of export rights, 1,32,935 1bs.
4,924 (c) Purchase of export rights 78,185 lbs.
at annas 4.
1,629 (d) Food and clothing concessions 7,000 62,762 0 0 2,11,9360 0 Add For fees of assessors, Rs. 144 Coolie lines repairs, Rs. 10,000 10,1440 0 Rs. 2,22,08000 From the admitted facts which have been summarised above, it is clear that the business of the appellants as tea growers and tea manufacturers had come to a stop.
The word "business" is not defined exhaustively in the Income tax Act, but it has been held both by this Court and the Judicial Committee to denote an activity with the object of earning profit.
To say that a business is being carried on, means no more than that profit is to be earned by a process of production.
The business of a tea grower and manu facturer is not merely to grow tea plants but to collect tea leaves and render them fit for sale.
During the years in question, the appellants were tending their tea garden to preserve the plants, but this activity cannot be described as a continuation of the business, 262 which had come to an end for the time being.
It would have hardly made any difference to the carrying on of business, if, instead of the factories and buildings, the tea garden was requisitioned and occupied, because in that event also, the business Would have come to a standstill.
The compensation which was paid in the two years was no doubt paid as an equivalent of the likely profits in those years; but, as pointed out by Lord Buckmaster in The Glenboig Union Fireclay Co. Ltd. vs The Commissioners of Inland Revenue (1) and affirmed by Lord Macmillan in Van Den Berghs Ltd. vs Clark (2), "there is no relation between the measure that is used for the purpose of calculating a particular result and the quality of the figure that is arrived at by means of the application of that test".
This proposition is as sound as it is well expressed, and has been followed in numerous cases under the Indian Income tax Act and also by this Court.
It is the quality of the payment that is decisive 1 of the character of the payment and not the method of the payment or its measure '.
and makes it fall within capital or revenue.
We are thus required to determine what was it that was paid for, or, in other words, what did the two payments replace, if they replaced anything.
The arguments at the Bar followed the pattern which has by now become quite familiar to Courts.
We were taken to the 12th Volume of the Tax Cases series, where are collected case,% dealing with Excess Profits Duty and Corporation Profits Tax in England follow ing the First World War, and to, other English case, , reported since.
These cases have been considered and applied on more than one occasion by this Court, and we were referred to those cases as well.
Now, it is necessary to point out that the English cases were decided under a different system of taxation and must be read with care.
A case can only be decided on its own facts, and the desire to base one 's decision on another case in which the facts appear to be near enough sometimes leads to error.
It is well to (1) (2) ; 263 remember the wholesome advice given by Lord Dunedin in Green vs Gliksten & Son Ltd. (1) that "in these Income Tax Act cases one has to try, as far as possible, to tread a narrow path, because there are quagmires on either side into which one can easily be led. . " The English cases to which we were referred, were used even in England by Lord Macmillan in Van Den Berghs ' case (2) as mere illustrations, and when cited before the Judicial Committee in Income Tax Commissioner vs Shaw Wallace & Co.(3) were put aside by Sir George Lowndes with this observation "their Lordships would discard altogether the case law which has been so painfully evolved in the construction of the English income tax statutes both the cases upon which the High Court relied and the flood of other decisions which has been let loose in this Board".
Most of the cases cited before us deal with Excess Profits Duty and Corporation Profits Tax.
In the former group, pre war profits had to be determined, so that they might be Compared with post war business for the purpose of arriving at the excess profits, if any.
In dealing with the pre war profits, diverse receipts were considered from the angle whether they formed capital or revenue items.
The observations which have been made are sometimes appropriate to the nature of the business to which the case related and the quality of the payment in relation to that business.
Similarly, the Corporation Profits Tax was a tax intended to be imposed upon the profits of British Companies (which included some other corporate bodies ' carrying on trade or business including the ' business of investments.
The profits which were taxed under section 52 of the English, Finance Act were required to be determind according to the principles laid down in that Act.
It is thus obvious that though the English cases may be of some help in an indirect way by focussing one 's attention on what is to be regarded as relevant (1) 384 (2) ; (3) (1932) L.R 59 J.A. 206.
264 and what rejected, they cannot be regarded in any sense as precedents to follow.
Since this Court on other occasions used these cases as an aid, we shall refer to them briefly; but we have found it necessary to sound a warning, because the citation of these authorities has occasionally outrun their immediate utility.
We begin with the oft cited case of The Glenboig Union Fireclay Co. Ltd. (1).
That was a case under the Excess Profits Duty.
The facts are so well known that we need not linger over them.
A seam of fireclay could not be worked, and compensation was paid for it.
That the clay was capital asset was indisputable, and the portion lost was a slice of capital.
The hole made in the capital was filled up by the compensation paid.
It was said that a portion of the capital asset was sterilized and destroyed, and even though the business went on, the payment was treated as on capital account.
The case cannot be used as precedent, because here, no doubt, the factories and buildings were apart of fixed capital, but the payment was not so much to replace them in the hands of the appellants as to compensate them for the stoppage of business.
The Glenboig case (1) does not apply.
The case of Short Bros. Ltd. vs The Commissioners of Inland Revenue (2), another case under the Excess Profits Duty, illustrates a contrary principle.
The Company had agreed to build two ship;, 'but the contracts were cancelled and E. 100,000 were paid for cancellation of the contracts.
This was held to be a receipt in the ordinary course of the Company 's trade.
Rowlatt, J., said that it was "simply a receipt, in the course of a going business, from that going business nothing else".
In the Court of Appeal, Lord Hanworth, M.R., affirmed the decision, observing: "Looked at from this (business) point of view it appears clear that the sum received was received in ordinary course of business, and that there was not in fact any burden cast upon the company not to carry on their trade.
It was not truly compensation (1) (2) 265 for not carrying on their business; it was a sum paid in ordinary course in order to adjust the relation between the shipyard and their customers.
" The payment was by a customer to the shipyard.
Whether the amount was paid for ships built or because the contract was cancelled, it was a business receipt and in the course of the business.
In the present case, the payment is not of this character, and Short Bros. case (1) does not apply.
The next case also of Excess Profits Duty is The Commissioners of Inland Revenue vs Newcastle, Breweries, Ltd. (2).
In that case, the admiralty took over one third stock of rum of the Brewery, and paid to the Company the cost plus 1 section per proof gallon.
Later, the compensation was increased by an amount of E. 5,309 and was brought to tax in the earlier year, when the original compensation was paid.
The observations of Rowlatt, J., though made to distinguish the case from one in which the compensation is paid for destruction of business, are instructive.
We shall refer to them later.
The learned Judge held that this was a case of compulsory sale of rum, and that a compulsory sale was also a sale.
The receipt was held to be a profit.
The decision was affirmed by the Court of Appeal.
This case also, so far as its facts go, was very different, and the actual decision has no relevance.
The Commissioners of Inland Revenue, vs The Northfleet Coal and Ballast Co. Ltd. (3) was a case like Short Bros. case (1).
;E. 3,000 in a lump sum were paid to be relieved from a contract, and as the business was a going business, it was held to be profit.
In fact, Short Bros. case (1) was applied.
Ensign Shipping Co. Ltd. V. The, Commissioners of Inland Revenue 4 a case of Excess Profits Duty, is interesting.
During the Coal Strike of 1920, two ships of the Company were ready to sail with cargoes of coal.
They were detained for 15 and 19 days respectively by orders of Government.
In April 1924,pound 1,078/were paid as compensation, and were held to be (1) (3) 34 (2) (4) 266 trading receipts.
Rowlatt, J., laid down that if there was an operation which produced income, it was none the less taxable, because it was a compulsory operation.
The learned Judge then observed that he could not hold that this was a case of hire, like Sutherland vs The Commissioners of Inland Revenue (1), because the ships lay idle and their use was interrupted.
The learned Judge then concluded: "Now it is quite dear that if a source of income is destroyed by the exercise of the paramount right. and compensation is paid for it, that that is not income, although the amount of the compensation is the same sum as the total of the income that has been lost. but in this case I have got to decide the case of a temporary interference.
Here these ships remained as ships of the concern. they merely could not sail for a certain number of days, and in lieu of the value of the use which they would have been to their owners in their profit earning capacity during those days, in lieu of that receipt, this money was paid to the owners, although they were not requisitioned, as if requisitioned.
I think I ought to regard this sum, as the Commissioners have obviously regarded it, as a sum paid which to the shipowners stands in lieu of the receipts of the ship during the time of the interruption.
" This decision was approved by the Court of Appeal.
Now, the case was one of loss of time during which the ships would have been usefully and profitably employed.
It was argued in the Court of Appeal with the assistance of the Glenboig case (2), and it was suggested that the vessels, were `sterilised ' for the period of detention.
Lord Hanworth said that that was rather a metaphorical word to use, and that the correct way was to look at the matter differently.
The Master of the Rolls observed: "But in the present case it seems to me that, looked at from a business point of view, all that has happened is that the two vessels arrived much later at the ports to which they were consigned than they would have done, with the consequent result (1) (2) 267 that for the certain number of days which they were late they could not possibly make any earnings, and it is in respect of that direct loss by reason of the interference with the rights exercised on behalf of His Majesty that they made a claim and have been paid compensations This ruling was strongly relied upon by the Department as one which laid down a principle applicable here.
We do not agree.
The, payment there was made towards loss of profits of a going business, which business was not destroyed.
As a source of income, the business was intact, and the business instead of being worked for the whole period, was worked for a period less by a few days and the profit of that period was made up.
That may be true if one is going to determine standard profits of a particular period, because what is paid goes to profits in the period but is of no significance in a case like the present, where during the whole of the year no business at all was done nor profits made.
This case also does not help to solve the problem.
Charles Brown & Co. vs The Commissioners of Inland Revenue (1) is yet another case of Excess Profits Duty.
In that case, the business of the taxpayer was carried on under the control of the Food Controller from 1917 to 1921, and he was compelled to bay and sell at prices fixed by the Controller .
By agreement a 'mill standard ' was fixed, and the tax.
payer was allowed to retain profits up to that standard, and if there was a shortfall, it was to be made up by the Controller.
This amount which the taxpayer retained together.
with the amount paid towards shortfall was regarded as profits.
The principle applicable is easily discernible.
There can be little doubt that the trade was being carried on, and what was received was rightly treated as profits.
Howlatt, J., observed that this was a clearer case than the Ensign case (2).
The matter was covered by section 38 of the Finance (No. 2) Act of 1915, Fourth Schedule, Part 1(1), where the words were "The profits shall be taken to be the actual profits arising in the accounting period".
(1) (1) 268 In Barr Crombie & Co. Ltd. vs The Commissioners of Inland Revenue (1), the Company 's business consisted almost entirely of managing shipping for another Company.
When the shipping Company went into liquidation, a sum was paid as compensation to the managing Company.
It was held that this was a capital receipt.
The reason for holding thus was that the structure (if the managing Company 's whole business was affected and destroyed, and this was not profit but compensation for loss 'of capital.
Kelsall Parsons & Co. vs The Commissioners of Inland Revenue (2), to which we shall refer presently, was distinguished on the ground that, though in that case the agency was cancelled, the payment was for one year and that too, the final year.
This case is important in one respect, and it is that if the entire business structure is affected and destroyed, the payment may be regarded as replacing capital, which is lost.
These are cases of Excess Profits Duty where profits for a particular period had to be determined and also the character of the payments in relation to the kind of business, to determine whether to treat them as excess profits or not.
In the Glenboig case (1), the payment was not regarded as profit, because it replaced lost capital and so also, in Barr Crombie case(1).
These form the first group.
Short Bros. case Northfleet case (5) and Ensign Shipping CO 's case were of a going business, and what was paid was towards lost profits in a going concern.
These form the second group.
Newcastle Breweries case (7) and Charles Brown and 60 's case (3) were of business actually done and profits therefrom.
None of these rulings is directly in point.
In the case with which we are concerned, the payment was not towards any capital asset to attract the first group, there was no going business so as to attract the second, and nothing was bought nor any business done with the taxpayer to make the third group applicable.
(1) (2) ; (3) (4) (5) (6) (7) (8) 269 We shall next see some cases which involved Corporation Profits Tax.
In The Gloucester Railway Carriage and Wagon Co. Ltd. vs The Commissioners of Inland Revenue(1), the Company was doing business of selling wagons and of hiring them out.
The Company then sold all the wagons which it was using for purposes of hiring.
The receipt was treated as profit of trade, there being but one business and the wagons being the stock in trade of that business.
In Green vs Gliksten & Son Ltd.(2), stocks of timber were destroyed.
Their written down value was pound 160,824 but the Insurance Company paid :E. 477,838.
The Company credited E. 160,824 in its trading account but not the balance.
The House of Lords held that the timber, though burnt, was realised, and that the excess of the sum over the written down book value must be brought into account.
These two cases throw no light upon the problem with which we are faced, and any observations in them are so removed from the facts of this case as to be of no assistance.
The cases under Sch.
D of the Income tax Act like Burmah Steam Ship Co. Ltd. vs The Commissioners of Inland Revenue(3), a case of late delivery of ships sent for overhaul, Greyhound Racing Association (Liverpool) Ltd. vs Cooper(4), which was a case of surrender of an agreement in which the amounts were treated as trading receipts, are not cases of stoppage of a business and are not relevant.
Kelsall Parsons case(5), where one of the agreements of a commission agency which was to run for 3 years was terminated at the end of the second year and compensation of pound 1500/ was paid for the last and final year, was held on its special facts to involve taxable profits of trading.
Though the business came prematurely to an end, the struc ture of the business was not affected because the payment was in lieu of profits in the final year of the business as if business had been done.
The payment was held to be within the structure of the business in the same way as in Shove vs Dura Manufacturing Co. Ltd. (6).
The converse of these cases is the well known (1) (3) (5) ; 270 Van Den Berghs Ltd. vs Clark (1), where mutual trade agreements were rescinded between two Companies and pound 450,000 were paid to the assessee Company as ",damages".
This was treated as capital receipt and not as income receipt to be included in computing the profits of trade under Sch.
D Case 1 of the Income tax Act of 1918.
Lord Macmillan observed: "On the contrary the cancelled agreements related to the whole structure of the appellants ' profitmaking apparatus.
They regulated the appellant 's activities, defined what they might and what they might not do, and affected the whole conduct of their business.
I have difficulty in seeing how money laid out to secure, or money received for the cancellation of, so fundamental an Organisation of a trader 's activities can be regarded as an income disbursement or an income receipt".
We have referred to these cases to show that none of them quite covers the problem before us.
The facts are very dissimilar, and the observations, though attractive, cannot always be used with profit and often not without some danger of error.
We shall now turn to the cases of this Court, which were referred to at the hearing.
The first case of this Court is The Commissioner Income Tax and Excess Profits Tax, Madras vs The, South India Pidures Ltd., Karaikudi (2).
The South India Pictures, Ltd., held distribution rights for 5 years of three films towards the completion of which they had advanced money to a film producing Company, called the Jupiter Pictures.
When the term had partially run out, the agreement for distribution was cancelled, and the South India Pictures, Ltd., received Rs. 26,000/ as commission.
The question was whether this sum was on capital or revenue account.
Das, C. J., and Venkatarama Aiyar, J., held that it was the latter, while Bhagwati, J., held that it was the former.
The learned Chief Justice came to his conclusion on four grounds: (i) that the payment was towards commission which would have been earned; (ii) that it was not the price of any capital (1) ; (2) ; 271 asset sold, surrendered or destroyed; (iii) that the structure of the business, which was a going business, was not affected; and (iv) that the payment was merely an adjustment of the relation between the South India Pictures, Ltd. and the Jupiter Pictures.
The learned Chief Justice thus rested his decision on, Short Bros '(1) and Kelsall Parsons '(2) cases and not upon Van den Berghs (3) or Barr Crombie 's case (4).
Bhagwati, J., who dissented, judged the matter from the angle of business accountancy.
He observed that money advanced to produce the cinema pictures, if returned, would have been credited on the capital side as a return of capital, just as expenditure for distribution work was revenue expenditure and the commission, a revenue receipt.
On a parity of reasoning, the learned Judge held that money spent in acquiring distribution rights was a capital outlay, and that when distribution rights were surrendered, it was capital which was returned, since the agreement was a composite one, the films were a capital asset and the payment for their release was a return of capital.
With due respect, it is difficult to see how the payment could be regarded as capital in that case.
The fact which seems to have been overlooked in the minority view was that the entire capital outlay had, in fact, been previously recouped and even the security held by the South India Pictures had been extinguished.
It was a portion of the running business which ceased to be productive of commission and by the payment, the commission which would have been earned and would have constituted a revenue receipt when so earned, was put in the pockets of the South India Pictures.
The business of the South India Pictures.
was still & going business, one portion of which instead of being fruitful by stages became fruitful all at once.
What was received was still the fruit of business and thus revenue.
The case, though interesting, is difficult to apply '.
in the present context of facts, where no business at all was done and what was received was not the fruit of any business.
(1) (3) ; (2) ; (4) 272 The next case of this Court, Commissioner of Income Tax vs Jairam Valji (1), may be seen.
The assessee there was a contractor, and received Rs. 2,50,000 as compensation for premature termination of a contract.
This was held to be a revenue receipt.
The assessee had many businesses including many contracts, and the receipt was considered as one in the ordinary course of business.
All the English decisions to which we have referred, were examined in search for principles, but the principle on which the decision 'was rested, was that the payment wag an adjustment of the rights under the contract and must be referred to the profits which could be made if the contract had instead been carried out.
The payment not being on account of capital outlay and the assessee not being prevented from carrying on his business, the receipt was held to be revenue, that is to say, related to income from a contract terminated prematurely.
In a sense, the case is analogous to The South India Pictures, Ltd. case which it follows.
In The Commissioner of Income tax, Hyderabad Deccan vs Messrs. Vazir Sultan & Sons (3), the assessee held the sole selling agency and distribution rights of a particular brand of cigarette, in the Hyderabad State on foot of a 2 per cent discount on all business done.
Subsequently, the area outside Hyderabad State was also included on the same terms.
Later still, the area was again reduced to the Hyderabad State.
Rs. 2,19,343 were paid by way of compensation "for loss of territory outside Hyderabad".
Bhagwati, J., and Sinha, J., (as he then was), held that the compensation was on capital account, while Kapur, J., held otherwise.
The reason given by the majority was that the agency agreement was a capital asset and the payment was in lieu of the loss of a portion of the capital asset.
Kapur, J., on the other Wand, held that the loss which was replaced was the loss of agency commission and bore its character.
The case furnishes a difficult test to apply.
If what was adjusted was the relationship between the parties and if (1) [1959] Supp. 1 S.C.R. 110.
(2) ; (3) [1959] SUPP.
2 S.C.R. 375.
273 there was a going business as, in fact, there was, the case comes within the dicta in The South India Pictures Ltd. case (1) and Jairam Valji 's case (2).
The case can only be a decision on the narrow ground that a portion of the 'fixed capital was lost and paid for.
In Godrej & Co. vs Commissioner of Income tax(3) the assessee firm, which held a managing agency, released the managed Company from an onerous agreement and inconsideration,, was paid Rs. 7,50,000.
It was held that the payment was not made to make up the difference in the remuneration of the managing agency firm bat to compensate it for the deterioration or injury of an enduring kind to the managing agency itself.
The injury being thus to a capital asset, the compensation paid was held to be on capital account.
The last case of this Court to which reference may be made is Commissioner of Income tax vs Shamshere Printing Press (4).
That 'was a very special case.
There, the premises of the Press were requisitioned by Government, but the Press was allowed to set up its business elsewhere, the charges for shifting the machines, etc., being paid by Government.
In addition, Government paid a sum claimed as loss of profits, which was expected to bring up the profits to the level of profits while the business was in its old place.
The ' assessee claimed that this sum was paid as compensation for loss of goodwill arising from its old locality.
There was however, nothing to show that the payment was goodwill and it was held that the compensation paid must be regarded as money arising as profits in the course of business.
It was like putting money in the till to bring the profits actually made by the level of normal profits.
All these cases were decided again on their special facts.
Though they involved examination of other decisions in search for the true principles, it cannot be said that they resulted in the discovery of any principle of universal application.
To summarise them: South India Pictures ' case (1) was so decided because (1) ; (2) [1959] SUPP.
1 S.C.R. 110.
(3) [1960] 1 S.C.R. 527.(4) [1960] 39 I.T.R. go.
35 274 the money received was held to be in lieu of commission which would have been earned by the business which was still going, and the receipt was treated as the fruit of the business.
The same reason was given in Jairam Valji 's case (1) and Shamshere Printing Press case (2).
In Vazir Sultan 's case (3), the compensation was held to replace loss of capital, and in Godrej 's case (4), the compensation was said not to have any relation to the likely income or profits but to loss of capital.
Each case was thus decided on its facts.
We have so far shown the true ratio of each case cited before us, and have tried to demonstrate that these cases do no more than stimulate the mind, but none can serve as a precedent, without advertence to its facts.
The nature of the business, or the nature of the outlay or the nature of the receipt in each case was the decisive factor, or there was a combination of these factors.
Each is thus an authority in the setting of its own facts.
Before we deal with the facts of this case and attempt to answer the question on which there is so much to guide but nothing to bind, we will refer to two cases of the Judicial Committee, one of which is Income Tax Commissioner vs Shaw Wallace & Co. (5), to which we have referred in another connection.
In that case, all the authorities prior to 1935 to which we have referred (and some more) were used in aid of arguments; but the Judicial Committee, for reasons which are now illustrated by this judgment, declined to comment on them.
Shaw Wallace and Co., did many businesses, and included in them was the managing agency of two oil producing Companies.
This agency wag terminated, and compensation was paid for it.
The usual question arose about capital or revenue.
The Full Bench of the Calcutta High Court related the payment to goodwill, but the Judicial Committee rejected that ground because no goodwill seemed to have been transferred.
The Judicial Committee also rejected the contention that it was compensation in lieu of notice under section 206, Indian (1) [1959] SUPP.
1 S.C.R. 110.
(3) [1959] SUPP.
2 S.C.R. 375.
(2) (4) [1960] 1 S.C.R. 527.
(5) (1932) L.R. 59 I.A. 206.
275 Contract Act, as there was no basis for it either.
The Judicial Committee held that income meant a periodical monetary return coming in with some sort of regularity or expected regularity from a definite source and in business was the produce of something "loosely spoken of as capital".
In business, income is profit earned by a process of production, or, in other words, by the continuous exercise of an activity.
In this sense, the sum sought to be charged could not be regarded as income.
It was not the product of business but some kind of solatium for not carrying on business and thus, not revenue.
The case is important, inasmuch as this analysis of 'income ' has been accepted by this Court and has been cited with the further remark made in Gopal Saran Narain Singh vs Income Tax Commissioner (1) that the words "profits and gains" used in the Indian Income tax Act do not restrict the meaning of the word "income" and the whole expression is 'income ', writ 'large.
From this case, it follows that the first consideration before, holding a receipt to be profits or gains of business within section 10 of the Indian Income tax Act is to see if there was a business at all of which it could be said to be income.
We shall now take up for consideration the facts of our case and see how far any principle out of the several which have governed earlier cases can be usefully applied.
The assessee was a tea grower and tea.
manufacturer.
His work consisted in growing tea and in preparing leaves by a manufacturing process into a commercial commodity.
The growing of tea plants only furnished the raw material for the business.
Without the factory and the premises, the tea leaves could not be dried, smoked and cured to become tea, as is known commercially, and it could not be packed or sold.
The direct and immediate result of the requisition of the factories was to stop the business.
That the tea was grown or that the plants were tended did not mean that the business was being continued.
It only meant that the source of the raw material was intact but the business was gone.
(1) (1935) L.R. 62 I.A. 207.
276 Now, when the payment was made to compensate the assessee, no doubt the measure was the out turn of tea which would have been manufactured; but that has little relevance.
The assesee was not compensated for loss or destruction of or injury to a capital asset.
the buildings were taken for the time being, but the injury was not So much to the fixed capital as to the business as a whole.
The entire structure of business was affected to such an extent that no business was left or was done in the two years. ' This was not a case where the interruption was caused by the act of a contracting party so that the payment could be regarded as an adjustment of a contract by payment.
It was a case of compulsory requisition, but the requisition did not involve the buying of tea either as raw material or even as a finished product.
If that had been the case, it might have been possible to say that since business was done, though compulsorily, profits had resulted.
It ' was not even a case in which the business continued, and what was paid was to bring up the profits to normal level.
The observations of Rowlatt, J., in Newcastle Breweries case (1) distinguish a case where business is carried on and one in which business comes to an end.
The learned Judge observes: "Now I have no doubt that a Government re quisition, such as took place during the war, could destroy a trade, and anything which was paid would be compensation for such destruction.
I can understand, for instance, if they had requisitioned in this case the people 's building and stopped them either brewing and selling or doing anything else, and paid a sum, that could not be taken as a profit; they would have destroyed the trade pro tempore and paid compensation for that destruction; and in fact I daresay if they take the whole of the raw materials of a man 's trade and prevent him carrying it on, and pay a sum of money, that is to be taken, not as profit on the sale of raw materials, which he never would have sold,, but as compensation for interfering with the trade altogether." These observations, though made under a different (1) 277 statute, are, in general, true of a business as such, and can be usefully employed under the Indian Income tax Act.
Our Act divides the sources of income, profits and gains under various heads in section 6.
Business is dealt with under section 10, and the primary condition of the application of the section is that tax is payable by an assessee under the head profits and gains of a business ' in respect of a business carried on by him.
Where an assessee does not carry on business at all, the section cannot be made applicable, and the compensation that he receives cannot bear the character of profits of a business.
It is for this reason that the Judicial Committee in Shaw Wallace 's case (1) observed that the compensation paid in that case was not the product of business, or, in other words, profit, but some kind of solatium for not carrying on business and thus, not revenue.
It is to be noted that Das, C.J, in South India Pictures ' case (2), in distinguishing Shaw Wallace 's case (1), made the following observation: "In Shaw Wallace 's case the entire distributing agency work was completely closed, whereas the termination of the agreements in question, did not have that drastic effect on the assessee 's business at all. .
In Shaw Wallace 's case, therefore, it could possibly be said that the amount paid there represented a capital receipt.
" The observation is guarded, but it recognises the difference made in the Privy Council case and others between payment to compensate interference with a going business and compensation paid for stoppage of a business altogether.
This distinction was emphasised in the dissenting opinion in Vazir Sutltan 's case (3).
Though the payment in question was not made to fill a hole in the capital of the assessee, as in the Glenboig case (4), nor was it made to fill a hole in the profits of a going business as in Shamshere Printing Press case (5), it cannot be treated as partaking the character of profits because a business not having (1) (1932) L.R. 59 I. A. 206.
(3) [1959] Supp. 2 S.C.R. 375.
(2) ; (4) (5) 278 been done, no question of profits taxable under section 10 arose.
The Privy Council described such a payment as a solatium.
It is not necessary to give it a name; it is sufficient to say that it was not profit of a business.
Once it is held that this was not profit at all, it is clear that Rules 23 and 24 of the Indian Income tax Rules could not apply, and there was no question of apportioning the amount, as laid down in R. 24.
The whole of the amount received by the assessee was not assessable.
It remains to consider whether the payment could be treated as income from property under section 9 of the Income tax Act.
That this was never the case of the Department is clear from the fact that the income was not processed under that section, and even the Judicial Member of the Tribunal, who entertained this opinion, did not express it as his decision in the case.
This aspect of the matter not having been considered in the case before, we cannot express any opinion upon it.
In our opinion, the answers to the two questions ought to have been: Question (1) no Question (2) does not arise.
In the result, the appeal is allowed with costs here and in the High Court.
Appeal allowed.
| Lands in four villages forming part of the Cis Sutlej jagir were compulsorily acquired under the East Punjab Acquisition and Requisition of"Immovable Property (Temporary Powers) Act, 1948.
At the time of the acquisition A was the holder of the jagir.
Possession over one of the villages had been given to 677 A 's wife G in lieu of maintenance under a consent decree.
The matter of payment of compensation was referred to an arbitrator.
A claimed that he was entitled to the entire compensation amount as he was the present holder of the jagir.
A 's son S claimed that the lands, acquired were inalienable, that A merely had a life interest therein and that the compensation money should be deposited out of which A should get only the interest for his life.
G claimed that she was entitled to the entire compensation in respect of the lands over which she was in possession.
All the claimants claimed interest on the compensation amount from the date of taking of possession to the date of payment of compensation.
The arbitrator held: (i) the acquired lands were inalienable and A merely had a life interest thereiq, (ii) S was entitled to a share in the compensation awarded, (iii) the amount of compensation for the first three villages should not be deposited but should be divided between A and S in the proportion of 3/4th to 1/4th, (iv) the compensation for the fourth village should be deposited and the interest thereof be paid to G and after the death of G the amount be divided between A and S half and half, and (v) the claimants were not entitled to any interest on the amount of compensation.
On appeal the High Court confirmed the awards in toto.
The claimants appealed to the Supreme Court by special leave.
Held, that the acquired lands formed part of a Cis Sutlej Jagir which was inalienable, that A was merely a limited owner thereof and was not entitled to the entire amount of compensation and that the reversioners were also entitled to a share therein.
The compensation amount could not be permanently deposited leaving the parties the right to enjoy only its income.
Even if the equitable principle of section 32, Land Acquisition Act, 1894, was applied it would not justify the permanent investment of the compensation amount.
Section 32(1)(b) was intended to be applied provisionally for short periods, where other lands had to be purchased out of the compensation money but were not immediately available and the money had to be invested as an interim measure till such lands were available.
It was fair to divide the compensation money in respect of the first three villages half and half between A and section In deciding the question of apportionment on equitable grounds it was relevant and material to take into account the facts that no part of the amount paid to A would reach the reversioners, that S himself had a son and that the reversionary interest had to be safeguarded.
Shri Somashekhar Swami vs Bapusaheb Narayanrao Patil A.I.R. , K. C., Banerjee, Official Receive?, In re: A.I.R. 1928 Cal.
402, Mt. Gangi vs Santu A.I.R. 1929 Lah. 736 and Special Deputy Collector, Ramnad vs Rajah of Ramnad A.I.R. 1935 Mad. 215, referred to.
Held, further, that the claimants were entitled to interest at 4% per annum on the compensation amount from the date when possession was taken by the State to the (late on which it deposited 678 or paid the amount of compensation to the claimants ' The provision in section 5(e) of the 1048 Act which made section 23(1) of the Land Acquisition Act, 1894, applicable did not exclude the application of SS. 28 and 34 of the latter Act which dealt with the payment of interest.
On general principles, the act of taking possession of immovable property generally implied an agreement to pay interest on the value of the property ; the right to receive interest took the place of the right to retain possession.
The application of this rule was not excluded by section 5 of the 1948 Act.
Even under the Interest Act, 1839, the power to award interest on equitable grounds was expressly saved by the proviso to section 1.
Swift & Co. vs Board of Trade , Birch vs joy ; and Inglewood Pulp and Paper Co. Ltd. vs New Brunswick Electric Power Commission , applied.
Surjan Singh vs The East Punjab Government A.I.R. 1957 Punj.
265, approved.
Seth Thawardas Pherumal vs The Union of India and Nachiappa Chettiar vs Subramaniain Chettiar ; , referred to.
|
ition (Criminal) No. 735 of 1987.
(Under Article 32 of the Constitution of India).
U.R. Lalit, P. Lal and Mrs. Rani Chhabra for the Petitioner.
Yogeshwar Prasad and Dalveer Bhandari for the Respondent.
The following order of the Court was delivered JAGANNATHA SHETTY, J.
The arguments of this case conc luded at the close of the court hours on December 18, 1987.
We then nlade the following order: "We will give the reasons later.
But we make the operative order here and now.
595 The detention order is quashed.
The detenu will be set at liberty forthwith.
" Here are the reasons: In this writ petition, the validity of the detention of Arun Aggarwal has been challenged.
He has been detained by the District Magistrate, Meerut by an order dated August 3, 1987 made under sec.
3(2) of the .
The Government, after the receipt of opinion of the Advisory Board, has approved the detention as required under sec.
12(1) of that Act.
The impugned order reads as under: "office of the District Magistrate, Meerut ORDER As I am satisfied as District Magistrate, Meerut that issue of order to prevent Shri Arun Aggarwal, son of Shri Rattan Singh, resident of 234, 'L ' Block, Shastri Nagar, Police Station Medical, Meerut from doing act against the maintenance of public order is necessary.
Therefore, in exercise of power given in sub section 3 of sec.
3 of (Act No. 65/ 1980), I hereby give order that the above said Shri Arun Aggarwal, son of Shri Rattan Singh, resident of 234, 'L ' Block, Shastri Nagar Police Station Medical, Meerut be detained in general category in District Meerut Jail in the custody of the Supdt.
Of the said jail under sub section 2 of Sec.
3 of the above said Act.
Passed today dated 3.8.1987 under my signature and seal " There are as many as five grounds of detention set out in the order.
All relate to the offence said to have been committed by Arun Aggarwal on May 19, 1987.
Two of the offences are said to have been committed at 9.OO A.M.
On that day, the other two offences at 9.30 A.M. and the fifth one was alleged to have been committed between 9.30 A.M. to 1.00 P.M.
On the same day.
In each of the grounds there is a mention to the following effect: 596 "Due to your above ill acts there broke out com munal riots causing heavy loss to properties and lives of the people and your this ill act has spread fear and terror in the general public of Meerut City.
In this manner, you have corrlmitted such an act which is against public law and order.
" All the cases referred to in the grounds are non bailable offences.
In relation of those offences, Arun Aggarwal was arrested as an accused on August 2, 1987.
The detention order was passed and served on August 3, 1987.
The order particularly stated: "At present you are detained in District Jail, Meerut and you are trying to come out on bail and there is enough possibility of your being bailed out." Before we consider the main ground raised in the petition, we may make one point clear.
The order of detention repeatedly states that the detenu committing the alleged five offences set out in the detention order was the cause for breaking out communal riot in Meerut City.
But in the counter affidavit filed on behalf of the respondents, it has been stated "that the communal riots broke out in Meerut on April 14, 1987 on the occasion of Shab e Earat.
That was controlled by the Administration.
However, in the night intervening between 13/19 May, 1987, again a communal riot broke out.
" But all the offences said to have been committed by the detenu were after 9.00 A.M. on May 19, 1987.
It was not in the intervening night between May 18/19.
It was, therefore, inaccurate to state that the communal riot broke out due to the incidents attributed to the detenu on May 19, 1987.
The primary question however, is whether the detention of Arun Aggarwal could be justified solely on the ground that he was trying to come out on bail and there was enough possibility of his being bailed out and he would then act prejudicially to the interest of the public order.
Mr. Yogeshwar Prasad, learned counsel for the State, sought to justify the detention order relying upon the decision of this Court in Alijan Mian and another vs District Magistrate, Dhanbad, [ The counsel also said that the subsequent two decisions of this court to which we will make reference later, are not in tune with the ratio of the decision in Alijan Mian 's case.
We will first consider what the case about in Alijan Mian case.
The detention order considered in that case contained statement that the District Magistrate was satisfied that the detenu was likely to be 597 released on bail and if he was allowed to remain at large, he would be indulging in activities prejudicial to the maintenance of public order.
This court refused to interfere with that detention order on the ground that the detaining authority was justified in forming that opinion.
The conclusion of this Court was evidently on the basis of material placed before the detaining authority in that case.
The principles applicable in these types of preventive detention cases have been explained in several decisions of this Court.
All those cases have been considered in a recent decision in Poonam Lata vs M. L. Wadhawan, ; The principles may be summarised as follows.
Section 3 of the does not preclude the authority from making an order of detention against a person while he is in custody or in jail, but the relevant facts in connection with the making of the order would make all the difference in every case.
The validity of the order of detention has to be judged in every individual case on its own facts.
There must be material apparently disclosed to the detaining authority in each case that the person against whom an order of preventive detention is being made is already under custody and yet for compelling reasons, his preventive detention is necessary.
We will now refer to the two decisions which according to Mr. Yogeshwar Prasad are not in tune with the ratio of the decision in Alijan Milan 's case (supra).
In Ramesh Yadav vs District Magistrate Etah and Ors., [1985]4 SCC 232 at p. 234, this Court observed: "On a reading of the grounds, particularly the paragraph which we have extracted above, 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 raisec;.
Merely on the ground that an accused in detention as an under trial prisoner was likely to get bail an order of detention under the should not ordinarily be passed.
" What was stressed in the above case is that an apprehension of the detaining authority that the accused if enlarged on bail would again 598 carry on his criminal activities is by itself not sufficient to detain a person under the .
Every citizen in this country has the right to have recourse to law.
He has the right to move the court for bail when he is arrested under the ordinary law of the land.
If the State thinks that he does not deserve bail the State could oppose the grant of bail.
He cannot, however, be interdicted from moving the court for bail by clamping an order of detention.
The possibility of the Court granting bail may not be sufficient.
Nor a bald statement that the person would repeat his criminal activities would be enough.
There must also be credible information or cogent reasons apparent on the record that the detenu, if enlarged on bail, would act prejudicially to the interest of public order.
That has been made clear in Binod Singh vs District Magistrate Dhanbad, ; at 421, where it was observed: "A bald statement is merely an ipse dixit of the officer.
If there were cogent materials for thinking that the detenu might be released then these should have been made apparent.
Etemal vigilance on the part of the authority charged with both law and order and public order is the price which the democracy in this country extracts from the public officials in order to protect the fundamental freedoms of our citizens.
" There is, to our mind, nothing in these two decisions which runs counter to the decision in Alijan Mian 's case (supra).
In the instant case, there was no material made apparent on record that the detenu, if released on bail, is likely to commit activities prejudicial to the maintenance of public order.
The detention order appears to have been made merely on the ground that the detenu is trying to come but on bail and there is enough possibility of his being bailed out.
We do not think that the order of detention could be justified only on that basis.
These were the reasons upon which we quashed the order of detention.
| % The appellants in C.A. Nos. 59 and 60 of 1982, who were appointed as Civil Judges on temporary and officiating basis on probation, were not confirmed after the expiry of the period of probation or the extended period of probation, and their services were terminated by the State Government under Rule 12 of the Madhya Pradesh Government Services (Temporary and Quasi Permanent Service) Rules, 1960.
They filed writ petitions before the High Court, challenging the orders of termination of service as illegal and invalid, contending that in view of Rule 3 A, providing that a Government servant in respect of whom a declaration under cl.
(ii) of Rule 3 had not been issued, but had been in temporary service continuously for five years in a service or post in respect of which such declaration could be made, shall be deemed to be in quasi permanent service unless for reasons to be recorded in writing they should be deemed to be in Quasi Permanent Service, since no declaration under cl.
(ii) of Rule 3 had been issued and they had been in service continuously for five years.
On behalf of the respondents it was contended that the question of confirmation came within the purview of Article 235 of the Constitution vesting in the High Court control over subordinate courts and, consequently, the provision of Rule 3 A had no application to the members of the Subordinate Judicial Service.
Division Bench of the High Court took the view that if in Rule 3 A in place of the words "appointing authority" the words "competent authority" be read it would be consistent with Article 235 of the 493 Constitution, and dismissed the writ petitions holding that the resolution passed in the Court meeting, adjudicating the appellants unfit for confirmation, satisfied the requirement of Rule 3 A as continuance in Quasi Permanent capacity was included within the ambit of confirmation.
The services of the respondent in .A.
No. 2860 of 1985 were also terminated under Rule 12 of the Rules.
In the writ petition filed by him, the Full Bench of the High Court, while approving the aforesaid view expressed by the Division Bench, held that the findings of the High Court in its resolution, considering the respondent unfit for confirmation, could not be regarded as reasons within the meaning of Rule 3 A, and quashed the impugned termination order.
Disposing of the appeals, ^ HELD: Whether a member of Subordinate Judicial Service should be confirmed or not is absolutely the concern of the High Court.
The question of confirmation falls squarely within Article 235 of the Constitution and no rule framed by the State Government can interfere with the control vested in the High Court under Rule 235.
[498A B ] B.S. Yadav vs State of Haryana, ; and High Court of Punjab & Haryana vs State of Haryana, ; relied on.
Both the Full Bench and the Division Bench were wrong in placing reliance upon Rule 3 A of the M.P. Government Service (Temporary and Quasi Permanent) Rules, 1960.
As the High Court did not confirm the omcials, the question of their being deemed to be in Quasi Permanent Service does not arise.
Further, as the question of confirmation was completely within the domain of the control of the High Court under Article 235 of the Constitution, there is no necessity to read the words "competent authority" in place of "appointing authority", for Rule 3 A was inapplicable to the members of the Subordinate Judicial Service.
Moreover, there is a specific provision in the termination of service of a Judicial officer who is found by the High Court to be unfit for confirmation as provided in Rule 16(5) of the Madhya Pradesh Judicial Service (Classification, Requirement
|
ivil Appeal Nos.
14 32, 902, 879, 1130 32, 1121, 1172, 1215, 1201, 1127, 1128, 1222, 1224, 1223, 1275, 1129, 1523, 1539, 1280, 863, 1361, 1323, 1375, 1621, 1374, 1410, 1628, 2117, 1961, 1917, 1918, 1919, 1920 & 2290 of 1978 3447 3450/79.
Appeals by Special Leave from the Judgments and order dated 13.10.1977 etc.
Of the Andhra Pradesh High Court in Writ Petition No. 1872/77 etc.
AND WRIT PETITION Nos: 3973, 3998, 3836, 4198, 4199, 4200, 4210, 4263, 4317, 4318, 4414, 4256, 4537 and 4500 of 1978.
F. section Nariman, K. Krishna Rao and K. Rajendra Choudhary far the Appellants in CA Nos.
14 to 23, 25 29, 1223 1224 1628/78, 3447 and 3449/79.
A. Subba Rao for the Appellants in CA No. 1126 & WP Nos.
3973, 4198, 4199, 4200, 4317, 4318 4210/78.
A. V. V. Nair for the Appellants in CA Nos.
1215, 1361, 2117, 1286 and W.P. No. 1374/78.
G. section Rama Rao for the Appellants in CA No. 1121 & Petitioners in WP Nos. 4256 and 3836/78.
Vepa Sarathi and B. Ranta Rao for the Appellants/Petitioners in CA Nos. 24, 30, 32, 1172, 1127, 1128, 1129, 1261, 1323 1275/ 78 and WP Nos.
4263, 4500 4537/78.
section Venkata Reddy and G. Narsimulu for the Appellants in CA Nos. 31, 902, 879, 1130 32, 1410, 1621, 1917 20, 1961/78 & 1373/78.
A. K. Ganguli for the Appellants in CAs 1222 and 863/78.
R A. V. Rangam for the Petitioners in WP No. 3998/78.
section Balakrishan for the Petitioners in WP 4414/78.
V.S. Desai and A. Subba Rao for the Applicant/Intervener.
1147 K. K. Venugopal Addl.
, Ram Chandra Reddy Adv.
A Genl.
A. P. and B. Parthasarthy for the appearing respondents.
BHAGWATI, J.
These appeals by special leave and the writ petitions represent a last but desperate attempt by the; class of land holders in Andhra Pradesh to defeat an agrarian reform legislation enacted by the State or the benefit of the weaker sections of community.
It is indeed a matter of regret that a statute intended to strike at concentration of land in the hands of a few and to act as a great equaliser by reducing inequality in holding of land between the haves and the have nots should have practically remained unimplemented for a period of over seven years.
Unfortunately, this is the common fate of much of our social welfare legislation.
We can boast of some of the finest legislative measures calculated to ameliorate the socio economic conditions of the poor and the deprived and to reach social and economic justice to them, but regret ably, a large part of such legislation has remained merely on paper, and the benefits of such legislation have not reached the common man to any appreciable extent.
The Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act 1 of 1973 (hereinafter referred to as the Andhra Pradesh Act) which is challenged in the present appeals was enacted by the Andhra Pradesh Legislature on 1st January 1973.
Soon after its enactment, the constitutional validity of the Andhra Pradesh Act was challenged before the Andhra Pradesh High Court on various grounds, but a full Bench of the High Court negatived the challenge and held the Andhra Pradesh Act to be constitutionally valid.
Though this judgment was delivered by the High Court as early as 11th April, 1973, no effective steps for implementation of the Andhra Pradesh Act could be taken, since the Andhra Pradesh Act merely remained on the statute book and for some inexplicable reason, it was.
not brought into force until 1st January 1975.
Even after the Andhra Pradesh Act was brought into force, not much enthusiasm was shown be the Government in implementing its provisions and in the mean while, it was found necessary to amend the legislation and hence the Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Amendment Act 1977 was enacted with retrospective effect from 1st January 1975 and by this amending Act certain amendments were made which included inter alia the introduction of section 41A.
We shall presently refer to the relevant provisions of the amended Andhra Pradesh Act, but before we do so, it is necessary to point out that as soon as the amending Act was passed, another round 1148 of litigation was started by the landholders by filing writ petitions in the High Court challenging once again the constitutional validity of the Andhra Pradesh Act.
There were several grounds on which the constitutional validity was challenged but the main ground was that by reason of the enactment of the Urban Land (Ceiling Regulation) Act 1976 (hereinafter referred to as the Central Act), the Andhra Pradesh Act had become void and inoperative.
Certain other questions involving the interpretation of the provisions of the Andhra Pradesh Act were also raised in some of the writ petitions, but they too need not be mentioned here, because in the course of the hearing we made it clear to the parties that we would examine only the constitutional validity of the Andhra Pradesh Act and other questions could be agitated by the landholders in the appeals filed by them against the orders determining surplus land.
It was pointed out to us that some of the landholders had not filed appeals within the prescribed time and grave injustice would therefore result to them if these question, were not decided by us.
But the learned Additional Solicitor General appearing on behalf of the State family stated before us that if appeals have been filed beyond time or are filed within a month of disposal of these appeals, the delay in filing the appeals would be condoned.
Turning to the constitutional challenge which in those days was required to be decided by a full Bench of 5 Judges of the High Court, it was held that the enactment of the Central Act did not have the effect of invalidating the whole of the Andhra Pradesh Act, but since the provisions of the Andhra Pradesh Act were repugnant to the provisions of the Central Act so far as concerned land satisfying both the definition of "land" in the Andhra Pradesh Act and the definition of "vacant land" in the Central Act, the Andhra Pradesh Act was held not applicable to "vacant land" falling within the ambit of the Central Act.
The High Court accordingly granted a declaration to this effect to the landholders, but save for this limited relief, dismissed the writ petitions in all other respects, since in the opinion of the High Court there was no substance in any of the other contentions raised on behalf of the landholders.
The landholders thereupon preferred the present appeals after obtaining special leave from this Court.
The principal contention urged on behalf of the landholders in support of the appeals was that the Andhra Pradesh Act was ultra vires and void as being outside the legislative competence of the Andhra Pradesh Legislature.
This contention was based on two resolutions, one dated 7th April 1972 passed by the Andhra Pradesh Legislative Council and the other dated 8th April 1972 passed by the Andhra Pradesh Legislative Assembly under clause (1) of Article 1149 252 of the Constitution.
This Article carves out an exception derogating from the normal distribution of legislative powers between the Union and the States under Article 246 and is in the following terms: article 252(1) : If it appears to the legislatures of two or more States to be desirable that any of the matters with respect to which Parliament has no power to make laws for the States except as provided in Articles 249 and 250 should be regulated in such States by Parliament by law, and if resolutions to that effect are passed by all the Houses of the Legislatures of those States, it shall be lawful for Parliament to pass an Act for regulating that matter accordingly, and any Act so passed shall apply to such States and to any other State be which it is adopted afterwards by resolution passed in that behalf by the House or, where there are two Houses, by each of the Houses of the Legislature of that State.
(2) An Act so passed by Parliament may be amend ed or repealed by an Act of Parliament passed or adopted in like manner but shall not, as respects any State to which it applies, be amended or repealed by an Act of the Legislature of that State.
" The effect of passing of resolutions be the Houses of Legislature of two or more States under this constitutional provision is that Parliament which has otherwise power to legislate with respect to a matter, except as provided in Articles 249 and 250, becomes entitled to legislate with respect to such matter and the State Legislatures passing the resolutions cease to have power to make law relating to.
that matter.
The resolutions operate as abdication or surrender of the powers of the State Legislatures with respect to the matter which is the subject of the resolutions and such matter is placed entirely in the hands of Parliament and Parliament alone can then legislate with respect to it.
It is as if such matter is lifted out of List II and placed in List I of the Seventh Schedule to the Constitution.
This would seem to be quite clear on a plain natural construction of the language of clauses (1) and (2) of Article 252 and no authority.
is necessary in support of it, but if any was wanted, it may be found in the decision of a Full Bench of five Judges of this Court in Union of India vs V. V. Chaudhary in fact the same Bench as the present one where an identical view has been taken.
It was in pursuance of clause (l) of this Article that a Resolution 1150 was passed by the Andhra Pradesh Legislative Council on 7th April 1972 to the effect that "the imposition of a ceiling on urban immovable property and acquisition of such property in excess of the ceiling and all matters connected therewith or ancillary and incidental thereto should be regulated in the State of Madhya Pradesh by Parliament by law and an identical resolution in the same terms was passed on the next day by the Andhra Pradesh Legislature Assembly.
Similar resolutions were also passed by the Houses of Legislature of some other States, though there is no material to show as to when they were passed.
It was however common ground that at best some of these resolutions were passed prior to the enactment of the Andhra Pradesh Act.
The result was that at the date when the Andhra Pradesh Act was enacted, Parliament alone was competent to legislate with respect to ceiling on urban immovable property and acquisition of such property in excess of the ceiling and all connected, ancillary or incidental matters, and the Andhra Pradesh Legislature stood denuded of its power to legislate on that subject.
Now the Andhra Pradesh Act, as its long title shows, was enacted to consolidate and damned the law relating to the fixation of ceiling on agricultural holdings and taking over of surplus land and matter connected therewith.
On its plain terms, it applies to land situate in any part of Andhra Pradesh.
Section 3(f) creates an artificial unit called 'family unit ' by defining it as follows: "Sec. 3(f) "family unit" means (i) in the case of an individual who has a spouse or spouses, such individual, the spouse or spouses and their minor sons and their unmarried minor daughters; if any; (ii) in the case of an individual who has no spouse such individual and his or her minor sons and unmarried minor daughters; (iii) in the case of an individual who is a divorced husband and who has not remarried, such individual and his minor sons and unmarried minor daughters, whether in his custody or not; and (iv) where an individual and his or her spouse are both dead, their minor sons and unmarried minor daughters.
Explanation Where a minor son is married, his wife and their offspring, if any, shall also be deemed to be members of the family unit of which the minor son is a member: 1151 The term "land" is defined in section 3(j) to mean "land which A is used or is capable of being used for purposes of agriculture, or for purposes ancillary thereto, including horticulture, forest land, pasture land, waste land, plantation and tope; and includes land deemed to be agricultural land under this Act".
Explanation I to this definition enacts a rebuttable presumption that land held under Ryotwari settlement shall, unless the contrary is proved, be deemed to be 'land ' under the Andhra Pradesh Act.
Section 3(o) defines 'person ' as including inter alia an individual and a family unit.
Section 10 is the key section which imposes ceiling on the holding of land by providing that if the extent of the holding of a person is in excess of the ceiling area, the person shall be liable to surrender the land held in excess.
If therefore an individual or a family unit holds land in excess of the ceiling area, the excess would have to be surrendered to the State Government.
But the question then arises, what is the ceiling area above which a person cannot hold land.
The answer is provided by section 4 which reads as follows: "Sec.
4(1) The ceiling area in the case of a family unit consisting of not more than five members shall be an & extent of land equal to one standard holding.
(2) The ceiling area in the case of a family unit consisting of more than five members shall be an extent of land equal to one standard holding plus an additional extent of one fifth of one standard holding for every such member in excess of five, so however that the ceiling area shall not exceed two standard holdings.
(3) The ceiling area in the case of every individual who is not a member of a family unit, and in the case of any other person shall be an extent of land equal to one standard holding.
Explanation: In the case of a family unit, the ceiling area shall be applied to the aggregate of the lands held by all the members of the family unit".
It will thus be seen that the ceiling area in the case of an individual who is not a member of a family unit is equivalent to one standard holding and so also in the case of a family unit with not more than five members, the ceiling area is the same, but if the family unit consists of more than five members, the ceiling area would stand increased by one fifth of one standard holding for every additional member of the family unit, subject however to the maximum limit of 2 standard holdings.
When the ceiling area is applied to the holding of a 1152 family unit, the Explanation requires that the lands held by all the members of the family unit shall be aggregated for the purpose of computing, the holding of the family unit.
Where, therefore, there in a family unit consisting of father, mother and three minor sons or daughters, the lands held by all these persons would have to be clubbed together and then the ceiling area applied to the aggregate holding.
There is no distinction made in the definition of 'family unit ' between a divided minor son and an undivided minor son.
Both stand on the same footing and a divided minor son is as much a member of the family unit as an undivided minor son, and consequently the lands held by a divided minor son would have to be included in the holding of the family unit for the purpose of application of the ceiling area.
Section 7 invalidates certain transfers of land and provides for inclusion of such lands in the holding of an individual or a family unit.
Then there is a provision in section 8 for furnishing a declaration in respect of his holding by every person whose land exceeds the ceiling area and the Tribunal is required by section 9 to hold an enquiry.
and pass an order determining the land held in excess of the ceiling area.
Such land has to be surrendered by the person holding the land and on such surrender, the Revenue Divisional officer is empowered under section 11 to take possession of the land which thereupon vests in the State Government free from all encumbrances.
Section 14 provides inter alia that the land vested in the State Government shall be allotted for use as house sites for agricultural labourers.
village artisans or other poor persons owning no houses or house sites or transferred to the weaker sections of the people dependent on agriculture for purposes of agriculture/or for purposes ancillary thereto in such manner as may be prescribed by the Rules, subject to a proviso that as far as practicable not less than one half of the total extent of land so allotted or transferred shall be allotted or transferred to the members of the Scheduled Castes and the Scheduled Tribes.
Section 15 enacts a provision for payment of compensation for land vested in the State Government at the rates specified in the Second Schedule.
These are the only relevant provisions of the Andhra Pradesh Act which need to be referred to for the purpose of the present appeals.
We may now turn to examine the relevant provisions of the Central Act.
This Act was enacted by Parliament pursuant to the authority conferred upon it by the resolutions passed by the Houses of legislature of several States including the State of Andhra Pradesh under clause (1) of Article 252.
It received the assent of the President on 17th February 1 976 and as its long title and recital shows it was enacted to provide for the imposition of a ceiling on vacant 1153 land is urban agglomerations for the acquisition of such land in excess of the ceiling limit, to regulate the construction of buildings on such land and for matters connected therewith, with a view to preventing the concentration of urban land in the hands of a few persons and speculation and profiteering therein and with a view to bringing about an equitable distribution of land in urban agglomerations to sub serve the common good.
We shall refer to a few material provisions of this Act.
Section 2(a) (i) defines "appointed day" to mean in relation to any State to which this Act applies in the first instance which includes the State of Andhra Pradesh the date of introduction of the Urban Land (Ceiling and Regulation) Bill, 1976 in Parliament.
This was the Bill which culminated in the Act and it was introduced in Parliament on 28th January 1976.
Consequently, this date would be the 'appointed day ' for the purpose of applicability of the Act to the State of Andhra Pradesh.
The definition of "family" in section 2 (f) is materially in the same terms as the definition of "family unit" in the Andhra Pradesh Act.
Then follow two important definitions which needed to be set out in extenso.
The word "person" is defined in section 2(i) as including inter alia an 'individual ' and the 'family '.
Section 2(n) defines "urban agglomeration" in the following terms: "Sec.2(n) (A) in relation to any State of Union territory specified in column (1) of Schedule 1, means (i) the urban agglomeration specified in the corresponding entry in column (2) thereof and includes the peripheral area specified in the corresponding entry in column (3) thereof; and (ii) any other area which the State Government may, with the previous approval of the Central Government, having regard to its location, population (population being more than one lakh) and such other relevant factors as the circumstance of the case may require, by notification in the official Gazette, declare to be an urban agglomeration and any agglomeration so declared shall be deemed to belong to category D in that Schedule and the peripheral area there for shall be one kilometre; (B) xx xx xx xx xx" The term 'urban land ' is defined in section 2(o) to mean: Sec.
2(o)(i): any land situated within the limits of an urban agglomeration and referred to as such in the master plan; or 1154 (ii) in a case where there is no master plan, or where the master plan does not refer to any land as urban land, any land within the limits of an urban agglomeration and situated in any area included within the local limits of a municipality (by whatever name called), a notified area committee, a town area committee, a city and town committee, a small town Committee, a cantonment board or a panchayat, but does not include any such land which is mainly used for the purpose of agriculture.
Explanation: For the purpose of this clause and clause (q), (A) "agriculture" includes horticulture, but does not include (i) raising of grass, (ii) dairy farming, (iii) poultry farming, (iv) breeding of live stock, and (v) such cultivation, or the growing of such plant, as may be prescribed.
(B) land shall not be deemed to be used mainly for the purpose of agriculture, if such land is not entered in the revenue or land records before the appointed day as for the purpose of agriculture; (C) notwithstanding anything contained in clause (B) of this Explanation, land shall not be deemed to be mainly used for the purpose of agriculture if the land has been specified in the master plan for a purpose other than agriculture; " Section 2(q) gives a definition of "vacant land" by providing that "vacant land" means, subject to certain exceptions which are not material, land not being land mainly used for the purpose of agriculture, in an urban agglomeration.
Section 3 is the rebuttal section which imposes ceiling on holding of 'vacant land ' by providing that: "Sec. 3.
Except as otherwise provided in this Act, on and from the commencement of this Act, no person shall be n entitled to hold any vacant land in excess of the ceiling limit in the territories to which this Act applies under sub section (2) of section 1." 1155 Section 4 divides urban agglomeration into categories A, B, C and D lays down different ceiling limits for these different categories.
Then there is a provision in section 5 invalidating in certain circumstances the transfer of vacant land made at any time during the period commencing on the appointed day and ending with the commencement of the Act.
The procedure for determining "vacant land" held in excess of the ceiling limit is laid down in sections 6 to 9 and section 10 enacts a provision for acquisition of such land held in excess of such limit.
Section 23 provides for disposal of vacant land acquired under the Act and it empowers the State Government to allot such vacant land to "any person for any purpose relating to or in connection with any industry or for providing residential accommodation of such type as may be approved by the State Government to the employees of any industry.
It will thus be seen that the Central Act imposes a ceiling on holding of land in urban agglomeration other than land which is mainly used for the purpose of agriculture and agriculture in this connection includes horticulture, but does not include raising of grass, dairy farming, poultry farming, breeding live stock and cultivation or the growing of such plants as may be prescribed by the Rules, and, moreover, in order to fall within the exclusion, the land must be entered in the revenue or land record before the appointed day as for the purpose of agriculture and must also not have been specified in the master plan for a purpose other than agriculture.
Now, as we have already pointed out above, the Andhra Pradesh Legislature had, at the time when the Andhra Pradesh Act was enacted, no power to legislate with respect to ceiling on urban immovable property.
That power stood transferred to parliament and as a first step towards the eventual imposition of ceiling on immovable property of every other description, the Parliament enacted the Central Act with a view to imposing ceiling on vacant land, other than land mainly used for the purpose of agriculture, in an urban agglomeration.
The argument of the landholders was that the Andhra Pradesh Act sought to impose ceiling on land in the whole of Andhra Pradesh including land situate in urban agglomeration and since the concept of agglomeration defined in section ' 2(n) of the Central Act was an expensive concept and any area with an existing or future population of more than one lakh could be notified to be an urban agglomeration, the whole of the Andhra Pradesh Act was ultra vires and void as being outside the legislative competence of the Andhra Pradesh Legislature.
This argument plausible though it may seem, in our opinion, is unsustainable.
It is no doubt true that if the Andhra Pradesh Act seeks to impose ceiling on land falling within an urban agglomeration, it would be outside the area of its legislative competence, because it 1156 cannot provide for imposition of ceiling on urban immovable property.
But the only urban agglomerations in the State of Andhra Pradesh recognised in the Central Act were those referred to in section 2(n) (A) (ii) and there can be no doubt that so far as these urban agglomerations are concerned, it was not within the legislative competence of the Andhra Pradesh Legislature to provide for imposition of ceiling on land situate within these urban agglomerations.
It is, however, difficult to see how the Andhra Pradesh Act could be said to be outside the legislative competence of the Andhra Pradesh Legislature in so far as land situate in the other areas of the State of Andhra Pradesh is concerned.
We accept that any other area in the State of Andhra Pradesh with a population of more than one lakh could be notified as an urban agglomeration under section 2(n)(A)(ii) of the Central Act but until it is so notified it would not be an urban agglomeration and the Andhra Pradesh Legislature would have legislative competence to provide for imposition of ceiling on land situate within such area.
No sooner such area is notified to be an urban agglomeration, the Central Act would apply in relation to land situate within such area, but until that happens the Andhra Pradesh Act would continue to be applicable to determine the ceiling on holding of land.
It may be noticed that the Andhra Pradesh Act came into force on 1st January 1975 and it was with reference to this date the surplus holding of land in excess of the ceiling area was required to be determined and if there was any surplus it was to be surrendered to the State Government It must therefore follow that in an area other than that comprised in the urban agglomerations referred to in section 2(n) (A) (i), land held by a person in excess of the ceiling area would be liable to be determined as on 1st January 1975 under the Andhra Pradesh Act and only land within the ceiling area will be allowed to remain with him.
It is only in respect of land remaining with a person whether an individual or a family after the operation of the Andhra Pradesh Act, that the Central Act would apply if and when the area in question is notified to be an urban agglomeration under section 2(n)(A)(ii) of the Central Act.
We fail to see how it can at all be contended that merely because an area may possibly in the future be notified as an urban agglomeration under section 2(n)(A)(ii) of the Central Act, the Andhra Pradesh Legislature would cease to have competence to legislate with respect to ceiling on land situate in such area even though it is not an urban agglomeration at the date of the enactment of the Andhra Pradesh Act.
Undoubtedly, when an area is notified as an urban agglomeration under section 2(n)(A)(ii), the Central Act would apply to land situate in such area and the Andhra Pradesh Act would cease to have application but by that time the Andhra Pradesh 1157 Act would have already operated to determine the ceiling on holding of land falling within the definition in section 3(j) of that Act and situate within such area.
It is therefore not possible to uphold the contention of the landholders that the whole of the Andhra Pradesh Act is ultra vires and void as being outside the area of legislative competence of the Andhra Pradesh Legislature.
It is only in respect of land situate within the urban agglomerations referred to in section 2(n) (A) (i) of the Central Act that the Andhra Pradesh Act would not apply but it would be fully applicable in respect of land situate in all the other areas of the State of Andhra Pradesh.
The next contention urged on behalf of the landholders was that on a proper construction of the relevant provisions of the Andhra Pradesh Act, a divided minor son was not liable to be included in "family unit" as defined in section 3(f) of that Act.
The argument was that sub section (2) of section 7 did not invalidate all partitions of joint family property but struck only against partitions effected on or before 2nd May 1972 and thus by necessary implication recognised the validity of partitions affected prior to that date.
If therefore a partition was effected prior to 2nd May 1972 and under that partition a minor son become divided from his father and mother, the divided minor son could not be included in the family unit and his property could not be clubbed with that of his father and mother, because otherwise it would amount to invalidation of the partition though section 7, sub section (2) clearly recognised such partition as valid.
This argument is clearly fallacious in that it fails to give due effect to the definition of family unit in section 3(f) and the provisions of section 4.
It is undoubtedly true that a partition effected prior to 2nd May 1972 is not invalidated by the Andhra Pradesh Act and therefore any property which comes to the share of a divided minor son would in law belong to him and would not be liable to be required as part of joint family property.
But under the definition of family unit in section 3(f) the divided minor son would clearly be included in the family unit and by reason of section 4 his land whether self acquired or obtained on partition would be liable to be clubbed with the land held by the other members of the family unit.
The land obtained by the divided minor son on partition would be liable to be aggregated with the lands of other members of the family unit not because the partition is invalid but because the land held by him howsoever acquired is liable to be clubbed together with the lands of others for the purpose of applying the ceiling area to the family unit.
We do not therefore see how a divided minor son can be excluded from the family unit.
That would be flying in the face of sections 3(f) and 4 of the Andhra Pradesh Act.
1158 Then a contention was advanced on behalf of the landholders that the definition of "family unit" was violative of Article 14, of the Constitution in that it made unjust discrimination between a minor son and the major son by including minor son in the "family unit" while excluding a major son from it.
This contention has already been dealt with by learned brother Tulzapurkar, J. in the judgment delivered by him today in the Haryana Land Ceiling matters and we need not repeat what he had already stated there while repelling this contention.
Moreover, this contention isl no longer open to the landholders since the Andhra Pradesh Act is admittedly an agrarian reform legislation and it is protected against challenge on the ground of infraction of Articles 14, 19 and 31 by the protective umbrella of Article 31A.
We do not therefore see any substance in the contentions urged on behalf of the landholders and we accordingly dismiss the appeals and the writ petitions with costs.
S.R. Appeals & Petitions dismissed.
| Dismissing the appeals and the Writ Petitions, the Court ^ HELD: (1).
It is fundamental that the nation 's Constitution is not kept in constant uncertainty by judicial review every season because it paralyses, by perennial suspense, all legislative and administrative action on vital issues deterred by the brooding interest of forensic blow up.
This, if permitted, may well be a kind of judicial destabilisation of State action too dangerous to be indulged in save where national crisis of great moment to the life, liberty and safety of this country and its millions are at stake, or the basic direction of the nation itself is in peril of a shake up.
The decision in Kesavananda Bharati 's case, therefore, upholding the vires of Article 31A in unequivocal terms binds the court on the simple score of stare decisis and the constitutional ground of Article 141.
Further, fatal flaws silenced by earlier rulings cannot survive after death because a decision does not lose its authority "merely because it was badly argued, inadequately considered and fallaciously reasoned".
And none of these misfortunes can be imputed to Bharati 's case.
[1164 C G, 1165 C D] (2).
The sweep of Article 31A is wide and indubitably embraces legislation on land ceilings.
Equitable distribution of lands, annihilation of monopoly of ownership by imposition of ceiling and regeneration of the rural economy by diverse planning and strategies are covered by the armour of Article 31A. Article 31A repulses, therefore, all invasions on ceiling legislation armed with Articles 14, 19 and 31.
[1165 D E, 1166 D E] Ranjit Singh and ors.
vs State of Punjab and Ors.
; , State of Kerala and Anr.
vs The Gwalior Rayon Silk Manufacturing (Weaving) Co. Ltd. etc. ; , reiterated.
The decision in Maneka Gandhi 's case is no universal nostrum or cure all.
Nor can it be applicable to the land reform law which is in another domain of constitutional jurisprudence and quite apart from personal liberty in Article 21.
To contend that land reform law, if unreasonable violates Article 21 as expansively construed in Maneka Gandhi case is incorrect.
[1168 E G] (4).
Section 5(6) d the U.P. Imposition of Ceiling on Land Holdings Act, 1960 is fair, valid and not violative of Article 19(1)(f) of the Constitution.
There is no blanket ban by it but only qualified invalidation of certain sinister assignments etc.
There is nothing in this section which is morally wrong nor is such an embargo which comes into force only on a well recognised date not from an arbitrarily retrospective past constitutionally anathematic.
Article 19(1)(f) is not absolute in operation and is subject, under Article 19(6), to 1160 reasonable restrictions such as the one contained in Section 5(6).
Further it is perfectly open to the legislature as ancillary to its main policy to prevent activities which defeat the statutory purpose, to provide for invalidation of such action.
When the alienations are invalidated because they are made after a statutory date fixed with a purpose, there is sense in this prohibition.
Otherwise, all the lands would have been transferred and little would have been left by way of surplus.
[1169 A B, D, F G, 1170 C, E F] (5).
Articles 14 and 15 and the humane spirit of the Preamble rebel against the defacto denial of proprietory personhood or womanhood.
But this legal sentiment and jural value must not run riot and destroy the provisions which do not discriminate between man and woman qua man and woman but merely organise a scheme where life realism is legislatively pragmatised.
Such a scheme may marginally affect gender justice but does not abridge, wee bit, the rights of women.
If land holding and ceiling thereon are organised with the paramount purpose of maximizing surpluses without maiming women 's ownership, any plea of sex discrimination as a means to sabotage what is socially desirable measure cannot be permitted. [1173 D F] From a reading of Section 3(7) read with Section S(3) it is clear that no woman 's property is taken away any more than a man 's property.
Section 5(3) does not confer any property on an adult son nor withdraw any property from adult daughter.
Legal injury can arise only if the daughter 's property is taken away while the son 's is retained or the daughter gets no share while the son gets one.
The legislation has not done either.
[1171 G, 1173 F, H, 1174 C D] (6).
Section 3(17) of the Act is not discriminatory Land does not offend Articles 14 & 15 of the Constitution.
True, Section 3(17) makes the husband a tenure holder even when the wife is the owner.
This is a legislative device for simplifying dealings and cannot therefore be faulted.
[1174 E, F G] (7).
Neither ceiling proceedings abate nor taking surplus land from the tenure holder is barred under the provisions of Section 4 of the U.P. Consolidation of Holdings Act, 1953 read with Section 5(2) of the Ceiling Act.
[1177 C] The whole scheme of consolidation of holdings is to restructure agrarian landscape of U.P. so as to promote better farming and economic holdings by 'eliminating fragmentation and organising consolidating.
No one is deprived of his land.
What happens is, his scattered bits are taken away and in lieu thereof a continuous conglomeration equal in value is allotted subject to minimal deduction for community use and better enjoyment.
Whatever land belongs to the tenure holder at the time when consolidation proceedings are in an on going stage, may or may not belong to him after the consolidation proceedings are completed.
Alternative allotments may be made and so the choice that he may make before the prescribed authority for the purpose of surrendering surplus lands and preserving 'permissible holding ' may have only tentative value.
But this factor does not seriously prejudice the holder.
While he chooses the best at the given time the Consolidation Officer will give him its equivalent when a new plot is given to him in tho place of the old.
There is no diminution in the quantum of land and quality of land since the object of consolidation is not deprivation but mere substituting of scattered pieces with a consolidated plot.
The tenure holder may well exercise his option before the prescribed officer and if, later, the Consolidation Officer takes away there lands, he will allot a real equivalent thereof to the tenure holder elsewhere.
There is no reduction or damage or other prejudice by this process of statutory exchange.
[1177 C G] 1161 When land is contributed for public purposes compensation is paid in that behalf, and in the event of illegal or unjust orders passed, appellate and revisory remedies are also provided.
On such exchange or transfer taking place, pursuant to the finalisation of the consolidation scheme, the holding, upto the ceiling available to the tenure holder, will be converted into the new allotment under the consolidation scheme.
Thus there is no basic injustice nor gross arbitrariness in the continuance of the land reforms proceedings even when consolidation proceedings are under way.
[1178 B D] Agricultural & Industrial Syndicate Ltd. vs State of U.P. and Ors., [1974] 1 S.C.R. 253, distinguished.
Khetarpal Singh vs State of U.P. (High Court) [1975] Recent Decisions p. 366, approved.
There is no time wise arbitrariness vitiating the statute in that various provisions in the Act were brought into force on random dates without any rhyme or reason, thus violating, from the temporally angle, Article 14.
It is true that neither the legislature nor the Government as its delegate can fix fanciful dates for effectuation of provisions affecting the rights of citizens.
Even so, a larger latitude is allowed to the State to notify the date on which a particular provision may come into effect.
Many imponderables may weigh with the State in choosing the date and when challenge is made years later, the factors which induced the choice of such dates may be buried under the debris of time.
Parties cannot take advantage of this handicap and audaciously challenge every date of coming into force of every provision as capriciously picked out.
[1179 B D]
|
Criminal Appeal No. 559 of 1983.
From the Judgment and Order dated 7.1.1982 of the Punjab and Haryana High Court in Crl.
Appeal No. 537 (SB) of 1980.
Harbans Lal, I.S. Goel and K. Chaudhri for the Appellant.
Govind Mukhoty (Amicus Curiae) for the Respondent.
The Judgment of the Court was delivered by BALAKRISHNA ERADI, J.
Uttam alias Cheaku, the respond ent herein along with three others was tried by the learned Additional Sessions Judge, Gurgaon for alleged commission of offences under Sections 395,397 and 4 12 of the Indian Penal Code.
By judgment dated July 21.
1980, the learned Addition al Sessions Judge held that the charge against Uttam under Section 395 I.P.C. was proved beyond all reasonable doubt and he was accordingly convicted and sentenced to undergo rigorous imprisonment for four years.
The other three ac cused were acquitted on the ground that their participation in the crime was not sufficiently proved and hence they were entitled to the benefit of doubt.
The respondent carried the matter in appeal to the High Court of Punjab and Haryana.
The High Court by its impugned judgment dated January 7, 1982 allowed the said appeal, extending the benefit of doubt to the respondent, and set aside his conviction and sen tence.
The State of Haryana has come up to this Court with this appeal against the said order of acquittal after ob taining Special leave from this Court.
Briefly stated, the prosecution case i.s that on October 24, 1978, Om Parkash (P.W. 5) accompanied by his wife Jai Rani (P.W. 6) and their daughter Neelam left Delhi in the early hours of the morning for Jaipur by car.
Om Parkash and his wife Jai Rani were in the front seat of the vehicle while their daughter was occupying the rear seat.
When their car had reached about 10 12 Kms.
beyond Gurgaon on the Delhi Jaipur Road, another car bearing registration No. DEA 2914 came 1067 from behind and attempted to overtake their vehicle.
Even though Om Parkash had made way for the other car to pass, that car deliberately swerved to the left side and struck against the front wheel of his car, whereupon Om Parkash stopped his car on the left side of the road in the kacha portion.
In the meantime, the other car also stopped at a distance of about ten paces ahead and five persons came out of that vehicle.
It is stated that two or three out of them were armed with revolvers and others with daggers.
Om Par kash got out of the vehicle and asked the assailants as to why they had caused the accident.
In the meantime, Jai Rani also came out of the car.
One of the assailants then gave a couple of knife blows in the chest of Om Parkash, whereupon he tried to raise an alarm.
Hearing the said cry ' for help, some trucks which were passing along that road tried to stop but one of the assailants who was armed with a pistol, fired shots in the air and scared away those truck drivers.
There after one of the assailants removed the ear rings, necklace and wrist watch from the person of Jai Rani and in that process one of her ear lobes was cut as under.
The wrist watch and purse of Om Parkash were also removed by one of the culprits.
Apart from that, three attache cases which were on the luggage carrier of the car were also forcibly removed and taken away by the miscreants.
Before the cul prits left the spot in their car with all the booty, a shot was fired by one of them which hit Om Parkash on his fore head.
After inflicting the said injury, the miscreants made good their escape.
Om Parkash somehow managed to drive back his car to Gurgaon and there he contacted his partner Joginder Singh (P.W. 7) to whom he narrated the whole incident.
Om Parkash was immediately taken to Civil Hospital, Gurgaon where he was medically examined and various injuries were found on his person.
Jai Rani also medically examined and the injury on her right ear lobe was declared to be grievous.
The other injuries were found to be simple for which she was given first aid.
The first information report was thereafter lodged with the police by Om Parkash and Sub Inspector Tilak Raj (P.W. 21) carried out the investigation.
He recovered empty cartridge cases (Exhibits P. 15 and P. 16), one wad (Exhibit P. 17) and one Ball Point Pen (Exhibit P. 18) from the place of occurrence.
During the investigation it was found that the car used by the culprits had been stolen on October 23, 1973 from the house of its owner, one S.K. Mahajan.
Subsequently, on October 27, 1978, the car was found lying abandoned in the Ghaziabad factory area and it was taken into police custody.
The accused were arrested after a fairly long delay since it so happened that subsequent to the occurrence in question the accused 1068 persons had been allegedly involved in the commission of other crimes in the State of Uttar Pradesh and they were lodged in the Meerut jail.
After the accused were brought from Meerut, two test identification parades were held, one separately for Uttam at his request and the other for the remaining suspects.
In the first parade, Uttam was correctly identified by both Om Parkash and Jai Rani.
In the second identification parade, Om Parkash failed to identify any of the other accused whereas Jai Rani identified Trilok Singh, who was accused No. 2.
On the basis of the information furnished by the accused the Investigating Officer and the police party led by him recovered some of the articles which formed the contents of the suit cases removed from the car of the victims.
They consisted of new suit length cloths, sarees, trousers, blouses, petti coats etc.
The Prosecution examined in all 22 witnesses in its endeavour to establish the guilt of the accused in relation to the the charges framed against them.
The learned Addi tional Sessions Judge after an elaborate and analytical discussion of the whole evidence recorded the conclusion that the participation of the respondent Uttam in the com mission of the crime was established beyond all doubt inas much as he had been identified by both Om Parkash (P.W. 5) and Jai Rani (P.W. 6), and the testimony given by these two witnesses narrating the details of the incident of robbery and assault was not in any manner shaken in cross examina tion and deserved to be accepted as wholly truthful.
The remaining three accused were given the benefit of doubt mainly on the ground that excepting the second accused who had been identified only by Jai Rani at the identification parade, the others were not identified either by Jai Rani or by Om Parkash and hence there was no satisfactory proof of their participation in the crime.
In the light of the afore said conclusion reached by him, the learned Additional Sessions Judge convicted the respondent Uttam under Section 395 I.P.C. and sentenced him to undergo rigorous imprison ment of four years.
The High Court by a judgment which we are constrained to characterise as most perfunctory has set aside the judgment of the learned Additional Sessions Judge in so far as he was convicted the respondent herein and acquitted him.
We regret to have to remark that the High Court has dealt with the case in a very superficial and casual manner and has not even taken to,trouble to discuss the evidence adduced in the case before it proceeded to interfere with the well consid ered judgment of the trial court.
Both Om Parkash (P.W. 5) and Jai Rani (P.W. 6) had clearly identified the respondent at the test identification parade as well as in the Court and they had 1069 clearly and unequivocally deposed that he was one of the assailants who took part in the robbery and assault.
Their testimony has been discussed at length by the learned Addi tional Sessions Judge and he has given sound and convincing reasons for accepting and acting upon the same.
The whole discussion of the case by the High Court is contained in one short paragraph of its judgment namely, paragraph 6.
It is not disclosed anywhere therein as to why the High Court considered that the testimony of these two witnesses who were the victims of the crime could not be accepted and why it could not form the foundation for the conviction of the respondent.
A case of highway robbery, such as this, should have been dealt with much more seriousness and care than has been bestowed on it by the High Court.
The approach of the High Court to the case and the conclusion recorded by it cannot but be characterised as manifestly illegal and per verse.
In the absence of any discussion of the evidence by the High Court, we have ourselves gone through the entire evi dence adduced in the case with the assistance of the Counsel appearing in both sides.
We are in complete agreement with the conclusion recorded by the learned Additional Sessions Judge that from the evidence of Om Parkash (P.W. 5) and Jai Rani (P.W. 6), the participation of the accused in the commission of the offence has been proved beyond all reason able doubt.
The respondent was, therefore, rightly convicted by the learned Additional Sessions Judge and the only mis take committed by the learned Additional Sessions Judge was in not in awarding a more severe sentence commensurate with the gravity of the offence.
In the result, we allow the appeal, set aside the judg ment Of the High Court and restore that of the learned Additional Sessions Judge convicting the respondent under Section 395 I.P.C. and sentencing him to undergo rigorous imprisonment of four years.
The Bail Bond of the respondent will stand cancelled.
He shall be taken into custody forth with to serve out the remaining portion of the sentence.
N.P.V. Appeal allowed.
| The respondent, a member of the Indian Police Service was the Inspector General of Police, Haryana from June 30, 1979 to July 25, 1980.
The Home Secretary to the Government of Haryana made certain adverse remarks against the respondent which after acceptance were communicated to the respondent on May 4, 1982, about two years and three months after the close of the relevant period on March 31, 1980.
The respondent filed a writ petition challenging the authority of the Home Secre tary to write a confidential report assessing the per 1031 formance, character, conduct and qualities of the respondent as Inspector General of Police and for the quashing of such report or adverse remarks, which was dismissed by a Single Judge of the High Court.
The respondent filed an appeal and the Division Bench set aside the judgment of the Single Judge and allowed the writ petition holding that the Home Secretary had no authority to submit any report against the performance of the respondent for the aforesaid period during which he was the Inspector General of Police, Haryana.
In the appeal by special leave by the State of Haryana it was submitted that as the Police Department has been placed under the Home Department and the Home Secretary being the head of the Department, the Home Secretary must necessarily be the Head of the Police Department under the Business of the Haryana Government (Allocation) Rules, 1974.
It was also stated that the provisions of Rules 5, 6, 6A and 7 of the All India Services (Confiden tial Rolls) Rules 1970 are directory and not mandatory.
It was urged by the respondent that the Business Rules framed under Article 166 cannot be relied upon for the purpose of interpreting the provisions of clause (e) of Rule 2 of the Rules, and in view of the delay in communica tion, the adverse remarks lost all importance and should be struck down on that ground.
Dismissing the appeal, HELD: 1.
A reporting authority must be a person to whom the member of the Service is answerable for his performances.
Such an authority must be one superior in rank to the member of the Service concerned.
The State Government can specifically empower only such authority as the reporting authority as is superior in rank to the Inspector General of Police.
[1036H; 1037A B] 2.1 The Business Rules have been framed under clauses (2) and (3) of Article 166 of the Constitution for the more convenient transaction of the business of the Government of Haryana and for the allocation of business among the Ministers.
[1038E F] 2.2 Under Rule 4 of the Business Rules, the Secretary of each Department of the Secre tariat is the head of the Department.
Thus, the Secretary of the Home Department is the head of the Home Department being a Department of the Secretariat, but merely because he has to conduct the business.
on behalf of the Government, of the Police 1032 Department, he does not thereby become the Head of the Police Department.
[1038F G] 2.3 The Rules of Business that have been framed under Article 166 cannot override the provisions of the Act, or any statutory rules.
In view of Section 3 and 4 of the read with Rule 1.2 to the Punjab Police Rules, the Inspector General of Police, Haryana is the Head of the Police Department.
The immediate authority superior to Inspector General of Police is the Minister in Charge of the Police Department.
The only authority who could be specifically empowered as the report ing authority in regard to the Inspector General of Police under clause (e) of Rule 2 of the All India Services (Confidential Rolls) Rules is the Minister in Charge and the Chief Minister being superior to the Minister in Charge may be the reviewing authority under clause (f) of Rule 2.
[1039D E] 4.1 Rules 5, 6, 6A and 7 of the All India Services (Confidential Rolls) Rules require that the whole process from the writing of the confidential reports assessing the perform ance, character conduct and qualities of every member of the service, to the communication of the adverse remarks should be completed within a period of seven months.
In the instant case, the adverse remarks were communicated after 27 months.
[1040F G] 4.2 The whole subject of the making and communication of adverse remarks is to give to the officer concerned an opportunity to im prove his performance, conduct or character, as the case may be, and this object would be lost if they are communicated to the officer concerned after an inordinate delay.
Adverse remarks should not be understood in terms of punishment, but really should be taken as an advice to the officer concerned, so that he can act in accordance with the advice and improve his service career.
[1041A B] 4.3 Rules 5, 6, 6A and 7 are directory and not mandatory, but that does not mean that the directory provisions need not be complied with even substantially.
But, where compliance after an inordinate delay would be against the spirit and object of the directory provision, such compliance would not be substantial compliance.
[1041C D] 4.4 While the provisions of Rules 5, 6, 6A and 7 require that everything including the communication of the adverse remarks should be completed within a period of seven months, this period cannot be 1033 stretched to twenty seven months, simply because these rules are directory, without serving any purpose consistent with the spirit and objective of these Rules.
[1041D E]
|
Appeals Nos. 54 to 65, 67 and 69 to 71 of 1963.
Appeals from the judgment and decree dated January 10, 1956 of the Madras High Court in Appeal Suit Nos. 223 and 224 of 1951, and 264 to 273, 275 and 277 to 279 of 1952.
R. Kesava Iyengar, R. Thiagarajan and R. Ganapathy Iyer, for the appellants (in all the appeals).
Bishan Narain and O. P. Malhotra, for respondent No. 1 (in C.A. Nos. 54 and 55 of 1963).
M. R. K. Pillai, for respondent No. 2 (in C.A. No. 55 of 1963) and for the respondents (in C.As.56 to 65, 67 to 71 of 1963).
The Judgment of the Court was delivered by Ramaswami, J.
These appeals are brought against the judgment and decree in A.S. nos.223 and 224 of 1951, 264 to 273 of 1952, 275 of 1952 and 277 to 279 of 1952 of the Madras High Court dated January _10, 1956 affirming the judgment and decree in O.S. nos.75, 77 to 81 of 1949 and 19 to 22, 24 to 26, 28 & 30 to 31 of 1950 of the Subordinate Judge, Tanjore.
The appellant instituted the above mentioned suits for re covery of possession from the respective defendants of the disputed lands and for payment of damages at the rate of Rs. 501per annum per acre.
The case of the appellant was that the disputed lands which were purchased by him by a sale deed dated November 11, 1948 (exhibit A 145) are situated in Orathur Padugai which is attached to Pannimangalam, one of the villages comprised in what is known as the "Tanjore Palace Estate", that 756 the said lands are not situated in an estate as defined by the Madras Estates Land Act 1 of 1908 (hereinafter referred to as the 'Act ') and in any event the said lands are 'private lands ' of the appellant and not 'ryoti lands ' as defined in the Act and the various defendants are trespassers in unlawful occupation of the lands and had no right to continue in possession and were therefore liable to ejectment.
The appellant also claimed that the defendants were liable to pay damages at the rate of Rs. 501 per, annum per acre in respect of the lands in their unlawful occupation.
The defence in all the suits was substantially the same.
it was contended by the defendants that the disputed lands are situated in an estate within the meaning of section 3 (2) (d) of the Act, that the lands are 'ryoti lands ' in which they have permanent right of occupancy and that they are not "private lands" as alleged by the appellant and the civil court had therefore no jurisdiction to entertain the suits and the Revenue Courts alone had jurisdiction.
By his two judgments dated October ')1, 1950 and February 2, 1951, the Subordinate Judge, Tanjore dismissed the suits, holding that the lands were situated in an estate and were 'ryoti lands ' in which the defendants were entitled to occupancy rights.
The appellant took the matter in appeal to the Madras High Court which affirmed the decision of the trial court and dismissed all the appeals.
The two principal questions which are presented for deter mination in these appeals are : (1) whether the suit lands are located in an estate within the meaning of section 3 (2) (d) of the Act, and (2 ' ) if the answer to the first question is in the affirmative, whether the suit lands are 'private lands ' or 'ryoti lands ' as defined in the Act.
Section 3 (2) (d) of the Act, as originally enacted states "3.In this Act unless there is something repugnant in the subject or context (2) 'Estate ' means (d) any village of which the land revenue alone has been granted in inam to a person not owning the kudivaram thereof, provided that the grant has been made, confirmed or recognised by the British Government, or any separated part of such village;" The section was amended by the Madras Estates Land (Third Amendment) Act 18 of 1936 to the following effect 757 " (d) any inam village of which the grant has been made, confirmed or recognised by the British Government, notwithstanding that subsequent to the grant, the village has been partitioned among the grantees, or the successors in title of the grantee or grantees.
Explanation (1): Where an inam village is resumed by the Government,it shall cease to be an estate; but, if any village so resumed is subsequently regranted by the Government as an main, it shall, from the date of such re grant be regarded as an estate.
Explanation (2): Where a portion of an inam village is resumed by the Government, such portion shall cease to be part of the estate, but the rest of the village shall be deemed to be an inam village for the purposes of this sub clause.
If the portion so resumed or any part thereof is subsequently regranted by the Government as an inam, such portion or part shall, from the date of such re grant be regarded as forming part of the inam village for the purposes of this sub clause.
" By section 2 of the Madras Act 11 of 1945 section 3 of the Act was further amended as follows "Section 2 : (1) In sub clause (d) of clause (2) of section 3 of the Madras Estates Land Act, 1908 (hereinafter referred to as the said Act) Explanations (1) and (2) shall be renumbered as Explanations (2) and (3) respectively and the following shall be inserted as Explanation (1)namely : Explanation (1): Where a grant as an inam is expressed to be of a named village, the area which forms the subject matter of the grant shall be deemed to be an estate notwithstanding that it did not include certain lands in the village of that name which have already been granted on service or other tenure or been reserved for communal purposes : (2)The amendment made by sub section (1) be deemed to have had effect as from the date on which the Madras Estates Land (Third Amendment) Act, 758 1936 came into force and the said Amendment shall be read and construed accordingly for all purposes;" Section 3(19) of the Act has defined a "Village" as follows " 'Village ' means any local area situated in or constituting an estate which is designated as a village in the revenue accounts and for which the revenue, accounts are separately maintained by one or more karnams or which is now recognised by the State Government or may hereafter be declared by the State Government for the purposes of this Act to be a village, and includes any hamlet or hamlets which may be attached thereto.
" The history of what is known as the "Tanjore Palace Estate" is well known and will be found in various reported decisions of the Judicial Committee and of the Madras High Court : (See Jijoyiamba Bayi Saiba vs Kamakshi Bayi Saiba(l), Sundaram Ayyar vs Ramachandra Ayyar(2), Maharaja of Kolhapur vs Sundaram Iyer (3) and Chota Raja Saheb Mohitai vs Sundram Iyer(4).
In 1799, Serfoji, the then Raja of Tanjore, surrendered his territory into the hands of the East India Company, but he was allowed to retain possession of certain villages and lands which constituted his private property.
When his son the last Raja died in 1855 without leaving male issue, the East India Company took possession of all his properties including his private property.
Thereupon the senior widow, Kamachee Boye Sababa filed a Bill on the Enquiry Side of the Supreme Court of Madras, and obtained a decree that the seizure of the private properties was wrong.
On appeal by the Secretary of State in Council of India, the Privy Council reversed the decree, and ordered the dismissal of the Bill.
Thereafter, a memorial was submitted to the Queen and in 1862 the Government of India which had succeeded the East India Company "sanctioned the relinquishment of the whole of the landed property of the Tanjore Raj in favour of the heirs of the late Raja".
Under instructions from the Government of India, the Government of Madras, on August 21, 1862, passed an order the material part of which is as follows : "In Col. Durand 's letter above recorded the Government of India have furnished their instructions with reference to the disposal of the landed property of the Tanjore Raj regarding which this Government addressed them under date the 17th May last.
Their decision is to the effect, that 'since it is doubtful whether the lands in question can be legally dealt with as State property, and since the plea in equity and policy, for treating them as the private property of the Raja is so strong that it commands the unanimous support of the members of the Madras Government, ' the whole of the lands are to be relinquished in favour of the heirs of the late Raja (page 228).
The Tan ore Palace Estate came into being as a result of this grant.
The question in these appeals is whether the property invol ved in the suits being a part of the Tanjore Palace Estate can be considered to be an "estate" within the meaning of the term in the Act.
It was conceded by the Counsel for the appellant that if it was part of an inam it would be an ,estate ' within the meaning of that Act.
It was, however, contended that the manner in which the property reverted to the widows of the Raja in 1862 after an act of State did not show that the estate was freshly granted but was restored to the widows who enjoyed both the warams, in the same way as the warams were enjoyed before.
To put it differently, the argument was that the effect of restoration or re linquishment was only the undoing of the wrong and therefore if the villages were the private properties of the Raja at the time of the seizure then the same character is maintained when they were handed back to his widow.
The contention was that what actually happened in 1862 was the restoration of the status quo ante rather than a fresh grant by the British Government.
The argument is not a new one but has been raised before and rejected in a number of authorities.
In Jijoyiama Bayi Saiba vs Kamakshi Bayi Saiba(1) it was held by the Madras High Court that the Government Order, 1862 was a grant of grace and favour to persons who had forfeited all claims to the personal properties of the Rajah by the act of State and was not a revival of any antecedent rights which they might have bad.
A similar opinion of the grant was expressed in a Full Bench case of the Madras High Court in Sundaram Ayyar vs Ramachandra Ayyar(2) But in Maharaja of Kolhapur vs Sundaram Iyer(3), Spencer, O.C.J., appeared to doubt the decision of Scotland, C.J., in Jijoyiamba Bayi Saiba vs Kamakshi Bayi Saiba(l) that there was a grant of grace and favour in 1862.
A similar view was taken in Sundaram vs Deva Sankara(4), but these cases have been subsequently explained or not accepted on this point.
In T.R. Bhavani Shankar Joshi vs Somasundra Moopanar(1), it was held by this Court that the act of State having made no distinction between the private and public properties of the Rajah the private properties were lost by the Act of State leaving no right outstanding in the existing claimants.
The Government Order, 1862 was therefore a fresh grant due to the bounty of the Government and not because of any antecedent rights in the grantees.
It was pointed out that the words "relinquished" or "restored" in the Government Order did not have the legal effect of reviving any such right because no rights survived the act of State.
The root of title of the grantees was the Government Order of l862 and it was therefore held that the restoration amounted to a grant in inam by the British Government within the meaning of the Act.
But the question whether with regard to any particular area what was granted in inam is a whole village or less than a whole village is a question that has to be decided with reference to the facts of each particular case.
The question therefore arises whether the area in question, viz., Orathur Padugai, constitutes a whole village and therefore an estate within the meaning of section 3 (2) (d) of the Act.
It was contended for the appellant that the suit lands were not comprised in a whole inam village.
The contention was rejected by both the lower courts which concurrently held that the lands were located in Orathur Padugai, a whole village by itself or a named village and therefore an estate within the meaning of the Act.
It was argued on behalf of the appellant that the finding of the lower courts is vitiated in law because it is based on no evidence.
In our opinion, there is no justification for this argument.
On behalf of the respondents reference was made to exhibit A 64, Pannimangalam Vattam Jamabandhi Account individual war, Fasli 1296, which shows in column No. 3 Orathur Padugai as a village .
Similarly, in exhibit A 78(a), Cess account for Pannimangalam Vattam and exhibit A 79, the Village war Jamabandhi Account Fasli 1309 Orathur Padugai village is shown as a whole village.
Exhibit A 82, Village war Jamabandhi Individual War, Fasli , Jamabandhi Ghoshpara for the village, Fasli 1311 and Exs.A 153 to A 157 all mention Orathur Padugai as a village.
All the leases, lease auctions and receipts given for payment of rent speak of Orathur Padugai as a separate village.
Even the sale deeds, Exs.B 6, B 31, B 32 and B 33 contain a recital of Orathur Padugai as a separate village.
It is manifest therefore that there is sufficient material to show that at least since 1830 onwards Orathur Padugai is a whole village.
On behalf of the appellant reference was made (1) 761 to exhibit A 128 and exhibit A 129 dated April 6, 1800 and July 5, 1800.
Exhibit A 128 is a letter from the President, Tanjore to the Secretary to the Government of Madras in which there is a reference to Pannimungalam.
It is stated therein 'that "the fields of Pannymungalam to the westward of Tanjore which from time immemorial have been reserved for the pasture of the circar cow do remain in the Raja 's possession.
There is neither village nor cultivation on these lands".
In answer to this letter there is a communication from the Chief Secretary to the Government to the Resident, Tanjore, exhibit A 129.
In para 5 of this letter it is stated: "The fields of Pucanymangalam containing neither village nor cultivation shall remain in the hands of Rajah for the pasturage of His Excellency 's cows.
" Much reliance was placed by Counsel for the appellant on these two documents, but the High Court has rightly pointed out that the identity of the lands referred to in Exs. A 128 and A 129 is doubtful.
The lands in suit ate situated at least 30 miles south east of Tanjore town in Mannaroudi taluk but in Exs.A 128 and A 129 the lands are described as westward of Tanjore.
That there was Orathur village in existence even as early as 1830 is clear from exhibit A 151 because in describing certain boundaries of another village it is mentioned as to the north of assessed Orathur village nadappu karai (bund pathway).
Exhibit A 4 of 1868 is a Debit and Credit Balance account relating to Orathur Padugai attached to Mukasa Pannimangalam Thattimal.
It is clear from this Exhibit that the entire village except the waste land was assessed.
From Exhibit A 5 dated September 4, 1870, it appears that the punja lands in Orathur village were taken on lease from the Collector of Tanjore who was the receiver and manager of the estate of the Rajah of Tanjore for a period of 5 years on payment of a total sum of Rs. 122/9/3.
Exhibits A 7, A 8, A 12 to A 16 and A 18 are either Adaiyolai muchilikas or lease deeds for leasing the lands in Orathur padugai village for a term ranted by the Collector of Tanjore.
In all these documents the description is that the lands are situated in Orathur Padugai in Mokhasa Pannymangalam Thattimal.
The documents range between the years 1870 to 1875.
In Ex.A 63 which is the individual war settlement register for Pannymangalam vattam for Fasli 1296 against column 6 it is stated that the income in the matter of the amani cultivation of sugarcane, etc., on 95 kullis is Rs. 4 and it is in Orathur padugai village, Pannymangalam vattam.
Exhibit A 61 is the debit and credit balance account of Orathur padugai for Fasli 1294.
Similarly, in exhibit A 64, the individual war settlement register for Pannimangalam vattam, column 3 relating to the village of Orathur states that the Orathur padugai is a village and the vattam is Pannimangalam.
There are similar des 762 criptions of Orathur as a village in exhibit A 65 which is the settlement register for Pannimangalam vattam for Fasli 1297.
Exhibit A 80 contains a similar description of Orathur village in Pannimangalam vattam.
Exhibits A 153 to A 155 and A 157 are all lease deeds between the years from 1901 to 1906 relating to lease of lands in Orathur padugai.
It is manifest that there is sufficient evidence to show that from 1868 right up to 1907 Orathur padugai was considered as a separate village.
It was contended for the respondents that even after the passing of the Act Orathur padugai was treated as a separate village.
Reference was made in this connection to a number of documents, Exs.A 158, A 105, A 159, A 106, A 116, A 161, B 17,A 117 to A 120, B 18, A 12 1, A 1 62 and A 1 63.
In our opinion, the finding of the lower courts that Orathur padugai is a whole village and therefore constitutes an 'estate ' within the meaning of the Act is supported by proper evidence and Counsel for the appellant is unable to make good his argument that the finding of the lower courts is in any way defective in law.
We proceed to consider the next question arising in this case, viz., whether the suit lands are 'private lands ' within the meaning of section 3 ( 1 0) (b) of the Act which reads as follows : "3.In this Act, unless there is something repugnant in the subject or context . . . . .(10) 'Private land ' (b) in the case of an estate within the meaning of sub clause (d) of clause (2), means (i) the domain or home farm land of the landholder, by whatever designation known, such as, kambattam, khas, sir or pannai; or (ii) land which is proved to have been cultivated as private land by the landholder himself, by his own servants or by hired labour, with his own or hired stock, for a continuous period of twelve years, immediately before the first day of July 1908, provided that the landholder has retained the kudivaram ever since and has not converted the land into ryoti land; or (iii) land which is proved to have been cultivated by landholder himself, by his own servants or by hired labour, with his own or hired stock, for a continuous period of twelve years immediately before the first day of November 1933, provided that the landholder has 763 retained the kudivaram ever since and has not converted the land into ryoti land; or (iv) land the entire kudivaram in which was acquired by the landholder before the first day of November 1933 for valuable consideration from a person owning the kudivaram but not the melvaram, provided that the landholder has retained the kudivaram ever since and has not converted the land into ryoti land, and provided further that, where the kudivaram was acquired at a sale for arrears of rent the land shall not be deemed to be private land unless it is proved to have been cultivated by the land holder himself, by his own servants or by hired labour, with his own or hired stock, for a continuous period of twelve years since the acquisition of the land and before the commencement of the Madras Estates Land (Third Amendment) Act, 1936.
" Section 3(16) of the Act defines 'Ryoti land ' as follows : "Ryoti land ' means cultivable land in an estate other than private land but does not include (a) beds and bunds of tanks and of supply, drainage, surplus or irrigation channels; (b) threshing floor, cattle stands, village sites, and other lands situated in any estate which are set apart for the common use of the villagers; (c) lands ranted on service tenure either free of rent or on favourable rates of rent if granted before the passing of this Act or free of rent if granted after that date, so long as the service tenure subsists.
" Section 185 of the Act enacts a presumption that land in inam village is not private land and reads as follows : "185.When in any suit or proceeding it becomes necessary to determine whether any land is the landholder 's private land, regard shall be had (1) to local custom, (2) in the case of an estate within the meaning of sub clause (a), (b), (c), or (e) of clause (2) of section 3, to the question whether the land was before the first day of July 1898, specifically let as private land, and (3) to any other evidence that may be produced Provided that the land shall be presumed not to be private land until the contrary is proved: 764 Provided further that in the case of an estate within the meaning of sub clause (d) of clause (2) of section 3 (i) any expression in a lease, patta or the like, executed or issued on or after the first day of July, 1918 to the effect or implying that a tenant has no right of occupancy or that his right of occupancy is limited or restricted in any manner, shall not be admissible in evidence for the purpose of proving that the land concerned was private land at the commencement of the tenancy; and (ii) any such expression in a lease, patta or the like, executed or issued before the first day of July 1918, shall not by itself be sufficient for the purpose of proving that the land concerned was private land at the com mencement of the tenancy.
" Section 6 is to the following effect "6.(1) Subject to the provisions of this Act, every ryot now in possession or who shall hereafter be admitted by a landholder to possession of ryoti land situated in the estate of such landholder shall have a permanent right of occupancy in his holding.
Explanation (1).For the purposes of this subsection, the expression 'every ryo t now in possession ' shall include every person who, having held land as a ryot continues in possession of such land at the commencement of this Act.
The Subordinate Judge and the High Court have concurrently come to the conclusion, upon consideration of the evidence, that the lands in suit are not private lands but ryoti lands.
On behalf of the appellant Mr. Kesava Iyengar conceded that onus is on the appellant to show that the lands are 'private lands ' within the meaning of the Act ', but the argument was stressed that the lower courts have failed to take into account certain important documents filed on behalf of the appellant, viz., A 128, A 129 and the Paimash account dated August 25, and the Land Register, exhibit A 134.
In our opinion, there is no warrant for the argument advanced on behalf of the appellant.
As regards Exs A 128 and A 129 it is apparent that apart from the question as to the identity of the land, they relate to a period previous to the grant of 1862 which alone constitutes the root of title of the grantees and there is no question of restoration or revival of any anterior right.
The same reasoning applies to the Paimash account dated August 25, which 765 cannot, therefore, be held to be of much relevance in this connection.
Reliance was placed on behalf of the appellant on exhibit A 134, the Land Register for Pannimangalam which shows that in Orathur Thattimal Padugai which consists of Punjais (dry lands) and are rain fed, the land holder (the Tanjore Palace Estate) owns both the warams (Iruwaram in vernacular).
It was argued for the appellant that the expression 'Iruwaram ' means that the land was owned as Pannai or private lands.
Reference was made to the record of rights and Irrigation Memoir dated January 13, 1935, exhibit B 8 which shows that the lands are lruwaram and there are no wet lands.
But the use of the expression "Iruwaram" in these documents is not decisive of the question whether the land is private land of the appellant or not.
Under section 3(10) of the Act, private land comprises of two categories, private lands technically so called, and lands deemed to be private lands.
In regard to private lands technically so called, it must be the domain or home farm land of the landholder a,,.understood in law.
The mere fact that particular lands are described in popular parlance as pannai kambattam, sir, khas, is not decisive of the question unless the lands so called partake of the characteristics of domain or homefarm lands.
In our opinion the correct test to ascertain whether a land is domain or home farm is that accepted by the Judicial Committee in Yerlagadda Malikarjuna Prasad Nayudu vs Somayya(1), that is, whether it is land which a zamindar has cultivated himself and intends to retain as resumable for cultivation by himself even if from time to time he demises for a season.
The Legislature did not use the words 'domain or home farm land ' without attaching to them a meaning; and it is reasonable to suppose that the Legislature would attach to these words the meaning which would 'be given to them in ordinary English.
It seems to us that the sub clause (b) (i) of the definition is intended to cover those lands which come obviously within what would Ordinarily be recognised as the domain or home farm, that is to say, lands appurtenant to the landholder 's residence and kept for his enjoyment and use.
The home farm is land which the landlord cultivates himself, as distinct from land which he lets out to tenants to be farmed.
The first clause is, therefore meant to include and signify those lands which are in the ordinary sense of he word home farm lands.
The other clauses of the definition appear to deal with those lands which would not necessarily be regarded as home farm lands in the ordinary usage of the term; and with reference to those lands there is a proviso that lands purchased at a sale for arrears of revenue shall not be regarded as private lands unless cultivated directly by the landlord for the required period.
It seeing to us that the definition reads as a whole (1) I.L.R. 3 Sup.CI/68 5 766 indicates clearly that the ordinary test for 'private land ' is the ' test of retention by the landholder for his personal use and cultivation by him or under his personal supervision.
No doubt, such lands may be let on short leases for the convenience of the landholder without losing their distinctive character; but it is not the intention or the scheme of the Act to treat as private those lands with reference to which the only peculiarity is the fact that the landlord owns both the warams in the lands and has been letting them out on short term leases.
There must, in our opinion be something in the evidence either by way of proof of direct cultivation or by some clear indication of an intent to regard these lands as retained for the personal use of the landholder and his establishment in order to place those lands in the special category of private lands in which a tenant under the Act cannot acquire occupancy rights.
In the present case there is no proof that the lands were ever directly cultivated by the landholder.
Admittedly, soon after the grant of 1862 the estate came under the administration of Receivers, who always let out the lands to the tenants to be cultivated.
In exhibit B 8, the Record of Rights the lands are entered in column 5 as Punja or dry land.
In column 4 which requires the entry to be made as private land they are not entered as private lands.
If was argued for the appellant that the lands are sometimes called 'Padugai ' and that the expression meant that the lands were within the flood bank and forming part of the river bed.
But the description of the land as 'Padugai ' is not of much consequence because they are also called as Orathur 'Thottam meaning a garden where garden crops are raised to distinguish it from paddy fields.
It appears that the lands actually lie between two rivers and comprise more than 100 acres, and by their physical feature cannot be 'padugai ' in the sense in which the term is normally used.
The argument was stressed on behalf of the appellant that leasing rights of the land were auctioned periodically.
But the High Court has observed that one and the same tenant continued to bid at the auction and there was evidence that tenants continued to cultivate the lands without break or change, and the fact that there were periodical auctions of the lease rights did not necessarily deprive the tenants of the occupancy rights which they e ' were enjoying.
We accordingly hold that the appellant has not adduced sufficient evidence to rebut the presumption under section 18: of the Act that the lands in the inam village are not private land and the argument of the appellant on this aspect of the case must be rejected.
For the reasons expressed we hold that the judgment of the Madras High Court dated January 10, 1956 is correct and these appeals must be dismissed with costs one set of hearing fee.
| When the Raja of Tanjore died in 1855 without leaving male issue the East India Company took possession of all his properties including his private property.
However on a memorial being presented by the senior widow of the late Raja, the Government of India in 1862 "sanctioned the relinquishment, of the whole of the landed property of the Tanjore Raja in favour of the heirs of the late Raja.
" The Tanjore Palace Estate thus came into existence.
In 1948 the appellant purchased certain lands situate in Orathur Padugai which was part of the aforesaid Tanjore Palace Estate, and thereafter instituted suits for possession of these lands from various defendants.
The trial court dismissed the suits on the ground that the lands were situated in an 'estate under section 3(2)(d) of the Madras Estates Lands Act 1 of 1908 and they were 'ryoti lands ' as defined in section 3(16) in which the defendants had acquired occupancy rights.
The Madras High Court affirmed the decree, whereupon the appellant came to this Court.
it was contended on behalf of the appellant that (i) the lands did not form an 'estate ' under section 3 (2) (d) of the aforesaid Act because the restora tion of the land to the widows of the Raja of Tanjore did not amount to a fresh grant but only a restoration of the status quo ante; (ii) that Orathur Padugai was not a whole village as required by the definition of 'estate '; (iii) the widows of the Raja enjoyed both the 'warams ' and the lands purchased by the appellant were 'private lands ' in section 3(10)(b) so that the defendants did not have any occupancy rights therein.
HELD: (i) The relinquishment by the Government of India in favour of the widows of the Raja in 1862 was a fresh grant as already held in several cases.
In view of the authorities it could no longer be questioned that the Tanjore Palace state was an 'estate ' within the meaning of section 3(2)(d) of the Madras Estates Lands Act.
[759 F 760 B] Jijoiamba Bayi Saiba vs Kamakshi Bayi Saiba, 3 M.H. C.R. 424, Sundaram Ayyar vs Ramachandra Ayyar, I.L.R. 40 Mad.
3891, Maharaja of Kolhapur vs Sondaram Iyer, I.L.R. 48 Mad. 1, Sundaram vs Deva Sankara, A.I.R. 1918 Mad.
428 and T. R, Bhavani Shankar Joshi vs Somasunakra Moopanar, , relied on.
Chota Raja.
Saheb Mahitai vs Suddaram Iyer, 63 I.A. 224, referred to.
(ii) There was sufficient material on the record to show that at least since 1830 onwards Orathur Padugai was a whole village and therefore an 'estate ' within the meaning of the Act.
[762 C] (iii) The lands in suit were 'ryoti lands ' and not 'private lands '.
The definition in section 3(10) read as a whole indicates clearly that the ordinary test for 'private land ' is the test of retention by the landholder 7 5 5 for his own personal use and cultivation by him or under his personal supervision.
No doubt, such lands may be let on short leases for the convenience of the landholder without losing their distinctive, character; but it is not ' the intention or the scheme of the Act to treat as private those lands with reference to which the only peculiarity is the fact that the landlord owns both the warams in the lands and has been letting them out on short ]cases.
1765 H 766 B) In the present case there was no proof that the lands were ever directly cultivated by the landholder.
The High Court had found that the same tenants continued to cultivate the lands without break or change, and the fact that there were periodical auctions of the lease rights did not necessarily deprive the tenants of the occupancy rights which they were enjoying.
The appellant had not been able to adduce sufficient evidence to rebut the presumption under section 185 of the Act that the lands in the inam village are not private lands.
[766 C G] Yerlagadda Malikarjuna Prasad Nayudu vs Somayya, I.L.R. , referred to with approval.
|
minal Appeal No. 443 of 1993.
From the Judgment and Order dated 22.4.92 of the Calcutta High Court in Crl.
Revision No. 800/92.
A.K. Sen, S.C. Ghosh, Rajiv K. Dutta and B.B. Tawakley for the Appellant.
Amlan Ghosh and Ranjan Mukherjee for the Respondents.
The Judgment of the Court was delivered by MOHAN, J.
leave granted.
The appellant herein was, married to second respondent on 16th January, 1990 according to Hindu Rites and Customs.
They lived together for sometime until second respondent left the matrimonial home to reside with her parents in order to prepare for Higher Secondary Examination which commenced on 5.4.90 920 and continued upto 10.5.90.
In the month of April, 1990 she conceived, on coming to know that she was pregnant, the appellant and the family members did not want her to beget a child.
Therefore she was forced to undergo abortion which was refused by the second respondent.
During the stay She was meted out cruetreatment both physically and mentally.
She came back to the matrimonial home during Durga Pooja in the month of October, 1990.
A female child was born on 3.1.91.
She filed a petition under section 125 Cr.
P.C. before the Learned Chief Judicial Magistrate, Alipore in Misc.
Case No. 143 of 1991 both for herself and the child.
By an order dated 14.8.91 which was passed ex parte he awarded a sum of Rs. 300 per mansum to the mother and Rs. 200 to the child.
Against that order, he moved a revision to the High Court.
That revision is pending as 1837 of 199 1.
Thereafter the petitioner filed a Crl.
Case No. 143 of 1991 for blood group test of the second respondent and the child.
In that proceeding the petitioner herein disputed the paternity of the child and prayed for blood group test of the child to prove that he was not the father of the child.
According to him if that could be established he would not be liable to pay maintenance.
That application was dismissed on two grounds: (i) there were other methods in the Evidence Act to disprove the paternity (ii) moreover it is settled law that medical test cannot be conclusive of paternity.
Aggrieved by this order, a revision was preferred before the High Court.
Dismissing the revision it was held that section 112 of the Evidence Act says where during the continuance of valid marriage if a child is born that is a conclusive proof about the legitimacy.
This section would constitute a stumbling block in the way of the petitioner getting his paternity disproved by blood group test.
The English law permitting blood test for determining the paternity of legitimacy could not be applied in view of section 112 of the Evidence Act.
Therefore it must be concluded that section 112 read with section 4 of the said Act debars evidence except in cases of non access for disproving the presumption of legitimacy and paternity.
It is the contention of Mr. Ashok Sen, learned counsel for the appellant that the only way for the father to disprove the paternity is by blood group test.
Having regard to the development of medical jurisprudence to deny that request to the appellant will be unreasonable.
As a matter of fact, in England, this is commonly resorted to as it will leave no room for doubt.
In 1968 (1) All England Reports p. 20 Re. 1 it was held that even without the consent of the guardian ad litem, the court had power to order an infant be subjected to a blood group test.
921 There is no justification for the court below to refuse the same on the ground that section 112 of the Evidence Act would be an obstacle in seeking relief of blood group test.
Before we deal with the arguments, we will examine the law as available in England.
At the beginning of the century scientists established that human blood had certain characteristics which could be genetically transmitted.
The first recognised system was ABO blood group.
The blood group of a child is determined by the parents ' genetic make up but the number of possibilities is such, that it is not possible to prove that certain individuals are the father on the basis of comparing blood groups, only, that they are not the father.
By 1930s other immunological test became available.
As a result the possibility of establishing paternity increased.
An attempt by way of statutory provision to make blood test compulsory in En land failed in 1938.
However, in 1957 the Affiliation Proceedings Act was passed.
Under that Act, it was assumed that a man was the father once a sexual relationship with the mother at the time of conception was proven unless he could show another man had intercourse with her at that time.
Failing the father 's attempt, the mother 's evidence had to be corroborated by facts such as blood test etc.
Under the Act either party could ask for a blood test and either was entitled to refuse to take part, although only the mother can apply for maintenance.
The Family Reforms Act, 1969 conferred powers on the court to direct taking blood test in civil proceedings in paternity cases.
Courts were able to give directions for the use of the blood test and taking blood samples from the child, the mother and any person alleged to be the father.
Since the passing of 1969 Act the general practice has been to use blood tests when paternity is in issue.
However, it is to be stated the court cannot order a person to submit to tests but can draw adverse inferences from a refusal to do so.
Now under the Fan lily Reforms Act, 1987 in keeping with modern thinking on the continuing and shared responsibility of parenthood, 'parentage ' rather than paternity has to be determined before the court.
Fathers as well as mothers can apply for maintenance.
Therefore contests can include mothers denial of paternity.
This Act finally removed the legal aid for corroboration of mother 's statement of paternity.
Two cases may be usefully referred to: Re L Lord Denning M.R. [1968] All England Reports p. 20 stated thus 922 "but they can say positively that a given man cannot be the father, because the blood groups of his and the child are so different." (emphasis supplied).
In B.R.B. vs J.B. [1968] 2 All England Reports 1023 applied this dictum and held as under: "The Country court judge will refer it to a High Court Judge as a matter suitable for ancillary relief, and the High Court Judge can order the blood test.
Likewise, of course, a magistrate 's court has no power to order a blood test against the will of the parties.
The magistrate can only do it by consent of those concerned, namely, the grown ups and the mother on behalf of the child; but, nevertheless, if any of them does not consent, the magistrate can take that refusal into account1 adhere to the view which expressed in Re L. that (6) "If an adult unreasonably refuses to have a blood test, or to allow a child to have one, I think that it is open to the court in any civil proceedings (no matter whether it be a paternity issue or an affiliation summons,or a custody proceedings) to take his refusalas evidence against him, and may draw an inference there from adverse to him.
This is simple common sense." "The conclusion of the whole matter is that a judge of the High Court has power to order a blood test whenever it is in the best interests of the child.
The judges can be trusted to exercise this discretion wisely.
I would set no limit, condition or bounds to the way in which judges exercise their discretion.
To object of the court always is to find out the truth.
When scientific advances give us fresh means of ascertaining it, we should not hesitate to use those means whenever the occasion requires." "Having heard full argument on the case, lam satisfied beyond any reasonable doubt (to use the expression used in rebutting the presumption as to legitimacy) that LORD DENNING, M.R., was right in saying that such an order may be made in any case where the child is made a party to the proceedings and in the opinion of the judge of the High Court it is in the child 's best interests that it should be made.
" 923 As regard United States the law as stated in Forensic Sciences edited by Cyril H. Wecht is as under: Parentage testing is the major (but not the exclusive) involvement of forensic serology in civil cases.
The majority of disputed parentage cases involve disputed paternity, although an occasional disputed maternity, or baby mix up case does arise, and can be solved using the tools of forensic serology described in this chapter.
Blood typing has been used to help resolve paternity cases since the mid 1920 'section According to Latters, there were 3,000 cases tested in Berlin in 1924, and Schiff and Boyd said that the first case went to court in Berlin in 1924.
Ottenberg, in this country published paternity exclusion tables in 192 1, as did Dyke in England in 1922.
It took somewhat longer to satisfy the courts, both in Europe and in country, that parentage exclusions based upon blood grouping were completely valid.
Wiener said that he had obtained an exclusion in a paternity case in this country which reached the courts early in 1933.
In January of 1934, Justice Steinbrink of the New York Supreme Court in Brooklyn ordered that blood tests be performed in a disputed paternity action, using a s precedent a decision by the Italian Supreme Court of Cassation, but his order was reversed upon appeal.
Soon afterward, however, laws were passed in a number of states providing the courts with statutory authority to order blood testing in disputed paternity cases.
Paternity testing has developed somewhat more slowly in the Unitted States than in certain of the European countries, but today the differences in the number of systems employed, and judicial acceptance of the results, are no longer that great.
A number of authorities have recently reviewed the subject of paternity testing in some detail, and in some cases have summarized the results of large number of cases that they have investigated.
Walker points out that failure to exclude a man, even at the 95 percent level of paternity exclusion does not mean that the alleged father is proven to be biologic father, because absolute proof of paternity cannot be established by any known blood test available.
Although this fact is well known and appreciated by workers it), the field of blood grouping and by attorneys active in this area, it is not generally understood by the lay public.
However, blood group 924 serology, using proven genetic marker systems, represents the most accurate scientific information concerning paternity and is so recognised in the United States, as well as in a number of countries abroad.
" In India there is no special statute governing this.
Neither the Criminal Procedure Code nor the Evidence Act empowers the court to direct such a test to be made.
In 1951 (1) Madras Law Journal p.58O Polavarapu Venkteswarlu, minor by guardian and mother Hanwnamma vs Polavarapu Subbayya in that case the application was preferred under section 151 of the Code of Civil Procedure invoking the inherent powers of the Court to direct a blood test.
The learned judge was of the following view: Section 15 1, Civil Procedure Code, has been introduced in to the Statute book to give effect to the inherent powers.
of Courts as expounded by Woodroffe, J., in Hukum Chand Boid vs Kamalan and Singh.
Such powers can only be exercised ex debito justice and not on the mere invocation of parties or on the mere volition of courts.
There is no procedure either in the Civil Procedure Code or in the Indian Evidence Act which provides for a test of the kind sought to be taken by the defendant in the present case.
It is said by Mr. Ramakrishna for the respondent before m e that in England this sort of test is resorted to by Courts where the question of non access in connection with an issue of legitimacy arises for consideration.
My attention has been drawn by learned counsel to page 69 of Taylor 's Principles and Practice of Medical Jurisprudence, Volume 2, where it is stated thus : "In Wilson vs Wilson, Lancet [1942] 1. 570, evidence was given that the husband 's group was OM, that the wife 's was BM and that the child 's was ABN.
The Court held that the husband was not the father of child, and granted a decree for nullity." "It is also pointed out by learned counsel that in the text books on Medical Jurisprudence and Toxicology by Rai Bahadur Jaising P. Moi, (8th Edition), at page 94, reference is made to a case decided by a Criminal Court at Mercare in June, 194 1, in which the paternity and maternity of the child being under dispute, the Court resorted to the results of the blood grouping test." 925 That may be.
But I am not in any event satisfied that if the parties are unwilling to offer their blood for a test of this kind this Court can force them to do so.
" The same view was taken by the Kerala High Court in Vasu vs Santha 1975 Kerala Law Times p. 533 as "A special protection is given by the law to the status of legitimacy in India.
The law is very strict regarding the type of the evidence which can be let in to rebut the presumption of legitimacy of a child.
Even proof that the mother committed adultery with any number of men will not of itself suffice for proving the illegitimacy of the child.
If she had access to her husband during the time the child could have been begotten the law will not countenance any attempt on the part of the husband to prove that the child is not actually his.
The presumption of law of legitimacy of a child will not be lightly repelled.
It will not be allowed to be broken or shaken by a mere balance of probability.
The evidence of non access for the purpose of repelling it must be strong, distinct, satisfactory and conclusive see Morris vs Davies; , The standard of proof in this regard is similar to the standard of proof of guilt in a criminal case.
These rigours are justified by considerations of public policy for there are a variety of reasons why a child 's status is not to be triffled with.
The stigma of illegitimacy is very severe and we have not any of the protective legislations as in England t o protect illegitimate children.
No doubt, this may in some cases require a husband to maintain children of whom he is probably not their father.
But, the legislature alone can change the rigour of the law and not the court.
The court cannot base a conclusion on evidence different from that required by the law or decide on a balance of probability which will be the result if blood test evidence is accepted.
There is an aspect of the matter also.
Before a blood test of a person is ordered his consert is required.
The reason is that this test is a constraint on his personal liberty and cannot be carried out without his consent.
Whether even a legislature can compel a blood test is doubtful.
Here no consent is given by any of the respondents.
It is also doubtful whether a guardian ad litem can give this consent.
Therefore, in these circumstances, the learned Munsiff was right in 926 refusing the prayer for a blood test of the appellant and respondents 2 and 3.
The learned Judge is also correct in holding that there was no illegality in refusing a blood test.
The maximum that can be done where a party refuses to have a blood test is to draw an adverse inference (see in this connection Subayya Gounder vs Bhoopala, AIR 1959 Madras 396, and the earlier decision of the same court in Venkateswarlu vs Subbayya AIR 1951 Madras 910.
Such an adverse inference which has only a very little relevance here will not advance the appellants case to any extent.
He has to prove that he had no opportunity to have any sexual intercourse with the 1st respondent at a time when these children could have been begotten.
That is the only proof that is permitted under section II 2 to dislodge the conclusive presumption enjoined by the Section.
" In Hargavind Soni vs Ramdulari AIR 1986 MP at 57 held as: "The blood grouping test is a perfect test to determine questions of disputed paternity of a child and can be relied upon by Courts as a circumstantial evidence.
But no person can be compelled to give a sample of blood for blood grouping test against his will and no adverse inference can be drawn against him for this refusal.
" Blood grouping test is a useful test to determine the question of disputed paternity.
It can be relied upon by courts as a circumstantial evidence which ultimately excludes a certain invididual as a father of the child.
However, it requires to be carefully noted no person can be compelled to give sample of blood for analysis against her will and no adverse inference can be drawn against her for this refusal.
In Raghunath vs Shardabai , it was observed blood grouping test have their limitation, they cannot possibly establish paternity, they can only indicate its possibilities.
In Bhartiraj vs Sumesh Sachdeo & Ors., held as: "Discussing the evidentiary value of blood tests for determining paternity, Rayden on Divorce, (1983) Vol. 1) p. 1054 has this to say "Medical Science is able to analyse the blood of individuals 927 into definite groups: and by examining the blood of a given man and a child to determine whether the man could or could not be the father.
Blood tests cannot show positively that any man is father, but they can show positively that a given man could or could not be the father.
It is obviously the latter aspect the proves most valuable in determining paternity, that is, the exclusion aspect for once it is determined that a man could not be the father, he is thereby automatically excluded from considerations of paternity.
When a man is not the father of a child, it has been said that there is at least a 70 per cent chance that if blood tests are taken they will show.
positively he is not the father, and in some cases the chance is even higher: between two giver men who have had sexual intercourse with.
the mother at the time of conception, both of whom undergo blood tests, it has likewise been said that there is a 80 per cent chance that the tests will show that one of them is not the father with the irresistible inference that the other is the father.
The position which emerges on reference to these authoritative texts is that depending on the type of litigation, samples of blood, when subjected to skilled scientific examination, can sometimes supply helpful evidence on various issues, to exclude a particular parentage set up in the case.
But the consideration remains that the party asserting the claim to have a child and the rival set of parents put to blood test must establish his right so to do.
The court exercises protective jurisdiction on behalf of an infant.
In my considered opinion it would be unjust and not fair either to direct a test for a collateral reason to assist a litigant in his or her claim.
The child cannot be allowed to suffer because of his incapacity; the aim is to ensure that he gets his rights.
If in a case the court has reason to believe that the application for blood test is of a fishing nature or designed for some ulterior motive, it would be justified in not acceding to such a prayer." "The above is the dicta laid down by the various High Courts.
In matters of this kind the court must have regard to section 112 of the Evidence Act.
This section is based on the well known maxim pater est quem nuptioe demonstrant (he is the father whom the marriage indicates).
The presumption of legitimacy is this, that a child born of a married woman is deemed to be legitimate, it throws on the person who is interested in making out the illegitimacy, the whole burden of proving it.
The law presumes both that a marriage ceremony is valid, any that every 928 person is legitimate.
Marriage or filiation (parentage) may be presumed, the law in general presuming against vice and immoratility.
" It is a rebuttable presumption of law that a child born.
during the lawful wedlock is legitimate, and that access occurred between the parents.
This presumption can only be displaced by a strong preponderannce of evidence, and not by a mere balance of probabilities.
In Smt.
Dukhtar Jahan vs Mohammed Faroog ; this court held.
"Section II 2 lays down that if a person was born during the continuance of a valid marriage between his mother and any man or within two hundren and eighty days after its dissolution and the mother remains unmarried, it shall be taken as conclusive proof that he is the legitimate son of that man, unless it can be shown that the parties to the marriage had no access to each other at anytime when he could have been begotten.
This rule of law based on the dictates of justice has always made the courts incline towards upholding the legitimacy of a child unless the facts are so compulsive and clinching as to necessarily warrant a finding that the child could not at all have been begotten to the father and as such a legitimation of the child would result in rank injustice to the father.
Courts have always desisted from lightly or hastily rendering a verdict and that too, on the basts of slender materials, which will have the effect of branding a child as a bastard and its mother an unchaste woman.
" This section requires the party disputing the paternity to prove non access in order to dispel the presumption. "Access" and "non access" mean the existence or non existence of opportunities for sexual intercourse; it does not mean actual cohabitation.
The effect of this section is this: there is a presumption and a very strong one though a reubttable one.
Conclusive proof means as laid down under section 4 of the Evidence Act.
From the above discussion it emerges: (1) that courts in India cannot order blood test as matter of course; 929 (2) wherever applications are made for such prayers in order to have roving inquiry, the prayer for blood test cannot be entertained.
(3) There must be a strong primafacie case in that the husband must establish non access in order to dispel the presumption arising under section 112 of the Evidence Act.
(4) The court must carefully examine as to what would be the consequence of ordering the blood test; whether it will have the effect of branding a child as a bastard and the mother as an unchaste woman.
(5) No one can be compelled to give sample of blood for analysis.
Examined in the light of the above, we find no difficulty in upholding the impugned order of the High Court, confirming the order of the Addl.
Chief Judicial Magistrate, Alipore in rejecting the application for blood test.
We find the purpose of the application is nothing more than to avoid payment of maintenance, without making any ground whatever to have recourse to the test.
Accordingly Criminal Appeal will stand dismissed.
Cr, M.P.No.
2224/93 in S.L.P.(cr No. 2648/92 filed by Respondent No. 2 will stand allowed.
She is permitted to withdraw the amount without furnishing any Security.
R.P. S.L.P. dismissed.
| The appellant was a teacher in the Department of Biochemistry of Rajendra Medical College.
He filed an application for his registration as a student in M.D.
The University forwarded the application to the Principal of Rajendra Medical College.
The Principal objected to appellant 's registration as he was not posted in any of the teaching posts in Rajendra Medical College.
Though the appellant was attached to the Department of Medicine, was a Biochemist attached to that Renal Unit dealing with the subject of Biochemistry.
The appellant filed a writ petition in the High Court for a direction tot he University to permit him to submit his thesis in M.D. (Medicine) examination on the ground that he was a teacher.
The University took the stand that the appellant was not a teacher and he was not eligible for training in M.D. (General Medicine).
The High Court dismissed the appellants writ petition and held that he was not entitled for admission to the examination in M.D. as he did not such it 910 his thesis and did not produce a certificate of having undergone satisfactory training.
The High Court did not decide on the question whether he held a teaching post or not.
The appellant was granted permission to appear for M.D. (Medicine) examination after the University was satisfied that the appellant was holding a teaching post The respondent Association filed a writ petition before the High Court challenging the permission given to the appellant to appear for the said examination, contending that he was not a teacher and that he did not undergo the necessary training for 2 years and that he did not do housemanship in General Medicine for one year.
The High Court allowed the writ petition on the ground that the appellant did not undergo training for 3 years prior to his application to appear for M.D. (Medicine) examination.
In this writ petition also the High Court did not decide whether the appellant was holding a teaching post.
The appellant filed this appeal by special leave against the High Court 's judgment.
Allowing the appeal, this Court HELD : 1.1.
On account of the interim order passed by the High Court, the appellant appeared for the examination.
The High Court has, however, by the impugned decision restrained the University from declaring his results in the examination.
(915 G) 1.2.
Since the High Court has not gone into the question as whether the appellant was appointed against a teaching post and has proceeded on the footing that he was appointed, it is not necessary for this Court to go into the said question.
(915 F) 2.1.
The facts of the case would reveal that this was a dispute relating to an individual and turned on the facts.
There was no question of law involved in it.
It is not understood how the respondent Association could convert an individual dispute into a public interest litigation.
(915 H) 2.2 Cases where what is strictly an individual dispute is sought to be 911 converted into a public interest litigation should not be encouraged.
The present proceeding is one of the kind.
(915 H) 3.1.
The requirement of the relevant regulation is that the candidate must have done one year 's housemanship prior to the admission to the Postgraduate degree in the same subject in which he wants to appear for the examination or atleast six months housemanship in the same Department and the remaining six months in the allied Department.
The period of training thus, shall be 3 years after full registration including one year of the.
housejob.(912 B) 3.2.
According to the rules, 4 years, (teaching experience in the College and the Hospital (which is always combined.
with practice in the Hospital) is considered equivalent to one year 's house job experience.
In the face of these facts, it is difficult to understand the stand taken by the State Government in the present proceedings.
(916 D) 3. 3.
The University bad on the facts of the case accepted the contention of the appellant that he had completed 3 years ' training.
It is not understood as to what ' state the State has in denying the said factual position.
(916 B)
|
Civil Appeal No. 19 of 1954.
Appeal from the judgment and decree dated April 8, 1949 of the Patna High Court, in Appeal from Original ]Decree No. 116 of 1947, arising out of the judgment and decree dated the February 28, 1947, of the Sub Judge at Begusarai in Title Suit No. 14/14 of 1944/45.
L. K. Jha and B. K. Sinha, for the appellant.
G. section Pathak, B. Sen, B. K. Saran and R. C. Prasad, for respondent No. 1. section D. Sekhri, for respondents Nos. 3 and 4. 1959.
September 7.
The Judgment of the Court was delivered by DAS GUPTA J.
Though a member of questions, some of fact and some of law were originally raised in this suit for pre emption, the main question for consideration in this appeal from the judgment of the 665 High Court of Patna, reversing the decree for preemption granted by the Trial Court, the Subordinate Judge of Monghyr, is the question on which the High Court based its decision of reversal.
That question is whether the ceremonies essential for exercising the right of pre emption were properly performed.
Issue No. 9 in which this question was raised is in these words: " Did the plaintiff perform the ceremonies of Talab E Mowasibat and Talab E Ishtashad as required by law ?" The plaintiff Radha Prasad Singh brought this suit for pre emption in respect of 5 items of property described in Schedule B of the plaint which along with certain other properties were sold by the Defendant 2nd Party Mst.
Jogeshwari Kumari alias Jageshwari Kumari widow of Babu Ganga Prasad Singh deceased and daughter of Babu Narsingh Prasad Singh by a deed executed on November 18, 1943, at Moghra and registered on November 23, 1943, at Monghyr.
The Trial Court held that the plaintiff had failed to prove that he was a co sharer in respect of Item 2 of Schedule B. As regards the other 4 Items of properties he held that the plaintiff was a co sharer and as already indicated he gave the plaintiff a decree for pre emption in respect of these 4 Items.
The sale deed is in favour of the defendant first party, Gajadhar Singh.
It is no longer disputed, however, that Gajadhar Singh was a mere Benamidar and the real purchaser by this deed was Babu Lakshmi Prasad Singh, his son Satya Narayan Singh and others.
A dispute was raised as to whether 4 annas 5 gandas odd share of Mauza, Majhaul Kilan Shri Ram, was sold or the entire 8 annas odd share of the vendor was sold.
It has been held by both the Courts below that the plaintiff 's original case that the 4 annas 5 gandas odd share of Majhaul Kilan Shri Ram was sold is not correct and that really 8 annas odd share, the entire interest of the vendor in this property was sold by the deed, but that after the registration of the sale deed it was tampered with and by an act of forgery the 666 8 annas odd share was altered fraudulently to 4 annas 5 gandas.
It was after the defendant 's pleading in the written statement that 8 annas odd gandas of this Mauza was sold and not 4 annas odd gandas as mentioned in Schedule B, that the plaintiff prayed for and obtained an amendment of the plaint by which an alternative prayer for pre emption in respect of 8 annas odd share of this Mauza was made.
But for this amendment it is obvious the prayer for pre emption could not be granted as being only for a partial pre emption, once it has been found that 8 annas odd gandas were sold and not 4 annas odd gandas.
One question which was therefore raised whether the amendment was rightly granted by the Trial Court.
The question that the suit as brought was for partial pre emption was also raised from another aspect, viz., that though the sale of this Mauza, Majhaul Kilan Shri Ram, was of all villages Asli Mai Dakhili, i.e., original with dependencies, there is no prayer for pre emption in this suit in respect of Dakhili villages.
As already indicated, however, the main question in controversy was whether the essential ceremonies required in law, i.e., Talab E Mowasibat and Talab E Ishtashad, were performed in accordance with law.
A regards this the plaintiff 's case is that he came to know of this sale by his co sharer Jogeshwari for the first time on January 2, 1944, at about 11 a.m. when Jadunath Singh, a resident of Majhaul, informed him of this and that he at once completed the formality of Talab E Mowasibat in the presence of some persons and that shortly after this he went to the properties of Tauzis 1130, 4201, and 1136, and also Mauza Bugurgabad and performed Talab E Ishtashad, that he went then to the residence of the purchaser Gajadhar Singh at Matihani on January 3, 1944, and again performed the Talab E Ishtashad ; and that very day he started for the residence of the vendor and performed the Talab E Ishtashad there on January 4, 1944.
The defence was that the story of any such ceremonies having been performed is wholly untrue and that, in fact, the plaintiff had knowledge of the sale 667 from long before January 2, 1944, he having been a rival bidder for the purchase of those very properties.
A detailed story of a proclamation by beat of drums of the proposed sale by Bindeshwary and the plaintiff 's attempt to secure the property at the sale was set out by the defendant in the written statement and was sought to be proved by his witnesses.
The Trial Court disbelieved the. defendant 's story on this point.
He also rejected the defence allegation that the plaintiff was himself responsible for the forgery that was committed in respect of the deed of sale by altering the statement of the share in Majhaul Kilan Shri Ram that was sold, from 8 annas odd gandas to 4 annas odd gondas.
On these findings he held the plaintiff 's suit was not barred by estoppel.
Proceeding then to the consideration of the question whether the plaintiff 'came to know of the sale in favour of the first defendant for the first time on January 2, 1944, from Jadunath as alleged, the learned Judge has accepted the evidence given by the plaintiff and Jadunath on this point and held that the plaintiff 's case that he received information for the first time on that day was true.
He also accepted the evidence of the plaintiff as regards the requisite ceremonies having been duly performed.
The very important question that arose for the decision of the Court was whether the plaintiff 's story that he came, to know of the sale for the first time from Jadunath on January 2. 1944, is true.
The Trial Court held that it was true.
On this point the High Court came to a, contrary conclusion.
The learned judges of the High Court were of opinion that the evidence of witness Jadunath was wholly unacceptable and that the plaintiff 's evidence that he came to know of the alleged sale on January 2, 1944, could not be accepted.
After pointing out that the whole basis of the plaintiffs claim that he performed 'the ceremonies of Talab E Mowashibat and Talab E Ishtashad was without substance, they examined the evidence as regards the performance of the ceremonies and held that this evidence was also not acceptable, 668 The question in dispute before us is thus a pure question of fact, viz., whether the plaintiff came to know of the sale for the first time on January 2, 1944, and thereupon performed the ceremonies of Talab E Mowasibat and Talab E Ishtashad.
The main contention raised by Mr. Jha, who appeared in support of the appeal is that in considering this question of fact the High Court approached the question from a wrong point altogether and was not justified in reversing the judgment of the Trial Court on that point.
The question as to what should be the right approach for a Court of Appeal in deciding a question of fact already decided in one way by the Judge in the Court of the first instance has often engaged the attention of the courts, though the views expressed have not been uniform.
Emphasis has been laid in some cases on the importance of the Court of Appeal deciding for itself the question of fact when the appeal is on facts, though remembering that it should not lightly do so not having had the advantage which the Trial Judge had of seeing the witnesses.
, More emphasis has been laid in other cases on the importance of not reversing the Trial Judge 's findings of fact without compelling reasons.
All the Courts in all the cases have stressed the rule which the courts of appeal should observe for themselves: that a Judge sitting on appeal not having had the opportunity of seeing and hearing the witnesses should think twice and more than twice before reversing the findings of fact arrived at by the Trial Court who has had that opportunity.
To say that however is not to say that the Court of Appeal will never reverse a finding of fact of the Trial Court.
In Shunmugaroya Mudaliar vs Manikka Uudaliar (1), Lord Collins pointed out that: "It is always difficult for judges who have not seen and heard the witnesses to refuse to adopt the conclusions of fact of those who have; but that difficulty is greatly aggravated where the Judge who heard them has formed the opinion, not only that their inferences are unsound on the balance (1) (1909) L.R. 36 I.A. 185.
669 of probability against their story, but they are not witnesses of truth.
" In the same judgment Lord Collins referred approvingly to the judgment delivered by Lindley, Master of the Rolls, in the Court of Appeal in the case of Coghlan vs Cumberland (1) which set out the limitations of the rule : " even where the appeal turns on a question of fact, the Court of appeal has to bear in mind that its duty is to rehear the case, and the Court must reconsider the materials before the Judge with such other materials as it may have decided to admit.
The Court must then make up its own mind, not disregarding the judgment appealed from, but carefully weighing and considering it; and not shrinking from overruling it if on full consideration the Court comes to the conclusion that the judgment is wrong.
When, as often happens, much turns on the relative credibility of witnesses who have been examined and cross examined before the Judge, the Court is sensible of the great advantage he has had in seeing and hearing them.
It is often very difficult ' to estimate correctly the relative credibility of witnesses from written depositions and when the question arises which witness is to be believed rather than another; and that question turns on manner and demeanour, the Court of Appeal always is, and must be, guided by the impression made on the Judge who saw the witnesses.
But there may obviously be other circumstances, quite apart from manner and demeanour, Which may shew whether a statement is credible or notand these circumstances may warrant the Courtin differing from the Judge, even on a question offact turning on the credibility of witnesses whom the Court has not seen.
" Almost the same view was expressed by Lord Thankerton in Watt (or Thomas) vs Thomas (2 ) : " I. Where a question of the fact has been tried by a Judge without a jury and there is no question if misdirection of himself by the Judge, an appellate (1)(1898) 1 Ch. 704.
(2) (1947) I All E.R. 582.
85 670 court which is disposed to come to a different conclusion on the printed evidence should not do so unless it is satisfied that any advantage enjoyed by the Trial Judge by reason of having seen and heard the witnesses could not be sufficient to explain or justify the trial judge 's conclusions.
The appellate Court may take the view that, without having seen or heard the witnesses, it is not in a position to come to any satisfactory conclusion on the printed evidence.
The appellate Court, either because the reasons given by the Trial Judge are not satisfactory, or because it unmistakably so appears from the evidence, may be satisfied that he has not taken proper advantage of his having seen and heard the witnesses, and the matter will then become at large for the appellate court.
It is obvious that the value and importance of having seen and heard the witnesses will vary according to the class of case, and, it may be, the individiual case in question.
" These observations were cited with approval by Lord Reid in Bonmax vs Austin Motor Co., Ltd., (1).
(See also the observations of Mokerjee, J., in Laljee Mahomed vs Girlder (2).
This question of the proper approach of the Court of Appeal to decisions on questions of fact arrived at by the Trial Court was considered by this Court in Sarju Pershad vs Raja Jwaleshwari Pratap Narain Singh(3).
Mukherjea, J., while delivering the judgment of the Court observed: " In such cases, the appellate court has got to bear in mind that it has not the advantage which the trial Judge had in having the witnesses before him and observing the manner in which they deposed in Court.
This certainly does not mean that when an appeal lies on facts, the appellate court is not competent to reverse a finding of fact arrived at by the trial judge.
The rule is and it is nothing more than a rule of practice that when there is conflict of oral evidence of the parties on any matter in issue and the decision hinges upon the credibility of (1) (1955) I All E.R. 326.
(2) Cal.
(3) [1950]S.C.R.781,784.
671 the witnesses, then unless there is some special feature about the evidence of a particular witness which has escaped the trial judge 's notice or there is a sufficient balance of improbability to displace his opinion as to where the credibility lies, the appellate court should not interfere with the finding of the trial Judge on a question of fact.
" The position in law, in our opinion, is that when an appeal lies on facts it is the right and the duty of the Appeal Court to consider what its decision on the question of facts should be; but in coming to its own decision it should bear in mind that it is looking at the printed record and has not the opportunity of seeing the witnesses and that it should not lightly reject the Trial Judge 's conclusion that the evidence of a particular witness should be believed or should not be believed particularly when such conclusion is based on the observation of the demeanour of the witness in Court.
But, this does not mean that merely because an appeal court has not heard or seen the witness it will in no case reverse the findings of a Trial Judge even on the question of credibility, if such question depends on a fair consideration of matters on record.
When it appears to the Appeal Court that important considerations bearing on the question of credibility have not been taken into account or properly weighed by the Trial Judge and such considerations including the question of probability of the story given by the witnesses clearly indicate that the view taken by the Trial Judge is wrong, the Appeal Court should have no hesitation in reversing the findings of the Trial Judge on such questions.
Where the question is not of credibility based entirely on the demeanour of witnesses observed in Court but a question of inference of one fact from proved primary facts the Court of Appeal is in as good a position as the Trial Judge and is free to reverse the findings if it thinks that the inference made by the Trial Judge is not justified.
Turning now to the instant case we find that the Trial Judge having seen and heard Jadunath and the plaintiff, believed their evidence on the point of information being given to plaintiff by Jadunath about the 672 sale on January 2, 1944, at about II a.m.
It does not, however, appear that the learned Trial Judge arrived at his conclusion on the basis of the demeanour of these witnesses having created a favourable impression on his mind as to their credibility.
In scrutinising the evidence of the plaintiff and of Jadunath it must be borne in mind that the case of the plaintiff is that on January 2, 1944, certain information having been received by him, he performed the formalities.
There is no case that the formalities were performed on any other date.
Therefore, if the story of the communication of information on January 2, 1944, is not established then the whole case of the plaintiff must fail.
Jadunath 's evidence on this point was: " On 2 1 44 I told Radha Babu at his house in Manjhaul that Maghrawalli Jugeshwari Kumari had sold away her Milkiat to Gajadhar Rai of Matihani, this was about 11 a.m. Radha was startled to hear this and standing up said: "Jo jo jaidad Babu Gajadhar Singh hath (then says Maghrawalli Mussammat Jageshwari Kumari ne jo jo jaidad Babu Gajadhar Singh ka liath becha hai uske kharidne ka haq mere.
Ham Kharida, Ham Kharida, Ham Kharida.
Talab Mowashibat karte hain.
Babu Jagdamba Prasad aur Babu Narayan Prasad gabah rahie.
I came to know from a man of Chitral, I kos from Matihani that gajadhar had a marriageable grandson.".
Mention should be made in this connection also of the evidence of Jagdambi Prasad: "On 2 1 44 I had been to plaintiff 's house at 10 30 a.m.
Babu Narayan Prasad Singh, a pleader of Samastilpur was at plaintiff 's house at the time .
Jadunath Singh told Radha Prasad that Musanimat Jagesliwari Kumari of Maghra had sold away her property in Manjhaul to Gajadhar Singh of Matihani.
As soon as Jadunath Singh said this Radha Prasad Singh was startled, stood up and said: I have a right to purchase this property.
I have purchased; I have purchased; I have purchased.
673 You Jagdamba Prasad Singh, you Narayan Prasad Singh and you Jadunath Singh, bear witness to this fact.
He uttered these words thrice." In deciding the question whether the information from Jadunath was the first information received by the plaintiff the Trial Judge had necessarily to consider whether the story that Jadunath came to know of the sale and brought this information on to the plaintiff on January 2, 1944, at about 11 a.m. was true or not.
In arriving at a decision on the point it was necessary for him to consider the probabilities of the story, of Jadunath having gone to Gajadhar 's house in search of a bridegroom and that there Gajadhar Singh informed him of the sale and then of the probability of the story that he would be taking upon himself the task of going to the plaintiffs house immediately on return to his village to convey this information, the probability of the story as to how the plaintiff reacted to the account and also the question of discrepancy.
It does not appear that the learned Trial Judge took any of these matters into consideration.
All that he says about Jadunath 's credibility is that his evidence had been criticised on the ground that he was one of plaintiff 's witnesses in the previous suit brought by him against Satya Narain Singh 's ancestors and that is in his opinion was not a valid ground for discarding the evidence of Jadunath Singh.
We agree with the learned Judge that the mere fact that Jadunath was one of the plaintiff 's witnesses in the previous suit brought by him against Satya Narain Singh 's ancestors about 33 years ago would not by itself be a valid reason for discarding his testimony.
The fact that this was not a valid reason for discarding his testimony does not, however, absolve the Court of the duty of testing the witness 's testimony on the touch stone of probability.
The learned judges of the High Court applied that touch stone and came to the conclusion that Jadunath was not a witness of truth.
It is clearly a case where the words used by Lord Thankerton that the Trial Judge had not taken proper advantage of his having seen and heard the witnesses, and the matter would become at large for the appellate 674 court, should apply.
Here was a witness who could not be considered to be wholly independent.
For, on his own showing he took the trouble of going to plaintiff 's house after what may be taken to be an arduous country in an unsuccessful search for a bridegroom, to inform the plaintiff of a matter in which he himself had no interest a witness who had figured, though many years ago, in a pre emption suit brought by the same person.
These facts made close scrutiny of the witness 's account necessary before the Judge could say just by looking at him that he was a witness of truth.
That scrutiny is conspicuous by its absence.
Taking his evidence as a whole we find that his story that after coming to know of the sale in question he went to the house of Gajadhar, the first defendant, at village Matihani to make enquiries about a marriage proposal in respect of his daughter with his grandson and that it was in that connection that Gajadhar spoke to him about his purchase.
But it is curious that in his examination in chief this witness came straight to his account of 'coming to the plaintiff 's house on January 2, 1944, and informing him about the sale by Jogeshwari of her Milkiat to Gajadhar without saying a word as to his visit to Gajadhar 's house, to the purpose of his visit and the manner in which Gajadhar gave him the information, or even the detailed nature of the information.
It was in cross examination that he disclosed that he went to Gajadhar 's house for "barthuari".
It is in vain that we look into his evidence, whether in examination in chief or in cross examination, for the exact information given by Gajadhar.
It has to be remembered in this connection that it is no longer disputed that Gajadhar himself had no interest in these properties and was a mere Benamidar.
Even if Gajadhar 's own account that he was completely in the dark about these transactions be left out of account it was necessary for the Court to consider how far it was probable that Gajadhar would put on Jadunath a false story of purchase by himself of properties.
It was urged that this Gajadhar did with a view to raise the Tilak which he could thus obtain.
675 Jadunath himself has not said anything about the negotiations about Tilak but one Mahabir Ray has said that when he was going to the fields Gajadhar called him and there lie heard Gajadhar demanding a higher Tilak stating that he had recently purchased properties at Majhaul from Mussammat.
Jadunath himself does not mention having seen this Mahabir at Gajadhar 's house.
Jadunath claims to have gone to his house with a servant.
Mahabir has not mentioned the presence of this servant.
The question whether a man like Mahabir who was a total stranger to the plaintiff would be called by Gajadhar to hear such talks also requires the serious consideration of the Court.
The Trial Judge does not appear to have given the slightest consideration to this aspect of the matter.
The learned judges of the High Court thought that there was no reason that Gajadhar would go out of his way to convey the information to Jadunath that he had purchased the Milkiat of Jogeshwari, the defendant No. 2.
It is difficult not to agree to this estimate of probability.
Even more important was the question of probability as regards the story of the plaintiff 's reaction when the information is said to have been given to him.
Both Jadunath and Jagdambi say that the plaintiff was startled on getting information of the sale and at once uttered the words which have been set out already of the Talab E Mowsibat.
What would a man of ordinary prudence not to speak of the man of property and with experience of previous litigation like the plaintiff would do under such circumstances ? There cannot be any two opinions on this question.
He may consider it unwise to ask his informant any further question before making the first Talab, i.e., Talab E Mowasibat.
Once that was completed he would ply his informant with questions as to where he got this information, what the information exactly was, what properties had been sold, what the consideration was, and other connected questions.
In this case, according to the evidence of Jadunath no such questions were asked by the plaintiff.
In his examination in chief, Jadunath says: 676 " He (plaintiff) asked his syce to bring his tandom.
He told Jagdamba Babu that he would go to make talab e isthashad and asked him to accompany him.
While they were boarding the tandom Jai Prakash Narayan came that way.
Radha Babu asked him also to accompany him.
The same night Radha Babu met us at my house at 8 p.m.
He asked me where I had obtained the information about the sale.
" From this evidence it is clear that though Jadunath was at the place until the Tandom bad been brought and the plaintiff and Jagdamba got into the Tandom and Jai Prakash Narayan also arrived, no question was put by the plaintiff to Jadunath in this behalf.
It has to be noted that the plaintiff went to Jadunath 's house the same night at 8 p.m. and the only question which was asked was: Where he had obtained the information about the sale and nothing was asked about what properties had been sold or for how much had they been sold.
In cross examination Jadunath made the further statement in these words: " When I broke the news Radha Prasad did not ask me where I had received the information, or who had purchased the properties; what properties had been purchased or what the consideration was.
" Such conduct on the part of Jadunath is incredible and any Judge of facts with experience of normal human conduct could have no hesitation in coming to the conclusion that things could not have happened in the way Jadunath has described.
Mr. Jha, the learned Counsel for the appellant, urged that it would be unfair to base any conclusion on the supposed improbability or unnaturalness of such silence on the part of the plaintiff without having given him an opportunity to explain why be acted in this peculiar manner.
It has to be noticed, however, that Jadunath had been examined and cross examined on January 9, 1947, and when the plaintiff was put in the Witness Box on the following day, i.e., January 10, 1947, the lawyer who examined him had before him the fact that Jadunath 's evidence had brought out this strange silence on the part of the plaintiff after he had been informed of the 677 sale.
It was his duty to obtain from Radha Prasad an explanation of such conduct.
But he put no questions to Radha Prasad about this.
The obvious reason is that Radha Prasad had no explanation to offer and the lawyer knowing this kept quiet.
It appears to us that the learned judges of the High Court of Patna were right in attaching great importance to this conduct of the plaintiff and were justified when they thought that this was an improbable story and rejected, in disagreement with the Trial Judge Jadunath 's evidence altogether.
Mention has to be made of another circumstance which was noticed in the High Court judgment.
That is as regards the exact information which is said to have been given by Jadunath.
Jadunath 's own account in the examination in chief is that he "told Radha Babu at his house in Majhaul that Maghrawalli Jugeshwari Kumari had sold away her Milkiat to Gajadhar Rai of Motihani.
In his cross examination he first said : " The information I gave was in these terms: Maghrawali Musammat apni Jaidad Babu Gajadhar Singh Motihani wale ke chan bech dia." and then correcting himself said: " Babu Gajadhar Singh ne kaha ki Maghrawali Musammat ki jaidad kharid kia.
" It is not possible for anybody to remember exactly the words used by himself many years ago and it is reasonable to say that there was no substantial difference between the account given by him of this matter in his examination in chief and in cross examination.
It is interesting to remember, however, that in paragraph 4 of the plaint, it was stated that the information that Jadunath gave was: " That the defendants 2nd and 3rd parties had sold the properties entered in Schedule B of this plaint, along with other properties to the defendant 1st party, under a registered deed of sale.
" According to Jadunath 's evidence he does not appear to have mentioned the defendant 3rd parties as the sellers nor gave any details to show that the properties 86 678 entered in Schedule B were covered by the sale nor that there was a registered deed of sale.
Turning to the evidence on the plaintiff and Jagdamba as regards the information said to have been given by Jadunath we find that Jagdamba says: " Jadunath Singh told Radha Prasad that Musammat Jogeshwari Kumari of Maghra had sold away her property in Majhaul to Gajadhar Singh of Motihani.
" According to the plaintiff himself the information which Jadunath gave was that Gajadhar Singh had purchased the Majhaul properties from the Maghrawali Musammat.
An examination of Schedule B shows that while the first 3 items were properties in Mauza Majhaul, the 4th item is a property in Buzurgabad while the 5th item is a property in Mauza Dundit.
There appears to be no reason to think that these properties 4 and 5 could be even loosely be considered to be properties in Majhaul or Majhaul Properties.
Commenting on Jagdamba 's evidence on this point Mr. Justice Sinha, who delivered the leading judgment stated : " Plaintiff 's witness No. 2 has stated that Jadunath told the plaintiff that the second defendant had sold her property in Majhaul to the first defendant.
If that is so, it is a little difficult to under.
stand how they went to Bugurgabad or to the other items of property to perform the ceremonies, if they ever did so.
" It is strange that there should be such discrepancy between the evidence of Jadunath himself and the plaintiff and Jagdamba as to what actually was said.
But if Jagdamba 's account such as is supported by the plaintiff himself, is true then there is no acceptable explanation as to why the plaintiff could think of going to Bugurgabad at all as he and his witnesses say, he did.
It was the duty of the Trial Judge to take into account these several considerations in testing the credibility of the account given by Jadunath, the plaintiff and Jagdambi that Jadunath informed the plaintiff on January 2, 1944 about the sale.
He did not do so, The learned judges of the High Court as a 679 Court of Appeal were in duty bound to consider these questions before accepting the decision of the learned Trial Judge.
The criticism that the approach of the learned judges of the High Court was wrong is therefore wholly without foundation.
The learned judges of the High Court rightly took these matters into consideration and the decision they arrived at on these considerations that the Trial Judge 's assessment of the evidence was wrong and that Jadunath was not a witness of truth and that the account given by the plaintiff that the information was conveyed to him by Jadunath on January 2, 1944, should not be accepted is clearly right.
Once this decision is reached it is unnecessary to consider the further question whether any ceremonies were performed at all on 2nd, 3rd or 4th January, 1944, as stated by the plaintiff and his witnesses.
Even if they were, they would be of no assistance to the plaintiff as the plaintiff had failed to show that it was on January 2, 1944, that he received the information about the same.
It is unnecessary for us therefore to decide the further question that appears to have been raised, viz., that even if the evidence as regards the performance of the two Talabs i. e., Talab E Mowashibat and Talab E Ishtashad is accepted at its face value the requirements of the law have not been fulfilled.
The High Court held that the plaintiff had failed to prove that the words used by him at the time of the making of the second demand of Talab E Ishtashad were sufficient to draw the attention of the witnesses to the specific properties in respect of which he was demanding his right of pre emption.
We express no opinion whether this view of the learned judges of the High Court is correct or not.
We also express no opinion on the two other questions, viz., whether the Trial Court acted in accordance with law in granting leave to the plaintiff to amend his plaint so as to include the alternative prayer for pre emption in respect of 8 annas odd share of Tauza No. 1130 instead of 4 annas odd share as originally claimed and also whether the suit was bound.
to fail because there was 680 no prayer for pre emption for the Dakhili villages of Tauza No. 1130.
In our opinion the plaintiff having failed to prove that the information of the sale was conveyed.
to him by Jadunath on January 2, 1944, the suit 'was rightly dismissed by the High Court.
This appeal is, therefore, also dismissed with costs.
| A complaint was filed against seven persons under SS. 409, 465, 467, 471 and 477A of the Indian Penal Code.
After examining the complainant summonses were issued to the accused to answer a charge under section 406. 'The trial started as in a warrant case; prosecution witnesses were examined and cross examined and the statements of the accused were recorded, and the Magistrate heard arguments on the question of framing charges.
Thereafter, he framed charges under SS. 409 and 465 read with SS. 471 and 477A, and without giving previous intimation of his intention to do so, passed an order committing the appellants to the Court of Sessions.
The appellants, contended that the commitment was illegal because the case having begun as a warrant case it was incumbent upon the Magistrate, when he decided to commit the case to the Court of Session, to follow the procedure provided in Ch.
XVIII Code of Criminal Procedure, but he failed to comply with the provisions of SS. 208 to 213 of.
737 that Chapter.
The complainant urged that even if the provi sions of SS. 208 to 213 had not been complied with no prejudice was caused to the appellants and the commitment could not be( quashed.
Held, that the commitment order was illegal as the Magistrate had failed to comply with the provisions of section 208 of the Code of Criminal Procedure.
The proceedings having begun as in a warrant case, if the Magistrate, at a subsequent stage, was of the view that the case should be committed to the Court of Sessions, he had to act under section 347(1) of the Code and to follow the procedure prescribed for inquiries under Ch.
XVIII of the Code.
When, in the present case, the Magistrate decided to commit the case, he should have refrained from framing the charge and should have informed the accused of his intention to commit and should have called upon the accused to produce defence evidence, if any.
The failure of the Magistrate to intimate his decision to commit to the accused deprived them of the right to produce defence evidence, if any, under section 208.
The denial of this right was itself sufficient to cause prejudice to the accused and failure of justice inasmuch as the accused were prevented from leading evidence which might have induced the Magistrate not to frame the charge against them.
Subramania Iyer vs King Emperor, (1901) L.R. 28 I.A. 257 Pulukuri Kotayya vs King Emperor, (1948) L.R. 74 I.A. 65, and ' Narain Rao vs The State of Andhra Pradesh, , referred to.
|
Appeal No. 742 of 1967.
Appeal from the judgment and decree dated April 4, 1960 of the Madras High Court in Appeal No. 334 of 1956.
M. Natesan, K. section Subramanian and K. Jayaram, for the appellant.
A. V. Rangam and A,.
Subhashini, for the respondent.
The Judgment of the Court was delivered by Grover, J.
This is an appeal by Certificate from a judgment of the Madras High Court.
The appellant 's predecessor in office T. G. Kuppuswamy Iyer filed on April 14, 1950 a suit in the District Court, Madurai, under section 84(2) of the Madras Hindu Religious Endowments Act, 3 L152SupCI./7 586 (Act 11 of 1927) against the respondent and two other persons who are not parties to the appeal for a declaration that the suit Mandapam was a private Mandapam, i.e., family property of Thoguluva Thirumalier and was not a temple covered by the provisions of the aforesaid Act.
This suit had to be instituted because the authorities appointed under the Madras Act 11 of 1927 held that the premises No. 29 South Masi Street, Madurai wherein the idol of Sri Srinivasaperumal and certain other idols Were located was a temple within the meaning of the said Act.
The District Judge decreed the suit in favour of the appellant but the High Court, on appeal, reversed that judgment and passed a decree holding that the premises constituted a temple.
The appellant thereupon filed a petition for leave to appeal to this Court but the High Court refused to grant the certificate.
The matter was brought to this Court.
By a judgment which is reported in T. D. Gopalan vs Commr. of Hindu Religious & Charitable Endowments, Madras(1) this Court directed that the subject matter of the dispute should be ascertained with reference to the claim made by the plaintiff in his plaint.
Consequently the valuation of the property should have been done according to the claim made in the plaint, namely, that the property was private pro perty of the family capable of alienation.
Thereafter the High Court granted a certificate on determination of the value of the suit property.
The only question which had to be decided by the District Court and the High Court was whether the property in dispute was a private Mandapam and not a public temple.
The District Judge appointed a Commissioner to submit a report regarding the physical features of the property.
The Commissioner reported that the suit premises was a temple and in front of it there was a Garbha Graha on either side.
There were two stone idols called Dwarabalakas.
The implements necessary for offering puja were also found by the Commissioner.
But there was no Dwejasthamba, Balipeeda or Gopuram.
There is no dispute, that the premises where the temple is situ.ate originally belonged to one Kuppiyan.
A decree was obtained by Tirumalaiyyan against Kuppiyan and in execution of that decree the property was put to sale by public auction.
It was purchased by Tirumalaiyyan in 1885 (vide Ext.
B 1 extract from the suit register dated 14 1 1885).
The title to the property thus vested in Tirumalaiyyan and the members of the family who later on came to be known as Thoguluva family.
The case laid in the plaint was that the Mandapam came to be constructed on the suit property by the members of that (1) 5 87 family which belonged to what is known as the Saurashtra community in Madurai town.
It was a private Mandapam which was in the exclusive and absolute control of the said family and worship was performed there for the spiritual benefit of the members of the Thoguluva Tirumalaiyyam family.
, It is common ground that at all times the management and control over the Mandapam was with some or other members of the Thoguluva family.
In 1932 or 1933 some shops in the eastern and western side of the Mandapam were constructed for which the Municipality levied a tax which had been paid by the members of the Thoguluva family which was in the management of the temple.
The learned District Judge 's approach to the appreciation of the evidence, oral as well as documentary, was on the prin ciple that once the private character of the temple was established more strong proof was necessary to hold that the temple was subsequently dedicated to the public; (Babu Bhagwan Dill & Others vs Gir Har Saroop & Others(1).
He considered the evidence produced by the parties and, in particular, carefully analysed the evidence led on behalf of the defendants according to whom the Mandapam was a public temple.
While discussing the evidence of each of the witnesses the learned judge gave detailed reasons for accepting or rejecting the evidence of a particular witness.
Before him the defendant had sought to establish the dedication of the temple to the public by producing evidence on the following points : (1) Subscriptions were collected by G. Rama Ayyangar and his descendants from the public because the members of the Thoguluva family stopped giving any financial help to the temple; (2) Shops in the front Mandapam were constructed with public donations and even for the Kumbabishekan public funds were collected; (3) D.W. 6 who did not belong to the Thoguluva family was doing the Mandagapadi; (4) There used to be a procession on Vaikunta Ekadasi day the expenses of which were met by D.W. 7; (5) There were jewels and other articles used for worship donated by members of public which were in the custody of Srimathigal Sangam; (6) On each of the Navaratri days people who did not belong to the Thoguluva family did the Ubhayam; (7) The worshippers had been making offerings during the daily pooja as of right and were participating in the daily Neivedyams, (8) That there was a Nagara, bell and Hundial in the suit temple; (9) That there was Utsava idol in the suit Mandapam, The learned District Judge found : D.Ws. 3, 4 and 8 who belonged to the Thoguluva family had played into the hands of the opposite camp.
(ii) D.W. 3 was disbelieved mainly because 67 I.A.P.I. 588 he claimed that he was the Manager for some time and that he had handed over all the charge papers and account books to the plaintiff at the meeting at which the plaintiff was appointed manager.
But in a previous tatement Ext.
A 17 he had admitted that there was no record to show that he had handed over the charge to the plaintiff.
(iii) The burden of proving that donations were collected from the public was on the defendants as they were seeking to establish dedication of a temple which was once private in character.
There was no satisfactory evidence that donations had ever been collected from members of the public.
2 and 6 who claimed to have made such contribution could not produce any account books which contained any such entries although they were running trade and business.
(iv) There were clear contradictions in the statements of DWs.
4 and 8 on some material matters and therefore their evidence could not be relied upon.
(v) The evidence of P.W. 1 read with the recitals in Ext.
B 5 negatived any inference of any public donation having been collected for the building of the shops or for the Kumbabishekam.
(vi) The statements of DWs.
7 & 8 when considered in the light of the other evidence did not establish that the deity was taken out in a procession as alleged by the defendants.
(vii) It had not been satisfactorily proved that any non Thoguluva performed any of the Mandagapodies on Navaratri day or that any monies were so collected for taking the deity in procession on Vaikunta Ekadasi day.
(viii) The evidence of D.Ws. 2 and 6 on the question of the expenses of the Nagara, bell and Hundial was negatived by the absence of their mention in the report of the Commissioner.
There was no mention of the Hundial even in some earlier affidavits or petitions.
(ix) Even defendants 2 and 3 did not say in their written statements that there had been any user of the temple by the public as of right.
They had only asserted that members of the Saurashtra public were worshipping there as of right.
It was pointed out by the learned judge that a temple worshipped even by a section of the public would be a public temple but the evidence which had been produced on behalf of the defendants was to the effect that any member of the public whether a Saurashtra or a non Saurashtra had a right to workship there.
The case as laid in the pleadings and as developed in the evidence was thus inconsistent.
The High Court observed that the origin and history of the shrine could not be traced with any degree of continuity owing to the paucity of the evidence on the record.
Reference was, however, made to the auction sale.
It was not disputed before the High Court that the property formed the subject matter of the court sale comprised the suit property.
Before the High 589 Court the plaintiff relied on Ext.
B 1 for two purposes : (1) It showed that the property was private secular property and (2) the title to the property became vested in Thoguluva Tirumalliyan and members of his family.
The observation of the High Court on these contentions was, "the document, Ext.
B 1 (a) lends considerable support to these contentions of the plaintiff".
The High Court, however, proceeded to note that in the description of the property in Ext.
B 1 there was a mention of Garbha Graha Prakaram and vacant site etc.
These terms were generally associated with only public temples.
According to the High Court there was no evidence to show how the worship at the shrine was conducted and who provided the necessary funds and further how the property was treated by the public authorities like the Government or the Municipality.
It was common ground, however, that the shrine was a popular one at least among the members of the Saurashtra community and that Nithyapadi pooja was being performed at the shrine just as in public temples.
Par ticular reference was made by the High Court to the expenses of stone images which were to be installed in the suit premises in 1947 the offer of the gift having been made by persons who did not belong to the Thoguluva family.
In Ext.
B 4 the donors offered to make three stone images at their cost and also offered a sum of Rs. 350/ for meeting all expenses in connection with the installation of newly made idols and the various ceremonies which were to be performed in connection with the same.
An invitation Ext.
B 5 was issued in that connection for a Mahakumbabishakam to be celebrated on January 27, 1947.
In this, invitation the plaintiff styled himself as the Honorary Secretary.
The donors were described therein as the Udhayadars.
On March 17, 1947 the plaintiff wrote to the donors requiring them to pay Rs. 100/ every month towards the pooja at the shrine.
This demand was said to have been made on the basis of the alleged agreement on the part of the donors to furnish the necessary expenses for running the institution after the images were duly installed.
The High Court felt that it was difficult to conceive of the owner of a private temple receiving gifts of images from strangers and installing them in his temple; and it was impossible to reconcile the demand for contributions with the claim that the temple was a private one.
The High Court next proceeded to reproduce a summary of the statement of each of the witnesses produced by the defendants.
No attempt whatsoever was made to discuss the reasons which the learned District Judge had given for not accepting their evidence except for a general observation here and there that nothing had been suggested in the cross examination of a particular witness as to why he should have made a false statement.
We apprehend that the uniform practice in the matter of appreciation of evidence has been that if the trial court has given cogent and detailed 590 reasons for not accepting the testimony of a witness the appellate court in all fairness to it ought to deal with those reasons before proceeding to form a contrary opinion about accepting the testimony which has been rejected by the trial court.
We are, therefore, not in a position to know on what grounds the High Court disagreed with the reasons which prevailed with the learned District Judge for not relying on the evidence of the witnesses produced by the defendants.
It seems that the approach of the High Court was also some what influenced by the observations of the Judicial Committee of the Privy Council in Mundancheri Koman vs Achuthan Nair & Others(1) that in the greater part of the Madras Presidency private temples were practically unknown and the presumption was that the temples and their endowments formed public religious trusts.
This was, however, not the case in Malabar where large tarwads often established private temples for their own use.
Finally the High Court held that the temple was a public temple.
After stating some other facts which were found, presumably after believing the evidence produced by the defendant, the High Court made two observations which may be reproduced : (1) "Admittedly the members of the public have been worshipping at the shrine without let or hindrance.
The evidence on record shows unmistakably that this temple was being run only by contributions and by benefactions obtained from members of the public." Mr. Natesan who appears for the plaintiff appellant has assailed the whole approach of the High Court to the question of the character of the temple which, according to him, had been proved to be private in origin.
It has been contended by him that the usual state of affairs to be found in Madras as per the observations of the Privy Council could not be applied to the case of Saurashtra community which migrated from the territories which now form part of the State of Gujarat centuries ago.
This community, has, apart from several other individual characteristics, maintained a tradition of having private temples.
Moreover if the origin of the temple had been proved to be private then according to the law I aid down by the Privy Council itself in Babu Bhagwan Din 's case dedication to the public was not to be readily inferred.
Such an inference, if made, from the fact of user by the public was hazardous since it should not, in general, be consonent with Hindu sentiment or practice that worshippers should be turned away; and, as worship generally implied offer (1) 61 T.A. 405.
591 ings of some kind, it was not to be expected that the managers of a private temple should in all circumstances desire to discourage popularity.
It was further emphasised by their lordships that the value of public user as evidence of dedication depends on the circumstances which give strength to the inference that the user was as of right.
In Goswami Shri Mahalaxmi Vahuii vs Rannchboddas Kalidas & Others(1) it was pointed out that the appearance though a relevant circumstance was by no me= decisive.
The circumstance that the public or a section thereof had been regularly worshipping in the, temple as a matter of course and they could take part in the festivals and ceremonies conducted in that temple apparently as a matter of right was a strong piece of evidence to establish its public character.
if votive offerings were being made by the public and the expenses were being met by public contribution, it would be safe to presume that the temple was public.
In short the origin of the temple the manner in which its affairs were managed the nature and extent of the gifts received by it, rights exercised by devotees in regard to worship therein, the consciousness of the manager and the consciousness of the devotees themselves as to the public character of the temple were factors that went to establish whether a temple was public or private.
Mr. Natesan says that if the evidence of the witnesses pro duced by the District Judge then there will be hardly any features or circumstances barring some of the physical features of the temple and the fact that people have been allowed to worship and take part in the festivals and ceremonies and even to make some offerings, (though without their having the right to worship in the temple) which would be sufficient to make a temple which was private in origin a public temple.
According to Mr. Natesan even the witnesses of the defendants had shown consciousness of the temple beng private.
He has laid a great deal of emphasis on the absence of any property attached to the temple which might be endowed.
He says that admittedly only two shops were build by the family and out of the rents received from those shops together with other contributions made by the members of the family the expenses of the temple were being met.
He has relied a great deal on the decision of a Division Bench, of the Madras High Court in The Madras Hindu Religious En dowments Board vs V. N. D. Ammal(1).
There reliance had been placed on the following features : (1) that when the temple was built in 1919 Kumbabishekam was performed on a grand scale; (2) the respondent had made Utsavamurthis and built Chaprams and the deities were also taken in procession on spe (1) [1970]2 S.C.R. 275. (2) [1953] 2 M.I.J. 688. 592 cial occasions; (3) a Gurukkal had been, engaged to perform the pooja regularly and (4) the temple has got a Gopuram and other features which are usually found in a public temple.
This is what Venkatarama Ayyar J., as he then was, observed : "It is true that the facts that there is an utsava idol and there are processions are generally indicative of the fact that it is a public temple.
But then no property has been dedicated for the upkeep of the temple.
The worship is maintained and the expenses are met from out of the private funds of the respondent.
In the absence of any property being dedicated for the maintenance of worship in the temple, it is difficult to hold that, the temple has been dedicated to the public".
At this stage the provisions of section 9 (12) of the Madras Act 2 of 1927 which defines a temple may be noticed.
According to that definition it is a place by whatever designation known used as a place of public religious worship and dedicated or used as of right by the Hindu community or any section thereof as a place of public religious worship.
In the Madras Hindu Religious and Charitable Endowments Act (Act 22 of 1959) the definition of "temple" is given in sub clause (20) of section 6.
It is practically in the same terms as in the earlier Act.
In our judgment the, High Court was in error in holding that members of the public had been worshipping at the Mandapam in dispute without let or hindrance.
In arriving at that conclusion it appears to have believed the witnesses produced by the defendants.
It has also relied on the principle that in the absence of any evidence to show that such user was permissive it could be presumed that, it was as of right.
We have already pointed out that the High Court, while appraising the evidence of the witnesses, has not discussed the reasons and grounds given by the learned District Judge for not relying on the defendant 's witnesses.
Mr. A. V. Rangam who appears for the contesting respondent has endeavoured to take us through the evidence of the witnesses for demonstrating that the reasons given by the card the testimony of the defendants witnesses.
But we are learned District Judge were neither cogent nor sufficient to disunable to agree with him that the appreciation of evidence by the learned Judge was open to criticism as suggested by him.
Apart from this the High Court did not consider the evidence produced by the plaintiff without which many matters could not be properly appreciated or explained.
The other finding of the ' High Court that the temple was being run by contributions and benefactions obtained from members of the public was also based mainly on the evidence produced by the defendants.
In our 593 opinion the conclusion of the learned District Judge on that point receives more support from the entire material on the record It is significant that the High Court did not attach sufficient importance to three matters which, in the present case, were of material consequence.
The first was that the origin of the Mandapam had been proved to be private.
The second was that its management had remained throughout in the members of the Thoguluva family.
The third was the absence of any endowed property.
There was no Gopuram or Dwajasthamba nor a Nagara bell nor Hundial in the suit temple.
The learned District Judge adverted to the evidence, on all these and other relevant matters and we concur with him in his conclusions.
It is true that the suit temple had some physical characteristics and features which are generally to be found in a public temple.
It was also established that persons who were outsiders in the sense that they did not belong to the Thoguluva family used to come and worship at the temple and made offerings there.
There were also some jewels and other articles in the temple.
But the determination of the question whether the temple was public or private did not depend on some facts or set of facts alone.
The entire evidence, both documentary and oral, had to be, considered as a whole keeping in view the principles already noticed by us.
We are satisfied that the learned District Judge came to the correct conclusion that the suit temple was private in character.
For all the above reasons the appeal is allowed, the judg ment of the High Court is set aside and that of the District Judge restored.
The appellant will be entitled to costs in this Court.
Appeal allowed.
| The respondent, a partnership firm of which the second respondent was a partner, carried on business as manufacturers of bidis at various places in the State of Madhya Pradesh.
Being unable to secure sufficient tendu leaves locally, the firm took leases for the collection of such leaves in Bihar & Maharashtra.
They actually imported tendu leaves under two railway consignments from Bihar.
They informed the Divisional Forest Officer about the same and asked permission for transport of the leaves and to utilise them in their factories.
By letter, the D.F.O. informed the respondents that the leaves must not be moved for bidi manufacture until permission is given.
Respondents obeyed the order; but in spite of that, the Sub divisional Forest Officer seized two quantities of such leaves and filed a complaint alleging contravention of section 5 of Madhya Pradesh Tendu Patta (Vyapar Viniyaman) Adhiniyam, 1964.
The respondent filed a petition under article 226 of the Constitution for a writ of certiorari quashing the complaint.
The contention of the respondents was that the Act did not prohibit import of tendu leaves from outside nor was there any restriction on a manufacturer to consume the same for the manufacture of bidis or the Rules made under the Act did not regulate the transport of the tendu leaves imported from outside.
The State however, contended that transport of tendu leaves whether grown locally or imported from outside was completely prohibited under section 5 of the Act, except by a license holder in terms of a permit issued.
S.5(1) provides that no person other than the State Government or an Officer of the State Government etc.
shall purchase or transport tendu leaves.
Further, the Act did not prohibit import of tendu leaves and so the Act is not violative of articles 31, 301 and 304 of the Constitution and the control of movement of tendu leaves after their import was in no way repugnant to articles 301 and 304 of the Constitution.
The State contended that unless the State had the power to check the purchase of tendu leaves from outside the State and to restrict the transport thereof within the State, the monopoly of State trading in tendu leaves would not be effective.
The High Court rejected these contentions of the State and hence the appeal.
Dismissing the appeal, HELD : (1) All the relevant provisions of the Act and the rules made thereunder show that the legislature intended that everybody growing leaves within the State should offer the same to it to its agents in different units for sale and the State was bound to purchase every single lot of usable tendu leaves.
Prima facie trade in tendu leaves could consist of dealing in those leaves, i.e., their purchase and sale but transport 'of the leaves once purchased or sold would not prima facie be an organic or integral part of dealing in those leaves.
[842 D] 839 Vrajlal Manilal vs M.P. State ; , followed.
(ii) In the present case, the transport of tendu leaves purchased outside but consigned to places within the State to be used for the manufacture of bidis is not integrally connected with the State monopoly as envisaged in the Act.
The Act ought not to be construed so as to ban import of tendu leaves from outside the State or restrict their movement once they are within the State unless clear language was used in that behalf.
[844 C] Akadasi Padhan vs State of Orissa, [1963] Supp. 2 S.C.R. 691, referred to.
|
Civil Appeal No. 3168 & 3167 of 1986 708 From the Judgment and order dated 21.9.1984 of the Gujarat High Court in First Appeal No. 163 of 1974 and Civil Application No. 9 of 1982.
B.K. Mehta, A.B. Maniar and Ms. Indu Sharma for the Appellant in C.A. No. 3168 of 1986.
P.H. Parekh and P.K. Manohar for the Appellant in C.A. No. 3167 of 1986.
S.H. Seth, T.U. Mehta, Vimal Dave, C.D. Kakkad, Ajay.
Rajeshwar Rao and M.N. Shroff for the Respondents.
T.S. Krishnamoorthy Iyer and Mukul Mudgal for the Intervener in C.A. No. 3168 of 1986.
Anil K. Nauriya and K.L. Hathi for the Intervener in C.A. No. 3167 of 1986.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
These two appeals by special leave assail the judgment of the Gujarat High Court substantially affirming the appellate decision of the Charity Commissioner that the Pushti Margiya Moti Havali at Junagad and thirty eight items of its properties constitute a public trust under the Bombay Public Trusts Act, 1950.
The appellant is the widow of Maharajshri Purshottamlalji who admittedly was a lineal descendant of Shrimad Vallabhacharyaji, the founder of the Pushti Margi Sampradaya.
Purshottamlalji passed away in 1955 and, after him, the appellant has been in charge of the management of the Haveli and its assets both moveable and immoveable.
The Bombay Public Trusts Act, 1950, (hereinafter referred to as 'the Act ') was extended to Saurashtra area of the Gujarat State in the year 1961.
In October 1961, the appellant made an application to the Assistant Charity Commissioner at Rajkot under section 18 of the Act contending that the Haveli and its properties did not constitute a public trust.
An inquiry followed to determine the character of the institution and the Assistant Charity Commissioner and the Charity Commissioner found that the institution was a public trust and all the forty items of property belonged to that trust.
The High Court on appeal by the appellant has, however, recorded the following findings: 709 (1) Haveli Mandir at Junagad is a public trust within the A meaning of section 2(13) read with section 2(17) of the Act.
(2) The moveable and immoveable properties appearing in the appendices A and in the judgment of the Charity Commissioner excepting two items of immoveable property covered by Exhibits 265 and 268 belong to the trust.
In the absence of any challenge against exclusion of the two items from the purview of the trust, the same are no more in dispute.
(3) The appellant is the trustee of the temple and its properties, Succession to trusteeship is by inheritence without the sanction of the State Government.
(4) Guruseva Bhet and Charanseva Bhet offered by the devotees of Vallabha cult form part of the public trust.
While recording these specific findings the High Court has affirmed the findings of the Charity Commissioner on all other issues.
Shrimad Vallabhacharyaji, the founder of Pushti Margi Sampradaya is usually referred to as Mahaprabhuji.
The lineal descendants of Mahaprabhuji are known as Goswami Maharajshree.
Goswami Madhavraiji, a direct lineal descendant of the founder of the cult was living at Chittal now in Amreli district of Gujarat.
Some time in 1776 A.D., the Hindu Diwan Amarji of the Muslim Nawab of Junagad extended invitation to Madhavraiji to come to Junagad and he came there with his own deity.
The Muslim Nawab was impressed by the attainments of Madhavraiji, made grants of property both for residence as also cultivation, and on the property gifted for residential purpose, Madhavraiji raised the Haveli.
It houses the deity in the ground floor and in the first floor thereof Goswami Maharajshree and members of his family have been living generation after generation.
Indisputably, the devotees of the Sampradaya hold the Maharaj in great esteem and reverence and consider him as the living representative of the Lord.
Before the High Court long and detailed arguments appear to have been canvassed and on the basis thereof, the High Court formulated the following points for determination: 710 (i) Whether the Haveli Mandir of Madan Mohanlalji situated at Junagad is a public charitable trust within the meaning of section 2(13) read with section 2(17) of the Act? (ii) Whether the moveable and immoveable properties described in appendices A and in the judgment of the Charity Commissioner belong to the said public trust? (iii) What is the mode of succession to trusteeship of the trust? (iv) What are the sources of income of the said trust? The High Court went into the matter at great length, settled the tests to be applied for determining the character of the institution by carefully referring to several decisions of the Judicial Committee of the Privy Council, different High Courts and this Court; examined the documentary as also the oral evidence analytically and relied upon the following features for coming to the conclusion that the Haveli and the thirty eight properties constituted a public trust: (1) Grants of property by the State of Junagad for construction of Haveli and its upkeep; gifts of immoveable properties from time to time by devotees.
(2) Donations for repairs, renovation and expansion from the devotees of the Sampradaya; (3) Tablets placed on the walls of the Haveli showing particulars of substantial donations; (4) Right of darshan enjoyed by devotees at large; (5) Holding of religious festivities and performances on grand scale; (6) Placing of Golaks (hundies) in different parts of the haveli for collection of offerings from devotees visiting the temple; (7) Service rendered by the devotees for maintenance and upkeep of the haveli; MANOHAR 711 (8) Treatment meted by the State over the years towards A the temple; (9) The get up of the Haveli; and (l0) The contents of the application for registration of the haveli (Exh. 36) and the stand of the appellant with reference to the same.
While dealing with these features, the High Court considered certain other aspects some connected with the above and others not and in an elaborate and well considered judgment came to the conclusions which have already been indicated.
In this Court intervention by devotees was asked for mainly on the ground that the High Court had dealt with and relied upon religious customs and practices of the Pushti Margi Cult and the treatment given by the High Court was wrong.
This Court permitted intervention confined to written submissions.
Eleven thousand and twelve affidavits came to be filled by the devotees of the cult and at the hearing, one of them on his persistent request, was heard for some time.
A plea was made that the questions in dispute could be disposed of without going at length into the religious philosophy of the Cult.
Admittedly Pushti Margi Vaishnavas following the Vallabha Cult are Hindus and the Hindu law of religious endowments is applicable to their havelis.
It is, therefore, unnecessary to scan their religious philosophy at length to decide the present dispute.
This Court had occasion twice to deal with disputes relating to the nature of temples of this cult and it is appropriate that we refer to them at this stage.
A five Judge Bench in Tilkayat Shri Govindlalji Maharaj vs The State of Rajasthan and others, [1964] 1 SCR 561 was called upon to adjudicate the character of the famous Nathdwara Temple.
It had been canvassed on behalf of the Tilkayat that it was against the tenets of the Vallabha School to worship in public temples.
This Court held: "Therefore, we are satisfied that neither the terms nor the religious practices of the Vallabha School necessarily postulates that the followers of the School must worship in a private temple, some temples of this cult may have been private in the past and some of them may be private even 712 today.
Whether or not a particular temple is a public temple must necessarily be considered in the light of the relevant facts relating to it.
There can be no general rule that a public temple is prohibited in Vallabha School.
" This conclusion appeals to us and we are also bound to accept the same as a correct proposition.
In Goswami Shri Mahalaxmi Vahuji vs Rannchhoddas Kalidas and ors.
; , where the dispute related to the character of the Haveli at Nadiad, a three Judge Bench followed the conclusion in Tilkayat 's case (supra) that there was no restriction on worship in public temples in the Vallabha tenets.
It was further stated: "Yet another contention taken on behalf of the appellant is that the architecture of the building in which Gokulnathji is housed and the nature of that building is such as to show that it is not a public temple.
It was urged that building does not possess any of the characteristics of a Hindu temple.
It has not even a dome.
This contention again has lost much of its force in view of the decision of this Court refer red to earlier (Tilakayat 's case).
Evidence establishes that Vallabha 's son and his immediate successor Vithaleswar had laid down a plan for the construction of temples by the Vallabha Sampradayes.
He did not approve the idea of constructing rich and costly buildings for temples.
Evidently he realized that religious temple buildings were not safe under the Mohamedan rule.
For this reason he advised his followers to construct temples of extremely simple type.
The external view of those temples gave the appearance of dwelling houses.
It appears to be a common feature of the temples belonging to the Vallabha Sampradayes that the ground floor is used as the place of worship and the first floor is used as the residence of Goswami Maharaj . " The Haveli at Nadiad was held to be a public trust notwithstanding its appearance of a residential house and the fact that in the upper floor, the Goswami Maharaj had his living abode.
In Mahalaxmi 's case (supra) this Court again said: "If a temple is proved.
to have originated as a public temple, nothing more is necessary to be proved to show that it is a public temple but if a temple is proved to have 713 originated as a private temple or its origin is unknown or A lost in antiquity, then there must be proof to show that it is being used as a public temple.
In such cases the true character of the particular temple is decided on the basis of various circumstances.
In these cases the Courts have to address themselves to various questions such as: (i) Is the temple built in such imposing manner that it may prima facie appear to be a public temple? (ii) Are the members of the public entitled to worship in that temple as of right? (iii) Are the temple expenses met from the contributions made by the public? (iv) Whether the sevas and utsavas conducted in the temple are those usually conducted in public temples? (v) Have the management as well as the devotees been treating that temple as a public temple?" The High Court has found in this case that the Haveli was a public temple from the inception.
It took into account the fact that the haveli was built upon the land donated by the Ruler of Junagad and for its upkeep sumptuous provisions had been made by the State.
The material on record justifies the inference drawn by the High Court that when Goswami Madhavraiji came to Junagad in response to the invitation carrying his deity with him, he obviously did not come with the mental frame of raising a haveli.
That became possible on account of the gifts made by the Ruler.
Therefore, it would be quite appropriate to affirm the finding of the High Court that the haveli was built out of the grants made by the Nawab and gifts and offerings made by the devotees around that time.
Mr. Mehta, learned counsel for the appellants seriously challenged the finding of the High Court that the haveli and its properties constituted a public trust.
We have given a close look to the judgment and are of the view that the High Court scrutinised the evidence both documentary and oral keeping the proper perspective in view.
The five way test formulated by this Court in Mahalaxmi 's case (supra) and the other relevant features referred to by Dr. B.K. Mukherjea in the 714 Tagore Law Lectures on Hindu Law of Religious and Charitable Trusts for use as tests in determining the character of a Hindu temple have been appropriately utilised by the High Court while assessing the evidence.
The large contributions by the devotees evidenced by tablets placed on the walls of the haveli, contributions by members of the public for its repairs and expansion, the clear evidence regarding the manner and scale in which festivities are celebrated at the haveli, public grants of property made for the upkeep of the institution, interference with the management of the haveli by the State when a minor succeeded to trusteeship, the fact that the members of the public had darshan freely and without let or hindrance from the appellant and her predecessors (the two instances of obstruction having rightly been rejected by the High Court), placing of golaks or hundies at different places within the haveli for collection of contributions from the devotees, that the State had either remitted the rent or adopted a quit rent basis for the lands granted to the haveli, the fact that the Junagad State levied and collected a cess for the maintenance of the haveli, the other havelis or temples of the Sampradaya under the control of the disputed haveli had been accepted as public trusts and were registered as such and the like were justifiedly utilised by the High Court as features and materials for holding that the haveli was a public trust.
The High Court did take into account certain other features from which support was sought by the appellant for her stand that the haveli was a private trust and did not come within the ambit of the Act.
These are the features like some of the grants being personal, the Barkhali Abolition compensation not having been settled on annuity basis, the upper portion of the haveli being used as private residence of the Goswamiji, the mode of accounting, the income being shown as personal in the returns under the Income tax Act and the like.
We find that the High Court has also appropriately taken note of the position that Goswami Maharaj enjoyed among the devotees as their spiritual leader and upon an assessment of the total evidence, it has reached its conclusions.
In a dispute of this type; a single or a few features would not provide the conclusive basis for the decision to be arrived at.
On the other hand, the entire material has to be scanned and the ultimate conclusion has to rest on the sum total view.
That is exactly what the High Court has done.
The tests to be applied for deciding whether a temple is public or private have been laid down in a catena of cases by this Court and reference to them was made by learned counsel for the parties in course of the hearing.
Since we are recording a judgment of affirmance 715 and the tests are well known, we do not propose to advert to them A now.
In agreement with the High Court we hold that the Haveli and the listed thirty eight items of property constitute a public trust under the Act and we also affirm the finding that succession to trusteeship is by inheritance without sanction of the State.
We have now to examine the correctness of the conclusion reached by the High Court regarding the character of the guruseva bhet and charanseva bhet.
The High Court has found that these also are a part of the source of income and according to it, these constitute an important source of income of the trust.
It is the accepted situation that Vallabha and his descendants enjoyed a special position in the community of the devotees.
In Tilkayat 's case.
(supra) this Court pointed out: "It is significant that this denomination does not recognise the existence of Sadhus or Swamis other than the descendants of Vallabha .
" It is the practice of Goswami Maharaj to lead collective and congregational prayers within the haveli and act as the religious preceptor of the devotees.
It is customary for the devotee to make offerings at the feet of the Guru when he meets the Maharaj.
Such offerings are known as charanseva or offerings at the feet of the Guru.
It is also the accepted position that the Guru moves about among the devotees living in different areas coming within the territorial limits of the haveli.
It is equally customary for devotees who meet the Guru while he is on the move outside the headquarters to make similar offerings and these are known as Pradesh Seva.
The High Court has towards the end of its judgment adverted to these gifts and said: "In addition thereto.
Gurubhet and Charanseva bhets given to the concerned Maharaj also formed substantial portion of the temple income.
As the evidence shows more than 70% of the temple income springs from the source of pradesh seva and guruseva bhet.
We fully concur with the finding of the Charity Commissioner in this aspect." This finding of the High Court has been seriously assailed by appellant 's learned counsel.
Support has been sought from the observations of the Constitution Bench judgment of this Court in the Commissioner., Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, [ ; to contend that 716 the bhets to the Guru are offerings to him as distinct from offerings to the deity and in consideration of the feature that the Vallabha Sampradayin Guru enjoys a special position, these offerings must be held to be his and not of the deity.
The High Court has taken the view that once Bramha Sambadha is established, the Guru as also every devotee in the cult loses his individuality and his very existence (apart From the physical) merges with the Lord.
This has been an over stretching of the doctrine.
Though we do not intend to enter into the religious rites and practices of the cult; nothing has been shown from the record to justify the conclusion that the Guru is only a conduit pipe between the devotee at one end and the Lord on the other so as to lead to the conclusion that whatever is offered at the feet of the Guru Belongs to the Lord.
In Shirur Mutt case (supra), this Court was considering the vires of the provision in section 30 of the Madras Hindu Religious and Charitable Endowment Act, 195l, which required the personal gifts (Pada Kanikkais) to be duly accounted for and to be spent for the Purpose of the Mutt.
The gifts were taken for granted to be personal and examination was not undertaken to ascertain whether such gifts laid at the feet of the Guru were personal or otherwise.
Yet inferentially support is available for the view that what is laid at the feet of the J Guru is intended to be an offering to him and not to the deity.
There is a distinction between an offering made before the deity or put into the Golak and put at the feet of the Guru.
In the earlier case, it is clearly a gift to the deity while in the latter, in the absence of anything more, it would be one to the Guru.
The High Court, by accepting the doctrine of Bramha Sambadha reached the conclusion that such gifts were also to the deity.
Though the character of pada Kannikaris was not in issue before this Court in Shirur Mutt case, the fact that the Court proceeded on the footing that such gifts were personal is a feature which cannot be overlooked.
The preceptor has his position and if he is not a conduit pipe in the sense stated above, what is laid at his feet out of reverence by the devotee must belong to him.
We are not in a position to uphold the finding of the High Court on this score and would conclude that the proceeds of the Guruseva and Pradesh Seva do not constitute part of the public trust.
The High Court has said that these two sources contribute seventy per cent of the income of the trust.
No argument was raised on this aspect by either side.
We, however, hope and trust that the Goswami Maharaj or in his absence, his lawful heir succeeding him, will continue in his discretion to allow the trust of which he is the administrator to draw upon this source as and when necessary.
717 The appeal is partly allowed.
Parties are directed to bear their respective costs throughout.
Ajanta Estate Agency, the appellants in the connected appeal entered into an agreement with the trustee to purchase certain properties during the pendency of the litigation arising out of the enquiry under the Act.
Once the properties are held to belong to the public trust, the appellants would have no claim to enforce and the appeal has to fail.
We dismiss the appeal without any direction for costs in this Court P.S.S. Appeal dismissed.
| Shrimad Vallabhacharyaji was the founder of Pushti Margi Sampradaya.
Goswami Madhavraiji was a direct lineal descendant of the founder.
He came over to Junagad in Saurashtra from Amreli district of Gujarat in the year 1776 with his own deity on the invitation of the Muslim Nawab.
Impressed by his attainments the Nawab made grants of property both for residence as also cultivation.
On the property gifted for residential purpose Madhavraiji raised a Haveli.
It housed the deity in the ground floor and in the first floor thereof Goswami Madhavraiji and after him his descendants and members of their families have been living generation after generation.
The Bombay Public Trusts Act, 1950 was extended to Saurashtra area of Gujarat State in the year 1961.
The appellant.
the widow of Maharajshree Purshottamlalji, a lineal descendant of the founder, who had been in charge of the management of the Haveli and its assets, both moveable and immoveable, ever since the demise of her husband in 1955, made an application to the Assistant Charity Commissioner under section 18 of the Act in October, 1961 contending that the Haveli and its properties did not constitute a public trust.
The Assistant Charity Commissioner and the Charity Commissioner found that the institution was 706 a public trust and that all the forty items of property belonged to the trust.
In appeal by the appellant, the High Court held that (i) the Haveli Mandir was a public trust within the meaning of section 2(13) read with section 2(17) of the Act; (ii) the moveable and immoveable properties which were thirty eight in number belonged to the trust; (iii) the appellant was the trustee of the temple and its properties, and the succession to the trusteeship was by inheritance without the sanction of the State, and (iv) Guruseva and Charanseva Bhets offered by the devotees of Vallabha cult formed part of the public trust, on the view that once Brahma Sambadha is established, the Guru as also every devotee in the cult loses his individuality and his very existence (apart from the physical) merges with the Lord.
In the appeal to this Court intervention by devotees was permitted mainly on the ground that the High Court had dealt with and relied upon religious custom and practice of the Pushti Margi cult and the treatment given by the High Court was wrong.
It was contended for the appellants that the bhets to the Guru were offerings to him as distinct from offerings to the deity and in consideration of the feature that the Vallabha Sampradayin Guru enjoyed a special position, these offerings must be held to be his and not that of the deity.
Allowing the appeal in part and dismissing the connected appeal, the Court, ^ HELD: 1.
Pushti Margi Vaishnavas following the Vallabha Cult are Hindus and the Hindu Law of religious endowments is applicable to p their havelies.
lt was, therefore, not necessary in the instant case, to scan their religious philosophy to decide the issue.
[711E] 2.
The High Court was right in holding that the Haveli and the listed thirty eight items of property constituted a public trust under the Bombay Public Trusts Act, 1950 and that succession to trusteeship was by inheritance without sanction of the State.
In reaching that conclusion the Court has scrutinised the evidence, both documentary and oral, keeping the proper perspective in view, appropriately utilised the five way test formulated by this Court and the other features relevant in determining the character of a Hindu temple, and taken note of the position that Goswami Maharaj enjoyed among the devotees as their spiritual leader.
In a dispute of this type, a single or a few features 707 would not provide the conclusive basis for the decision to be arrived at.
A The entire material has to be scanned and the ultimate decision has to rest on the sum total view.
[715A B; 714F G] Tilkayat Shri Govindlalji Maharaj vs The State of Rajasthan and others, 119641 1 SCR 561; Goswami Shri Mahalaxmi Vahuji vs Rannchhoddas Kalidas and Ors., ; ; and Tagore Law Lectures on Hindu Law of Religious and Charitable Trusts by Dr. B. K. Mukherjea, refereed to.
3.1 The proceeds of the Guruseva and Pradeshseva do not constitute part of the public trust.
[716G] 3.2 Vallabha and his descendants enjoyed a special position in the community of devotees.
They have been leading collective and congregational prayers within the Haveli and acting as the religious preceptor of the devotees.
It is customary for a devotee to make offerings at the feet of the Maharaj when he meets him in the Haveli or during his visits to areas coming within the territorial limits of the Haveli.
[715D E] 3.3 There is a distinction between an offering made before the deity or put into the Golak and that put at the feet of the Guru.
In the earlier case, it is clearly a gift to the deity while in the latter, in the absence of anything more, it would be one to the Guru, for what is laid at the feet of the Guru is intended to be an offering to him and not to the deity.
[716E] 3.4 The doctrine of Brahma Sambadha is not applicable to the instant case, for nothing has been shown from the record to justify the conclusion that the Guru is only a conduit pipe between the devotee at one end and the Lord on the other so as to lead to an inference that whatever is offered at the feet of the Guru belongs to the Lord.
The preceptor has his position and if he is not a conduit pipe in the sense stated, what is laid at his feet out of reverance by the devotee must belong to him.
In view thereof the finding of the High Court on this issue cannot, therefore .
be sustained .
[7l6B C] Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt. ; , referred to.
|
vil Appeal Nos.
3131 and 3132 of 1988.
From the 'Judgment and Order dated 15.4.1987 of the A.P. Administrative Tribunal in R.P. No. 1909 of 1985.
K. Madhava Reddy, G. Prabhakar and Narasimhu P.S. (NP) for the Appellant.
section Ramachandran, B. Kanta Rao and N. Venkatarayudu for the Respondents.
Ms. Rani Chhabra and B. Rajeshwar Rao for the Interveners.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
These appeals are directed against the order of the A.P. Administrative Tribunal, Hyderabad dated April 15, 1987 directing the State Govern ment to consider the cases of Officers for promotion to the category of Additional Director of Medical and Health Serv ices and equivalent posts on the basis of seniority includ ing service in their lower cadre.
The appointment in the A.P. Medical and Health Services is regulated by the statutory rules called "The Special Rules for the A.P. Medical and Health Services, 1982" (called shortly as the "Rules").
All the respondents were originally recruited as Civil Assistant Surgeons upon selection by the State Public Serv ice Commission.
The minimum qualification for Civil Assist ant Surgeon is M.B.B.S.
The post of Civil Assistant Surgeon is equivalent to the post of Assistant Professor.
They are inter transferable posts but a Post Graduate Degree is necessary for posting as Assistant Professor.
The Civil Assistant Surgeon is also posted as Tutor in the teaching side if he has no Post Graduate Degree qualification.
In the select list prepared by the Public Service Commission, respondents 1 to 12 were ranked above the other respondents, but they were not considered for promotion to the category of Additional Director and other equivalent posts.
Their juniors in the original cadre were appointed to such posts, and that was their grievance before the A.P. Administrative Tribunal.
58 All Civil Assistant Surgeons including Assistant Profes sors and Tutors are eligible for promotion as Deputy Civil Surgeon on the basis of seniority of Assistant Professors/Civil Assistant Surgeons and Tutors.
It is said that the post of Deputy Civil Surgeons are not cadre posts.
They are just like Selection Grade posts covering 15% of total cadre strength of Civil Assistant Surgeon posts.
They are common both in teaching cadre as well as in non teaching cadre.
From the very beginning after formation of Andhra Pra desh State, the Civil Assistant Surgeons are appointed by direct recruitment except perhaps in the year 1984, when there was direct recruitment of Assistant Professors with the minimum qualification of Post Graduate degree in the concerned speciality.
The Rules contain inter alia two parts; Part I and Part II.
We are concerned with Part I only.
It consists of the following three branches: Branch I Teaching cadre Branch II Non teaching cadre Branch III Laboratories Branch I Teaching cadre again consists of Class I and Class II.
Under Class I. there are six categories of posts.
They are as follows: Category 1 Additional Director of Medical and Health Services (Medical Education), Principals of Medical Colleges, Superintendents of Medical Colleges, Superintendents of Teaching Hospitals and Principal, Govern ment Dental College.
Category 2 Professors Clinical.
Category 3 Professors Non Clinical.
Category 4 Dental Professors.
Category 5 Deputy Civil Surgeons Clinical and non clinical.
Category 6 Deputy Civil Surgeon Dental.
Class II consists of the following three categories: Category 1 Assistant Professors Clinical and non clinical.
59 Category 2 Assistant Professors Dental.
Category 3 Tutors.
Rule 2 under Branch I Teaching cadre provides for method of recruitment to different classes and categories.
This Rule is important and may be read in full: "Rule 2 Appointment Appointment to the various classes and categories shall be made as follows: Class and Category Method of Recruitment Class I Category 1 (i) By promotion from among the Additional Director of holders of the post of Professors Medical & Health Services included in Class I Categories 2 (Medical Education), and 3 of this branch with not less Principals of Medical than three years service of which Colleges,Superintendents at least two years service in the of Teaching general said Category on First year in Hospitals and Principal, which panel is prepared.
Government Dental College.
Provided that the post of princi pal, Government Dental College shall be filled in by promotion from among the holders of the posts included in class I,Cate gory 4.
(ii) who have completed 45 years of age on first January or 1st July of the year in which panel is prepared.
Category 2 (i) By promotion from among the holders of the posts of Deputy Civil Surgeons (clinical) included in Class I, Catego ry 5 of this branch; (ii) By promotion from the holders of posts of Assistant Professors (clinical) included in Class II, Category 1 of this branch if persons from item (i) are not available.
" Similar are the provisions for promotion to the posts of pro 60 fessors (non clinical) in Category 3: "Category 3: (i) By promotion from among the holders of the posts of Deputy Civil Surgeons (non clinical) included in Class I, Category 5 of this branch; (ii) By promotion from the holders of posts of Assistant Professors (Non clinical) included in Class II, Catego ry 1 of this branch if persons from item (i) above are not available.
" It will be convenient, if at this stage, we also read the amendment to the foregoing Rules made on March 29, 1988.
They are as follows: AMENDMENT TO SPECIAL RULES FOR THE ANDHRA PRADESH MEDICAL AND HEALTH SERVICES (G.O.M.No.
182, Health, Medical and Family Welfare (A 1) 29 March, 1988) 1.
Constitution . . 2.
Appointment to the various categories of posts shall be made as shown in the Table below: Category of Post Method of Recruitment Category: 1 Additional Director of By promotion from among the holders Medical & Health Service of the post of professors in Cate (Medical Education), gories 2 and 3 with not less than Principals of Medical three years of service of which at Colleges,Superintendents least two years shall be in one of Teaching General the said categories as on first Hospitals and Principals January or 1st July of the year in Government Dental which panel is prepared.
College.
There are three requirements for eligibility for considera tion 61 for promotion to the category of Additional Director and equivalent posts: (i) He should be in cadre 2 and 3 in Class I; (ii) He should have a minimum service of two years in the said categories; and (iii) He should have a total service of not less than three years.
Two years service in the category appears to mean two years service as Professor and this is not in doubt or dispute.
The dispute, however, is about the requirement of service of three years.
Whether that service should be only in Class I categories 2 and 3 or inclusive of service in Class II is the question for consideration.
The Tribunal appears to have accepted the latter view.
It has been held that promotion to the post of Additional Director and equiv alent posts is to be made on the basis of total period of service in including service in the lower categories subject to the condition that the person should be holding the post of Professor or equivalent post for at least two years.
Mr. Madhava Reddy, learned counsel for the appellants argued that the view taken by the Tribunal would be contrary to the rule of seniority in the cadre of Professors.
The seniority for zone of consideration for promotion should always be of the feeding cadre and not from any other cadre.
Reference was made to Rule 10 of the Rules and also to Rule 33(a) of the Andhra Pradesh State and Subordinate Services Rules.
Counsel also contended that the minimum three years of service provided under rule 2 in any event must be in class I in any category and it can never be in Class II Service.
We are unable to accept the submission of learned coun sel for the appellants, having regard to the facts and circumstances of this case.
Rule 10 of the Rules requires determination of seniority on unit wise.
It reads: "10.
Seniority.
For purposes of seniority and appointment as full members the posts included in this branch shall consti tute separate units as indicated below: Unit 1 Class I Category 1, viz.
Additional Director of Medical and Health Services (Medical Education),Principals of Medical Colleges, Superintendents of Teaching General Hospitals.
Unit 2 Class I Category 2 viz. (i) Professors (Clinical and nonclinical).
62 Unit 3 Class I Dental Professors.
provided that Deputy Civil Surgeons and Assistant Professors shall have separate seniority in order of speciality" Rule 33(a) of the A.P. Subordinate Service Rules pro vides that seniority of a person in service, class, category or grade shall, unless he has been reduced to a lower rank as a punishment, be determined by the date of his first appointment to such service, class, category or grade.
It seems to us that the seniority in the category of professors in the teaching and non teaching cadre or in the lower cadre based on speciality wise may not be relevant for preparation of a penal for promotion to the cadre of Additional Director and other equivalent posts in Category.
Equally the service rendered as Deputy Civil Surgeon in category 5 cannot also be the basis for preparing the panel for consideration.
As observed earlier, Deputy Civil Surgeon is a common category in all the Branches; Branch I teaching cadre; Branch II non teaching cadre and Branch III Laboratories.
It is a part of the category of Civil Assistant Surgeons, and not cadre post.
It is just like selection grade post covering in all 15% of total cadre strength of Civil Assistant Surgeons.
The posts are distributed in all the three Branches and promo tion to the posts depends upon the available vacancies in every branch.
Furthermore, Rule 2 does not expressly exclude the service in Class II Cadre for preparing panel for considera tion for promotion to posts with which we are concerned.
We also consider that it would be unreasonable and unjust to exclude the service and overlook the vertical seniority in the substantive cadre to which everyone was selected by the Public Service Commission.
In medical profession there are specialities and specialities, but it is generally accepted that they are not of equal importance or utility.
However, the promotions are allowed on the basis of the respective specialities and the availability of promotional vacancies in such specialities.
A junior with relatively less impor tant speciality may be fortunate enough to get quick promo tion than his senior with a different speciality.
We are of the opinion that the juniors who get accelerated promotion on account of fortuitous circumstances depending upon their speciality and availability of vacancies in such speciality should not be allowed to march over their seniors for ap pointment to administrative posts.
Any advantage gained by juniors on such fortuitous circumstances of having some speciality and promotion should not impair the rights of their seniors for promotion to posts where speciality or teaching experience 63 is not called for.
The seniority determined in order of speciality should not therefore be the basis for promotion to administrative posts.
Any rule providing for the contrary may be vulnerable to attack on the ground of arbitrariness.
We therefore, concur with the view expressed by the tribunal and dismiss these appeals with costs.
Before parting with the case, however, it is necessary to point out that the imprecise drafting of the present Rules has led to misunderstanding and litigation and it would be proper for the State Government to have the word ings of the Rules properly amended with perspicuity to give effect to the view indicated.
N.P.V. Appeals dis missed.
| Under Rule 2 of the Special Rules for the A.P. Medical and Health Services, 1982, which provided for the method of recruitment to different classes and categories in the A.P. Medical and Health Services, there were three requirements for eligibility for consideration for promotion to the Class I, Category I posts of Additional Director (Medical Educa tion) and equivalent posts.
These were (i) the person should be in categories 2 and 3 posts of Professors, (ii) he should have a minimum service of two years in the said categories, and (iii) he should have a total service of not less than three years.
The respondents were all originally recruited as Civil Assistant Surgeons, upon selection by the State Public Service Commission.
In the Select List prepared by the Commission, respondents No. 1 to 12 were recruited above the other respondents.
However, they were not considered for promotion to the category of Additional Director and other equivalent posts.
Hence the aggrieved respondents took their grievance to the State Administrative Tribunal.
The dispute before the Tribunal was whether the requirement of three years service should be only in Class I, Categories 2 and 3, or it was inclusive of service in Class II.
The Tribunal held that it should be on the basis of total period of service including in the lower categories, subject to the condition that the person should be holding the post of Professor or equivalent post for at least two years.
56 In the appeal before this Court, on behalf of the State.
it was contended that the seniority for zone of considera tion for promotion should always be of the feeding cadre and not from any other cadre.
and that the minimum of three years must be in Class I in any category and can never be in Class II service.
Dismissing the appeals, this Court, HELD: 1.1 The juniors who get accelerated promotion on account of fortuitous circumstances depending upon their speciality and availability of vacancies in such speciality should not be allowed to march over their seniors for ap pointment to administrative posts.
Any advantage gained by juniors on such fortuitous circumstances of having some speciality and promotion should not impair the rights of their seniors for promotion to posts where speciality or teaching experience is not called for.
The seniority deter mined in order of speciality should not.
therefore, be the basis for promotion to administrative posts.
Any rule pro viding for the contrary may be vulnerable to attack on the ground of arbitrariness.
[62G H; 63A] 1.2 It would be unreasonable and unjust to exclude the service and overlook the vertical seniority in the substan tive cadre to which everyone was selected by the Public Service Commission.
In medical profession, there are spe cialities but it is generally accepted that they are not of equal importance or utility.
However, the promotions are allowed on the basis of the respective specialities and the availability of promotional vacancies in such specialities.
A junior with relatively less important speciality may be fortunate enough to get quick promotion than his senior with a different speciality.
[62E G] 1.3 The seniority in the category of professors in the teaching and non teaching cadre or in the lower cadre based on speciality wise will not be relevant for preparation of a panel for promotion to the cadre of Additional Director and other equivalent posts in Category I. Equally.
the service rendered as Deputy Civil Surgeon in Category 5 cannot also be the basis for preparing the panel for consideration.
Further more.
Rule 2 does not expressly exclude the service in Class 11 Cadre for preparing panel for consideration for promotion to the Category of Additional Director and equiva lent posts.
[62B E] 2 Imprecise drafting of the Rules has led to misunder standing and litigation.
It would, therefore.
be proper for the State Government to have the wordings of the Rules properly amended with perspicuity to 57 give effect to the view indicated ' herein.
[63B C]
|
iminal Appeal No. 72 of 1962, Appeal by special leave from the judgment and order dated February 8, 1962, of the Allahabad High Court in Criminal Appeals Nos, 1728 and 1739 of 1961 and Referred No. 125 of 1961.
Jai Gopal Sethi, A.N. Mulla, J.B. Goyal, C.L. Sareen and R.L. Kohli, for the appellants, G.C. Mathur and C.P. Lal, for the respondent, 1962.
May 4.
The Judgment of Das.
Sarkar, Dayal, JJ., was delivered by Dayal, J. The Judgment of Kapur and Hidayatullah, JJ., was delivered by Kapur, J. RAGHUBAR DAYAL, J. Raghav Prapanna Raghul Tripathi, hereinafter called Raghav, Ramanuj Das, Jai Devi, Mohan and Udham Singh, appeal by special leave against the order of the High Court of Allahabad, dismissing their appeal against their conviction by the sessions Judge, Etawah, Raghav, was convicted and sentenced to death under section 302 1.
P. C. He and the other apppellants were also convicted of the offence under section 201 I. P. C.
Ramanuj Das was convicted of the offence under a. 176 1.
P. C. also.
The prosecution case, in brief, is that Raghav shot dead his first wife Kamla, and their son Madhusudhan, aged about 4 years, at about sunset on April 5, 1961, at their house in village Hamirpur Roora, District Etawah The motive for this conduct is "id to be Raghav 's not caring for Kamla and ill treating her after his marrying one Bimla in 1954.
Kamla had to go to her father 's place and stay there for about two years on account of the alleged ill treatment she got at her husband s 242 hands.
She was, however, brought back by Ramanuj Das, in 1960.
He assured her father that she would be well looked after and that he would transfer 90 bighas of land to her and pay her Rs. 10,000/ .
It is also alleged that earlier in the day on April 5,[1961] Ramanuj Das bad ultimately promised to Lakhan Prasad that he would execute the necessary transfer deed on Monday following and that Raghav left the place during their conversation in this regard.
It is alleged that he did so as he resented the idea of so much property and cash, which would have ultimately benefited him, being made over to Kamla.
This resentment is said to have prompted Raghav to murder his wife and son that evening.
We may now mention facts to show the connection of Ramanuj Das and other accused with Raghav which is said to have led them to be parties to the disappearance of the evidence about the murders in order to protect Raghav from legal punishment and thereby to commit the offence under section 201 1.
P. C. Lachman Das was the Mahant of the temple in village Hamirpur Roora.
Narayan Das, father of Raghav, and Ramanuj Das were his disciples.
On Lachman Das, death, Ramanuj Das succeeded him as Mahant, though Narayan Das was the senior disciples, as Narayan Das bad taken to secular life.
Ramanuj Das, Raghav, Jai Devi, mother of Raghav.
Raghav 's wife Kamla, and Madhusudhan, all lived as a joint Hindu family in the house in which there was the temple.
Mohan Singh was a servant of Ramanuj Das.
Udham Singh was also alleged to be a servant of Ramanuj Das.
Raghav mostly lived at Lucknow with Bimla and his sisters who were studying there.
He is 243 a law graduate.
He possessed a jeep car whose registration number was U. section J. 3807.
No information was conveyed by anyone to the police about the numbers for about two days.
Khushali, Chaukidar, lodged a report at 9.20 a. m. on April 7, 1961, at police station Airwa Katra, District Etawah.
The Station Officer was not present at the police station.
This report may be usefully quoted here: "Day before yesterday in the night Raghav of my village, who is a son of Narain Das, has murdered his wedded wife and son by firing at them with the gun of Mahant Ramanuj Das.
He has gone somewhere with the two dead bodies in a car.
There is a rumour about, it in the whole of the village.
Having heard of it, I went to the Mahant who is also the Pradhan of my village.
I asked him to give me something in writing, so that I would go to the Police Station and make a report.
The Mahant then asked me to wait and to go only after Thakur Dalganjan Singh had some.
I did not listen to him, although he kept on forbidding.
I have come to make a report.
" Sub Inspector Brij Raj Singh Tomer, Station Officer, Airwa Katra, received the copy of the first information report at 11 a. m., and immediately proceeded to the spot and reached there at 2 p. m.
He inspected the house of Ramanuj Das and prepared the site plan.
He suspected blood stains at about 11 places in the house and took the stained plasters from those places and put them in different packets.
All the 11 packets were then sealed in a single bundle.
The Chemical Examiner found the plasters in 5 of these packets to be stained with blood.
The 244 Serologist could not determine the origin of the blood on account of its disintegration.
The positions of the plasters found bloodstained are not clearly made out from the various documents, but, in view of the fact that 11 stained plasters were taken in possession from over the door in the front wall of the southern outer room or from its floor or its wall, that at least 2 of the blood stained plasters were from the southern outer room portions, even if the other three blood stained plasters were from the outer wall of the northern room, the roof of the temple and the floor of the southern inner room.
Sub Inspeotor Brij Raj Singh Tomer did not find any of the appellants in the village.
On April 12, 1961, Bashir Hussain, Deputy Superintendent of police, visited the spot and recovered suspected blood stained earth from the parnalas of the roof of the house and also from the land on which the water of the parnalas fell.
He took 7 samples of such earth, put them in 7 packets and sealed them in a bundle.
The Chemical Examiner found the earth of two such packets to be stained with blood.
Again, the Serologist could not determine the origin of blood due to disintegration.
On April 16, 1961, Bashir Hussain recovered Raghav 's shirt and pyjama from Snowhite, Cleaners & Dyers at Lucknow, as they were suspected to be stained with blood.
No blood was detected on the pyjama.
The Chemical Examiner found blood stains on the shirt.
The Serologist could not detect the origin of the blood.
The police failed to discover the dead bodies of Kamla and Madhusudhan and also the jeep car.
245 Raghav surrendered in the Court of the Magistrate at Barabanki on April 20.
Mohan was arrested on April 9, Ramanuj Das surrendered in the Court of the Judicial Officer, Bidhuna, on April 24, 1961, Jai Devi applied for bail on April 27, presumably, she surrendered on that day.
As a result of the investigation, the appellants were sent up for trial.
All the appellants denied that they committed the offences with and stated that they had been falsely implicated.
There is no direct evidence about Raghav 's committing the murder of Kamla and Madhusudhan.
Neither is there direct evidence about his carrying away the dead bodies of Kamla and Madhusudhan in the jeep that night from village Hamirpar Roora as alleged for the prosecution.
There is no direct evidence about Ramanuj Das or any other accused being a party to the removal of the dead bodies from the house.
The entire case against the appellants depends on circumstantial evidence.
We may deal with the circumstances which the learned Sessions Judge and the High Court found established and from which they concluded that Raghav murdered Kamla and Madhusudhan and that thereafter, Raghav, Mohan and Udham Singh, with the connivance of Ramanuj Das and Jai Devi, carried away the dead bodies in the jeep and disposed of them.
These circumstances are 1.
On April 5, 1961, Kamla and Madhusudhan were in the house of Ramanuj Das. 2.
Kamla and Madhusudhan were last seen alive on April 5, 1961, in the evening.
On April 5, 1961, Raghav Prapanna was also in the house of Ramanuj Das.
246 4.
On April 5, 1961 at about 5 or 6 p.m. three gun shots were fired on the roof of Ramanuj Das.
On April 5, 1961, at about 9 or 10 p. m. Raghav Prapanna, Mohan and Udham Singh left village Hamirpur Roora on the jeep of Raghav.
On April 5, 1961, at about 11 p. m.
Raghav Prapanna purchased petrol from Bidhuna Petrol Pump.
On April 6, 1961, at about 8.
30 a. m. Raghav Prapanna crossed.
Rawatpur barrier in Kanpur.
On April 6, 1961, Raghav Prapanna got a post card sent by his sister that Kamla had reached Lucknow safely.
On April 7, 1961, blood stained earth was recovered from the house of Ramanuj Das from 11 different places.
On April 14, 1961, blood stained earth was recovered from the house of Ramanuj Das from 7 different places.
All the accused absconded after the alleged murder.
Blood stained shirt and pyjama belonging to Raghav Prapanna were recovered from the possession of Snow white Dyers and Cleaners, Lucknow.
The police could not trace out the jeep of Raghav Prapanna in spite of beat efforts.
On behalf of the appellants it is not dispute hat the circumstances numbered 1, 2, 7, 9, 10, 1 247 and 13 have been established.
It is contended for the appellants that the other circumstances have not been proved and that, even if proved, all the aforesaid circumstances are insufficient to lead to the sole conclusion that Raghav committed the murders of Kamla and Madhusudhan and that he and the other appellants were parties to the removal of the dead bodies.
Kamla and Madhusudhan were in the house on April 5, 1961.
They were not seen after the evening of April 5, 1961, The third circumstance is disputed, Raghav states that he had left Hamirpur Roora on April 4.
This finds support from the statement of Sri Ram, P.W. 3, that he had seen Raghav pass via Samain in a jeep that night.
He saw this on Tuesday, April 4, 1961 was a Tuesday.
Even if he was in the village on April 5, his presence in the house does not put him in such a position that his omission to furnish information about the whereabouts of Kamla and Madhusudhan or as to what happened to them should point to his committing their murders.
He was not the only person in the house to know of what happened to them.
There were other persons in the house.
It is true that the circumstance of his presence in the house and the absence of any activity on his part to make enquiries about Kamla and Madhusudhan when they were not seen in the house on April 6, is a conduct which is not expected from a husband, even if the relations between the husband and the wife be strained.
The fourth circumstance that three gun shots ,were fired from the roofs of Ramanuj Das at about 5 or 6 p.m. on April 5, cannot lead reasonably to the only conclusion or even to a reasonable suspicion that Raghav did fire those shots, that he 248 fired them in the room and that he shot dead his wife and son by that firing.
The connection between the firing of gun shots from the side of the roof of Ramanuj Das and the alleged murders, seems to us to be too remote to arrive at the conclusion that Raghav had killed his wife and son In this connection, reference may also be made to circumstances Nos. 9 and 10, relating to the recovery of the bloodstained earth from the house.
The blood stained earth has not been proved to be stained with human blood, Again we are of opinion that it would be far fetched to conclude from the mere presence of blood stained earth that that earth was stained with human blood and that the human blood was of Kamla and Madhusudhan.
These circumstances have; therefore, no evidentiary value.
The facts that Kamla 'and Madhusudhan have not been seen since the evening, of April 5, 1961, and that blood stains, not proved to be of human origin, were found in that room, are not sufficient for holding that they must have been murdered, however strongly one may suspect it in view of the unlikelihood of their having left the house for any other place.
In this connection, reference may also be made to circumstance No. 8.
Exhibit Ka 7 was addressed by Govind Kumari, sister of Raghav, to Ramanuj Das on April 6, 1961, from Lucknow.
It is stated in this post card that Raghav etc., had arrived safely and that as 'bhabi ' had also arrived, it was not necessary for her to cook food etc. '.
This letter, according to the post mark, reached Samrin Post Office on April 10, and was not delivered till April 13, to the addressee, as he was not present, and was ultimately handed over to 249 the Deputy Superintendent of Police, in compliance with the orders of the Magistrate.
under section 95, Cr. P. C. It is alleged that this letter was written at the instigation of Raghav in order to prepare evidence about Kamla 's reaching Lucknow on April 6.
There is however no evidence on record about Raghav 's having a hand in the sending of this letter by Govind Kumari.
She was not examined to prove the contents of her letter and to explain to whom she referred to as bhabi ' Raghav has stated that he had gone to Lucknow along with Rama Sewak 's wife, whom he also called bhabi '.
That may be true or not.
The fact remains that there is no evidence that Govind Kumari wrote this postcard with a purpose and at the instigation of Raghav.
The evidentiary value of this postcard is nil and the conclusions that Raghav got this.
letter sent is not justified when there is no evidence to that effect and there is no definite proof that the expression bhabi ' referred to Kamla.
Support for.
the inference that the expression 'bhabi 'referred to Kamla has been found, by the Court below, from complete omission to Govind Kumari 's sending wishes to Kamla and Madhusudhan, as it is expected that if she knew that they were at Hamirpur Roora, she would have conveyed her wishes to them.
One can normally expect this, but it is in the statement of Lakhan Prasad, P. W. 6, that there could not have been good relations between Govind Kumari and Kamla.
Lakhan Prasad deposed that on his asking Kamla the cause of her unhappiness for the last four years, she told him that one Sub Inspector Iqbal visited her father in law 's place and had illicit connection with Govind Kumari and that these persons, together with Raghav, used to take wine and meat in the temple.
She further told him that her complaint to her mother in law in this respect 250 went un heeded.
It follows, therefore, that omission of the usual courtesies in the postcard from Govind Kumari need not lead to the conclusion that it was on account of the attempt to show, when need be, that Kamla and her son had reached Lucknow and were alive on April 6, 1961.
Circumstances 5 and 6, by themselves, are not sufficient to lead to the conclusion that Raghav had taken the corpses of Kamla and Madhusudhan in the jeep from the village on the night of April 5, 1961, when there is no evidence of any witness about seeing any such things in the jeep which might reasonably lead to the inference that they contained the dead bodies.
The 7th circumstance, does not in any way go against Raghav, as he himself admits to have gone to Lucknow from village Bhuwain on April 6, 1961.
In doing so he would pass Rawatpur barrier.
This circumstance, in a way, supports his version and has nothing incriminating in itself.
The 11th circumstance, as stated, is not quite correct.
All the accused did not abscond after the alleged murders.
Ramanuj Das himself was in the village till the morning of April 7, according to the statement of Khushali, Chowkidar, who lodged the first information report.
If he and others left the house after knowing of the report lodged by the chowkidar, that is understandable.
The mere absconding, however, may lend weight to the other evidence establishing the guilt of the accused, but, by itself, is hardly any evidence of guilt.
The 12th circumstance, is about Raghav 's shirt being found to be stained with blood by the Chemical 'Examiner.
The bloodstain has not been proved to be of human origin.
In the circumstances, this circumstance has no evidentiary value in 251 connecting Raghav with the offence of murder.
Further,the shirt was recovered from the Dry Cleaners on April 16.
It was given to them on April 9.
The murder is said to have taken place on April 5.
Bloodstain on the shirt could have been due to reasons other than Raghav 's taking part in the murder of his wife and son.
In this connection, reference must be made to the statement of Babu Lal, P. W. 7, the proprietor of the Snowhite Cleaners & Dyers to the effect that when Raghav gave him the shirt for washing it was not blood stained.
He has also stated that even when the Sub Inspector took it in possession, it was not blood stained.
The High Court considered Babu Lal 's statement to be untrue as he had signed the recovery list which stated that the shirt had stains suspected to be washed bloodstains.
There was no statement that the shirt had bloodstains on April 9 when it was given for washing.
Further, if the signing of the recovery list by Babu Lal as a witness to the recovery be taken to be his statement about the correctness of its contents, that statement would be inadmissible in evidence in view of section 162, Cr.
The last circumstance, as a piece of evidence against the accused, is that the police could not trace out the jeep of Raghav in spite of best efforts.
The inability of the police to find the jeep does not prove that the jeep, if found, would have furnished evidence against Raghav by showing the existence of human blood stains on its parts and thereby indicating that it was used in removing the corpses.
If it had been recovered and human bloodstains had been found on it, there would have been some evidence against the accused about the jeep having been used for removing the dead bodies.
But it is too much to conclude from the non recovery of the jeep that if recovered 252 it would have afforded evidence of existence of human bloodstains and thus of its having been used to remove evidence of murder.
This circumstance has therefore no evidentiary value.
In this connection, we must refer to the unusual conduct of the Magistrate in forwarding the letter of request by the Investigating officer under a. 94 Cr. P. C., to the Jailor, requiring Raghav to convey information in whose charge he left his jeep No. 3807 while surrendering in Court at Bar& banki, and the whereabouts of the jeep at the time.
The Investigating Officer could have interrogated the accused in jail, as is usually done, of course, with the permission of the Magistrate.
But, to attempt to get written replies from the accused, is unusual, if not unwarranted under the Code of Criminal Procedure.
Any way, any reply given by the accused to such a query of the Investigating Officer, cannot be used in evidence in view of a. 162 of the Code of Criminal Procedure.
We have now dealt with the pieces of circumstantial evidence which were accepted by the Courts below and are of opinion that those circumstances are not sufficient to support the finding that Raghav committed the murder of Kamla and Madhusudhan.
The facts alleged to constitute motive for Raghav to commit the murders do not necessarily provide such a motive.
Raghav married Bimla in 1954 and for seven years he appears to have continued his marital relations with Kamla as well.
Madhusudhan was born in 1957.
He may not be showing the same affection to Kamla after his marriage with Bimla as before.
There might have been something of an estrangement in his relations towards her.
But all this would not afford a motive for murdering her, and also their son Madhusudhan.
The suggestion to Ramanuj Das to TOY 253 Rs. 10,000/ to Kamla and also to transfer 90 Bighas of land to her, even if true, need not have caused such a resentment to Raghav as to decide on murdering his wife and son.
There is nothing on the record to indicate how such a transfer of cash and property would affect the total property of Ramanuj Das, and how, ultimately, Raghav would be affected by it.
Apparently, Raghav would have no claim to the property left by Ramanuj Das as a mahant of the mutt or temple.
The property would go to the successor of Ramanuj Das.
Raghav who was leading a secular life, will dot succeed to the Mahantship, just as his father Narain Das, though a senior disciple of Lachman Das, did not succeed to it.
His leaving the place when Ramanuj Das was approached by Lakhan Das to transfer cash and land to Kamla, does not necessarily indicate that he left as he resented the suggestion.
There is no evidence that he raised any protest at the time or indicated by any expression that Ramanuj Das should not do so.
We do not consider it reasonable to conclude from the mere fact of his leaving the place, that be did so on account of such keen resentment as would make him commit the murders of his wife and son.
Lastly, there is no such circumstantial evidence which would establish that the appellants had removed and concealed the dead bodies.
We have already referred to the absence of evidence about the dead bodies being carried in the jeep that night by Raghav.
There is no evidence about the part which Ramanuj Das or Jai Devi played in the removal of the dead bodies.
The fact that they were in the house and could have possibly known of the removal of the dead bodies, if that was a fact, would not by itself establish that they assisted in the removal of the bodies.
We are therefore of opinion that no offence under a. 201 254 I. P. C. has been established against the appellants.
Further.
no offence under section 176 1.
P. C. can be held proved against Ramanuj Das when there is no proof that Kamla and Madhusudhan were murdered.
As a member of the village Panchayat he was bound to convey information to the nearest Magistrate or Officer in charge of the nearest Police Station about the commission of an offence under section 302, 1.
P. C., only when a murder.
had been committed and he know about it.
The conviction of the appellants for the various offences is therefore not justified on the material on record.
We therefore allow the appeal, set aside their conviction and acquit them of the offences they have been convicted of.
They will be released forthwith from custody, if not required to be detained under any other process of law.
KAPUR, J. This is an appeal against the judgment and order of the High Court of Allahabad confirming the conviction and sentences passed on the appellants.
Of the appellants Raghav Prapanna Tripathi was convicted of murdering his wife Kamla and his son Madhusudhan on the evening of April 5, 1961 at Hamirpur Roora and was sentenced to death.
He and other appellants were also convicted under section 201, Indian Penal Code for causing the disappearance of the evidence of the crime and were sentenced to five years ' rigorous imprisonment.
Appellant Ramanuj Das was further convicted under a. 176, Indian Penal Code and sentenced to 3 months ' rigorous imprisonment.
The conviction is based on circumstantial evidence.
This Court in Anant Chintaman Lagu vs The State, of Bombay has laid down the princi (1) (1960)2 S.C.R. 460.
255 ples which govern such cases.
In that case Hidayatullah J., at p. 516 quoting the observations of Baron Parke in Towell 's case(1) where the learned Baron laid down the principles applicable to such cases observed that any circumstance which destroys the presumption of innocence, if properly established can be taken into account to find out if the circumstances lead to no other inference but of guilt.
Thus what we have to see is whether taking the totality of circumstances which are held to have been proved against the appellants it can be said that the case is established against the appellants i.e. the facts established are inconsistent with the innocence of the appellants and incapable of explanation on any hypothesis other than that of guilt.
See also Govind Reddy, State of Mysore(2).
It may also be observed here that ordinarily this court does not reassess the evidence and reexamine the findings reached by the courts below particularly where there are concurrent findings of fact, but it was urged before us that this is one of those cases where the rule laid down by the Privy Council in Stephen Seneviratne vs The king (3) applies i.e. on the evidence taken as a ,whole no tribunal could as a matter of legitimate inference arrive at the conclusion that the appellants are guilty.
The inference of guilt of the appellants has been drawn from a number of circumstances which, according to the appellants, do not lead to the irresistible conclution that they are guilty and which, according to the submission of the res pondent, lead to only one conclusion and one alone that the appellants have been rightly convicted and sentenced.
In order to satisfy ourselves at to the guilt of the appellants we have found it expedient in this case to go into the evidence and see whether the conviction is rightly based.
(1) (2) A.I.R. 1960 S.C. 29.
(3) A.I.R, 1931 P. C. 289, 299.
256 In village Hamirpur Roora which is in Itawah district there is a religious institution of which Lachhman Das was the Mahant.
He had two chelas (disciples) tHe elder was Narain Das and the younger Ramanuj Das who is one of the appellants in the present case.
Narain Das got married and was therefore excluded from succession.
His wife is Jai Devi who is also an appellant and they has several children amongst whom is their son Raghav who is another appellant in the case and they have got younger sons and some daughters amongst whom we need only mention Govind Kumari who is M.A.LL.B. of the Lucknow University but she is neither a witness nor an accused in the case.
The other two accused are Mohan Singh and Udham Singh who are retainers (if the Mahant.
Raghav in the year 1950 was married to Kamla who was the daughter of Rain Sarup, a well to do gentleman living in another village.
In 1954 Raghav married another girl who is also an M.A., LL.B. and she and Raghav with Govind Kumari and other sisters were living at Lucknow in a flat in Shankarpuri.
The case for the prosecution is that after the marriage the relations between Kamla, the first wife, and Raghav were stained and she was ill treated by her husband and Kamla had to leave her father in law 's house and to go and live with her father in his village.
Before this Kamla and Raghav bad a son Madhusudhan who was born in 1957.
While Kamla was staying with her father, P.W. Lakhan Prasad intervened and suggested to Ramanuj Das appellant to 'give to Kamla Rs. 10,000 in cash and 90 bighas of land and this was agreed to by Ramanuj Das and on this assurance Ramanuj Das went to Kamla 's father 's house and brought back Kamla after the Bidai ceremony was perform.
It has I been stated in the evidence of Ram Sarup which has been accepted by the High Court that Ramanuj Das himself had told him (Ram Sarup) that the money and the land would be given.
257 Sometimes in February 1961 i.e. about a month and half before the date of the alleged occurrence Ram Sarup went to the house of Ramanuj Das along with Lakhan Prashad P.W, He asked Ramanuj Das to execute the document in respect of the property and also in regard to the money and they were told by Ramanuj Das that after Raghav returned from Lucknow this would be done.
After having this talk Ramanuj Das, Ram Sarup and Lakhan Prasad met Kamla in the house of Ramanuj Das and apprised her of this arrrangement.
On April, 4, 1961 Lakhan Prasad came to know about the arrival of Raghav and on the following day i.e. April 5, 1961 he want to Vamanuj Das as he had been instructed by Ram Sarup and there he found both Ramanuj Das and Raghav.
Lakhan Prasad then asked Ramanuj Das that the promise in regard to Rs.10,000 and 90 bighas of land should be carried into effect.
Thereupon it is stated that Raghav got up abruptly and left, the place but Ramanuj Das promised to execute the document on the day Ram Sarup could come.
Lakhan Prasad told Ramanuj Das that he would go to Ram Sarup on Saturday i.e. April 8, 1961 and bring him on the following day i.e. April 9, 1961 and then the document could be executed on Monday, April 10,1961.
This arrangement was accepted by Ramanuj Das Lakhan Prasad then went and informed Kamla about it.
According to the prosecution both Kamla and Madhusudan were murdered with gun shots sometime in the evening of April 5, 1961, the day the above ' talk took place.
These gunshots were heard by three witnesses.
The same evening Raghav left Hamirpur Roora by jeep accompanied by appellants Mohan Singh and Udham Singh 'I hey were seen passing through the village Samain at about 9 O 'clock by P W. Sri Ram.
They then proceeded to Bidhupa where petrol was purchased from the shop of one Rain Bhajan P.W.
This was at about 258 11 P.M. Ram Bhajan saw two other persons in the jeep which was being driven by Raghav.
They then crossed the Ganga at Kanpur at the Rawatpur Barrier at 8.30 a.m. and from there proceeded to Lucknow, A post card was sent from Lucknow on April 6, 1961 by Govind Kumari in regard to the arrival of Raghav and others.
It is not disputed that Kamla and Madhusudan were not seen alive after the evening of April 5, 1961.
As a matter of fact it is admitted that she became "traceless" after Raghav left Hamirpur Roora.
On April 7, 1961, Khushali Chowkidar of the village made a First Information Report at the police station to the following effect. "Day before yesterday in the night Raghav of my village,, who is son of Narain Das, has murdered his wedded wife and son by firing of them with the gun of Mahant Ramanuj Das.
He has gone some where with the two dead bodies in a car.
There is a rumour about it in the whole of the village.
Having heard of it, I went to the Mahant who is also the Pradhan of my village.
I asked him to give me something in writing, so that I should go to the Police Station and make a report.
The Mahant then asked me to wait and to go only after Thakur Dalganjan Singh had come.
I did not listen to him, although he kept on forbidding.
I have come to make a report".
The Sub inspector in charge of the Police Station had gone in connection with some official duty and therefore the above information was sent to him by the police.
He came to Hamirpur Roora at about 2 p.m. and inspected the house where the deceased was residing.
According to his statement he did not find any one in the house; he took some witnesses along with him and made a search of the house and there he found some patches 259 which looked like blood on the terrace and in the rooms of the first floor.
He prepared a site plan and made a memorandum of what he saw there.
This site plan and the memorandum that he prepared have been proved.
He took into possession blood stained plaster pieces from II places from inside the room, put them into separate packets and made the packets into a bundle and sealed it.
On April 12, 1961 Police Deputy Superintendent Bashir Hussain took in and the investigation and came to the place of the occurrence and found seven other places where there were marks which looked like blood marks and he took the earth into possession.
These included places like Parnalas (water spots).
These were also made into a sealed parcel but unfortunately all these articles were not sent to the Chemical Examiner till May 25, 1961 and when examined out of 11 pieces which had been collected by the Sub lnspector five were found to be bloodstained and of out seven pieces collected by Deputy Superintendent Bashir Hussian only two were found to be bloodstained.
When these articles were sent to the Serologist the origin of the blood could not be ascertained as the blood by that time had disintegrated.
The Sub Inspector searched for the, accused persons but could not find any one at the house or at other places.
On April 10, 1961 he arrested Mohan Singh appellant but the others could not be traced.
They excepting Raghav surrendered themselves on different dates in the Magistrate 's court in the district of Etawah Ramanuj Das on April 24 and Jai Devi on April 27.
The Sub Inspector started a search for Raghav, looked for him in different places in Lucknow but he could not find him nor was his jeep found.
April 20, 1961 Raghav surrendered in the court of the Magistrate at 260 Nawabganj in the district of Barabanki.
In the application he stated as follows: "2.
That Srimati Kamla daughter of Ram Swarup of village Manchhana, P. section Kotwali District Mainpuri, residing in my house has become traceless along with her minor son and in this connection a strong rumour has been set afloat by the enemies of the applicant 's family to the effect that she has been murdered.
" He also stated that his name was being associated with the murder because of enmity.
AD Affidavit was filed in the court of the Magistrate by Govind Kumari sister of the appellant in which it was stated that Kamla had run away from the house of Ramanuj Das after stealing ornaments.
The jeep in which Raghav had left Hamirpur Roora Was never found in spite of the best efforts of the Police.
During the course of their investigations the police recovered from the laundry of on Babulal P.W. in Lucknow a shirt and a pyjama belonging, to appellant Raghav.
The police thought that there were blood marks both on the shirt as well as the pyjama but the Chemical Examiner only found three minute size bloodstains on the shirt but the origin of this blood also could not be discovered as the blood had disintegrated.
The appellants were then tried before the learned Sessions Judge who convicted them as has been said above.
The conviction was upheld by the High Court and the appellants have come to this court by special leave.
It may be remarked that the dead body of Kamla or her son Madhusudan was never found and this is a case where there is no direct proof of corpus delicti.
The question is whether in a case 261 like this and on the evidence which we are going to discuss, it can be said that a ease of murder has been proved and it has also been proved as to who committed the murder and further whether a case under section 201 has been made out.
There are certain facts in this case which are not in controversy.
The appellant Raghav after having been married to Kamla for about four years married a second time.
His second wife is Vimla who is a graduate of the Lucknow University.
It is not disputed that some time in 1959 Kamla with her son Madhusudan who was born in 1957 went to live with her parents, her father being a well to do resident of another village.
She stayed with her parents for about two years and was brought back to Hamirpur Roora some time in 1960.
The prosecution case is that this was on the promise that she will be given Rs. 10, 00) in cash and 90 bighas of land but this is denied by the defence.
The High Court has found this fact proved.
There is again no dispute about their (Kamla and her son Madhasudan) being alive upto the evening of April 5, 1961.
On the night between April 5 and April 6, both Kamla and Madhusudan disappeared.
They were not seen at the house of Ramanuj Das where they were residing and where also were residing her father in law and his family and her husband whenever he came to the village from Lucknow where he was a University student and where he had a flat of his own for his residence and that of his second wife Vimla and his sisters.
It is also clear on this record that none of the members of the family i.e. Ramanuj Das, Jai Devi or any other made the slightest attempt to trace the whereabout of Kamla and her son after their disappearance.
No report was made to the Police, no search was made.
On the other hand when the chowkidar of the village Khushali P. W., asked Ramanuj Das 262 to give something in writing so that he could inform the Police regarding the rumour which was afloat in the village about the murder of Kamla and her son he told him to wait till Dalgajan Singh came.
It was after this that the chowkidar made a report at the Police Station.
The first question is as to whether Kamla and her son were murdered and the murder was committed in the house of Ramanuj Das as alleged by the prosecution.
As we have said above both Kamla and her son were seen alive till the evening of April 5, 1961 and they were not seen thereafter.
Both the courts below have found and there is evidence on the record that relations between Kamla and he husband Raghav were strained and it was for that reason that she had gone away to her parents house.
Ram Swarup, Kamla 's father has deposed to this and so has Lakhan Prasad who deposed that whenever he met Kamla he found her to be unhappy.
Ordinarily amongst families such as that of the appellant daughters in law do not go away to stay at their parents house unless there is reason for it.
, The High Court has considered this evidence in regard to the relations between the husband and the wife at great length and it is not necessary to repeat those statements of the witnesses which have been referred to in the judgment of the High Court.
We are satisfied that on this evidence the High Court has rightly found that the relations between the two were unhappy.
In those circumstances it has to be enquired as to how and why Kamla came back to the house of her in laws along with her son.
For that the evidence again is of Ram Swarup and Lakhan Prasad.
Somewhere in 1960 Lakhan Prasad went to Ram Swarup and asked him that Kamla should be sent to Hamirpur Roora and that there would be no further trouble.
we also told Ram Swarup that Ramanuj Das had decided to give Kamla a sum of Rs. 10,000 in cash 263 and 90 bighas of Land for cultivation on the understanding that she would reside at Hamirpur Roora.
On this condition Ramanuj Das came and took Kamla with him after the bidai ceremony.
On that occasion, according to ham Swarup, Ramanuj Das told him that he would settle the money and the land as promised.
Sometime in February 1961 Ram Swarup accompanied by Lakhan Prasad went to the house of Ramanuj Das and asked him to perform his part of the promise to which Ramanuj Das replied that be would do so on the arrival of Raghav from Lucknow.
On April 5, 1961, the date of the alleged murder, Lakhan Prasad went to the house of Ramanuj Das and there he had a talk with Ramanuj Das, Raghav was also sitting near Ramanuj Das.
When Lakhan Prasad started talking about this matter Raghav got up and went away but Ramanuj Das promised that he would execute the document on Monday April 10, 1961 and it was arranged that Ram Swarup would also be present by them and Lakhan Prasad informed Kamla of this fact.
The defence has denied this part of the prosecution ease and before us the evidence of Lakhan Prasad was severely criticised and reliance was placed on the criticism of this witness by the learned Sessions Judge.
It appears that the learned Sessions Judge has been unduly severe on Lakhan Prasad merely because of a post card which was produced by, Ramanuj Das and proved by defense witnesses that the marriage between Kamla and Raghav was not brought about by Lakhan Prasad but by Dafadar Singh.
Lakhan Prasad had deposed that he had brought about the marriage.
It was also said that Lakhan Prasad was unable to recognise the photograph of Govind Kumari and other children and thus could not be very familiar with the family.
But the evidence of Lakhan Prasad gets strong corroboration from the evidence of Ram Swarup.
The 264 High Court was satisfied that on that day Ramanuj Das had agreed that he would execute such a document and we see no reason to differ from the finding of the High Court, The fact that Ramanuj Das was present for the settlement of money and land in favour of Kamla is amply proved on this record and it is equally clear that when this matter was broached in the presence of Raghav he suddenly left the place from which an inference might well be and has rightly been drawn that he was not very happy about this settlement.
On the same evening three shots were heard by three witnesses P. W., Narain Singh, P.W. Lallu Singh and P. W. Babu Singh.
Both the courts below have accepted the testimony of these witnesses.
We have gone through the evidence of these witnesses and although there may be certain points on which the testimony of.
these witnesses may legitimately be subjected to criticism, those points are Dot sufficient to detract from their evidence that they did bear three shots being fired.
The defence had put forward the theory that it was the firing of a toy gun by the younger brother of Raghav which these witnesses heard on that day but this plea has rightly not been accepted by the High Court.
The question then arises whether Raghav was in the village on April 5, the date of the murder.
The case for Raghav is that he had left on the 4th and that he was not in the village on the 5th.
One fact which has been taken into consideration against this plea is the statement of Lakhan Prasad when he states that in the presence of Raghav the question of settlement of land and of money was discussed and n Raghav got up and went away.
This, according to Lakhan Prasad, was on the 5th.
Then 265 there is the evidence to show that the jeep of appellant Raghav was seen in the house of Ramanuj Das on the evening of th.
This evidence is of P. W. Narain Singh who saw the jeep in the house and of P. W. Lallu Singh who saw the jeep of Raghav going towards the north at about 9 or 10 O 'Clock on the evening of April 5, 1961 and finally the evidence of P. W. Babu Singh who says that on the same evening he heard the sound of car at about 10 p. m.
He also stated that the only person who had a jeep or a car was Raghav.
These witnesses have been believed and after going through their evidence we are of the opinion that they have been rightly believed.
There is then the evidence of P. W. Sri Ram who says that on April 5.
at about 10 p.m. he saw the jeep of Raghav in village Samain which is at a distance of a mile and in that jeep there were the appellant Raghav and the two appellants Mohan Singh and Udham Singh and that the back curtain of the jeep was drawn.
This evidence was criticised on the ground that this witness had made a mistake as to the date which was 4th and also that he did not meet the appellant 's jeep there but at another place on the canal bank and it is argued that the statement of this witness is compatible with the case of the defence.
It appears to us that Sri Ram has made a mistake about the date.
He was deposing after a long time but corroboration is from another source and that shows that Sri Ram must have seen the jeep on the 5th and not the 4th.
The jeep was seen at Hamirpur Roora on the 5th by two witnesses.
Raghav was seen at the house on the 5th by Lakhan Prasad and his further movements have been traced also.
Raghav took petrol from P. W. Ram Bhajjan who states that the petrol was purchased about 10 30 P. M. or 11 p. m. and considering the distance between Bidhauna and Samain that would probably be the 266 time when Raghav would be in Bidhuna.
The evidence of this witness was also criticised that he made a mistake in regard to time and that petrol was brought at 2 p. m. and not in the night.
It was argued that other cash memos bad not been taken from Ram Bhajjan which, if they had been taken, would have shown that the petrol was taken not at 10 30 p. m. or 11 p. m. but earlier in the afternoon.
This witness has given good reasons why he remembered the time when petrol was taken by him.
He stated that two days later he heard the rumour and then remembered the time and the date on which Raghav bad bought petrol from him.
He was criticised for not remembering the time when Raghav bought petrol on the 4th but then he had no reason to recall that visit.
In our opinion the testimony of this witness has been rightly accepted by the courts below.
On the morning of 6th the jeep was seen at the barrier at the river Ganga at Kanpur at 8 30 a. m. and then Raghav went to Lucknow.
From the evidence of demand of Lakhan Prasad for the Settlement of land on Kamla on April 5, 1961 in the presence of Raghav from the fact that the jeep of Raghav was seen in the village in the evening and his jeep was seen going from village Hamirpur Roora and again at Samain and Bhidhuna an inference has rightly been drawn that appellant Raghav was present in village Hamirpur Roora on April 5 and his plea that he left that village on the 4th is false.
The police was informed about the rumour in the village of the murder of Kamla and her son on April 7 and the Sub Inspector Brijraj Singh Tomar came to the house of Ramanuj Das at about 2 p.m.
He went into the house and inspected the place of occurrence and prepared a site plan and memo showing as to what he saw.
This, he has sworn to be correct and there is no reason to doubt his testimony.
According to his statement he found 267 what appeared to be blood at different places in the rooms and be took the plaster from those places.
As we have said above the origin of this blood has not been proved because of disintegration but the fact is that blood was found in the rooms.
The case put forward by appellant Raghav was that he started from the village on April 4 and want to his mother 's father 's house at Shah Nagla.
From there he took with him his Dada Ram Sewak and the wife of Ram Sawak whom he called Bhabhi.
He started from that place on April 5, 1961 at about 12 noon, took petrol from Bidhuna and reached Samain, which he wants us to read as Bhawain, where his mother 's sister is married and where he want to condole because the father in law of his mother 's sister bad died and from there he started from Lucknow on April 6, 1961 after taking refreshments.
All these facts were capable of easy proof if facts they were.
Neither the Dada nor the Bhabhi were examined The two persons who saw the appellant go in the jeep are P. W. Sri Ram and P.W. Ram Bhajan.
The testimony of these witnesses has been believed by the courts below and with that we have agreed.
Neither of them says that they saw a woman in the jeep.
If the appellant left with Mohan Singh and Udham Sinah then there should have been four individuals in the jeep besides the appellant at the petrol pump.
That is not the statement of P. M. Ram Bhajan nor is there any proof that as a matter of fact the father in law of the appellant 's mother 's sister (Massi) had died or that the appellant had gone there for the purpose of condoling or that he went there at all.
We are unable to accept this explanation given by the appellant in view of the testimony of the witnesses who have been discussed above.
Thus after the three gunshots were fired and heard by the three witnesses, the appellant 's jeep was seen leaving the village.
It was seen in Samain with 268 the two appellants Mohan Singh and Udham Singh and it was then seen at Bidbuna "with two persons sitting at the back".
This was on April 5.
The explanation given by the.
appellant, therefore, is false.
When the appellant reached Lucknow his sister wrote a letter saying that the appellant etc.
had arrived and that Bhabhi had also come and "as Bhabhi has come over here so I have not to worry about cooking of food".
The defence submit that what was meant by Bhabhi wag Vimla or it may be Dada s wife and therefore it cannot he said that there was any oblique motive in the writing of this post card so as to create evidence in regard to Kamla being alive on April 6. 1951.
The prosecution has rightly argued that in this post card there is no mention of Kamla.
The father, uncle and mother and three younger children are mentioned but not Kamla or Madbusudan.
To this the reply of counsel for the appellant was that there was not much love lost between Kamla and Govind Kumari and for that reason her name was not mentioned.
But there wag nothing against the little boy who could have been mentioned as the other children.
Even if Govind Kumari 's distaste be true that is an additional reason for saying that Kamla was not a very welcome member of the family of her in laws.
The appellant then was found to be absconding.
According to Sub Inspector Tomar efforts were made to search for him in different places where he would ordinarily be in the town of Lucknow or elsewhere but he was not found.
Ultimately he went to Nawabganj in the district of Barabanki where on April 20, 1961 he surrendered himself before a Magistrate.
In the application that he made for surrendering himself he stated, as has been said above, that Kamla d/o Ram Swarup who was living in his house was missing and it was being 269 said by his enemies that she had murdered and that his name had been mentioned in that connection due to enmity and that a warrant had issued against him although be was wholly unaware of her disappearance.
This is rather an extraordinary conduct on the part of a husband.
There is nothing to indicates that any attempt was made by the hus band to search for the missing wife and the child or anything was done by him in regard to that matter.
He may not have worried about the mother but what about the child? The allegation of the prosecution that he was absconding and that when they searched for him they could not find him is satisfactorily established on this record.
We are aware that the burden of proving everything against the appellant is on the prosecution and there is no burden on him to disprove anything but in a case of circumstantial evidence where there are circumstance of the kind which are proved in this case the cumulative effect has to be seen by placing together proved facts any conclusion drawn therefrom and in the absence of any explanation all that one has to consider is the prosecution evidence.
There is another important circumstance ' A shirt of the appellant was recovered from a laundry on April 16.
It was found to be bloodstained although the origin of the blood has not been proved by the prosecution.
The fact remains that at three places this shirt which was given by the appellant on April 9, 1961 was found to be blood stained.
Counsel for the appellant argued that this was a most innocuous circumstance because there is no proof that there was blood on the shirt on April 9 when it was given to the laundry and that merely three specks of blood being found on the 16th i.e. seven days later is not a circumstance which can be taken against the appellant.
With this we do not agree.
The appellant must consider himself lucky that the shirt was washed or it would 270 have cleared him or inculpated him still more.
The fact that the blood was not visible to Babulal when the shirt was taken is not a circumstance which goes against the prosecution case because books on medical jurisprudence show that bloodstains are sometimes faint and invisible by ordinary light.
The shirt was given to be laundered and Babulal will look for tears and damage and not for stains or dirt for which the shirt was given to be cleaned.
The colour of the shirt was khaki and it is likely that the small stains would go unnoticed.
After all the shirt was given for a wash.
It is true that the blood was found on April 16, 1961 and there is no proof that it was there on April 9, 1961 but we see no reason why blood should suddenly appear seven days later on the shirt of Raghav.
When be was asked in regard to this bloodstained shirt, his answer was "I do not know".
In the circumstances the courts were justified in taking this to be a circumstance in the chain of circumstances which have to be placed together in order to determine whether the case has been made out against the appellant or not.
Another very striking circumstance against the appellant is that the jeep in which Ragbav travelled from the village to Lucknow has vanished from the face of this earth.
In spite of the beat efforts of the police it has not been found.
Evidently the police wanted to interrogate the appellant in regard the whereabouts of the jeep but it appears that by an order dated April 28, 1961 the Magistrate ordered that the Investigating Officer should issue a written order requiring Raghav to produce the jeep "as well as to interrogate the accused", that the accused is at liberty to say whatever be likes and he could not be compelled either to produce the thing or to tell its whereabouts as this is his privilege under the law.
It is then that the police made an order calling upon the appellant (Raghav) to produce the 271 jeep and of course it was never produced nor found.
His reply cannot be read under section 162 Criminal Procedure Code and we leave have it out of account altogether.
Every possible place was searched and it is significant that it has not been found till today and even when the evidence was being led about its disappearance the evidence was not contradicted.
by driving the jeep to the court house and saying,, here it is.
This, in our opinion, is a circumstance which can be taken into consideration in order to, determine the guilt or otherwise of the appellant.
In the opinion of the High Court the jeep has not been produced because it must be bloodstained, on account of the dead bodies having been carried in it.
It is quite obvious that however much the jeep be washed the chances would be that in some crevice, in some joint or in some bolt nut or screw, blood may still remain adhearing.
But if the jeep is not produced there can be no risk of detection and the inference from its disappearance can be countered by arguments as it has actually been.
The non production of the jeep is a strong circumstance against appellant Raghav which the courts below were entitled to.
take into consideration.
Articles ' like jeeps do not just disappear in this air and when they do disappear and cannot be traced as they have not been traced in this cage and when the allegation is that they have been used for carrying away the dead bodies their non production or their not being found is a circumstance which a court can take into consideration in determining the guilt of an accused person.
It may also he added that the other appellants were also absconding.
Why the whole household went away is not just a coincidence.
If the girl and the child had disappeared in innocent circumstances there was hardly reason for all of them to panic.
None of them proved why they were so difficult to get at or what was the urgent business which had 272 called them away.
Mohan Singh was arrested on April 9, Ramanuj Das surrendered on April 24, and in his application he stated that be bad been informed by A. P. Dubey that be was wanted.
Jai Devi surrendered on April 27, 1961 and claimed to be a purdanashin lady and her appearance in court was excused and she was released on bail.
Thus all the accused persons were found to be absconding and except one the other four were not arrested but they surrendered in the court of the Magistrate and of them 3 were released on bail.
We have therefore the following circumstances which the Courts have taken into considerations % '1) strained relations between Raghav and his wife Kamla; (2) there was an agreement by Ramanuj Das of making a settlement of land and money in favour of Kamla and on the insistence of Ram Swarup father of Kamla, Ramanuj Das bad agreed that the document would be executed on Monday i.e April 10, 1961 ; (3) it is also proved that when the matter was discussed in the presence of appellant Raghav whose arrival was awaited for finalising the arrangement he got up and went away; and it is also established that Kamla had been brought from the house of her parents on the express condition that such a settlement would be made; (4) on April 5, 1961 appellant Raghav was in village Hamirpur Roora and on that evening three gunshots were fired and some time later Raghav left in his jeep with two other appellants Mohan Singh and Udham Singh and after Raghav left Kamla and her son were found missing from the house; (5) although this fact was discovered the next day no attempt was made to search for Kamla and her son; (6) Appellant Raghav and his two companions travelled by night from village Hamirpur Roora according to witnesses he was in a hurry and were found on the 6th morning at Kanpur and the same day they reached Lucknow as the post card written by 273 Govind Kumari shows.
In that post card it is stated that the appellant and others had arrived at Lucknow.
The explanation of the appellant was that he left on the 4th and took his Dada and his Bhabbi along with him but this explanation has not been accepted and is a false explanation; (7) thereafter the appellant made himself scarce and the police could not trace him till he surrendered himself in the court of a magistrate at Nawabgunj where he made an application stating that one Kamla was found missing and that he was being suspected of murdering her; (8) why he should have gone to Nawabgunj is not quite clear and of course neither he nor any of his relatives made any attempt to look for Kamla; (9) when the chowkidar of the village told Ramanuj Das about the rumour in the village of the murder of Kamla he was asked by Ramanuj Das not to make the report till Dalganjan Singh had arrived (Dalganjan Singh we are told is an Up Pradhan of the Panchayat) the report was made by the chowkidar on the 4th and the police came the same day and inspected the house of Ramanuj Das ; (10) In the rooms upstairs blood was found at 5 places.
According to the memo prepared and deposed to in Court there were marks of blood having been wiped off at many places and the Chemical Examiner found the marks on these various places of plaster which had been taken into possession by the sub Inspector to be of blood but its origin could not be determined due to disintegration; (11) on April 12, D. Sp.
Bashir Hussain.
found the blood at 2 places more in the house of the Ramanuj Das.
The origin of this blood has also not been proved due to disintegration; (12) on April 16, a bloodstained shirt of Raghav was found from a laundry; (13) no explanation is given of this blood on the shirt and (14) on April 5, 1961 both Kamla and her son disappeared from the fact of this earth and nobody has heard of them and no attempt has on made to find out as to what happened to them 274 and instead false explanation was given that Kamla had left with her child and a suggestion was made in the cross examination that she had eloped with one Chander Sekhar and thus had vanished from the house.
It may be stated that there is no reasons why she should have disappeared when according to evidence she was going to get land and money and when she had her father who could look after her and was in affluent circumstances; (15) Coupled with this is the fact, of disappearance of jeep in which the appellant travelled from his village to Lucknow; (16) and a wholly false explanation was given as to the movement of the appellant Raghav.
From these circumstances the courts below came to the conclusion that the murder was committed at the house of Ramanuj Das.
We find no reason to disagree with the conclusions drawn from the evidence that Kamla and her son Madhusudhan are dead and they met their death by violence in the house of Ramanuj Das.
In king Horry (1) the headnote states the law as follows: "At the trial of a person charged with murder, the fact of death is provable by circumstantial evidence, not withstanding that neither the body nor any trace of the body has been found and that the accused has made no confession of any participation in the crime.
Before he can be convicted, the fact of death should be proved by such circumstances as render the commission of the crime morally certain and leave no ground for reasonable doubt; the circumstantial evidence should be so cogent and compelling as to convince a jury that upon no rational hypothesis other than murder can the facts be accounted for.
" (1) [1952] N.Z.L.R. III.
275 This statement of the law was approved in Regina vs Onufrejczyk(1) except as to moral certainty and that statement of the law has received approval of this court in Anant Chintaman Lagu vs The State of Bombay(2).
It was also said in King vs Horry (3): "That the jury, viewing the evidence as a whole, was entitled to regard the concurrence of so many separate facts and circumstances themselves established beyond all doubt, and all pointing to the fact of death on or about July 13, 1942 as excluding any reasonable hypothesis other than the death of the person alleged to have been murdered and as having, therefore sufficient probative force to establish her death.
" In this connection it would be apposite ', to quote from the judgment in Lagu 's case(2) at page 506 where it was observed: "In Rex vs Horry [1952] N.Z.L.R. 111 where the entire case law in England was presented for the consideration of the Court.
It was pointed out by the Court that there was no rule in England that corpus delicti must be proved by direct evidence establishing the death of the person and further the cause that death.
Reference was made to Evans vs Evans 161 E.R. 466, 491.
Where it was ruled that corpus delicti might be proved by direct evidence or by ",irresistible grounds of presumption".
In the same case it has been pointed out that in New Zeland 'the Court, upheld numerous convictions where the body of the victim was never found.
" The two cases referred to above i.e. King vs Horry(1) and Regina vs Onufrejczyk (1) are cases of conviction (1) [1955] 1 Q.B. 388.
(2) (3) [1952] N.Z. L.R. III.
276 no doubt by juries on evidence which was wholly circumstantial but in both those cases neither the body was found nor any trace of the body was found and there was no confession by the accused of any participation in the crime and the conviction was based on the occurrence of so many separate facts and circumstances all pointing to the fact of death on or about a particular date and excluded any reasonable hypothesis other than the death of the person alleged to have been murdered and this was held to be of Bufficient probative force to establish death.
In the present case the circumstances which have been proved and to repeat the circumstances are, strained relations between the husband and wife, motive to escape the giving of money and land or maintenance to the wife or the child, suddenly leaving the village at night with two others and almost simultaneous disappearance of Kamla and her son, no search for her and absolute callousness or the part of Raghav, subsequent false explanation being given and his absconding are all circumstances from which the courts below were justified in concluding the Kamla and her son were murdered and that Raghav had a predominent motive to commit the murder.
The High Court found that Raghav had a strong motive to commit the murder and after taking all the circumstances into consideration came to the conclusion that the Sessions Judge had rightly convicted Raghav of murder.
No two cases can have the same facts but the principles applied in placing the various links in the chain of events and circumstances by the High Court are, in our opinion wholly correct and they have rightly drawn the conclusion that the appellant Raghav was guilty of the offence with which he was charged.
The inculpatory facts which have been proved were, in the opinion of the High Court, inconsistent with the innocence of the appellant and are not capable of explanation or any other hypothesis except his 277 guilt and as was said by this Court in Govinda vs State of Mysore(1). "In cases where the evidence is of circum stantial nature, the circumstances from which the conclusion of guilt is to be drawn should in the first instance be fully established and all the facts so established should be consistent only with the 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 huma n probabilities the act must have been done by the accused.
The principle that the inculpatory fact must be inconsistant with the innocence of the accused and incapable of explanation on any other hypothesis than that of guilt does not mean that any extravagant hypothesis would be sufficient to sustain the principle, but that the hypothesis suggested must be reasonable.
" The evidence in this case and the inferences drawn from the evidence by the courts below do not fall in what was said by Baron Alderson in his charge to the jury in Re vs Hodge(2) 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 matter, to overreach and .lm0 (1) A.I.R.1960 S.C.29.
(2) 278 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.
" Therefore in our view the courts below having applied correct principles and having found the circumstances, to be such which can only be explained on the hypothesis of the guilt of appellant Raghav have rightly found the appellant to be guilty.
He had the immediate motive to rid himself of the wife.
His child was just as undesirable and indeed the child could not be kept back and the mother murdered.
Jai Devi as the murderer by gun shots was out of the question.
Ramanuj ' Das was trying to placate Kamla by promising money and lands.
The servants had I no reason to murder their mistress.
It is manifest that the shots must have been fired by Raghav who took steps also to rid the bodies and the jeep which carried them.
If the jeep was not connected it would have come forth if not in the investigation at least during the trial.
We therefore dismiss the appeal of Raghav and see no reason to disagree with the opinion of the courts below that no sentence other than death was called for in this case.
The murder was a venal one and had been committed to get rid of an inconvenient wife and her child.
Then the question arises whether a case is made out section 201 of the Indian Penal Code and if so against whom ? The two appellants Mohan Singh and Udham Singh were with the appellant (Raghav) in his jeep and if the dead body was taken away in his jeep as it has been held by the Courts below that they were then the case against these two appel lants is proved.
It is said that no one saw the dead bodies being carried.
That may be so but the conclusion drawn is from circumstantial evidence i.e. series of events which lead to the conclusion of 279 guilt.
We have already said that murder was committed in the house of Ramanuj Das on the evening of April 5, 1961.
There was disappearance of Kamla and Madhusudan and sudden departure of Raghav and these two appellants.
They were in a ,hurry and the back curtains of jeep were drawn.
They travelled all night and took almost 11 hours to reach the barrier at Kanpur.
There is no trace of Kamla and her child.
No one has seen them since their disappearance on April 5.
From these proved facts the courts drow the inference of an offence under a. 201 Indian Penal Code which in our opinion was correct.
Thus these two appellants have been rightly convicted and their appeals are dismissed.
In regard to the case of Ramanuj Das and Jai Devi the finding of the High Court is that the dead bodies of Kamla and her son Madbusudan were not found in the house of Ramanuj Das and they must have therefore been removed ; that an attempt was made to wash out the bloodstains from inside the rooms and also outside on the roof ; that the dead bodies could not have been removed without the knowledge and active cooperation of Ramanuj Das and Jai Devi and further that both Ramanuj Das and Jai Devi absconded.
On this basis the conviction of these appellants was held by the High Court to be justified.
It is true that the murder was committed in the house of Ramanuj Das and that there is the evidence to show that the blood inside and outside the living rooms was washed and an attempt was made to obliterate any sign of it though it was unsuccessful.
It also may be that both Ramanuj Das and Jai Devi had knowledge of the removal of the dead bodies but what section 201 requires is causing any evidence of the commission of the offence to disappear or for giving any information respecting the offence which a person knows or believes to be false.
In this case there is no evidence of either.
It is not shown that 280 these two appellants caused any evidence to disappear.
There may be a very strong suspicion that if from the house dead bodies are removed or blood was washed, person placed in the position of the appellants must have had.
a hand in it but still that remains a suspicion even a strong suspicion at that.
It is true that they were absconding but merely absconding will not fill the gap or supply the evidence which is necessary to prove the ingredients of section 201 of the Indian Penal Code.
In our opinion the case against Ramanuj Das and Jai Devi has not been made out.
There appeals must therefore be allowed and they be set at liberty.
We have found that the murder was committed in the house of Ramanuj Das and that disappearance of the dead bodies took place from that house.
Ramanuj Das did have the knowledge of the commission of the murder and he took no steps to inform the police about it.
In these circumstances he has been rightly convicted under section 176 of the Indian Penal Code and his appeal in regard to conviction under that section is dismissed.
By COURT.
The appeal of Raghav Prapanna Tripathi, Mohan and Udham Singh is allowed by majority and that of Ramanuj Das and Jai Devi for offence under section 201 of the Indian Penal Code is allowed unanimously.
The appeal of Ramanuj Das for offence under section 176 of the Indian Penal Code is allowed by majority.
| The appellants were prosecuted and committed to the Sessions for trial.
Raghav was convicted and sentenced to death under section 302, I.P.C. He and Jai Devi, his mother, Ramanuj Das, Mohan Singh and Udham Singh were convicted under section 201 IPC.
Ramanuj Das was also convicted under section 176 IPC.
Their appeals were dismissed by the High Court.
They came to this court by special leave.
The appeal of Raghav, Mohan Singh and Udham Singh was allowed by majority, that of Ramanuj Das and jai Devi for offence under section 201, IPC was allowed unanimously and appeal of Ramanuj Das for offence under section 176 IPC was allowed by a majority.
Held (Kapur and Hidayatullaha, JJ dissenting) that there was no direct evidence about Raghav committing the murder of Kamla and Madhusudan.
There was no direct evidence about his carrying away their dead bodies in the jeep.
There was no direct evidence about Ramanuj Das or any other accused being a party to the removal of the dead bodies from the house.
The entire case was based on circumstantial evidence.
The circumstances proved against Raghav were not sufficient to support the finding that he had committed the murder.
The mere absconding may lend weight to the other evidence establishing the guilt of the accused but by itself that is hardly any evidence of guilt.
It was too much to conclude from the non recovery of the jeep that if it had been recovered, it would have afforded evidence of existence of human blood stain and of its having been used to remove evidence of murder.
That circumstance had no evidentiary value.
There was no evidence about the part Ramanuj Das or Jai Devi played in the removal of the dead bodies.
The .fact that they were in the house and could have possibly known of the removal of the dead bodies, if that was a fact 240 would not by itself establish that they assisted in the removal if the bodies.
The conviction of the appellant was not justified on the material on record.
Per Kapur and Hidayatullah JJ.
The strained relations between husband and wife, the motive to escape the giving of money and land as maintenance to the wife or child, suddenly leaving the village at night with two others and almost simultaneous disappearance of Kamla and her son, no search for her and absolute callousness on the part of Raghav, giving of false explanation later on and his absconding were circumstances from which the Courts below were justified in concluding that Kamla and her son were murdered and Raghav bad a predominant motive to commit the murder.
The inculpatory facts proved against Raghav were not capable of explanation on any other hypothesis except his guilt.
The Courts below bad applied correct principles and found Raghav guilty and there was no reason to disagree with their conclusions.
The non production of the jeep was a circumstance against Raghav which the Courts below were entitled to take into consideration.
Articles like jeeps do not just disappear in thin air and when they do disappear and cannot be traced and when the allegation is that they have been used for carrying away the dead bodies, their nonproduction or their not being found is a circumstance which a Court can take into consideration in determining the guilt of an accused person.
No case under section 201 of the Indian Penal Code had been made out against Ramanuj Das and jai Devi.
What section 201 requires is causing any evidence of the commission of the offence to disappear or giving any information respecting the offence which a person knows or believes to be false.
It was not proved that the two appellants had caused any evidence to disappear.
There may be a strong suspicion that if from the house dead bodies were removed or blood was washed, the persons placed in the position of the two appellants must have had a hand in it, but still that remains a suspicion, although a strong suspicion.
There mere absconding would not fill the gap or supply the evidence which was necessary to prove the ingredients of section 201.
Anant Chintaman Lagu vs The State of Bombay.
, ; , Govinda Reddy vs The State of Mysore, A.I.R. 1960 S.C. 29, Stephen Seneviratnan vs The King, A.I.R. 1936 P.C. 289, Towell 's case; , , Rex vs Horry, , Regina vs Onufrejczyk, , relied upon.
241 Rex V. Hodge, 7, referred to.
|
Appeal No. 1898 of 1967.
Appeal by Special Leave from the Judgment and Order dated the 4th November, 1965 of the Allahabad High Court in Civil Miscellaneous Petition No. 2491 of 1965.
Bishan Narain and D. N. Mishra, for the appellant.
section N. Prasad and section P. Nayar, for respondents Nos. 1 & 2.
The Judgment of the Court were delivered by SARKARIA J.
This appeal by special leave is directed against the order dated November 4, 1965, of the High Court of Judicature at Allahabad dismissing the appellant 's writ petition under Article 226 and 227 of the Constitution in limine.
The appellant was a Guard 'C ' Grade in Northern Railway.
He was confirmed in that post in 1952.
On April 3, 1955, an incident took place at Railway Station, Kalka, as a result of which, he was prosecuted for an offence under section 509, Penal Code.
The Additional 180 District Magistrate, Ambala convicted and sentenced him on December 29, 1955 to three months simple imprisonment.
His appeal was dismissed by the Court of Session.
In Revision, the High Court of Punjab, on March 5, 1956, maintained his conviction but reduced the sentence.
On April 2, 1956, the appellant received a communication from the Divisional Personnel Officer, Northern Railway that he had been dismissed by the Divisional Superintendent from service w.e.f. March 31, 1956.
In Appeal by special leave, this Court, set aside the conviction ,of the appellant and acquitted him by its judgment dated March 7, 1957.
Thereafter, the appellant filed a writ petition in the High Court of Punjab under Article 226 of the Constitution impugning the order The High Court by its judgment, dated of his dismissal.
September 2, 1958, issued the, writ directing the respondents to treat the dismissal of the appellant wholly void and ineffective.
Pursuant to that direction, on December 26, 1958 the appellant received a letter from the Divisional Personnel Officer that he had been reinstated to the post of Guard 'C ' Grade and that the matter of his back wages for the period between the date of his.
dismissal and the date of reinstatement would be decided later on.
By another letter of February 13, 1959, the same officer informed the appellant that the period from the date, of his dismissal to the date of his reinstatement would be treated as leave due.
The appellant, on March 11, 1959, was paid Rs. 81.51 as his entire wages for the period ending March 7, 1959.
On August 13, 1959, the appellant made an application under section 15(2) of the (Act 4 of 1936) (here inafter referred to a$ the Act) before the prescribed authority claim in , a sum of Rs. 9015.60 plus 10 times of, the said amount as compensation from the respondents.
In addition, Traveling Allowance was claimed.
Later, an attempt was made to amend the application and replace 'Traveling Allowance ' by 'Running Allowance '.
The Authority did not permit the appellant to do so as he had failed to amend in time despite the order of the Court.
The respondents resisted the appellant 's claim on various grounds including that of limitation.
By an order dated August 7, 1963, the Authority directed respondent No. 1 (Union of India), in its capacity as employer, to refund the sum of Rs. 4863.20, (plus Rs. 100/ as costs) to the appellant holding that the same had been illegally deducted from his wages.
The Authority disallowed the remaining claim including that of the Running Allowance.
Against the order of the Authority, two appeals were carried to the Appellate Authority (Additional District Judge) One by the appellant and the other by the respondents.
The Appellate Authority held that the appellant 's claim was barred by time as limitation had commenced from the date of dismissal from service and not from the date of reinstatement or the date on which it was decided to treat the period of dismissal as leave due.
It upheld the dismissal of the appellant 's claim to the Running Allowance, inter alia for the reason that he had, despite the order of the 181 Authority, failed to amend the petition within the period indicated in 0.6, R.18 of the Code of Civil Procedure.
The Appellate Authority further found that the Railway Administration was competent to treat the period of appellant 's inactive service from April 1, 1956 to February 17, 1959, as leave due and to deduct his wages for that period in accordance with rule 2044 of the Railway Establishment Code; and in view of section 7 (2) (h) of the Act, no refund of the deducted wages could be allowed.
It further held that in the case of Railway Administration, the Divisional Superintendent named as Pay Master was res ponsible for the payment of wages of the Railway employees, and consequently, the direction of the Authority requiring the Union of India to make payment to the claimant was illegal.
In the result, the Appellate Authority allowed the respondent 's appeal and dismissed the appellant 's claim.
The appellant 's writ petition impugning this order of the Appellate Authority was, as already stated, dismissed by the High Court.
Hence this appeal.
The first question that falls to be considered is, whether the claim application filed by the appellant under section 15(2) of the Act was time barred? Mr. Bishan Narain, learned Counsel for the appellant contends that the case falls under the first part of the proviso (1) to section 15(2) which relates to deduction of wages and limitation would start from March 11, 1959 when the wages for the period of the appellant 's inactive service were actually deducted and he was paid Rs. 81.51 only for the entire period ending March 7, 1959.
, Even on a stricter view, according to the learned Counsel, limitation would not start earlier than the date, February 13, 1959, when constructive deduction took place and it was decided to treat the period of his inactive service as leave due (which meant leave without pay).
Since the appellant 's claim application had been presented within six months of either of these dates, it was well within time.
Learned Counsel for the respondents does not dispute that this is a case of deduction of wages.
His argument, however, is that irrespective of whether the case was one of deduction or of non payment of wages, the starting point of limitation would be the same viz., the date on which the wages fell due or accrued.
The argument is that the concepts of 'deducted wages ' and . 'delayed wages ' are so integrated with each other that the events relatable to them always synchronise furnishing the same cause of action and the same start of limitation.
It is pointed out that the wages of a Railway employee fall due every month; wages of one month being payable by the 10th of the succeeding month.
Since the dismissal of the Appellant was declared void and non est by the Punjab High Court it is urged his right to claim wages continued to accrue every month even during the period of Ills dismissal.
In the view propounded by the learned Counsel, limitation for making the application under section 1 5 (2) started from January 3, 1956, the date of the dismissal and the application made by the appellant 182 more than three years thereafter, was clearly time barred.
Reference has been made to this Court 's decision in Jai Chand Sawhney vs Union of India(1).
We shall presently see that while the contentions of the learned Counsel for the respondents cannot, those canvassed by the learned Counsel for the appellant must prevail.
The material part of section 15 of the Act reads "15(1) 15(2) Where contrary to the provisions of this Act any deduction has been made from the wages of an employed person or any payment of wages has been delayed, such person himself, or any legal practitioner or any official of a registered trade union authorised in writing to act on his behalf, or any Inspector under this Act, or any other person acting with the permission of the authority appointed under sub section (1) may apply to such authority for a direction under sub section (3) Provided that every such application shall be presented within (twelve months) from the date on which the deduction from the wages was made or from the date on which the payment of the wages was due to be made, as the case may be: Provided further that any application may be admitted after the said period of twelve months when die applicant satisfies the authority that he had sufficient cause for not making the application within such period.
15(3) When any application under sub section (2) is entertained, the authority shall hear the applicant and the employer or other person responsible for the payment of wages under section 3, or give them an opportunity of being heard, and, after such further inquiry ' (if any) as may be necessary, may, without prejudice to any other penalty to which such employer or other person is liable under this Act, direct the refund to the employed person of the amount deducted, or the payment of the delayed wages, together with the payment of such compensation as the authority may think fit, not exceeding ten times the amount deducted in the former case and not exceeding twenty five rupees in the latter, and even if the amount deducted or the delayed wages are paid before the disposal of the application direct the payment of such compensation, as the authority, may think fit, not exceeding twenty five rupees :.
The question of limitation turns on an interpretation of the first proviso to sub section
(2) of section 15.
This proviso ex facie indicates two 1.
183 alternative termini a quo for limitation, namely : (i) the date on which deduction from wages was made, or, (ii) the date, on which the payment of the wages was due to be made.
From a reading of section 15, it is clear that the legislature has deliberately used, first, in sub section
(2), and then in sub section
(3) the expressions "deduction of wages" and "delay in payment of wages" as two distinct concepts.
Terminus a quo (i) in the proviso expressly relates to the deduction of wages, while (ii) is referable to the delayed wages.
if both these terminii were always relatable to the same point of time, then there would be no point in mentioning terminus a quo (i), and the, Legislature could have simply said that limitation for a claim under section 15(2) would always start from the date on which the wages "fall due" or "accrue" as has been done under article 102 of the Limitation Act which applies only to suits for recovery of wages.
The very fact that two distinct starting points of limitation referable to two distinct concepts, have been stated in the proviso, shows that the Legislature had visualised that the date of deduction of wages and the due date of delayed wages, may not always coincide.
Conjunction "or", which in the context means "either", and the phrase "as the case may be" at the end of the Proviso are clinching indicia of this interpretation.
They are not mere suplusages and must be given their full effect.
The Legislature is not supposed to indulge in tautology; and when it uses analogous words or phrases in the alternative, each maybe presumed to convey a separate and distinct meaning, the choice of either of which may involve the rejection of the other.
To hold that the two expressions "wages deducted", and "wages delayed", though used in the alternative, carry the same meaning, and in the Proviso are always referable to one and the same ' point of time, would be contrary to this primary canon of interpretation "Deduction from wages" has not been defined in the Act.
Some illustrations of such deductions are, however, to be found in sections 7 and 13.
One of them in section 7 (2) (b) is "deductions for absence from duty" which indicates that such deduction can be a total deduction, also.
That is to say "deduction from wages" may be 'the same thing as "deduction of wages".
The deduction in the instant case is akin to this category covering the entire deficiency for the period of absence, the only difference being that here, the appellant absence from duty was involuntary.
Such absence in official parlance is euphemistically called "in active service ', if the employee is later on reinstated.
The point to be considered further is when did such deduction ofwages take place ? Ordinarily in a case like the present where the employee was dismissed on one date and reinstated on a later date, the deduction of wages may synchronise with the act of reinstatement.
But on the peculiar and admitted facts of this case, the deduction did not take place on the date of reinstatement (26 12 1958) because the order of reinstatement expressly stated that "decision with regard to his wages to be paid for that period will be taken later on".
In the case in hand, therefore, the "deduction ' will coincide with the decision impliedly or expressly deducting the wages.
Such a decision was taken 184 and put in the course of a communication to the appellant on February 18, 1959 whereby he was informed that the period from 3 1 1956 to 17 3 1959, would be treated as 'leave due ' Which, it is conceded, meant leave without pay.
Thus, deduction from his wages for the entire period of his 'inactive service ' took place on February 18, 1959.
and limitation under the first part of the Proviso commenced from that date.
The application was made on August 13, 1959, within six months of that date and was thus within time.
in Jai Chand Sawhney 's case (supra), the, interpretation of the first Proviso to section 15(2) never came up for consideration.
Therein, the Court was concerned only with the construction of the expression "accrue/due" in article 102 of the Limitation Act, 1908 which does not govern applications under section 15(2) of the Act.
That case, therefore, is of no assistance in determining the precise issue before us.
It may be observed in passing that the, rule in Sheo Prasad vs Additional District Judge,(1) relied on by the Additional District Judge, was not followed by the same High Court in Ram Kishore Sharma vs Additional District Judge Saharanpur(2), as is had ceased to be good law in view _of the decision of this Court in Divisional Superintendent, Northern Railway vs Pushkar Dutt Sharma(3).
In Pushkar Dutt 's case (supra), the application under section 15 (2) of the Act was filed within six months of the date on which the dismissal of the employee was set aside by the court in second appeal.
The employee 's application would have been within time irrespective of whether his case was treated as one of "wages deducted" or "wages delayed".
Therefore, the necessity of examining the comparative mean ing and distinction between "deduction from wages" or "delay in payment of wages due" and the two alternative starting points of limitation relatable to these expressions, did not arise in that case.
In the light of the above discussion, we reverse the finding of the Additional District Judge and hold that the application filed by the appellant under section 15(2) of the Act having been made within six months of the date of deduction from his wages, was within time.
The second ground on which the order of the, Additional District Judge proceeds, is that since the deduction of the wages for the period of his inactive service from April 1, 1956 to February 17, 1959, had been made under the order of a co mpetent authority passed in accordance with rule 2044 of the Railway Establishment Code, in view of section 7 (2) (h) of the Act no order could be made for the refund of the deducted amount.
Both the learned Counsel before us are agreed that in view of the pronouncement of this Court in Devendra Pratap Narain 'Rai; Sharma vs State of U.P.(4), this ground is not sustainable.
In Sharma 's case (supra), this Court was construing rule 54 of the U.P. Government Fundamental Rules, the language of which is substantially the same as that of rule 2044 of the Railway Establishment Code.
It (1) A.I.R. 1962 All. 144.
(2) [1959] All Law Journal p. 225.
(3) (4) [1962] Supp.
S.C.R. 315.
185 was held therein, that r. 54 enables the State Government to fix the pay of a public servant when his dismissal is set aside in departmental appeal.
But that rule has no application to cases in which dismissal is declared invalid by a decree of civil court and he is, in consequence, reinstated.
Mr. Bishan Narain next contends that the prescribed Authority had wrongly disallowed the claim of the appellant to "Running Allowance ' which he had mis described as "Traveling Allowance" in his claim application.
The point pressed into argument is, that once the Authority had allowed the appellant to amend his application for converting the claim of "Traveling Allowance" into "Running Allowance", it had no discretion left thereafter to prevent him from carrying out the amendment, on the technical ground that the period indicated by Order 6, Rule 18, Code of Civil Procedure, for this purpose, has expired.
The Code of Civil Procedure, it is urged, does not govern amendment of applications under section 15(2) of the Act.
The contention is untenable.
While it is true that Rule s 17 and 18 of Order 6 of the Code do not, in terms, apply to amendment of an application under section 15(2), the Authority is competent to devise, consistently with the provisions of the Act and the Rules made thereunder, its own procedure based on general principles of justice, equity and good conscience.
One of such principles is that delay defeats equity.
The Authority found that the applicant was guilty of gross negligence.
He took no steps whatever to carry out the amendment for several months after the order permitting the amendment, and thereafter, when the case was at the final stage, he suddenly woke up, as it were, from slumber, and sought to amend his application.
In the circumstances, the Authority rightly refused to put a premium on this delay and laxity on the part of the appellant.
In the view we take on the claim to running allowance we need not pronounce finally on whether an amendment to the relief once granted requires to be formally carried out in the petition, as in a pleading in court, less rigidity being permissible in quasi judicial proceedings.
Mr. Bishan Narain further contends that Running Allowance was a part of the pay or substantive wages.
In support of this argument he has invited our attention to rule 2003 of the Railway Establishment Code, clause 2 of which defines 'average pay '.
According to the second proviso to this clause in the case, of staff entitled to running allowance, average pay for the purpose of leave salary shall include the average running allowance earned during the 12 months immediately preceding the month in which a Railway servant proceeds on leave subject to a maximum of 75 per cent of average pay for the said period, the average running allowance once determined remaining In operation during the remaining part of the financial year 1 cases of leave not exceeding one month.
The crucial words, which have been underlined.
show that such Running Allowance is counted towards 'average pay ' in those cases only where the leave, does not exceed one month.
It cannot, therefore, be said that Running Allowance was due to the appellant as part of his wages for the entire period of his inactive ser 186 vice.
Traveling allowance or running allowance is eligible if the officer has traveled or run, not otherwise.
We therefore negative this contention.
For the foregoing reasons, we allow this appeal, set aside the order of the Appellate Authority and restore that of the Prescribed Authority.
The appellant shall have his costs throughout.
KRISHNA IYER, J.
The judgment just delivered has my full concurrence but I feel impelled to make a few observations not on the merits but on governmental disposition to litigation, the present case being symptomatic of a serious deficiency.
In this country the State is the largest litigant to day and the huge expenditure involved makes a big draft on the public exchequer.
In the context of expanding dimensions of State activity and responsibility, is it unfair to expect finer sense and sensibility in its litigation policy, the absence of which, in the present case, he led the Railway callously and cantankerously to resist an action by its own employee, a small man, by urging a mere technical plea which has been pursued right up to the summit court here and has been negatived in the judgment just pronounced ? Instances of this type are legion as is evidenced by the fact that then Law Commission of India in a recent report(1) on amendments to the Civil Procedure Code has suggested the deletion of section 80, finding that wholesome provision hardly ever utilised by Government, and has gone further to provide a special procedure for government litigation to highlight the need for an activist policy of just settlement of claims where the State is a party.
It is not right for a welfare ' State like ours to be Janus faced, and while formulating the humanist project of legal aid to the poor, contest the claims of poor employees under it pleading limitation and the like.
That the tendency is chronic flows from certain observations I had made in the Kerala High Court decision(2) which I may usefully excerpt here "The State, under our Constitution, undertakes economic activities in a vast and widening public sector and inevitably gets involved in disputes with private individuals.
But it must be remembered that the State is no ordinary party trying to win a case against one of its own citizens by hook or by crook; for, the State 's interest is to meet honest claims, vindicate a substantial defence and never to score a technical point or overreach a weaker party to avoid a just liability or secure an unfair advantage, simply because legal devices provide such an opportunity.
The State is.
a virtuous litigant and looks with unconcern on immoral forensic successes so that if on the merits the case is weak, government shows a willingness to settle the dispute regardless of prestige and other lesser motivations which move, private parties to fight (1) Law Commission of India, .54th
Report Civil Procedure Code.
(2) P.P. Abu backer vs The Union of India : A.I.R. 1972 Ker.
103 : 107 para 5. 187 in court.
The lay out on litigation costs and executive time by the State and its agencies is so staggering these days because of the large amount of litigation in which it is involved that a positive and wholesome policy of cutting back on the volume of law suits by the twin methods of not being tempted into forensic show downs where a reasonable adjustment is feasible and ever offering to extinguish a pending proceeding on just terms, giving the legal mentors of government some initiative and authority in this behalf.
I am not indulging in any judicial homily but only echoing the dynamic national policy on State litigation evolved at a Conference of Law Ministers of India way back in 1957.
This second appeal strikes me as an instance of disregard of that policy.
" All these words from the Bench, hopefully addressed to a responsive Government, may, if seasonable reactions follow, go a long way to avoidance of governmental litigiousness and affirmance of the image of the State as deeply concerned only in Justic Social Justice.
The phyrric victory of the poor appellant in this case is a sad justification, for the above observations.
| The assessee firm applied for renewal of its registration under s.26A, Income Tax Act, 1922, in May 1958, stating that the income of the previous year, which ended on March 31, 1958, had been divided among the partners.
The Department Tribunal and the High Court did not believe that the previous year 's income had been divided and rejected the application.
Dismissing the appeal to this Court, HELD : From a reading of the section and rules 2, 3 and 6 of the In,come tax Rules and the forms prescribed, it is clear that in the case of an application for renewal, it is incumbent on the part of the assessee to have divided the previous year 's profits before the application for renewal is made.
The fact that the interpretation may cause hardship to the assessee is irrelevant when the language is plain.
[81 G] Surajmal vs Commissioner of Income tax, Madras, 43 I.T.R. 491 and Ganesh Lal Laxmi Narain vs Commissioner of Income Tax, U.P. , approved.
Khanjan Lal Sewak Ram vs Commissioner of Income tax, U.P., , referred to.
|
Appeal No., 132 of 1959.
Appeal from the judgment and decree dated March 23, 1956 of the Allahabad High Court in Special Appeal No. 291 of 1955.
Veda Vyasa and C. P. Lal, for the appellant.
J. P. Goyal, for the respondents.
February 6.
The Judgment of the Court was delivered by WANCHOO, J.
This is an appeal on a certificate granted by the Allahabad High Court.
The brief facts necessary for present purposes are these.
The three respondents were students of G. section Hindu Intermediate College at Sikandrarao and appeared at the Intermediate (Commerce) Examination con ducted by the appellant in the year 1954.
On June 12, 1954, the result of the examination was published in newspapers and the three respondents passed in the second division.
Thereafter they prosecuted further studies.
But in December 1954, their fathers and guardians received information from the Principal of the G. section Hindu Intermediate College that the Examinations ' Committee of the appellant (hereinafter referred to as the Committee) had cancelled the result of the respondents for the examination of 1954 and further that they had been debarred from appearing at the examination of 1955.
Thereupon the respondents filed a write petition in the High Court contending that the Committee had never afforded any opportunity to them to rebut the allegations made against them and that they were never informed about the nature of the unfair means used by them in the said exa mination and the first thing they come to know was the resolution of the Committee canceling their results and debating them from appearing in the examination of 1955.
They therefore contended that they were entitled to an opportunity being 39 afforded to them to meet the case against them of using unfair means at the examination before the appellant took action against them by canceling their results and debarring them from appearing at the examination of 1955.
The procedure thus adopted by the appellant was said to be in violation of the principles of natural justice inasmuch as they were given no opportunity whatsoever to defend themselves and to show cause against the action contemplated against them.
It was further contended that the procedure adopted by the appellant violated the provisions of the U. P. Intermediate Education Act, No. II of 1921 (hereinafter referred to as the Act) and the U. P. Education Code, and therefore, the resolution canceling their results and debarring them from appearing in the later examination was without jurisdiction and illegal.
They therefore prayed for a proper writ or order canceling the resolution of the appellant.
The appellant opposed the application and its case was that the respondents had used unfair means at the examination and their cases were reported to the Committee under the Regulations and the Committee had acted under the, powers conferred on it under the Act and the Regulations framed thereunder after a thorough inquiry.
It was not disputed, however, that no opportunity had been afforded to the respondents to rebut the allegations against them in the inquiry made by the Committee which resulted in the resolution canceling the results of the examination.
A large number of contentions appear to have been urged in the High Court; but we are here only concerned with one of them, namely, whether the respondents were entitled to a hearing before the appellant decided to cancel the results.
The contention on behalf of the respondents before the learned Single Judge was that the appellant was Under a duty to act judicially and therefore the 40 respondents should have been given a hearing before any order was passed , against them.
The learned Single Judge held that no duty was cast on the Committee to act judicially and there was no statutory obligation on the Committee to give an opportunity to every examine to be heard; therefore he rejected the petition.
The respondents then went in appeal which was heared by Dayal and Brijmohan Lall, JJ., who however differed.
Brijmohan Lall, J., was of opinion that the Committee was not required to act judicially or quasijudicially when it considered cases of this kind and was acting merely administratively; be nevertheless was of the opinion that one of the rules of natural justice contained in the maxim audi alteram partem would apply in this case, even though the Committee was acting administratively.
He was therefore in favour of allowing the appeal.
Dayal J., agreed with the view of Brijmohan Lall, J., that in the present case no duty was cast on the Committee to act judicially and that the action of the Committee was merely administrative.
He how ever did not agree that the Committee acted in violation of the principles of natural justice inasmuch as it did not give a hearing to the respondents.
He was of the view that. is the Committee was acting merely administratively it was not bound to give a hearing, as the maxim audi alteram partem applied only to judicial or quasijudicial tribunals.
The two learned Judges also differed on two other points with which we are not concerned.
Eventually they referred three questions to be answered by another learned Judge and one of these questions was whether the failure of the Committee to provide an opportunity to the respondents of being heard vitiated its order, which was of an administrative nature.
The matter then camo before a third learned Judge, Agarwala, J. He was doubtful whether the 41 view of the bench that there was no duty cast on the Committee to act judicially in the present case was correct; but as on that matter the two learned Judges were in agreement, he dealt with the case on the basis that the Committee was acting merely administratively, Even so, he came to the conclusion that the respondents were entitled to a hearing and agreed with the view of Brijmohan Lall, J. Consequently, the appeal was placed before the Bench again and in accordance with the opinion of the third Judge it was allowed.
Then followed an application by the appellant for leave to appeal to this court, which was granted; and that is how the matter has come up before us.
The main contention on behalf of the appellant is that the High Court was wrong in the view it took that an opportunity for hearing was iiecessary in this case even though the Committee acted merely administratively.
It is contended that where a body is acting merely administratively, it is not necessary that it should give a hearing to a party who might be affected by its decision and that the principles of natural justice, including the maxim, audi alteram partem, apply only to judicial or quasi judicial bodies, i.e., bodies on whom a duty is cast to act judicially.
It is submitted that where no such duty is cast on a body and it is acting merely administratively there is no necessity for it to hear the person who might be affected by it,.
, order.
The respondents on the other hand contend that though the final decision of the High Court is correct, the High Court was not right in holding that the Committee was acting merely administratively in a matter of this kind; they contend that considering the entire circumstances which operate in cases of this kind, the High Court should have held that there was a duty to act judicially and therefore it was necessary to give an opportunity to the respondents to be heard before action was taken against them.
It is submitted that the 42 mere fact that there was nothing express in the Act or the Regulations framed thereunder which might make it obligatory for the Committee to call for an explanation and to hear the examinees whose cases it was required to enquire into was not wholly determinative of the question whether a duty was cast on the Committee in cases like this to act judicially.
The first question therefore which falls for consideration is whether any duty is cast on the Committee under the Act and Regulations to act judicially and therefore it is a quasi judicial body.
What constitutes , 'a quasi judicial act" was discussed in the Province or Bombay vs Kusaldas section Advani.(1) The principle, have been summarised by Das, J. (as he was then), at p. 725 in these words: "The principles, as I apprehend them are: (i) that if a statute empowers an authority, not being a court in the ordinary sense, to decide disputes arising out of a claim made by one party under the statute which claim is opposed by another party and to determine the respective rights of the contesting parties who are opposed to each other, there is a vis and prima farcie and in the absence of any thing in the statute to the contrary it is the duty of the authority to act judicially and the decision of the authority is a quasi judicial act ; and (ii) that if a statutory 'authority has power to do any act which will prejudicially affect the subject, then, although there are not two parties apart from the authority and the contest is between the authority proposing to do the act and the subject opposing it, the final determination of the authority Will yet be a quasi.
judicial act provided the authority is required by the statute to act judicially.
(1) ; , 725.
43 In other words, while the presence of two parties besides the deciding authority will prima facie and in the absence of any other factor impose upon the authority the duty to act judicially, the absence of two such parties is not decisive in taking the act of the authority out of the category of quasi judicial act if the authority is nevertheless required by the statute to act judicially.
" These principles have been acted upon by this Court in latter cases: see Nagendra Nath Bora vs The Commissioner of Hills Division & Appeals, Assam(1), Shri Radheshyam Khare vs The State of Madhya Pradesh(2), Gullapalli Nageswara Rao vs Andhra Pradesh State Road Transport Corporation("), and Shivaji Nathubhai vs The Union of India(4).
Now it may be mentioned that the statute is not likely to provide in so many words that the authority passing the order is required to act judicially; that can only be inferred from the express provisions of the statute in the first instance in each case and no one circumstance alone will be determinative of the question whether the authority set up by the statute has the duty to act judicially or not.
The inference whether the authority acting under a statute where it is silent has the duty to act.
judicially will depend, on the express provisions of the statute read along with the nature of the rights affected, the manner of the disposal provided the objective criterion if any to be adopted, the effect of the decision on the person affected and other indicia afforded by the statute.
A duty to act judicially may arise in widely different circumstances which it will be impossible and indeed inadvisable to attempt to define exhaustively:(vide observations of Parker, J. in R. vs Manchester Legal Aid Committee)(5).
(1) ; (2) (3) [1959] Supp. 1 S.C.R. 319.
(4) ; (5) , 44 We must therefore proceed to examine the pro. visions of the Act and the Regulations framed thereunder in connection with matters of this kind to determine whether the Committee can be said to have the duty to act judicially when it deals with cases of examines using unfair means in examination halls.
Under s.7 of the Act, the Board constituted thereunder has inter alia powers to prescribe courses of instruction, to grant diplomas and certificates, to conduct examinations to admit candidates to its examinations to publish the results of its examinations, and to do all such things as may be requisite in order to further the objects of the Board as a body constituted for regulating and supervising High School and Intermediate education.
Under section 1 3, the Board has power to appoint and constitute various committees, including the examinations ' committee, and under section 14, the Board can delegate its power. ; by Regulations to such committees.
Section 15 gives power to the Board to make Regulations with respect to the constitution, powers and duties of committees, the conduct of examinations, and all matters which by the Act may be provided for by Regulations.
Section 20 gives power to the Board and its committees to make bye laws consistent with the Act and the Regulations.
It will be clear from the above that the Act makes no express provisions as to the powers of the committees and the procedure to be adopted by them in carrying out their duties, which are left to be provided by Regulations, and we have therefore to look to the Regulations framed under section 15 to see.
what powers and duties have been conferred on various committees constituted under the Regulations.
Section 13 (1) makes it incumbent on the Board to appoint the Committee and Chap.
VI of the Regulations deals with the powers and duties of the Committee.
Rule 1 (1) of Chap.
VI with which we are particularly concerned reads as 45 follows: "It shall be the duty of the Examinations ' Committee subject to sanction and control of the Board.
" "(1) to consider cases where examines have concealed any fact or made a false statement ill their application forms or a breach of rules and regulations to secure undue admis sion to an examination or used unfair means or committed fraud (including impersonation) at the examination or are guilty or a moral offence or indiscipline and to award penalty which may be one or more of the following : (1) withdrawal of certificate of having passed the examination ; (2) cancellation of the examination; (3) exclusion from the examination.
" There is however no provision in Chap.
VI as to how the Committee will carry out the duty imposed on it by r. 1 (1).
Further, there is no express provision in the Act or the Regulations casting a duty on the Committee to act judicially when exercising its powers under r. 1 (1); and the question whether the Committee has to act judicially when exercising these powers will have to 'be decided on an examination of all the circumstances relevant in the matter.
At the same time, there is nothing express in the Act from which it can be said that the Committee is not under a duty to act judicially.
It is true that there is no procedure provided as to how the Committee will act in exercising its powers under r. 1 (1) and it is.
further true that there is no express provision in that rule requiring the Committee to call for an explanation from the examines concerned and to hear the examines whose case,% ;it is required to consider.
But we are of opinion that the mere fact that the Act or the Regulations do not make it obligatory on the Committee to call for an explanation and to 46 hear the examiner is not conclusive on the question whether the Committee acts as a quasi judicial body in exercising its powers under r. 1 (1).
Even though calling for an explanation and hearing the examine may not have been made expressly oblitory by the Act or the Regulations, it is obvious that the Committee when it proceeds to decide mat ters covered by r. 1 (1) will have to depend upon materials placed before it, in coming to its decision.
Before the Committee decides to award any penalty it has to come to an objective determination on certain facts and only when it comes to the conclusion that those facts are established that it can proceed to punish the examinee concerned.
The facts which the Committee has to find before it takes action are (i) whether the examinee has concealed any fact or made a false statement in his application form; or (ii) whether the examinee has made a breach of the Rules and Regulations to secure under admission to an examination ; or (iii) whether the examinee has used unfair means at the examination ; or (iv) whether the examinee has committed fraud (including impersonation) at the examination ; or (v) whether the examinee is guilty of moral offence or indiscipline.
Until one or other of the five facts is established before the Committee, it cannot proceed to take action under r. 1 (1).
In order to come to the conclusion that one or other of these facts is established, the Committee will have to depend upon materials placed before it, for in the very nature of things it has no personal knowledge in the matter.
Therefore, though the Act or the Regulations do 47 not make it obligatory on the Committee to call for an explanation and hear the examinee, it is implicit in the provisions of r. 1 (1) that the Committee must satisfy itself on materials placed before it that one or other of the facts is established to enable it to take action in the matter.
It will not be possible for the Committee to proceed at all unless materials are placed before it to determine whether the examinee concerned has committed some misconduct or the other which is the basis of the action to 1 be taken under r. 1 (1).
It is clear therefore that consideration of materials placed before it is necessary before the Committee can come to any decision in the exercise of its powers under r. 1 (1) and this can be the only manner in which the Commit, tee can carry out the duties imposed on it.
We thus see that the Committee can only carry out its duties under r. 1 (1) by judging the Materials, placed before it.
It is true that there is no lis in the present case, in the sense that there are not two contesting parties before the Committee and the matter rests between the Committee and the examinee; at the same time considering that materials will have to be placed before the Committee to enable it to decide whether action should be taken under r. 1 (1), it seems to us only fair that the examinee against whom the Committee is proceeding should also be heard.
The effect of the decision of the Committee may in an extreme case blast the career of a young student for life and in any case will put a serious stigma on the examinee concerned which may damage him in later life.
The nature of misconduct which the Committee has to find under r. 1 (1) in some cases is of a serious nature, for example, impersonation, commission of fraud, and perjury; and the Committee 's decision in matters of such seriousness may even lead in some cages to the prosecution of the examinee in courts.
Considering therefore the serious following the 48 decision of the Committee and the serious nature of the misconduct which may be found in some cases under r. t (1), it seems to us that the Committee must be held to act judicially in circumstances as these.
Though therefore there is nothing express one way or the other in the Act or the Regulations casting a duty on the Committee to act judicially, the manner of the disposal, based as it must be on materials placed before it and the serious effects of the decision of the Committee on the examinee concerned, must lead to the conclusion that a duty is cast on the Committee to act judicially in this matter particularly as it has to decide objectively certain facts which may seriously affect the rights and careers of examinees, before it can take any action in the exercise or its power under r. 1 (1).
We are therefore of opinion that the Committee when it exercises its powers under r. 1 (1) is acting quasijudicially and the principles of natural justice which require that the other party, (namely, the examinee in this case) must be heard, will apply to the proceedings before the Committee.
This view was taken by the Calcutta High Court in Dipa Pul vs University of Calcutta, (1) and B. C. Das Gupta vs Bijoyranjan Rakshit, in similar circumstances and is in our opinion correct.
It is urged on behalf of the appellant that there are a large number of cases which come up before the Committee under r. 1 (1), and if the Committee is hold to act judicially as a quasijudicial tribunal in the matter it will find it impossible to carry on its task.
This in our opinion is no criterion for deciding whether a duty is cast to act judicially in view of all the circumstances of the case.
There is no doubt in our mind that considering the totality of circumstances the Committee has to act judicially when taking action under r. 1 (1).
As to the manner in which it should give an opportunity to the examinee concerned to be (1) A. I. R. (2) A. 1.
R. 49 heard, that is a matter which can be provided by Regulations or Bye laws if necessary.
As was pointed out in Local Government Board vs Alridge, (1) all that is required is that the other party shall have an opportunity of adequately presenting his case.
But what the procedure should be in detail will depend on the nature of the tribunal.
There is no doubt that many of the powers of the Committee under Chap.
VI are of administrative nature; but where quasi judicial duties are entrusted to administrative body like this it becomes a quasi judicial body for performing these duties and it can prescribe its own procedure so long as the principles of natural justice are followed and adequate opportunity of presenting his case is given to the examinee.
It is not however necessary to pursue this matter further, for it is not in dispute that no opportunity whatsoever was given to the respondents in this case to give an explanation and present their case before the Committee.
We are therefore of opinion that though the view of the High Court that the Committee was acting merely administratively when proceeding under r. 1 (1) is not correct, its final decision allowing the writ petition on the ground that no opportunity was given to the respondents to put forward their cases before the Committee is correct.
We therefore dismiss the appeal.
No order as to, in the circumstances.
Appeal dismissed.
| The appellant filed a suit before the Civil Court for the ejectment of the respondents on the ground that they were licenses.
Tile respondents claimed that they were occupancy tenants and contended that under section 77 of the Punjab Tenancy Act, 1887, the suit was triable by a revenue court only and not by the civil court.
The trial court and the first appellate court decreed the suit holding that the respondents were not tenants.
On second appeal the judicial Commissioner held that the respondents were occupancy tenants and that the civil court had no jurisdiction to entertain the suit.
Held, that the civil court had jurisdiction to entertain the suit.
Section 77 of the Punjab Tenancy Act was applicable only to suits between landlord and tenants where there was no dispute that the person cultivating the land was a tenant.
But where the status of the defendant as a tenant was not admitted by the landlord, section 77 did not bar a suit in a civil court.
Sham Singh vs Amarjit Singh, (1930) 1.
L. R. and Baru vs Niadar, Lah.
19 1, F. B., approved.
Magiti Sasamal vs Pandab Bissai, , relied on, Held, further that the finding of the first two courts that the respondents were not tenants was one of fact even though documentary evidence had to be considered in determining the question and the judicial Commissioner bad no jurisdiction to interfere with it in second appeal.
The judicial Commissioner had ignored the presumption which arose from entire in the revenue records under section 44 of the Act and this vitiated his findings.
Where there is conflict between prior and subsequent entries, the later entries must prevail.
|
Civil Appeal Nos.
3446 & 3447 of 1987.
From the Judgment and Order dated 11.3.87 of the High Court of Allahabad in Civil Misc.
Writ Petition No. 6789 of 1982.
Satish Chandra, Ms. Purnima Bhat and E.C. Agarwala for the Appellants.
P.P. Rao, B.D. Agarwal, P.K. Chakraverty, Ms. Sandhya Goswami and R.C. Verma for the Respondents.
The Judgment of the Court was delivered by OJHA, J.
These two appeals have been preferred against the judgment dated 11th March, 1987 of the Allahabad High Court in Writ 186 Petition No. 6789 of 1982.
In the said writ petition a Notification dated 20th May, 1982 issued under Section 4(1) read with Section 17(4) of the Land Acquisition Act, 1894 (hereinafter referred to as the Act) and also the consequential Notification dated 21st May, 1982 under Section 6 of the Act with regard to Plot No. 289 with an area of 3 bighas 14 biswa situate in village Kukra, District Muzaffarnagar in the State of Uttar Pradesh were challenged by Ratan Prakash Mangal and Kuldeep Singh who are Respondents 1 and 2 in Civil Appeal No. 3446 of 1987 and the appellants in Civil Appeal No. 3447 of 1987.
For the sake of convenience these two persons shall hereinafter be referred to as Respondents 1 and 2.
The Notification under Section 4(1) of the Act was quashed in part in so far as it invoked Section 17(4) of the Act and thereby dispensed with inquiry under Section 5A of the Act whereas the Notification under Section 6 was quashed as a whole with regard to the aforesaid Plot No. 289.
Civil Appeal No. 3446 of 1987 has been preferred by the Krishi Utpadan Mandi Samiti, Muzaffarnagar for whom the aforesaid plot had been acquired with a prayer that the judgment of the High Court may be set aside.
Civil Appeal No. 3447 of 1987 on the other hand has been preferred by Respondents 1 and 2 asserting that even the Notification under Section 4(1) of the Act should have been quashed by the High Court in its entirety and not only in so far as it invoked Section 17(4) of the Act.
Before dealing with the respective submissions made by learned counsel for the parties it is necessary to give some more facts.
Initially a Notification dated 20th March, 1975 was issued under Section 4(1) of the Act for acquiring nearly 80 acres of land for the public purpose of construction of a market yard for the appellant, Krishi Utpadan Mandi Samiti, Muzaffarnagar.
About 5 months thereafter, however, this Notification was superseded and another Notification was issued under Section 4(1) with regard to only 60 acres of land.
The Notification issued on 20th March, 1975 included Plot No. 289 aforesaid whereas the subsequent Notification which is dated 30th August, 1975 did not include the said plot along with several other plots.
Subsequently, however, another Notification was issued on 26th October, 1978 under Section 4(1) read with Section 17(4) of the Act with regard to 19.47 acres of land including Plot No. 289.
This Notification really seems to be with regard to that portion of land which even though included in the earlier Notification dated 20th March, 1975 had been excluded in the subsequent Notification dated 30th August, 1975.
The Notification dated 26th October, 1978 was followed by a Notification under Section 6 dated 27th October, 1978.
About four months prior to the issue of these Notifications Respondents 1 and 2 had purchased 187 Plot No. 289 aforesaid on 7th June, 1978, The purpose for which Respondents 1 and 2 purchased Plot No. 289 was shown by them in their writ petition filed before the High Court as construction of a residential colony.
According to them in furtherance of that purpose they executed three sale deeds one each on 10th November, 1978, 16th November, 1978 and 7th December, 1978.
The first of these three sale deeds had been executed in favour of one Smt.
Dhanwanti Agarwal, the second one in favour of Smt.
Santosh Kumari and the third one in favour of Shri Janardhan Das and Ram Kumar.
The writ petition filed by Respondents 1 and 2 in the High Court indicates that Smt.
Dhanwanti Agarwal and Smt.
Santosh Kumari were wives of two gazetted officers and the third purchaser Ram Kumar too was a Government servant.
The Respondents 1 and 2 challenged the Notification dated 26th October, 1978 and 27th October, 1978 referred to above before the High Court in Writ Petition No. 163 of 1979.
The plea raised by them was that there was no urgency and consequently the inquiry contemplated by Section 5 A of the Act could not be dispensed with by invoking Section 17(4) thereof.
This plea found favour with the High Court and the two Notifications mentioned above were quashed on 6th June, 1979 in so far as Plot No. 289 was concerned.
This judgment of the High Court was challenged by the Krishi Utpadan Mandi Samiti, Muzaffarnagar before this Court in Civil Appeal No. 2970 of 1979.
This Court agreed with the High Court in so far as it had held that the urgency clause had been wrongly applied.
But it was held that on that ground even though quashing of the Notification under Section 6 of the Act was justified the High Court was not right in quashing the Notification under Section 4(1) in its entirety.
On this view the appeal was allowed in part and the judgment of the High Court was set aside in so far as it quashed the Notification under Section 4(1) of the Act in its entirety.
The rest of the judgment was, however, maintained with a direction "that copies of the Notifications be served personally on Respondents Nos. 1 and 2 and their transferees so that Respondents Nos. 1 and 2 and their transferees may have an opportunity to file their objections to the proposed acquisition within three weeks from the date of service of the copy of the notification upon each of them.
The appropriate authority will then hold an inquiry into the objections under Section 5A and proceed with the matter in accordance with law.
Since the appellant has obtained possession of the land from Respondent Nos. 1 and 2 and their transferees by invoking the urgency clause which has been set aside, the appellant will restore possession of the same to Respondents Nos. 1 and 2 and their transferees within a week from today.
" 188 In pursuance of the aforesaid direction inquiry under Section 5A of the Act was made and the Land Acquisition Officer after giving the parties an opportunity to file their objections and produce evidence and hearing the arguments of their learned counsel, submitted a report on 20th January, 1981, that is, after about 15 months of the direction referred to above issued by this Court in Civil Appeal No. 2970 of 1979.
The report submitted by the Land Acquisition Officer was to the effect that Plot No. 289 may be exempted from acquisition.
In submitting the said report, a copy of which has been placed on record, it appears that the Land Acquisition Officer was impressed mainly by two circumstances: (1) That Smt.
Dhanwanti Agarwal and Smt.
Santosh Kumari who had purchased portions of Plot No. 289 had made a declaration saying that there was no house in their names in Muzaffarnagar and (2) that even though Mandi Samiti had constructed a building it was lying idle inasmuch as no trader was prepared to shift to these premises.
The Government, as is apparent from the counter affidavit filed on its behalf in this Court as also from the original record which was produced before us, did not seem to agree with the report of the Land Acquisition Officer and issued the Notifications which are the subject matter of the present appeals.
We shall deal with the details in this behalf as also with regard to the delay between 20th January, 1981, the date of the report and 20th May, 1982, the date of the issue of Notification under Section 4(1) of the Act while considering the submissions made by learned counsel for the parties on this point.
It was urged by learned counsel for the appellant that even Plot No. 289 was urgently needed by the appellant and the High Court has erred in taking a contrary view and holding that dispensing with inquiry under Section 5A was not bona fide or rational.
For the Respondents 1 and 2 on the other hand it was urged by their learned counsel that consequent upon the report of the Land Acquisition Officer dated 20th January, 1981 in proceedings under Section 5A of the Act to the effect that Plot No. 289 may be exempted from the acquisition, it was incumbent upon the Government to give a decision in this behalf as contemplated by the said Section 5A and until a decision was given, the direction of this Court referred to above given in Civil Appeal No. 2970 of 1979 remained unimplemented and the issue of fresh Notifications under Sections 4(1) and 6 was in colourable exercise of power.
In this connection it was pointed out that the only course open to the Government was to give a decision that notwithstanding the report of the Land Acquisition Officer dated 20th January, 1981 it was necessary to acquire Plot No. 289 and to issue a 189 Notification under Section 6 of the Act on the basis of such decision in continuation of the earlier Notification dated 26th October, 1978 under Section 4(1) of the Act.
According to him since the Notification dated 26th October, 1978 had initially been quashed by the High Court in its entirety on 6th September, 1979 in so far as Plot No. 289 is concerned and was partly maintained by this Court vide its judgment in Civil Appeal No. 2970 of 1979 with a direction to make inquiry under Section 5A of the Act and to proceed thereafter in accordance with law, the second proviso to Section 6(1) of the Act as inserted by the State of Uttar Pradesh by the Land Acquisition (U.P. Amendment) Act 28 of 1972 was clearly attracted.
It was urged that since the said proviso contemplated that in computing the period of three years for issuing a Notification under Section 6 prescribed by the first proviso to sub section (1) thereof the time during which the State Government was prevented by or in consequence of any order of any court from making such declaration shall be excluded, it was open to the State Government to issue a Notification under Section 6 even on 20th May, 1982 when the fresh Notification under Section 4(1) was issued and the issue of the fresh Notification under Section 4(1) invoking Section 17(4) of the Act was not bona fide and was apparently a case of colourable exercise of power.
It was also pointed out by learned counsel for the Respondents 1 and 2 that undue delay had been caused in issuing the fresh Notification under Section 4(1) of the Act on 20th May, 1982 after the report of the Land Acquisition Officer dated 20th January, 1981 which itself indicated that there was no occasion for invoking Section 17(4) of the Act.
In this connection it was further submitted by learned counsel for the Respondents 1 and 2 that no material change in the factual position had taken place between 20th January, 1981 and 20th May, 1982 and for this reason also Section 17(4) of the Act could not have been invoked.
According to learned counsel there was in any case no justification for the Government to include even that portion of the land other than Plot No. 289 which was the subject matter of Notifications dated 26th October, 1978 and 27th October, 1978 and with regard to which the said Notifications had not been quashed.
According to him the Government by including that portion of the land also in these Notifications dated 20th and 21st May, 1982 really took steps to acquire its own land which indicated lack of application of mind at the time of issuing these Notifications.
On the basis of these submissions it was urged by learned counsel for the Respondents 1 and 2 that not only the judgment of the High Court under appeal deserved to be confirmed, Civil Appeal No. 3447 of 1987 filed by Respondents 1 and 2 deserves to be allowed and the Notification dated 20th May, 1982 under Section 4(1) of the Act deserves to be quashed in its 190 entirety in substitution of the judgment of the High Court quashing the same only in so far as it invoked Section 17(4) of the Act.
Having heard learned counsel for the parties we are of the opinion that Civil Appeal No. 3446 of 1987 filed by the Krishi Utpadan Mandi Samiti, Muzaffarnagar deserves to be allowed and as a consequence thereof Civil Appeal No. 3447 of 1987 filed by the Respondents 1 and 2 deserves to be dismissed.
At this place another intervening circumstance may be noticed.
A Notification dated 20th November, 1981 was issued by the State Government under clause (b) of subsection (2) of Section 7 of the Uttar Pradesh Krishi Utpadan Mandi Adhyniyam, 1964 (hereinafter referred to as U.P. Act No. 25 of 1964) declaring that with effect from the date of publication of the Notification in the Gazette the wholesale transactions of agricultural produce in respect of Muzaffarnagar market area specified in Schedule A shall be conducted only on the place within the Muzaffarnagar Principal Market Yard.
A copy of this Notification forms part of the record of Civil Appeal No. 3446 of 1987 and it indicates that Schedule A thereto contains 54 commodities of agricultural produce.
The effect of the issue of the said Notification was that dealers of the said 54 commodities had to shift their existing place of business to the Principal Market Yard.
An association of traders in gur, khandsari and foodgrains, namely, the Gur, Khandsari and Grain Merchants Association (Regd.), Muzaffarnagar filed Writ Petition (Civil) No. 1318 of 1982 in this Court challenging the aforesaid Notification.
The grievance of the petitioners was that once the impugned Notification became operative no one could carry on wholesale business in the specified agricultural produce except at a place declared as a Market yard and any business being carried on at any other place would be contrary to law rendering persons carrying on such business liable to prosecution.
According to the petitioners in this view of the matter and in view of the circumstance that in the new Market Yard mentioned in the Notification shops were not available, the whole business of the petitioners would be ruined if the said Notification was implemented.
Notices were issued to the respondents and statements were made by learned counsel appearing for the concerned respondents that the Mandi Samiti had undertaken planned programme of constructing shops and that 120 more shops can be constructed within two months apart from the shops which had been constructed and allotted to the intending traders and dealers.
On the basis of the aforesaid statements this Court ordered on 2nd March, 1982: 191 "We, therefore, record the statements of Mr. Rana and Mr. Garg that within a period of six months from today the Samiti will construct required number of shops.
If some vacant shops are available proceedings for allotment must be taken forthwith.
Those of the traders/dealers who are allotted shops must shift to the notified market yard within a week from the date of the receipt of the allotment order.
Till any trader/dealer is not allotted a shop he can carry on his business in the old market yard and is not to be prosecuted, on the ground that he is doing business in the old market yard which is denotified.
" A further direction was given that the shops to be constructed must be in accordance with the plan according to which the existing shops had been constructed.
The impugned Notification dated 20th May, 1982 under Section 4(1) of the Act contained inter alia the following recital as is apparent from a copy thereof placed on the record of Civil Appeal No. 3446 of 1987: "Being of the opinion that the provisions of sub section (1) and (1A) of section 17 of the Act are applicable to the said land inasmuch as the said land which is arable and banjar Atirikt is urgently required for the construction of market yard of Krishi Utpadan Mandi Samiti, Muzaffarnagar under a planned development scheme and that in view of the directions of the Supreme Court additional shops are to be constructed most urgently.
It is as well necessary to eliminate the delay likely to be caused by an enquiry under Section 5A of the said Act.
" In the counter affidavit filed on behalf of the State of U.P. which forms part of Civil Appeal No. 3447 of 1987 it has been stated that after the receipt of the report of the Land Acquisition Officer dated 20th January, 1981 the State Government called for comments from the Director, Mandi Parishad, Uttar Pradesh, who vide his letter dated 27th June, 1981 informed the State Government that Plot No. 289 deserved to be acquired and there was no justification to release it from acquisition.
After the said letter had been received Smt.
Dhanwanti Agarwal, one of the vendees from Respondents 1 and 2 referred to above requested the State Government vide her letter dated 2nd September, 1981 to reconsider the matter.
On the receipt of 192 the said letter a meeting was convened at Government level on 16th November, 1981 attended by the District Magistrate, Muzaffarnagar, Agriculture Secretary and Director, Mandi Parishad.
In pursuance of the deliberations of that meeting the District Magistrate was requested to look into the matter and send his comments vide letter dated 21st November, 1981 and in response to that letter the District Magistrate vide his letter dated 3rd December, 1981 informed the State Government that for reasons stated therein it was not advisable to exempt or exclude Plot No. 289 from the acquisition proceedings.
Copies of these letters have been annexed to the counter affidavit.
In his letter dated 3rd December, 1981 the District Magistrate inter alia pointed out that the land of Plot No. 289 was situated in the middle of the land acquired under the Notifications in question and that it was necessary to acquire the land of the said plot also for a smooth construction of the market yard.
The District Magistrate by his letter made a request that Notification under Section 6(1) of the Act may be issued immediately.
The counter affidavit further indicates that while the matter was under consideration Smt.
Santosh Kumari the other vendee from Respondents 1 and 2 referred to above made an application before the State Government stating that Plot No. 289 should not be acquired in view of the report of the Land Acquisition Officer and further that since the Notification dated 26th October, 1978 under Section 4(1) had been published on 25th November, 1978 and a period of three years had elapsed any acquisition would be invalid.
We have already indicated above that the original record was produced before us by learned counsel appearing for the State Government and from its perusal it appeared that after Smt.
Santosh Kumari had made the said application the question as to whether a Notification under Section 6(1) of the Act could be issued in continuation of the Notificition dated 26th October, 1978 under Section 4(1) of the Act came up for consideration before the State Government.
The matter was ultimately referred to the Law Department.
The record further indicated that there appeared to be a divergence of opinion in regard to the applicability of the second proviso to Section 6(1) of the Act inserted by the State of U.P. and the ultimate view which prevailed was that it was expedient to issue a fresh Notification under Section 4(1) also and it was thus that in place of issuing a Notification under Section 6(1) in continuation of the Notification dated 26th October, 1978 under Section 4(1), fresh Notifications both under Sections 4(1) and 6 of the Act were issued on 20th May, 1982 and 21st May, 1982 respectively.
The original record also indicated that after the receipt of the report of the Land Acquisition Officer the file was 193 moving above for sometime to ensure as to whether possession over Plot No. 289 had been restored back or not in pursuance of the direction of the Supreme Court in Civil Appeal No. 2970 of 1979 and to take steps to ensure compliance of the said direction.
As seen above it was the own case of Respondents 1 and 2 in their writ petition before the High Court that Smt.
Dhanwanti Agarwal and Smt.
Santosh Kumari were wives of two gazetted officers.
In the counter affidavit which was filed on behalf of the Krishi Utpadan Mandi Samity, Muzaffarnagar in the said writ petition it was stated in paragraph 20 with regard to the report of the Land Acquisition Officer dated 20th January, 1981 that some of the land being of gazetted officers, they succeeded in exerting pressure on the Land Acquisition Officer to submit a wrong report.
As already pointed out in the counter affidavit filed on behalf of the State Government in this Court reference has been made to the two letters given by Smt.
Dhanwanti Agarwal and Smt.
Santosh Kumari on the basis of which further inquiry had to be made by the State Government and ultimately a decision had to be taken that in place of issuing a Notification under Section 6(1) of the Act in continuation of the Notification dated 26th October, 1978 under Section 4(1) fresh Notifications under Sections 4(1) and 6 may be issued.
The original record which was produced before us also indicated that at no stage after the receipt of the report of the Land Acquisition Officer dated 20th January, 1981 had the Government taken a decision that it was not necessary to acquire the plot.
Indeed, as seen above, the Government was not inclined to agree with the report of the Land Acquisition Officer because had it been so there would have been no occasion either for calling for a report from the Director Mandi Parishad or convening a meeting to consider the matter or to require the District Magistrate to submit his own report.
After making necessary inquiries the Government ultimately decided not to release Plot No. 289 from acquisition proceedings.
However, before a Notification could be issued under Section 6(1) of the Act in continuation of the Notification dated 26th October, 1978 under Section 4(1) a question was raised by Smt.
Santosh Kumari that three years having expired from the date of the publication of the Notification under Section 4(1) Plot No. 289 could not be acquired in pursuance of the said Notification.
The Government thereafter referred the matter to the Law Department and it was ultimately decided to issue fresh Notifications under Sections 4(1) and 6 of the Act.
There seems to be no doubt with regard to the legal position that 194 the report dated 20th January, 1981 submitted by the Land Acquisition Officer was not binding on the State Government and it was still open to it to continue the proceedings for acquisition of Plot No. 289 notwithstanding the said report.
The reason why in place of issuing a Notification under Section 6(1) of the Act in continuation of the Notification dated 26th October, 1978 under Section 4(1) fresh Notifications under Sections 4 and 6 had to be issued as also the reason for the delay in issuing the fresh Notifications have already been indicated above.
As regards the submission that Section 17(4) of the Act has been erroneously invoked in the fresh Notification under Section 4(1) dated 20th May, 1982 also and that inquiry under Section 5A had again to be made before issuing this Notification, suffice it to point out that once an inquiry under the said Section had already been made and the parties had been given full opportunity to substantiate their case in the said inquiry and the State Government was not inclined to agree with the report of the Land Acquisition Officer submitted in pursuance of that inquiry it would have been a futile exercise to repeat the whole performance again.
After the issue of the earlier Notification dated 26th October, 1978 a period of nearly 3 1/2 years had expired when the fresh Notification dated 20th May, 1982 under Section 4(1) was issued and apparently the necessity to acquire Plot No. 289 during this period became more acute due to this delay.
Further, as stated in the Notification dated 20th May, 1982 itself the urgency had become more imminent on account of the direction issued by this Court on 2nd March, 1982 in Writ Petition No. 1318 of 1982 filed by the traders challenging the Notification under Section 7(2)(b) of U.P. Act No. 25 of 1964.
Consequently, we find it difficult to hold that the opinion of the State Government that it was a fit case to invoke Section 17(4) of the Act was invalid on the ground that there was no basis or material in support of that opinion.
We are further of the view that on the facts indicated above it is also not possible to hold that the Notification dated 20th May, 1982 had been issued by the State Government in colourable exercise of its power.
At this place it would be relevant to notice that the Notifications dated 20th May, 1982 and 21st May, 1982 had not been challenged by Respondents 1 and 2 on the basis of mala fides of any particular officer of the State Government.
What was urged was that it was a case of legal mala fides inasmuch as in issuing the fresh Notification dated 20th May, 1982 under Section 4(1) of the Act, an attempt was made by the State Government to circumvent the direction issued by this Court in Civil Appeal No. 2970 of 1979 to make inquiry under Section 5A of the Act and to proceed thereafter in accordance with law.
Suffice it to say, 195 so far as this submission is concerned that the State Government in pursuance of the aforesaid direction given by this Court did make an inquiry under Section 5A of the Act and in the said inquiry full opportunity was given to the concerned parties to substantiate their case.
It is, therefore, difficult to agree with the submission of learned counsel for Respondents 1 and 2 that an attempt was made by the State Government to circumvent the direction of this Court.
As seen above, the State Government was not bound to agree with the report of the Land Acquisition Officer and it has not been disputed even by learned counsel for the respondents that it was open to the State Government to take a contrary decision and to issue a Notification under Section 6(1) of the Act on the receipt of the report dated 20th January, 1981 of the Land Acquisition Officer.
That the State Government in the instant case was not inclined to agree with the report of the Land Acquisition Officer has already been indicated above.
The reasons for the delay in taking further steps as also for issuing fresh Notifications under Sections 4(1) and 6 have also been indicated.
On these facts we are of the opinion that a case of even legal mala fides is not made out.
The decision of this Court in the case of State of Punjab vs Gurdial Singh & Ors., [1980] 1 S.C.R. page 1071 on which reliance has been placed by learned counsel for Respondents 1 and 2 is of no assistance inasmuch as the plea of mala fides in that case was based on personal malice.
So also is the position with regard to the decision of this Court in The Collector (Distt.
Magistrate) Allahabad and Anr.
vs Raja Ram Jaiswal etc., [1985] 3 S.C.R. Page 995.
That was a case where land had been acquired for a cinema theatre in the vicinity of the building housing the Hindi Sahitya Sammelan.
It was pointed out that the power to acquire land is to be exercised for carrying out the public purpose.
If the authorities of the Sammelan cannot tolerate the existence of a cinema theatre in its vicinity it could not be said that such a purpose would be a public purpose.
May be, the authority of the Sammelan may honestly believe that the existence of a cinema theatre may have the pernicious tendency to vitiate the educational and cultural environment of the institution and therefore, it will like to wish away a cinema theatre in its vicinity.
But that hardly constitutes public purpose.
Such is not the situation in the instant case.
The learned counsel for Respondents 1 and 2 in support of his submission that since this Court by its order dated 22nd October, 1979 in Civil Appeal No. 2970 of 1979 had issued a direction to hold an inquiry under Section 5A of the Act and to proceed with the matter in accordance with law it was incumbent on the Government to take a decision that notwithstanding the report of the Land Acquisition 196 Officer dated 20th January, 1981 it was necessary to acquire Plot No. 289, placed reliance on the decision of this Court in P.L. Lakhanpal vs Union of India & Ors., [1967] 1 S.C.R. page 433 where while dealing with Rule 30A of the Defence of India Rules, 1962 it was held that according to dictionary "decision" means "settlement, (of question etc.), conclusion, formal judgment, making up one 's mind, resolve, resoluteness, decided character." and on Siemens Engineering & Manufacturing Co. of India Limited vs Union of India & Anr., [1976] (Supplementary) S.C.R. page 489 where while dealing with the provisions of the Indian Customs Tariff it was held that if courts of law are to be replaced by administrative authorities and tribunals, as indeed, in some kinds of cases, with the proliferation of Administrative Law, they may have to be replaced, it is essential that administrative authorities and tribunals should accord fair and proper hearing to the persons sought to be affected by their orders and give sufficiently clear and explicit reasons in support of the orders made by them.
Reliance was placed on some other cases also but we do not find it necessary to deal with them in detail inasmuch as to us it appears firstly, that the Government in the instant case was all through of the opinion that Plot No. 289 did not deserve to be released from acquisition as already indicated above.
Secondly, this plea loses its significance and becomes almost of academic value inasmuch as the State Government in the instant case has not issued a Notification under Section 6(1) of the Act in continuation of the Notification dated 26th October, 1978 under Section 4(1).
After the issue of the fresh Notifications under Sections 4(1) and 6, what is really to be seen is whether there was justification for invoking Section 17(4) of the Act or not.
We have already indicated above that there was such justification.
In support of the submission that there was no material change in the factual position between 20th January, 1981 and 20th May, 1982, learned counsel for the Respondents 1 and 2 has urged that the direction contained in the judgment of this Court dated 2nd March, 1982 in Writ Petition No. 1318 of 1982 filed by the traders was confined to the question of allotment of 200 shops only.
And since the land which had already been acquired was sufficient for constructing as many shops it was not necessary to acquire Plot No. 289.
As seen above, the Notification under Section 7(2)(b) of the U.P. Act No. 25 of 1964 which had been challenged before this Court in Writ Petition No. 1318 of 1982 was in regard to 54 commodities.
The writ petition aforesaid had been filed by an association of traders dealing in gur, khandsari and foodgrains only.
Even though technically it may be said that the direction issued by this Court was relevant with regard to about 200 shops only, 197 in substance, however, that does not appear to be the correct position.
The effect of the direction issued by this Court was that no trader could be compelled to come to the market yard unless shops were provided.
The Krishi Utpadan Mandi Samiti, Muzaffarnagar could not afford to act contrary to this direction with regard to any of the traders who were dealing in any of the aforesaid 54 commodities.
As seen above, one of the two main circumstances relied upon by the Land Acquisition Officer in giving his report dated 20th January, 1981 was that no trader was willing to come to the premises which had already been constructed and were lying idle.
This circumstance had ceased to exist with the issue of the Notification under Section 7(2) of the U.P. Act No. 25 of 1964 as a consequence whereof on shops being made available in the market yard all the traders doing wholesale business in the 54 commodities mentioned in the Notification were bound to shift to the shops in the market yard.
For this provision had to be made by the Krishi Utpadan Mandi Samiti, Muzaffarnagar.
In paragraph 15 of the counter affidavit filed on behalf of the Krishi Utpadan Mandi Samiti, Muzaffarnagar in the writ petition in the High Court it was stated that the Mandi Samiti had completed construction of 120 shops and there was further scope for constructing only 90 more shops in the 60 acres of land originally acquired whereas Mandi Samiti had to construct 540 shops.
In this Court a supplementary affidavit has been filed on behalf of the said Mandi Samiti in which it has been stated that so far 348 shops had been constructed and 4 shops are incomplete on account of the impugned judgment of the High Court relating to Plot No. 289.
A site plan has been attached as Annexure D indicating that land on three sides of Plot No. 289 has already been acquired and on the fourth side lies a road.
Annexure E to the said supplementary affidavit is a sketch map indicating the various requirements of the Mandi Samiti in connection with the construction of the market yard.
The said sketch plan indicates that apart from construction of shops provision has been made for roads and parking grounds, godowns, auction platforms, open space in front of the shops, staff quarters, rest house, police chowki, check post, a building for bank as well as a post office, toilets, canteens and so on.
The affect of the Notification under Section 7(2) of U.P. Act No. 25 of 1964 is that wholesale business in 54 commodities mentioned therein can be carried out only in the principal market yard.
It is common knowledge that trucks, tractors with trollies and even bullock carts are used for transporting the various commodities to the principal market yard.
To accommodate them provision has necessarily to be made for roads and parking grounds etc.
Likewise, arrangement has also to be made for storage of the various commodities and for their auction as well as for lodging 198 such of the cultivators, drivers, cleaners etc.
who may have to stay on due to the exigencies of the situation.
Some if not all employees attached with the principal market yard have to be provided with accommodation.
Section 19 of U.P. Act No. 25 of 1964 deals with Market Committee funds and its utilisation.
Sub section (3)(vii) authorises the Market Committee to utilise its funds for payment of "cost of construction and repairs of buildings necessary for the market yards and for the health, convenience and safety for the persons using them".
It gives clue to the nature of some of buildings which are to be constructed by a Market Committee and for which land has to be provided for.
The requirement of the Mandi Samiti, therefore, has to be construed in this background and not in isolation with regard to its requirement for land to be covered by shops alone.
Apparently, therefore, there has been a material change in the circumstances after the report of the Land Acquisition Officer dated 20th January, 1981 so as to justify Section 17(4) of the Act being invoked.
In this connection reliance was placed by learned counsel for the Respondents 1 and 2 on the decision of this Court in Narayan Govind Gavate etc.
vs State of Maharashtra, [1977] 1 S.C.R. page 763 where dealing with Section 17(4) of the Act it was pointed out that the purpose of the said section was obviously not merely to confine action under it to waste and arable land but also to situations in which an inquiry under Section 5A will serve no useful purpose or for some overruling reason which should be dispensed with.
The mind of the officer or authority concerned has to be applied to the question whether there is an urgency of such a nature that even the summary inquiry under Section 5A of the Act should be eliminated.
It is not just the existence of an urgency but the need to dispense with an inquiry under Section 5A which is to be considered.
It was also held in that case that the development of an area for industrial and residential purposes in itself, on the face of it does not call for any such action barring exceptional circumstances, as to make immediate possession without holding even a summary inquiry under Section 5A of the Act, imperative.
On the other hand such schemes generally take sufficient period of time to enable summary inquiry under Section 5A of the Act to be completed without any impediment whatsoever to the execution of the scheme.
The aforesaid decision was considered in a subsequent decision of this Court in State of U.P. vs Pista Devi, ; and it was distinguished.
It was held: "Now it is difficult to hold that in the case of proceedings relating to acquisition of land for providing house sites it is unnecessary to invoke Section 17(1) of the Act and to dispense with the compliance with Section 5A of the Act.
199 Perhaps, at the time to which the decision in Narayan Govind Gavate vs State of Maharashtra, ; related the situation might have been that the schemes relating to development of residential areas in the urban centres were not so urgent and it was not necessary to eliminate the inquiry under Section 5A of the Act.
The acquisition proceedings which had been challenged in that case related to the year 1963.
During this period of nearly 23 years since then the population of India has gone up by hundreds of millions and it is no longer possible for the Court to take the view that the schemes of development of residential areas do not `appear to demand such emergent action as to eliminate summary inquiries under Section 5A of the Act '.
In Kasireddy Papaiah (died) vs Government of A.P., AIR 1975 AP 269: Chinnappa Reddy, J. speaking for the High Court of Andhra Pradesh dealing with the problem of providing housing accommodation to Harijans has observed thus: That the housing conditions of Harijans all over the country continue to be miserable even today is a fact of which courts are bound to take judicial notice.
History has made it urgent that, among other problems, the problem of housing Harijans should be solved expeditiously.
The greater the delay the more urgent becomes the problem.
Therefore, one can never venture to say that the invocation of the emergency provisions of the Land Acquisition Act for providing house sites for Harijans is bad merely because the officials entrusted with the task of taking further action in the matter are negligent or tardy in the discharge of their duties, unless, of course, it can be established that the acquisition itself is made with an oblique motive.
The urgent pressures of history are not to be undone by the inaction of the bureaucracy.
I am not trying to make any pontific pronouncements.
But I am at great pains to point out that provision for house sites for Harijans is an urgent and pressing necessity and that the invocation of the emergency provisions of the Land Acquisition Act cannot be said to be improper, in the absence of mala fides, merely because of the delay on the part of some government officials.
(italicising by us) 200 What was said by the learned Judge in the context of provision of housing accommodation to Harijans is equally true about the problem of providing housing accommodation to all persons in the country today having regard to the enormous growth of population in the country.
The observation made in the above decision of the High Court of Andhra Pradesh is quoted with approval by this Court in Deepak Pahwa vs Lt. Governor of Delhi, ; even though in the above decision the Court found that it was not necessary to say anything about the post notification delay.
We are of the view that in the facts and circumstances of this case the post notification delay of nearly one year is not by itself sufficient to hold that the decision taken by the State Government under Section 17(1) and (4) of the Act at the time of the issue of the notification under Section 4(1) of the Act was either improper or illegal." Apart from what has been pointed out above we have already held that on the facts of the instant case there was sufficient justification for invoking the provisions of Section 17(4) of the Act and dispensing with a further inquiry under Section 5A of the Act.
With regard to the submission made by learned counsel for Respondents 1 and 2 that since land other than land of Plot No. 289 which already stood acquired had also been included in the fresh Notification dated 20th may, 1982 under Section 4(1) of the Act it indicated lack of application of mind suffice it to say that the original record produced before us by learned counsel for the State Government indicates that the deliberations which took place after the direction of this Court dated 22nd October, 1979 in Civil Appeal No. 2970 of 1979 were with regard to Plot No. 289 and the inclusion of the other land in the Notification seems to be not the result of lack of application of mind on the part of the officers concerned but dute to inadvertent copying out of the entire plots included in the Notification under Section 4(1) dated 26th October, 1978 at some clerical level and it does not in any way have the effect of invalidating the fresh Notifications with regard to Plot No. 289.
The submission about the lack of application of mind before issuing the said Notification has also, therefore, no substance.
The effect of issuing a fresh Notification under Section 4(1) and the delay in issuing it has really benefited Respondents 1 and 2 inasmuch as now they will be entitled to compensation not on the basis of the market value of Plot No. 289 as on 26.10.1978 when the earlier 201 Notification under Section 4(1) was issued but as on 20th May, 1982 when the fresh Notification under the said Section was issued.
In the result, Civil Appeal No. 3446 of 1987 is allowed, the judgment dated 11th March, 1987 of the High Court in Writ Petition No. 6789 of 1982 is set aside and the said writ petition is dismissed.
As a consequence Civil Appeal No. 3447 of 1987 is dismissed.
In the circumstances of the case there shall be no order as to costs.
S.L. C.A. No. 3446/87 is allowed and C.A. No. 3447/87 is dismissed.
| The Appellant, a company registered under the Companies Act, had its registered office at Eloor in the erstwhile State of Travancore.
On October 21, 1948 the company entered into an agreement (Exhibit P1) with the erstwhile princely State of Travancore for the supply of electrical energy under the terms and conditions particularised in the agreement.
The price was fixed at Rs. 110 per K.W. per annum.
Subsequently, the State of Tranvancore merged in, and became part of, the Kerala State, and the Electricity Board was constituted for the State.
On May 10, 1965 a supplementary agreement was entered into between the appellant and the Electricity Board for supply of additional power for a period of 10 years at the rate of Rs.140 per K.W. per year.
On October 28, 1966 the Electricity Board in exercise of the powers under Section 79(j) of the Electricity Supply Act, 1948 framed and promulgated the Kerala State Electricity Board (General Tariff) Regulations, 1966 by which the Board empowered itself to prescribe higher tariffs for different classes of consumers.
Regulation 11 thereof empowered the Board to amend the terms and conditions of supply from time to time.
926 The Board issued a Notification dated July 16, 1968 (Exhibit P 2) providing that the rates for supply of power at 66 K.V. to the appellant company availed of by them as per the agreement dated October 21, 1948 be revised to Rs.200 per K.W. per year.
The supplemental agreement with the appellant dated May 10, 1965 which pertained to the additional supply of power for a period of ten years at Rs.140 per K.W. per year was, however, left undisturbed.
The appellant in a writ petition before the High Court assailed the enhancement in the electricity tariff, contending that the terms for the supply of electricity to the appellant 's industrial unit were governed by the agreement dated October 21, 1948 entered into by the company with the erstwhile Travancore State; that the agreement, in terms of Section 60 of the Electricity Supply Act, should be deemed to have been entered into by the Electricity Board and that during the subsistence of the said agreement the rates fixed therein were immune from any unilateral upward revision even if the purported enhancement was pursuant to the statutory regulations made under Section 49(2).
It was further contended that the enhancement being selective and discriminatory, was violative of Article 14 of the Constitution.
The writ petition having been dismissed by a Single Judge of the High Court, and the Division Bench having confirmed the order of dismissal in appeal, the appellant appealed to this Court by Special Leave.
In the appeal it was contended on behalf of the appellant that the agreement, Exhibit P I, though one entered into prior to the constitution of the 'Board ' was, by virtue of Section 60 of the Act, one which should be deemed to have been entered into by or with the Board, and must also be held to be referable to Section 49(3) of the Act.
Relying on the decision of this Court in Indian Aluminium Co. vs Kerala Electricity Board, , it was contended that the agreement must be regarded as having been entered into by the Board in exercise of its statutory powers under Section 49(3) of the Act, and therefore, immune from the operation of the Kerala State Electricity Board (General Tariffs) Regulations, 1966.
It was also submitted that power under Section 49(1) would be available to the statutory authority enabling an unilateral upward revision of the tariff only if the agreement itself enabled such revision, that as long as the agreement did subsist and was not terminated a unilateral change was impermissible and that the appellant was subjected to a steep revision in the tariffs while other similarly circumstanced high tension consumers were left unaffected.
927 On behalf of the respondent Board it was urged that Exhibit P 1 could not be held to fall under, and be protected by, Section 49(3) of the Act; that the agreement having been anterior to the commencement of the 'Act ' itself could not be held to have been entered into for "purposes of the Act" within the meaning of Section 60; that the agreement could not be deemed to be one entered into by the Board under Section 60(1), because it did not satisfy the essential requirement of having been entered into by the State Government; that the Board had not done anything with reference to the agreement which could attract Section 60 to it and though the obligations of the State Government became the obligations of the Board, the agreement itself did not qualify for recognition under Section 60 of the Act; that there was not fixity of tenure with reference to and in the context of which alone any immunity from unilateral alteration under Section 49(1) and (2) could be conceived and measured.
It was further contended that the additional agreement dated May 10, 1965 was for an independent purpose and that the action of the Board in entering into this agreement did not constitute any such Act in relation to the original agreement as would constitute a conscious adoption by the Board of the original agreement, so as to attract Section 60(1); that the essential quality of the agreement which qualified for recognition and protection as one made in exercise of the Board 's power under Section 49(3) was its distinctiveness as to the period of operation and that the protection and immunity from unilateral increase of tariff could only be with reference to the period of the agreement.
Two questions arose for consideration: (1) Whether the agreement datecd October 21, 1948 (Exhibit P 1) should be held to be one which was deemed to have been entered into by the Board under Section 60 of the Act and whether it is required to be considered as one entered into by the Board in exercise of its powers under Section 49(3) of the Act, and (2) Whether the enhancement under the Notification dated July 16, 1968 (Exhibit P 2) brings about a hostile discrimination against the appellant, because for similarly situated and circumstanced High Tension Consumers there was no such revision of the tariff.
Dismissing the Appeal, ^ HELD:1(i) The Board 's power to enter into an agreement fixing a special tariff for a 'specified period ' is relatable to Section 49(3).
[938H] (ii)One of the tests whether an agreement is entered into in exercise of the power under Section 49(3) is that such agreement has the effect of excluding the other statutory power under Section 49(1).
[939A] 928 (iii) The main consideration for protection from unilateral increase under Section 49(1) is the 'period factor ' in an agreement.
[939A B] (iv) A contract which does not provide for, an obligation to supply electricity at a specific rate for a specific period and does not, therefore, have the effect of excluding Section 49(1) cannot be said to fall under Section 49(3).
[939G] (v) If by an unilateral, volitional act on the part of the Board the assurance of a fixed rate to the consumer could be denuded that circumstances, in itself, would be such as to detract from the agreement being considered as one entered into in exercise of power under Section 49(3).
[939G H] In the instant case, the agreement was precarious in regard to the period of its operation and was susceptible to termination at the volition of the Board.
It cannot, therefore, be construed as one which was intended to give a statutory protection for the tariff by means of a special agreement by the exercise of the statutory power of the Board under Section 49(3).
[940D] Indian Aluminium Co. vs Kerala Electricity Board, ; and Delhi Cloth & General Mills Co. Ltd. vs Rajasthan State Electricity Board, , referred to.
(vi) In a long term contract of indefinite duration it is not unusual to find provisions for cancellation with reasonable notice and for payment of compensation in the event of termination.
It is also not unusual to infer, under certain circumstances, terminability by notice even in the absence of an express provision in that behalf, upon a construction of the contract.
A contract which contains no express provision for its termination may well be terminated by reasonable notice by one or the other party depending upon the implication of a term or upon a true construction of the agreement.
This principle has no application in the instant case.
[941C D] Staffordshire Area Health Authority vs South Staffordshire Water Works Co., [1978] 3 AII E.R. p. 769, referred to.
(vii) The agreement dated October 21, 1948 Exhibit P I, therefore, does not qualify to be recognised and protected under Section 49(3) of the Act.
[941E] 929 2(i) The Board while denying that there was any hostile discrimination, averred that no similarly situate consumer had been left out of the tariff revision and only cases that had been left out were those where the Board, owing to the subsistence of the agreements protected under Section 49(3), was under the legal inhibition from making an unilateral enhancement.
[943E F] 2(ii) The charge of discrimination against the respondent Board could not be said to have been established.
Indeed the appellant had not laid a proper foundation for examination of a case of discrimination under Article 14.
[944C] (iii) The allegations of discrimination ought to be specific.
Action of Governmental authorities must be presumed to be reasonable and in public interest.
It is for the person assailing that presumption to plead and prove the contrary.
But in the instant case the allegations are in general terms.
[944D] State of Maharashtra and Anr.
vs Basantilal Mohanlal Khetan and Ors., ; para 12 and Kasturi Lal Lakshmi Reddy vs State of J & K, ; at 1357, referred to.
In the instant case, the respondent Board while denying that there was any hostile discrimination, averred that no similarly situate consumer had been left out of the tariff revision, and only cases where the consumer had the protection of an agreement under Section 49(3) which prevented the unilateral increase, had been left out.
[944D E] Bisra Stone Lime Co, vs Orissa State Electricity Board, ; , referred to.
|
Appeal No. 432 of 1961.
Appeal by special leave form the judgment and order dated May 15 1959 of the Madhya Pradesh High Court in Miscellaneous Petition Nos.
301 of 1958 and 83 of 1959.
B. Sen and section N. Mukerji for the Appellant.
B. R. L. Iyengar and A. G. Ratnaparkhi for Respondent No. 1.
I. N. Shroff, for Respondents Nos. 2 and 4. 1962.
July 27.
The Judgment of the Court was delivererd by DAS GUPTA, J.
When under the Standing Orders of a Company the Company is empowered to take disciplinary action against an employee by proceeding in the prescribed manner can that power be legally delegated by the Company to any of its officers ? That is the principal question raised in this appeal.
The appellant is Company incorporated under the Indian Companies Act having its registered office at 12, Mission Row, Calcutta.
It is ' engaged in the generation and distribution of electricity at Jabalpur.
The Company 's office at Jabalpur is in charge of a Resident Engineer.
By a power of attorney given by the appellant company on June 26, 1957, Mr. Leonard Shell Macleod, the Company 's Resident Engineer at Jabalpur, was appointed "the company 's true and lawful attorney for and in the name of the Company to do exercise and perform all or any of the acts, matters, 455 discretions and things" set out in 11 clauses.
The 10 th clause provided that "subject to the Standing Orders from time to time given by the Company to appoint, dismiss, suspend or terminate the services of any of the employees of the Company at Jabalpur.
" On November 12, 1957, the respon dent Sambhu Prasad Srivastava was served with a charge sheet under the signature of Mr. Macleod in which it was alleged that he had substituted 13 coils of V.I.R. cable in the stores of the Company for the same quantity of cable of various makes from the local market, Sambhu Srivastava 's reply to this charge was that when the shortage of 13 coils came to his notice on the eve of the audit he remonstrated with his subordinates who actually handled these articles and that what he did was done in the best interests of the Company and that he never acted with any dishonest intention.
An enquiry was then held by the Resident Engineer and ultimately on January 16, 1958, the Resident Engineer issued a letter to him in these terms : "With reference to charge sheet dated 12th November, 1957, and the subsequent investigations in the case against you,, please note that the matter has been very carefully considered, and in accordance with the interview which you had with our Chief Engineer, Mr. J. W. Fawcett, on the morning of the 15 th January, 1958, we ;hereby notify you that the Company does not find it possible to. retain yo ur services.
Therefore, you are hereby discharged from the service of the Company, with immediate effect.
Please call at the Company 's office on the 17th instant,to receive final settlement of your dues from the Company.
" 456 Srivastava then applied to the Assistant Labour Commissioner, Jabalpur, alleging that this order was in contravention of the provision of the C. P. & Berar Industrial Tribunal Settlement Act and of the Standing Orders as the powers of the Company under the Standing Orders to hold the enquiry can be exercised only the Managing Director.
It was also alleged that the order though in from an order for discharge was really an order of dismissal and that cls.
14, 18 19 and 20 of the Standing Orders had been violated.
The Company pleaded in its reply that under the 'power of attorney the Resident Engineer had the power to hold an enquiry and take disciplinary action against an employee and the action by him should be considered in law to amount to an action by the Company.
It was pleaded that the provisions of the Standing Orders had not been violated.
The Assistant Labour Commissioner made an order on September 10, 1958, ordering reinstatement of the respondent without break in his service but without payment of back wages.
The State Industrial Court which was moved both by the Company and by the employee held that the order of discharge was in substance an order of dismissal, and that misconduct alleged was not proved, and that in any case the Resident Engineer was not empowered to hold an enquiry and to issue an order of discharge.
It refused to interfere with the order passed by the Assistant Labour Commissioner and rejected both the revisional applications.
Both parties then moved the Madhya Pradesh High Court for relief under article 226 of the Constitution.
The High Court held that the powers.
under cl.19 of the Standing Orders could not be delegated to the Resident Engineer and also that th 457 general right reserved to the Company under cl. 20 of the Standing Orders was meant to be exercised by it and was not covered by the delegation under cl. 10 of the power of attorney.
The High Court seems to have thought also that the order made by the Resident Engineer was not Under el. 20 of the Standing Orders.
Accordingly, the High Court refused to interfere with the order of reinstatement and dismissed the Company 's application under article 226.
It allowed the employee 's application under article 226, being of opinion that the Assistant Labour Commissioner had no discretion in the matter of back wages and was bound to order payment of back wages as soon an order of reinstatement was made.
Before considering the question whether the Company could delegate its power to take disciplinary action against its employees it will be proper to clear the ground on the question whether the order was made under cl.19 or cl. 20 of the Standing Orders.
Clause 18 of the Standing Orders mentions inter as that theft, fraud, or dishonesty in connection with the Company 's business or property will be treated as misconduct.
Clause 19 provides various penalties for misconduct.
The substance of these provisions is: that an employee who is adjudged by the Company on examination of the employee and of facts to be guilty of misconduct is liable to be summarily dismissed without notice or compensation in lieu of notice or alternatively to be suspended for a period not exceeding fourteen days; that the order of dismissal or suspension shall be in writing over the signature of an officer duly authorised for this pur pose, and shall also briefly mention the reason on.
which it is based, and that no order for dismissal or suspension under this Standing Order shall be made unless the employee is informed in writing of 458 the misconduct alleged against him and that he shall be given an opportunity to produce evidence in his defence.
Clause 20 does not deal with dismissal or suspension but provides that "the Company has at all times a general right to discharge an employee from service not only for proved misconduct but also when the employer has lost confidence in the employee.
" Clause 21 provides for notice of censure to be given for certain acts or omissions.
An examination of these provisions shows that for an order of dismissal under cl. 19 to be made a special procedure is to be followed and when it is made the employee is not entitled to any compensation.
Examining now the order made on January 16, 1958, we find that while cl. 20 has not been mentioned it does not say that the employee has been found guilty of misconduct but merely states that " 'the Company does not find it possible to retain (this employee 's) services" and reference is made to the investigations in the case against him and to an interview he had with the chief Engineer, Mr. J. W. Fawcett, on the morning of the 15th January, 1958.
The only reasonable view to take of this order, in our opinion, is that this order was being made under cl. 20 on the ground that the employer had lost con fidence in the employee and was in fact and in law an order of discharge as distinct from an order of dismissal or suspension.
It appears to us that while the Resident Engineer who held the enquiry may, have been satisfied that an act of misconduct 'for which the employee was liable to dismissal had been proved he took a merciful view of has conduct in view of his previous clean record, and proceeded accordingly to act under cl. 20 of the Standing Orders instead of proceeding under cl. 19.
This is a case in which the employer has acted, fairly and even generously in terminating the cases of the employee under el.
459 The question remains whether the Resident Engineer could take action under cl. 20.
The employee 's argument, which found favour with the High Court was that it was the Company alone which could take action under clause 20 and the Resident Engineer in his capacity as the Resident Engineer apart from anything else, was not competent to take action under el.
20 For, cl. 20 empowers the Company and not the Resident Engineer as such to discharge an employee on the ground that the employer had lost confidence in him, In the present case, however, it was not the Resident Engineer in his capacity as the Resident Engineer that made the order of discharge.
Clearly in making the order of discharge he was acting on the basis of the power of attorney executed in h0is favour on June 26, 1957.
Under cl. 10 of the power of attorney he had power "subject to the Standing Orders from time to time given by the Company to appoint, dismiss, suspend or terminate the services of any of the employees of the Company at Jabalpur.
" The power of the Company under el.
19 of the Standing Orders to dismiss or suspend and its power under el. 20 to discharge an employee are both covered by cl.10 of the power of attorney, If there be nothing in law to prevent these powers being delegated to the Resident Engineer there could be no escape from the conclusion that the exercise of the power cl. 20 in the present case by the Resident Engineer amounted in law to an exercise of the power by the Company itself, Is there anything in law which bars such delegation? We are unable to find any.
It is obvious.
and admitted that when a Company has to exercise its powers in connection with the management of its business it is not all the share holders of the Company that have to meet to exercise the power.
How the Company will regulate its business is prescribed in its Articles of Association.
It is nobody 's 460 case that in the Articles of Association of the Jabalpur Electric Supply Co., there is anything barring the delegation of the disciplinary powers of the Company to any of its officers.
In law therefore delegation of the functions of the Company may properly be made having regard to the exigencies.
of the business and the Articles of Association.
It cannot be reasonably disputed that where the Head Office of the Company is at Calcutta and the main business is to be carried on at Jabalpur the exigencies of the business do require delegation of the Company 's power to take disciplinary action against its employees to a responsible Official like the Resident Engineer, But whether or not the Company might have done without such delegation is a matter which it is unnecessary for us to enquire into.
The delegation was made and, neither on principle nor on authority is it possible to say that the delegation was against the provisions of law.
Nor can we see that the words 'subject to the Standing Orders from time to time given by the Company" with which cl. 10 of the power of attorney opens affects the delegation.
On a proper interpretation of these words their only effect is that in exercising the power to appoint, dismiss, suspend or terminate the services of the employees at Jabalpur the delegate cannot do anything beyond what the company itself can do under the Standing Orders.
On no reasonable construction of the words can they mean that the delegate cannot exercise these powers at all, because under the Standing Orders the Company itself is given these powers.
Whether it is the power to take action under cl.19 or under cl.20 of the Standing Orders the delegate can exercise these powers under cl. 10 of the power of attorney in the same way as if the delegate was the Company itself.
461 We therefore hold, disagreeing with the High Court, and the Courts below$ that the order of discharge made by the Resident Engineer was in exercise of the power validly delegated to him and that there, has been no breach of the Standing Orders by such action, We therefore allow the appeal, set aside the order passed by the High Court and direct that the appellant 's application under article 226 of the Constitution be allowed and the order made by the Assistant Labour Commissioner dated September 10, 1958, ordering, reinstatement of the respondent, Sambhu Prasad Srivastava be set aside.
There will be no order as to costs.
Appeal allowed.
| The two appellants, who were tried along with there others, were acquitted by the Judicial Magistrate of charges under sections 65(a),66(b),81 and 83 of the Bombay Prohibition Act, 1949, but were convicted by the High Court in appeal by the State.
The Magistrate found that the prosecution evidence was insufficient to establish conspiracy or abetment in transporting the contraband liquor and tobacco found in the car on search.
The High Court took a different view of the evidence and allowed the appeal so far as the appellants and another were concerned.
It was urged on behalf of the appellants that the search was in contravention of section 103 of the Code of Criminal Procedure and the finding of the contraband articles had not been proved.
Held, that a motor car was not a 'place ' within the meaning of sections 102 and 103 of the Code of Criminal Procedure or the Bombay Prohibition Act, 1949, and section 103 of the Code had therefore no application to a search of a motor vehicle.
Consequently, it was not obligatory upon the Police Officer to comply with the formalities prescribed by that section nor upon the Court to discard the Panchnama or the evidence of the finding of the articles where no witnesses of the locality could be called.
Although the High Court in the convicting the appellants under section 66 (b) of the Prohibitiuontion Act, conviction under sections Act was not sustainable and must rate was in error in discarding the entire evidence because discrepancies therein without appraising its intrinsic value.
387 Held, further that the Code of Criminal Procedure places no special limitation on the powers of the High Court in deal ing with an appeal against acquittal, It can review the evi dence and arrive at its own conclusion.
The presumption of innocence applies with equal, if not greater force in such an appeal and the burden of proving its own case lying as always on the prosecution.
The High Court would not therefore lightly disturb findings arrived at by the trial court on appreciation of the oral evidences
|
il Appeals Nos.
188, 188(A), 188(B) and 188(E) of 1952.
Appeals under article 133(1)(c) of the Constitution of India from the Judgment and Order dated the 6th December, 1951, of the High Court of Judicature at Bombay in Civil Applications Nos. 409, 410, 411 and 780 of 1951.
692 C.O. Shastri and Naunit Lal for the appellant in Civil Appeal No. 188 of 1952.
N.C. Chatterjee (Onkar Nath Srivastva and Rajinder Narain, with him) for appellants in Civil Appeals Nos. 188(A), 188(B) and 188(E) of 1952.
M. C. Setalvad, Attorney General for India, and C. K. Daphtary, Solicitor General for India (Porus A. Mehta and P. G. Gokhale, with them) for the respondents in all the appeals.
October 1 1.
The Judgment of the Court was delivered by JAGANNADH DAS J.
These are appeals by leave granted by the High Court of Bombay under article 133(1)(c) of the Constitution against its common judgment disposing of certain applications under article 226.
The short point involved in these appeals is whether the Bombay Taluqdari Tenure Abolition Act, 1949, (hereinafter referred to as the Act) is valid in law.
The impugned Act, as its very name indicates, was for ' the purpose of abolishing Taluqdari tenures in Bombay.
Section 3 of the Act enacts that with effect from the date on which the Act was to come into force the taluqdari tenure wherever it prevailed shall be deemed to have been abolished.
Under section 5(1)(a) all taluqdari lands are and shall be liable to the payment of land revenue in accordance with the provisions of the Bombay Land Revenue Code and the rules made thereunder.
Under section 6, broadly stated, all the items of property which are comprised within the taluqdari and belong to the taluqdar vest in the Government as its property and all rights held by the taluqdar in such property shall be deemed to have been extinguished.
Section 7 provides for payment of compensation in respect of the property so vested and rights so extinguished.
It also specifies the principles for and the manner of assessing and granting that compensation.
Section 14 provides for compensation with reference to the provisions of the Land Acquisition Act being payable in respect of any of the rights extinguished but not covered by the provisions of section 7 or any other section of the Act.
These broadly are the 693 main features of the impugned Act relevant for the present purpose.
The attack on the validity of the Act with reference to these provisions is that the Act is expropriatory, that it is not for any public purpose and that the compensation which it provides is illusory.
Now so far as the requirement of a public purpose is concerned it is too late in the day to maintain the contention that the abolition of the kind affected by the Act is not for a public purpose.
The only serious argument,therefore, is as to the alleged illusory character of the compensations provided by the Act.
The Act, it may be noticed, was one passed by the Bombay Legislature in the year 1949.
It received the assent of the Governor General on the 18th January, 1950, and was gazetted on the 24th January, 1950.
The attack in the High Court was accordingly based on the alleged violation of the provisions of section 299 of the Government of India Act, 1935, which is as follows: "(I) No, person shall be deprived of his property in British India save by authority of law.
(2) Neither the Federal nor a Provincial Legislature shall have power to make any law authorising the compulsory acquisition for public purposes of any land, or any commercial or industrial undertaking or any interest in, or in any company owning, any commercial or industrial undertaking, unless the law provides for the payment of compensation for the property acquired and either fixes the amount of the compensation, or specifies the principles on which and the manner in which, it is to be determined.
" It was contended before the High Court that this was an Act in respect of which a certificate could have been obtained from the President under clause (6) of article 31 of the Constitution in order to secure immunity from the challenge of unconstitutionality but since that has not been done, the liability to its challenge with reference to the alleged violation of section 299 of the Government of India Act remains.
The learned Judges of the High Court without going into the question whether or not under any of the 89 694 provisions of the present Constitution this piece of legislation was immune from attack of the kind put forward, dealt with the merits of the challenge and held that the Act was for a public purpose and that the compensation provided was neither illusory nor unfair and that accordingly there was no violation of the provisions of section 299 of the Government of India Act.
It is true that this is an Act which could have been submitted to the President for his certification under clause (6) of article 31 and that no such course has been adopted.
But this Act is one of the Acts specified in the Ninth Schedule of the Constitution being item (4) thereof and article 31 B which has been inserted in the Constitution by the First Amendment thereof in 1951 is as follows: "Without prejudice to the generality of the provisions contained in article 31 A, none of the Acts and Regulations specified in the Ninth Schedule nor any of the provisions thereof shall be deemed to be void, or ever to have become void, on the ground that such Act, Regulation or provision is inconsistent with, or takes away or abridges any of the rights conferred by, any provisions of this Part, and notwithstanding any judgment, decree or order of any court or tribunal to the contrary, each of the said Acts and Regulations shall, subject to the power of any competent Legislature to repeal or amend it, continue in force.
" By the above amendment therefore and by specifically enumerating this Act in the Ninth Schedule, it appears to us to have been clearly and unequivocally intended that the provisions of this Act should be immune from attack of the kind put forward.
Learned counsel for the appellants, however, strenuously contends before us to the contrary.
He points out that the validity of the Bihar Land Reforms Act, 1950 (Bihar Act XXX of 1950) which is the very first item in the Ninth Schedule was allowed to be challenged in this Court after the enactment of the First Amendment of the Constitution and that this Court has in fact held certain of the provisions thereof to be invalid.
The judgment of this Court doubtless shows that the 695 challenge was allowed and given effect to notwithstanding the protection given by article 31 B in respect of the alleged violation of the fundamental rights under the Constitution.
A careful perusal of the judgment however shows that the challenge allowed was as to the competency of the Legislature to enact certain provisions of the impugned Act which, in the opinion of the majority of the Court, were in the nature of fraud on the exercise of the legislative power.
(vide The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh of Darbhanga and Other8(1)).
Learned counsel accordingly urges that the protection under article 31 B is confined to a challenge based on the provisions of the Constitution and that it is therefore open to him to put forward a challenge based on a distinct ground, viz., in this instance violation of the provisions of section 299 of the Government of India Act.
He relies on the difference in language between article 31 B and clause (6) of article 31, which in terms refers to contravention also of the provisions of sub section (2) of section 299 of the Government of India Act.
It appears to us that takes too narrow a view of article 31 B.
What article 31 B protects is not a mere "contravention of the provisions" of Part III of the Constitution but an attack on the grounds that the impugned Act is "inconsistent with or takes away or abridges any of the rights conferred by any provisions of this Part.
" One of the rights secured to a person by Part III of the Constitution is a right that his property shall be acquired only for public purposes and under a law authorising such acquisition and providing for compensation which is either fixed by the law itself or regulated by principles specified by the law.
That is also the very right which was previously secured to the person under section 299 of the Government of India Act.
The challenge now made to the validity of the impugned Act is based on the alleged violation of that right.
Nor does this challenge cease to be in substance anything other than a challenge in respect of the violation of the said right Dotwithstanding that under section 299 of the Government of India Act the right is secured in terms which (1) 696 restricts the power of the Legislature an operates as a restraint on its competency.
What under the Government of India Act was a provision relating to the competency of the Legislature, was also clearly in the nature of a fundamental right of the person affected.
This appears from the Report of the Joint Parliamentary Committee on Indian Constitutional Reform, Vol. 1, Part 1, paragraphs 366 and 369.
But it is urged, that even so, article 31 B protects only the violation of the fundamental right in so far as "it was conferred by Part III of the Constitution" and that this right cannot be said to have been "conferred" by the Constitution.
We cannot agree with this contention.
This is clearly a case where the concerned right which was secured under section 299 of the Government of India Act in the form of a fetter on the competency of the Legislature and which in substance was a fundamental right, was lifted into the formal category of a fundamental right along with other fundamental rights recognised in the present Constitution.
There is therefore nothing inappropriate in referring to this right which was pre existing, along with the other fundamental rights for the first time secured by this Constitution, when grouping them.
together, as fundamental rights "conferred" by the Constitution, What is important to notice in the phraseology of article 31`B is that the protection is not merely against the contravention of certain provisions but an attack on the ground of unconstitutional abridgement of certain rights.
It will be illogical to construe article 31 B as affording protection only so far as these rights are taken away by an Act in violation of the provisions of the new Constitution but not when they are taken away by an Act in violation of section 299 of the Government of India Act which has been repealed.
The intention of the Constitution to protect each and every one of the Acts specified in the Ninth Schedule from any challenge on the ground of violation of any of the fundamental rights secured under Part III of the Constitution, irrespective of 'Whether they are preexisting or new rights, is placed beyond any doubt or question by the very emphatic language of article 31 B 697 which declares that none of the provisions of the specified Acts shall be deemed to be void or ever to have become void on the ground of the alleged violation of the rights indicated and "notwithstanding any judgment, decree or order of any court or tribunal.
" That intention is also emphasised by the positive declaration that "each of the said Acts or Regulations shall, subject to the power of any competent Legislature to repeal or, amend it, continue in force.
" We are, therefore, clearly of the opinion that the challenge to the validity of the Bombay Taluqdari Tenure Abolition Act, 1949 on the ground put forward was not open.
The appeals must, therefore, be dismissed with costs.
Costs one set.
Appeals dismissed.
| Held, that the validity of the Bombay Taluqdari Tenure Abolition Act, 1949 (Bombay Act LXII of 1949) cannot be questioned on the ground that it takes away or abridges the fundamental rights conferred by the Constitution of India in view of enactment of article 31 B which has been inserted in the Constitution by the First Amendment thereof in 1951 and in view of the Act having been specifticaIly enumerated as item No. 4 in the Ninth Schedule.
On the language used in article 31 B of the Constitution of India the validity of Bombay Act LXII of 1949 cannot also be challenged under section 299 of the Government of India Act, 1935.
The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh of Darbhanga and Others ([1952] S.C.R. 889) distinguished.
|
minal Appeal No. 168 of 1959.
Appeal by special leave from the judgment and order dated September 10, 1958, of the Patna High Court in Criminal Appeal No. 580 of 1953.
B. B. Tawakley and R. C. Prasad, for the appellant.
A. K. Dutt and section P. Varma, for the respondent.
April 18.
The Judgment of the Court was delivered by RAGHUBAR DAYAL, J.
This appeal, by special leave, is against the order of the Patna High Court dismissing the appellant 's appeal against his conviction for offences under section 161, Indian Penal Code and a. 5(2) of the Prevention of Corruption Act, 1947 (Act 11 of 1947), hereinafter called the Act.
The appellant was the Construction Engineer at Sindhri.
R. B. Basu was a contractor living in Calcutta and carrying on the business of the company named and styled the Hindustan Engineering and Construction Company.
The prosecution alleged, and the Courts below have found, that the appellant accepted the sum of Rs. 10,000 as illegal gratification from Basu at the Kelner 's Restaurant at Dhanbad Railway Station on July 18, 1951.
The Courts disbelieved the appellant 's defence that he had taken the envelope containing this amount not knowing that it contained this amount, but knowing that it contained papers relating to Basu 's con.
tracts.
The contentions raised on behalf of the appellant are: (i)that the provisions regarding the presumption contained in section 4 of the Act are unconstitutional; (ii) that the case was tried by the Special Judge who had no jurisdiction to try it; (iii) that there had been no proper corroboration of the statement of Basu about the accused demanding the bribe and accepting the amount as illegal gratification.
The Constitutionality of section 4 of the Act was sought to be questioned on the ground that it went against 52 the provisions of article 21 of the.
Constitution which reads: "No person shall be deprived, of his life or personal liberty except;according to procedure established by law.
" We do not consider this question to be a substantial question of law for the purpose of article 145(3), which lays down that the minimum number of Judges who are to sit for the purpose of deciding any case involving a substantial question of law as to the interpretation of the Constitution shall be five, in view of it being held that the word 'law ' in article 21 refers to law made by the State ' and not to positive law.
It has been held in A. K. Gopalan vs The State of Madras (1) that in article 21, the word law ' has been used in the sense of State made law and not as an equivalent of law in the abstract or general sense embodying the principles of natural justice, and 'procedure established by law ' means procedure established by law made by the State, that is to say, by the Union Parliament or the Legislatures of the States, Section 4 has been enacted by Parliament and therefore it must be held that what it lays down is a procedure established by law.
The appellant was tried by the Special Judge of Patna.
The offence was committed at Dhanbad, in Manbhum District.
The case was chalanned to the Magistrate at Dhanbad.
On an application by the accused, the High Court transferred it to the Court of the Munsif Magistrate at Patna.
Subsequent to this order of transfer, the Criminal Law Amendment Act, 1952 (Act XLVI of 1952) came into force on July 28, 1952.
The case, thereafter, was forwarded to the Special Judge at Patna in view of section 10 of the Criminal Law Amendment Act.
The contention for the appellant is that there was the Special Judge at Manbhum and flat he alone could have tried this case.
Section 7 of the Criminal Law Amendment Act, reads: (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1898, or in any other law the offences specified in subjection (1) of section 6 shall be triable by special Judges only.
(1) ; 53 (2) Every '.offence specified in sub section (1) of section 6 shall be tried by the special Judge for the area within which it was committed, or where there are more special Judges than one for such area, by such one of them as may be specified in this behalf by the State Government.
(3)When trying any case, a special Judge may also try any offence other than an offence specified in section 6 with which the accused may, under the Code of Criminal Procedure, 1898, be charged at the same trial." Sub section (1) makes the offences under section 161, Indian Penal Code and section 5(2) of the Act triable by a; special Judge only.
The appellant has been tried by a special Judge appointed under the Act.
His grievance is not with respect to the competency of the Court which tried him, but is with respect to the trial Court having no territorial jurisdiction to try him, as sub section
(2) of section 7 provides that such offences would be tried by the special Judge for the area in which the were committed.
The offences were committed within the territorial jurisdiction of the special Judge at Manbhum and therefore could have been tried by him alone.
It would therefore appear that the special Judge at Patna had no jurisdiction to try this case.
Sub section (3) of section 8 of the Criminal Law Amendment Act reads: "Save as provided in sub section (1) or sub section (2), the provisions of the Code of Criminal Procedure, 1898 shall, so far as they are not inconsistent with this Act, apply to the proceedings before a special Judge; and for the purposes of the said provisions, the Court of the special Judge shall be deemed to be a Court of Session trying cases without a jury or without the aid of assessors and the person conducting a prosecution before a special Judge shall be deemed to be a public prosecutor.
" It follows that the provisions of section 526 of the Criminal Procedure Code empowering the High Court to transfer any case from a criminal Court subordinate to it (1) ; 54 to any other Court competent to try it, apply to the case before any special Judge.
If this case had been transferred to the Court of the Special Judge, Manbhum, on the coming into force of the Criminal Law Amendment Act, it would have been open to the High Court to transfer the case from that Court to the Court of the Special Judge, Patna.
The case had been transferred from Dhanbad to Patna at the request of the appellant.
The trial at Patna cannot be said to have prejudiced the appellant in any way.
The mere omission of a formal forwarding of this case to the Special Judge at Manbhum and of a formal order of the High Court to transfer it to the Court of the Special Judge at Patna, have not, in our opinion, prejudiced the appellant in any way.
When the case was taken up by the Special Judge, Patna, on October 23, 1952, the accused as well as the Public Prosecutor desired de novo trial.
No objection to the jurisdiction of the Court to try the case was taken at that time.
Such an objection appears to have been taken at the time of the arguments before the Special Judge and was repelled by him.
Such an objection was not raised before the High Court when the appellant 's appeal was first heard in 1955 or in this Court when the State of Bihar appealed against the order of the High Court.
All this indicates that the appellant did not feel prejudiced by the trial at Patna.
In view of section 531 of the Code of Criminal Procedure, the order of the Special Judge, Patna, is not to be set aside on the ground of his having no territorial jurisdiction to try this case, when no failure.
of justice has actually taken place.
It is contended for the appellant that section 531 of the Code of Criminal Procedure is not applicable to this case in view of sub section
(1) of section 7 and section 10 of the Criminal Law Amendment Act.
We do not agree.
The former provision simply lays down that such offences shall be triable by special Judges and this provision has not been offended against.
Section 10 simply provides that the cases triable by a special Judge under section 7 and pending before a Magistrate immediately before the commencement of the Act shall be forwarded for trial to the 55 special Judge having jurisdiction over such cases.
There is nothing in this section which leads to the non application of section 531 of the Criminal Procedure Code.
We are therefore of opinion that the order of the special Judge convicting the appellant cannot be quashed merely on the ground that he had no territorial jurisdiction to try this case.
The last contention for consideration is whether there had been proper corroboration of the statement of Basu about the accused demanding the bribe of Rs. 10,000 and accepting it on July 18, 1951, at the Kelner Refreshment Room, Dhanbad Railway Station.
We may briefly indicate the salient facts deposed to by Basu in this connection.
The appellant is said to have visited Calcutta in December 1950, to have gone to Basu 's house and to have asked him to pay a bribe of Rs. 10,000.
There is no direct corroboration of this statement by the testimony of any other witness.
Kanjilal, an employee of Basu, under in.
structions of his master, met the appellant in May, 1951, enquired of him whether he would accept the amount he had demanded in December and had not been so far paid, and got the reply that the amount would be: acceptable.
He conveyed this information to Basu.
Nothing was done till over a month and then too, not to make the payment, but to inform the authorities.
In June 1951, Basu informed Mr. K. N. Mookerjee, P. W. 3, the then Superintendent of Police, Special Police Establishment, about the accused 's demanding bribe and at his request delivered the letter, Exhibit 11/1, dated June 18, to him.
He made mention in this letter about the demand made in December 1950, but made no reference to the appellant 's expression of readiness to accept the amount in the month of May. Mr. Mookerjee took steps for laying the trap and deputed Mr. section P. Mookerjee, P.W. 1.
Kanjilal met the appellant on July 14 and arranged with him that he would go to Dhanbad railway station when Basu would also be reaching there and 'that the money would be paid there and that the date of that meeting would be communicated later.
Basu was told of this arrangement at Calcutta.
He, in his turn, informed the authorities.
July 18 was fixed for the purpose.
Kanjilal informed the appellant by telephone on July 16 that the meeting would be on the 18th and that Basu would be reaching Dhanbad by the Toofan Express at about 5 p.m.
The trap arrangements were completed and the trap party reached Dhanbad by the Toofan Express on July 18.
Kanjilal himself went to Sindhri on the morning of July 18 and confirmed the arrangement to the appellant.
The appellant also reached Dhanbad railway station at about 5p.m.
The members of the trap party took their seats at different tables in the corners of the Refreshment Room of Kellner 's Restaurant.
Basu, with the appellant, reached there and occupied another table.
Refreshments were taken.
Thereafter, Basu talked over matters about the contract with the appellant, moved near him, took out the file from his satchel and then, after some conversation, took out the envelope containing the currency notes of the value of Rs. 10,000 and having its one long edge slit.
This envelope was passed on to the appellant.
Basu states that he made a statement at the time that there were Rs. 10,000, which he could, not pay to the appellant so far.
The appellant took the envelope and put it in his trouser pocket.
The trap party, after getting the signal that the bribe money had been paid, surrounded the appellant and got the envelope from him.
, It was found to contain the very currency notes whose 'numbers had previously been noted by the Magistrate, Mr. Mahadevan.
There is no verbal corroboration of Kanjilal 's statement about the message he conveyed to the appellant either in May or on the telephone or on the morning of the 18th of July.
The Courts below have found corroboration of the statements of Basu from the circumstances that the demand of money in December 1950 was mentioned in June, 1951, to Mr. K. N. Mookerjee; that the trap must have been laid when Basu must have been 67 certain that the appellant would turn up at Dhanbad at the appointed time and that the appellant 's presence at Dhanbad railway station could not have been accidental but must have been the result of previous arrangement.
No infirmity can be found in this reasoning.
The appellant gave an explanation for his presence at the railway station that day.
It has not been accepted by the Courts below.
In fact, the learned counsel for the appellant did not press it for consideration at the second hearing of the appeal, on remand by this Court.
No doubt, the trap arrangements must have been made when there was a practical certainty that the appellant would turn up at Dhanbad railway station.
Basu is not expected to mention falsely in the month of June that the appellant made a demand of Rs. 10,000 in December 1950.
Ordinarily, one is not expected to make a complaint of such a demand after such a long period of time.
The interval of time seems to have been due possibly to a hope that matters may straighten out or that a lower sum might be acceptable as bribe to pass the pending bills of Basu.
The omission of the trap witnesses to corroborate Basu 's statement at the time of the passing on of the envelope to the appellant, in forming the appellant of the envelope containing Rs. 10,000, is really surprising when the party consisted of four persons who had gone there for the purpose of being witnesses of the appellant 's accepting the bribe and who could therefore be expected to be alert to hear what passed on between the appellant and Basu.
The question here is, what did the appellant expect the envelope to contain? It was no occasion for Basu to personally deliver any bills or papers concerning the contract business.
Such papers could have been sent in the regular course of business to the appellant 's office.
The appellant does not appear to have questioned Basu as to what the envelope contained, as he would have done, if he did not know for certain what it contained.
The appellant 's statement that he understood the envelope to contain bills etc., is not consistent with his putting the envelope in his 8 58 pocket.
The envolope is expected to be a fat one as it contained one hundred Rs. 100 currency notes.
An envelope containing business papers is not expected to be put in the trouser pocket.
One usually carries it in hand, or in one of the pockets of the coat or bush shirt one may be putting on.
When it is held that the appellant must have gone to Dhanbad railway station by arrangement, it becomes a moot point, what the purpose of the arrangement was.
Surely, it could not have been a mere delivering of certain bills and papers.
As already mentioned, it could have been sent to Sindhri by post or through Kanjilal or any other messenger.
The purpose of the meeting at Dhanbad railway station must have been different.
The appellant has failed to mention any purpose which could be accepted as correct.
It is true that the appellant was not specifically questioned, when examined under section 342, Criminal Procedure Code, with respect to his demanding Rs. 10,000 at Calcutta, Kanjilal 's visit to him in May and July and his telephonic call and the arrangement and about Basu 's statement at the time the envelope was passed on to him.
But we are of opinion that this omission has not occasioned any failure of justice.
The appellant fully knew what had been deposed to by witnesses and what had been the case against him.
He denied the correctness of the main allegation that he received Rs. 10, 000 as bribe.
We are therefore of opinion that the appellant knew when he took the envelope from Basu that he was getting Rs. 10,000 as bribe, which amount he had demanded, and that therefore the conviction of the appellant is correct.
The appeal is therefore dismissed.
Appeal dismissed.
| The appellant was born in India before the partition.
He left for Pakistan and returned to India in 1953 on a Pakistani passport and Indian visa.
He did not return to Pakistan before the expiry of the period for which he was permitted to stay in India under the visa.
He was convicted for a breach of paragraph 7 Of the Foreigners Order, 1948, which required every "foreigner" entering India to depart from India before the expiry of the period during which he was authorised to remain in India.
Held, that the appellant was not a foreigner on the date of his entry into India and his conviction was bad.
On the relevant date the appellant was a natural born British subject within section 1(1)(a) of the British Nationality and Status of Aliens Act, 1914, and consequently was not a foreigner as defined in section 2(a) of the , as it then stood.
|
DICTION: Writ Petition No. 199 of 1986 Under Article 32 of the Constitution of India.
with Civil Appeal No. 664 of 1986 From the Judgment and Order dated 20th January, 1986 of the Bombay High Court in Writ Petition No. 183 of 1986.
V.M. Tarkunde and Rajiv Datta, for the Petitioner in W.P. No. 199 of 1986.
B. Datta, Additional Solicitor General, Soli J. Sorabji and K.K. Venugopal, A.G. Ganguli, A. Subba Rao, Miss Kutty Kumarmangalam, C.V. Subba Rao, Harish Salve, K.R. Nagaraja, B.R. Agarwala, M.M. Jayakar and Miss V. Menon, for the Respondents in W.P. No. 199 of 1986 F.S. Nariman and A.B. Diwan, P.H. Parekh and Uday Lalit, for the Appellants in C.A. No. 664 of 1986 B. Datta, Additional Solicitor General, K.K. Venlugopal, A.G. Ganguli, A. Subba Rao, Miss Kutty Kumarmangalam, C.V. Subba Rao, B.R. Agarwala, M.M. Jayakar and Miss V. Menon, for the Respondents in C.A. No. 664 of 1906.
The Judgment of the Court was delivered by PATHAK, J.
The petitioners, M/s Indo Afghan Chambers of Commerce and its President, Sundar Lal Bhatia, are aggrieved by the grant of additional licences to the respondents, M/s Rajnikant Brothers and M/s Everest Gems for the import of dry fruits.
The petitioner, M/s Indo Afghan Chambers of Commerce, is an association of dealers engaged in the business of selling dry fruit in North India.
The dry fruit is purchased by them either locally or through imports from outside India.
The respondents, M/s Rajnikant Brothers and M/s Everest Gems, are diamond exporters who have been issued additional licences pursuant to an order of the Court in the following circumstances.
92 The respondents diamond exporters had applied for the grant of Export House Certificates under the Import Policy 1978 79 and had been denied the Certificates on the erroneous ground that they had not diversified their exports.
In writ petitions filed in the Bombay High Court, they were held entitled to the Export House Certificates.
Special leave petitions filed by the Union of India against the order of the High Court were dismissed by this Court by its order dated April 18, 1985 which, while confirming the order of the High Court directed the appellants to issue the necessary Export House Certificates for the year 1978 79, and further that: "Save and except items which are specificially banned under the prevalent Import Policy at the time of import, the respondents shall be entitled to import all other items whether canalised or otherwise in accordance with the relevant rules.
" The respondents diamond exporters and other like diamond exporters were granted Additional Licences, and started importing goods on those Additional Licences.
It is the case of the petitioners that the goods sought to be imported on the Additional Licences included those which were prohibited by the prevalent Import Policy.
The diamond exporters commenced the Import of acrylic ester monomers.
This was challenged by M/s Raj Prakash Chemicals Ltd., an Indian company manufacturing acrylic ester monomers in India, by a writ petition in the Bombay High Court seeking a clarification of the order dated April 18, 1985 of this Court mentioned earlier.
The High Court rejected the writ petition, and an appeal by Special Leave filed by the Indian company was disposed of by this Court by its order dated March 5, 1986.
The Court held that it was not permissible for the diamond exporters to import acrylic ester monomers under the Additional Licences granted to them during the period of the Import Policy 1985 88, but having regard to the circumstance that the High Courts had already passed orders permitting such import and further that the Import Control Authorities had specifically allowed such import this Court permitted such imports to be completed in respect of which irrevocable Letters of Credit had been opened and established before October 18, 1985, the date on which for the first time an order was made by the Court imposing a restriction on the clearing of acrylic ester monomers by the Customs authorities.
The Court regarded the date, October 18, 1985 as a critical date because the diamond exporters could be said to have been warned on and from that date that the Court could possibly take a different view from that prevailing during the period before that date when, because of the orders of the High Courts and the conduct of the Import Control Authorities, the diamond exporters could have legitimately believed that they were 93 entitled to effect such imports.
It was made clear by the Court that cases in which irrevocable Letters of Credit had been opened and established after October 18, 1985 would not be entitled to the benefit of that order.
The petitioners contend that the principle which was applied to the import of acrylic ester monomers extends likewise to the import of all other commodities under Additional Licences granted to diamond exporters in similar circumstances.
It is asserted that the respondents diamond exporters and other like diamond exporters began to import dry fruit under their Additional Licences.
It is contended that having regard to the terms of the order of this Court dated April 18, 1985 as construed and clarified by its order dated March 5, 1986 the diamond exporters are not entitled to import dry fruit.
By order dated March 5, 1986 the Court construed its order dated April 18, 1985 to mean that only such items could be imported by diamond exporters under the Additional Licences granted to them as could have been imported under the Import Policy 1978 79, the period during which the diamond exporters had applied for Export House Certificates and had been wrongfully refused, and were also importable under the Import Policy prevailing at the time of import, which in the present case is the Import Policy 1985 88.
These were the items which had not been "specifically banned" under the prevalent Import Policy.
The items had to pass through two tests.
They should have been importable under the Import Policy 1978 79.
They should also have been importable under the Import Policy 1985 88 in terms of the order dated April 18, 1985.
The case of the petitioners is that under the Import Policy 1978 79 dry fruits (excluding cashewnuts) could be imported by all persons under the Open General Licence.
Dry fruits (excluding cashewnuts), is mentioned at item 22 of Appendix 10 of the Import Policy 1978 79 as open to import under the Open General Licence.
There was no need to obtain an Additional Licence for importing them in the year 1978 79, and therefore, the wrongful denial of Additional Licences to diamond exporters in the year 1978 79, could not justify any restitution subsequently in regard to the import of dry fruits (other than cashewnuts).
There is substance in the contention.
Under the Import Policy 1978 79 dry fruits (excluding cashewnuts) could be imported by all persons for whatever purpose under the Open General Licence.
No Additional Licence was required.
If an Additional Licence was wrongfully denied to diamond exporters at time when dry fruits (excluding cashewnuts) were importable under the Open General Licence no 94 damage can be said to have been suffered by diamond exporters who had been refused Export House Certificates, and consequently Additional Licences, under the Import Policy 1978 79.
In the circumstances, no question of restitution could be said to arise for the wrongful denial of the Additional Licences.
The wrongful denial of the Additional Licences was wholly immaterial to the importing of dry fruits (excluding cashewnuts).
It is urged by the respondents diamond exporters that paragraph 176 of the Import Policy 1978 79 envisages the grant of Additional Licences for the import of raw materials which have been placed on Open General Licence for Actual Users (Industrial).
It has not been shown to us that dry fruits were placed on Open General Licence specificially for Actual Users (Industrial).
Under the Import Policy 1978 79 their import was open to all persons.
We may assume for the purpose of this case that a diamond exporter is legitimately entitled to obtain an Additional Licence under the Import Policy 1978 79 for an item which is different from the item he may have intended to import had the Additional Licences been rightly granted to him originally.
In that event, the diamond exporter can succeed only if the item could have been imported under the Import Policy 1978 79 and also under the Import Policy 1985 88 in accordance with the terms of the order of this Court dated April 18, 1985 as construed by this Court by its judgment dated March 5, 1986.
The position in regard to the import of dry fruits (excluding cashewnuts) is simple and suffers from no complexity.
As has been mentioned, dry fruits (excluding cashewnuts) could be imported by all persons under the Open General Licence under the Import Policy 1978 79.
But under the Import Policy 1985 88, when the dry fruits (excluding cashewnuts and dates) are now sought to be imported, dry fruits (excluding cashewnuts and dates) are no longer open to import under the Open General Licence.
The sanction for importing them must be found under some other provision of the Import Policy.
If dry fruits (excluding cashewnuts and dates) are regarded as items for stock and sale, the import is governed by paragraph 181(3) in Chapter XIII of the Import Policy 1985 88.
Paragraph 181(3) declares that import of dry fruits (excluding cashwenuts and dates) will be allowed against licences issued to dealers engaged in this trade, the value of the import licence in each case being equal to 20 per cent of the C.I.F. value of the best year 's imports of the applicant in respect of dry fruits (excluding 95 cashewnuts and dates) during any of financial years from 1972 73 to the preceding Licencing year, subject to a minimum of Rs.5000.
Admittedly the diamond exportes cannot be regarded as dealers engaged in the trade of stocking and selling dry fruits (excluding cashewnuts and dates).
They are, therefore, not entitled to the advantages of paragraph 181(3) of the Import Policy 1985 88.
But the case of the respondents diamond exporters, is that they import the dry fruits as raw material for the purpose of selling to eligible Industrial Actual Users for processing or manufacturing into a variety of products, such as almond oil, Ayurvedic drugs and medicines, Unani drugs and medicines, processed and package foods, sweets and confectionary, and we are referred to item 1 in Appendix 6 of the Import Policy 1985 88.
Now item 1 of Appendix 6 speaks of: "1.
Raw materials, components and consumables (non iron and steel items) other than those included in the Appendices 2, 3 Part A, 5 and 8.
" The petitioners point out that the item is covered in Appendix 2 Part B of the Import Policy 1985 88 and, therefore, the respondents diamond exporters are not entitled to resort to item 1 of Appendix 6.
Appendix 2 Part B (List of Restricted Items) contains item 121 which reads: "(121) All consumer goods, howsoever described, of industrial, agriculatural or animal origin, not appearing individually in Appendices 3 Part A and 5 or specifically listed for import under Open General Licence.
" There can be no dispute that dry fruits must be regarded as consumer goods of agricultural origin.
The words "agricultural origin" are used in the broadest sense.
It is also clear that dry fruits do not appear in Appendix 3 Part A and 5 nor can be imported under the Open General Licence under the Import Policy 1985 88.
Inasmuch as they fall within item (121) of Appendix 2 Part B they are excluded from the scope of item 1 of Appendix 6, and cannot be imported as raw materials and consumables for sale to Actual Users (Industrial).
It is urged by the respondents diamond exporters that item 121 is not attracted because it refers to "consumer goods", and consumer goods are not raw material for the purposes of item 1 of Appendix 6.
There is a fallacy here.
It will be noticed that "consumables" are referred to in item 1 of 96 Appendix 6 of goods meant for Actual Users (Industrial).
We are not satisfied that "consumer goods" in item 121 of Appendix 2 Part B cannot refer to dry fruits imported for supply to Actual Users (Industrial).
In construing the order dated April 18, 1985 of this Court, the judgment dated March 5, 1986 of this Court explained the singificance of the words "specifically banned" occurring in the former order.
The expression determines the range of the items open to import by diamond exporters holding Additional Licences.
It was declared that the items exluded from import by diamond exporters under Additional Licences under the Import Policy 1985 88 were the items enumerated in Appendix 3 and Appendix 2 Part A of that Import Policy.
Appendix 2 Part A is the successor of Appendix 4 (List of Absolutely Banned Items) of Import Policy 1978 79.
A question arose before us whether Appendix 2 Part B of Import Policy 1985 88 could also be regarded as a successor of Appendix 4.
It appears from the material placed before us that Appendix 2 Part B (List of Restricted Items) was also successor of Appendix 4 (List of Absolutely Banned Items).
Appendix 4 in the Import Policy 1978 79 was described as the Absolutely Banned List.
In the Import Policy 1982 83, the same Appendix 4 is described as List of Non Permissible Items (Banned).
The same description of Appendix 4 continued in the Import Policy 1983 84.
During that year Beef Tallow was added in Appendix 4.
In the Import Policy 1984 85, Appendix 4 became Appendix 2 Part A and Appendix 2 Part B. Appendix 2 Part A was described as a List of Banned Items and Appendix 2 List B was described as List of Restricted Items.
In the Contents of the Import Policy 1985 88 the list of Appendices makes clear that Appendix 4 of Import Policy 1983 84 became Appendix 2 Part A and Appendix 2 Part B of the Import Policy 1984 85.
The same description of Appendix 2 Part A and Appendix 2 Part B was continued in the Import Policy 1985 88.
Therefore, it is apparent that the present Appendix 2 Part A and Appendix 2 Part B constitute together what was originally List 4 (List of Absolutely Banned Items) under the Import Policy 1978 79.
On the reasoning which found favour with the Court in its judgment dated March 5, 1986 we hold that diamond exporters holding Additional Licences were not entitled to import goods enumerated in Appendix 2 Part B of the Import Policy 1985 88.
On that ground also the respondents diamond exporters are not entitled to take advantage of item 121 of Appendix 2 Part B for the purpose of importing dry fruits.
As held by this Court in its judgment dated March 5, 1986, holders of Additional 97 Licences are entitled to import only those goods which are included in Appendix 6 Part 2 List 8 of the Import Policy 1985 88.
Dry fruits are not included in that List and therefore they cannot be imported under Additional Licences.
In our opinion the respondents diamond exporters are not entitled to import dry fruits under the Import Policy 1985 88 under the Additional Licences possessed by them.
They are also not entitled to the benefit extended by the judgment of this Court dated March 5, 1986 to those diamond exportes who had imported items under irrevocable Letters of Credit opened and established before October 18, 1985.
It appears from the record before us that the respondents diamond exporters opened and established the irrevocable Letters of Credit after that date.
One more contention of the respondents diamond exporters remains to be noticed.
It is urged that the writ petition under Article 32 is not maintainable because the petitioners ' fundamental rights are not violated.
It is pointed out that no appeal has been filed by the Customs authorities or by the Import Control authorities against the interim order dated January 8, 1986 of the Bombay High Court directing the Customs authorties to permit M/s Everest Gems to clear the imported consignment of almonds.
We do not think that an interim order can defeat the fundamental rights of the petitioners merely because it has not been questioned by the Customs authorities or the Import Control authorities.
The writ petition is allowed and the respondents Nos. 10 and 11, M/s Rajni Kant Brothers and M/s Everest Gems are restrained from importing dry fruits during the period 1985 88 under the Additional Licences granted to them under the Import Policy 1978 79.
In the circumstances there is no order as to costs.
Civil Appeal No. 664 of 1986 is directed against the judgment and order of the Bombay High Court rejecting the appellants ' writ petition challenging the import of dry fruits by the respondent, M/s Everest Gems under Additional Licences granted under the Import Policy 1978 79.
The questions raised in this appeal are identical with those raised in the writ petition disposed of earlier.
In the result this appeal is allowed, the judgment and order dated January 28, 1986 of the Bombay High Court are set aside and the writ 98 petition filed in the High Court is allowed.
The respondent, M/s Everest Gems is restrained from importing dry fruits during the period 1985 88 under the Additional Licences granted to them under the Import Policy 1978 79.
There is, however, no order as to costs.
A.P.J. Appeal allowed.
| The petitioner, an associations of dealers engaged in the business of selling dry fruit in North India, who purchase dry fruits either locally or through imports from outside India, challenged the grant of additional licences to the respondents diamond exporters, under Article 32 of the Constitution.
On behalf of the petitioners, it was contended: (i) that the goods sought to be imported on the Additional Licences included those which were prohibited by the prevalent Import Policy; (ii) that the principle which was applied to the import of acrylic easter monomers extends likewise to the import of all other commodities under Additional Licences granted to diamond exporters in similar circumstances and, therefore, the diamond exporters are not entitled to import dry fruit; and (iii) that the import of dry fruit is covered by item 121 in Appendix 2 Part B (List of Restricted Items) of the Import Policy 1985 88 and, therefore, the respondents are not entitled to resort to Item 1 of Appendix 6.
On behalf of the respondents, it was contended: (i) that paragraph 176 of the Import Policy 1978 79 envisages the grant of Additional Licences for the import of raw materials which have been placed on Open General Licence for Actual Users (Industrial); (ii) that they import the dry fruits as raw material for the purpose of selling to eligible Industrial Actual Users for processing for manufacturing into a variety of products under Item 1 of Appendix 6 of the Import Policy 1985 86; (iii) that item 121 of Appendix 2 Part B (List of Restricted Items) is not attracted because it refers to "consumer goods", and consumer goods 89 are not raw material for the purposes of item 1 of Appendix 6; and (iv) that the petition under Article 32 is not maintainable because the petitioners ' fundamental rights are not violated, in as much as no appeal has been filed by the Customs Authorities or by the Import Control Authorities against the interim order dated January 8, 1986 of the High Court directing the Customs Authorities to permit the respondents to clear the imported consignment of almonds.
Allowing the Writ Petition and the Appeal, ^ HELD: 1.
Respondents Nos. 10 and 11 are restrained from importing dry fruits during the period 1985 88 under the Additional Licences granted to them under the Import Policy 1978 79.
[97F] 2.
Under the Import Policy 1978 79, dry fruits (excluding cashewnuts) could be imported by all persons for whatever purpose under the Open General Licence.
No Additional Licence was required.
By wrongful denial of Additional Licence to diamond exporters no damage can be said to have been suffered by them and no question of restitution could, therefore, be said to arise.
The wrongful denial of the Additional Licences was wholly immaterial to the importing of dry fruits (exluding cashewnuts).
The respondents have not shown that the dry fruits were placed on Open General Licence specifically for Actual Users (Industrial).
Under the Import Policy 1978 79 their import was open to all persons.[94F,C] 3.
The position in regard to the import of dry fruits (excluding cashewnuts) is simple and suffers from no complexity.
Dry fruits (excluding cashewnuts) could be imported by all persons under Open General Licence under the Import Policy 1978 79.
But under the Import Policy 1985 88 dry fruits (excluding cashewnuts and dates) are no longer open to import under Open General Licence.
If dry fruits (excluding cashewnuts and dates) are regarded as items for stock and sale, the import is governed by paragraph 181(3) is Chapter XIII of the Import Policy 1985 88, which declares that import of dry fruits (excluding cashewnuts and dates) will be allowed against licences issued to dealers engaged in this trade.
[94E H] 4.
The diamond exporters cannot be regarded as dealers engaged in the trade of stocking and selling dry fruits (excluding cashewnuts and dates).
They are, therefore, not entitled to the advantage of paragraph 181(3) of the Import Policy 1985 88.
[95A B] 5.
Dry fruits must be regarded as consumer goods of agricultural 90 origin.
The words "agricultural origin" are used in the broadest sense.
Dry fruits do not appear in Appendix 3 Part A and 5 nor can be imported under Open General Licence under the Import Policy 1985 88.
In as much as they fall within item (121) of Appendix 2 Part B they are excluded from the scope of item 1 of Appendix 6, and cannot be imported as raw materials and consumables for sale to Actual Users (Industrial).
"Consumables" are referred to in item 1 of Appendix 6 as goods meant for Actual Users (Industrial) "Consumer goods" in item 121 of Appendix 2 Part B can refer to dry fruits imported for supply to Actual Users (Industrial).[95F H; 96A] 6.
The expression "specifically banned" occurring in the order dated April 18, 1985 of this Court determines the range of the items open to import by diamond exporters holding Additional Licences.
The items excluded from import by diamond exporters under Additional Licences under the Import Policy 1985 88 were the items enumerated in Appendix 3 and Appendix 2 Part A of that Import Policy.
Appendix 2 Part A is the successor of Appendix 4 (List of Absolutely Banned Items) of the Import Policy 1978 79.
Appendix 2 Part B (List of Restricted Items) was also the successor of Appendix 4 (List of Absolutely Banned Items).
Appendix 4 in the Import Policy 1978 79 was described as the Absolutely Banned List.
[96B E] The present Appendix 2 Part A and Appendix 2 Part B constitute together what was originally List 4 (List of Absolutely Banned Items) under the Import Policy 1978 79.
The diamond exporters holding Additional Licences were, therefore, not entitled to import goods enumerated in Appendix 2 Part B of the Import Policy 1985 88.[96F G] 7.
The diamond exporters are not entitled to take advantage of item 121 of Appendix 2 Part B for the purpose of importing dry fruits.
The holders of Additional Licences are entitled to import only those goods which are included in Appendix 6 Part 2 List 8 of the Import Policy 1985 88.
Dry fruits are not included in that List and, therefore, they cannot be imported under Additional Licences.
They are also not entitled to the benefit extended by the judgment of this Court dated March 5, 1986 to those diamond exporters who had imported items under irrevocable Letters of Credit opened and established before October 18, 1985.
[97B C] 8.
An interim order cannot defeat the fundamental rights of the petitioners merely because it has not been questioned by the Customs Authorities or the Import Control Authorities.
[97E] 91
|
Special Leave Petition (Civil) No. 7309 of 1986 From the Judgment and Order dated 16.4.1986 of the Punjab and Haryana High Court in Civil Revision No. 571 of 1986.
Harbans Lal and G.K. Bansal for the Petitioners.
The Order of the Court was delivered by VENKATARAMIAH, J.
The petitioners were plaintiffs.
They instituted a suit in a representative capacity under Order 1 rule 8 of the Code of Civil Procedure in the Court of the Additional Senior Sub Judge, Barnala for a declaration that they were the owners in posses 833 sion of the suit land along with some others, that the Gram Panchayat, Mehal Kalan, Tehsil Barnala, District Sangrur in the State of Punjab (hereinafter referred to as 'the Panchayat ') had no sort of right in the suit land and that the suit land had been wrongly shown as belonging to the Panchayat by the entries made in the revenue records which were not binding on the plaintiffs and for an injunction restraining the Panchayat from interfering their possession.
The Panchayat in the course of its written statement inter alia pleaded that the Court before which the suit had been instituted had no jurisdiction to try it by virtue of the provisions of section 13 of the Punjab Village Common Lands (Regulation) Act, 1961 (Punjab Act No. 18 of 1961) (hereinafter referred to as 'the Act ').
The trial court framed an issue relating to its jurisdiction and tried it as a preliminary issue.
It held that since the question involved in the suit was simply one of title to the suit land and it was not necessary to decide whether the suit land was shamlat deh or not and whether the land had validly vested in the Panchayat or not being shamlat deh, it had jurisdiction to try the suit.
Aggrieved by the said finding recorded by the trial court, the Panchayat filed a revision petition before the High Court of Punjab and Haryana in Civil Revision Petition No. 571 of 1986.
The learned Judge who heard the Revision petition came to the conclusion that the issues involved in the suit were not triable by a civil court by virtue of section 11 read with section 13 of the Act and accordingly he held that the suit was not maintainable before the civil court.
The plaintiffs have preferred this petition before this Court under Article 136 of the Constitution of India requesting the Court to grant leave to prefer an appeal against the decision of the High Court.
Section 2(g) of the Act defines the expression 'Shamlat deh ' as under: "2(g) 'shamlat deh ' includes (1) lands described in the revenue records as shamlat deh excluding abadi deh; (2) shamlat tikkas; (3) lands described in the revenue records as shamlat, tarafs, patties, pannas and tholas and used according to revenue records for the benefit of the village community or a part thereof or for common purposes of the villages; 834 (4) lands used or reserved for the benefit of village community including streets lanes, playgrounds, schools, drinking wells, or ponds within abadi deh or gorah deh; and (5) lands in any village described as banjar qadim and used for common purposes of the village according to revenue records: Provided that shamlat deh at least to the extent of twenty five per cent of the total area of the village does not exist in the village; . . . " The Act was amended by the Punjab Village Common Lands (Regulation) (Amendment) Act, 1976.
Section 7 of the above Amending Act substituted the original sections 11, 12 and 13 of the Act by new sections.
After the amendment sections 11, 12 and 13 read as follows: "11.
Decision of claims of right, title or interest in shamlat deh. (1) Any person claiming right, title or interest in any land vested or deemed to have been vested in a Panchayat under this Act, or claiming that any land has not so vested in a Panchayat, may submit to the Collector, within such time as may be prescribed, a statement of his claim in writing and signed and verified in the prescribed manner and the Collector shall have jurisdiction to decide such claim in such manner as may be prescribed.
(2) Any person or a Panchayat aggrieved by an order of the Collector made under sub section (1) may, within sixty days from the date of the order, prefer an appeal to the Commissioner in such form and manner as may be prescribed and the Commissioner may after hearing the appeal, confirm, very or reverse the order appealed from and may pass such order as he deems fit.
Finality of orders.
Save as otherwise expressly provided in this Act, every order made by the Collector or the Commissioner shall be final and shall not be called in question in any court by way of appeal or revision or in any original suit, application or execution proceedings.
835 13.
Bar of jurisdiction of civil courts.
No civil court shall have jurisdiction (a) to entertain or adjudicate upon any question whether any property or any right to or interest in any property or is not shamlat deh vested or deemed to have been vested in a Panchayat under this Act; or (b) to question the legality of any action taken by the Commissioner or the Collector or the Panchayat under this Act; or (c) in respect of any matter which the Commissioner or the Collector is empowered by or under this Act to determine" Section 11 of the Act provides that any person claiming right, title or interest in any land vested or deemed to have been vested in a Panchayat under the Act, or claiming that any land has not so vested in a Panchayat, may submit to the Collector, within such time as may be prescribed, a statement of his claim in writing and signed and verified in the prescribed manner and that the Collector shall have jurisdiction to decide such claim in such manner as may be prescribed.
Any person aggrieved by the decision of the Collector is entitled to prefer an appeal to the Commissioner.
Under section 12 of the Act every order made by the Collector or by the Commissioner, as the case may be is final save as otherwise expressly provided in the Act and such order cannot be called in question in any court by way of appeal or revision or in any original suit, application or execution proceedings.
Section 13 of the Act provides that no civil court shall have jurisdiction to entertain or adjudicate upon any question whether any property or any right to or any interest in any property is or is not shamlat deh vested or deemed to have been vested in a Panchayat under the Act or to question the legality of any action taken by the Commissioner or the Collector or the Panchayat under the Act or in respect of any matter which the Commission or the Collector is empowered by or under the Act to determine.
The contention of the Panchayat before the trial court was that the land in question was shamlat deh and it had been vested in it.
It is no doubt true that the plaintiffs who claimed to be the owners along with some others of the suit land had avoided to seek a 836 declaration that the suit land was not shamlat deh.
They had, however, questioned the correctness of the entries in the revenue records which showed that the Panchayat was entitled to the suit land.
The plaintiffs cannot by drawing their plaint cleverly by not claiming a declaration that the land in question was not shamlat deh confer jurisdiction on the civil court when by virtue of section 13 of the Act the jurisdiction of civil courts to try such suits had been taken away.
In the instant case the suit had been filed against the Panchayat and the Panchayat had expressly claimed that the land in question belonged to it as shamlat deh.
It will not be possible in the circumstances for the civil court to make a declaration in favour of the plaintiffs without deciding the question whether the property in question was shamlat deh or not and whether it belonged to the Panchayat or not.
Reliance was however placed by the learned counsel for the petitioners on a decision of the Punjab and Haryana High Court in Bhagu and Ors., vs Ram Sarup and Ors., [1985] Punjab Law Journal Page 366 in which the suit had been held to be maintainable in a civil court even though the defendant had contended that the land involved in that suit was shamlat deh.
The High Court found that plaintiff in that case had only stated in the plaint that the land in question was 'Gali Sheh re aam ' or a throughfare belonging to the Gram Panchayat which was being used by the plaintiff as an approach to his house for about 30 years and had prayed for an injunction restraining the defendant from interfering with his right.
The Gram Panchayat in question had not been impleaded as a defendant.
The plaintiff in that case had not claimed that the suit land belonged to him or that it did not belong to the Gram Panchayat.
The crucial issue which had been framed in that case was whether the land in question over which the plaintiff had asserted his right was a street or not and whether the defendant had blocked the said street.
The High Court held in the circumstances of that suit that the jurisdiction of the civil court had not been taken away by virtue of section 13 read with sections 13A and 13B of the Act which had been inserted by the Haryana Legislature into the Act.
We are of the view that the above decision is clearly distinguishable from the present case since in this case the Panchayat which had been impleaded as a defendant had raised the plea that the suit land was a part of shamlat deh and that the plaintiffs had no right or title in it.
This question has to be decided by the Collector only under section 11 of the Act and not by the Civil court.
We do not, therefore, find any ground to interfere with the judgment of the High Court of Punjab and Haryana against which this petition is filed.
The petition is dismissed.
P.S.S. Petition dismissed.
| HELD: Having regard to the various aspects of the case and the important points of law which arise for considera tion the petition to revoke the special leave cannot be granted.
Further the special leave, was granted by the Court in the presence of the counsel for the respondents and after hearing his submissions.
The petition has not only culminat ed in criminal appeal but the very same counsel has made a request that the case should be referred to a Constitution Bench ' [92B, 91H]
|
Civil Appeal No. 179 of 1983.
Appeal by special leave from the Award dated the 13th June, 1979 of the Industrial Tribunal, Maharashtra at Bombay in Ref (IT) No. 453 of 1975.
Jitender Sharma for the Appellant.
Dr. Y.S. Chitale, O.C. Mathur, section Kumar and Ms. Meera Mathur for the Respondent.
The Judgment of the Court was delivered by DESAI, J.
It is most unfortunate that all those unhealthy and 644 injudicious practices resorted to for unduly delaying the culmination of civil proceedings have stealthily crept in, for reasons not unknown, in the adjudication of industrial dispute for the resolution of which an informal forum and simple procedure were devised with the avowed object of keeping them free from the dilatory practices of civil courts.
Times without number this Court, to quote only two D.P. Maheswari vs Delhi Administration & Ors.
and S.K. Verma vs Mahesh Chandra & Anr. disapproved the practice of raising frivolous preliminary objections at the instance of the employer to delay and defeat by exhausting the workmen the outcome of the dispute yet we have to deal with the same situation in this appeal by special leave.
The Government of Maharastra by its order dated October 22, 1975 referred a dispute between Hindustan Lever Ltd. ( 'employer ' for short) and the workmen employed by them for adjudication under Sec.
10 of the to the Industrial Tribunal, Maharashtra.
The schedule annexed to the order of reference specified the dispute as under: "All the employees who are acting continuously in higher grades (as per annexure) for more than three months should be confirmed in the respective grades immediately and all the benefits should be given to the concerned employees with retrospective effect had they been confirmed immediately after three months or their continuous acting.
" After the workmen governed by the reference filed a statement of claim, M/s Hindustan Lever Ltd., the employer, appeared and contested the reference on diverse grounds.
A preliminary objection was raised that the reference was incompetent because the dispute raised by the workmen and referred by the Government to the Industrial Tribunal for adjudication was not an industrial dispute within the meaning of the expression in the Industrial Dispute Act, 1947.
Elaborating the contention, it was submitted that the dispute is not an industrial disputes because if the demand as raised is conceded, it would tantamount to allowing the workmen to decide the strength of the work force required in various grades and it is well settled that determining and deciding the strength of work force 645 required in any industry is a managerial function.
There were other contentions with which we are not concerned in this appeal at this stage.
The Industrial Tribunal held that whatever camouflage of the language in which the demand is couched, the attempt is to obtain promotion which cannot be claimed as a matter of right, it being a managerial function.
The Tribunal in terms held that promotion is the function of the management and the Industrial Tribunal will have no power and jurisdiction to take away the function of the management and direct that such and such workmen should be promoted to a particular post.
In this view of the matter ' the Tribunal held that the dispute was not an industrial dispute within the meaning of the expression and rejected the reference as incompetent.
Hence this appeal by special leave.
Sec.10(1) confers power on the appropriate Government to refer an existing or apprehended industrial dispute, amongst others, to the Industrial Tribunal for adjudication.
The dispute therefore, which can be referred for adjudication, of necessity, has to be an industrial dispute which would clothe the appropriate Government with power to make the reference and the Industrial Tribunal to adjudicate it.
The expression 'Industrial dispute ' is defined in Sec.
2(k) to mean 'any dispute or difference between employers and employers or between employers and workmen, or between workmen and workmen, which is connected with the employment or non employment or the terms of employment or with the conditions of labour, of any person '.
The question is: whether a demand for confirmation in the promoted post after a lapse of a certain time would be a dispute which is connected with the terms of employment or the condition of labour in the facts and circumstance of this case ? The expression 'industrial dispute ' has been the subject matter of numerous decisions of this Court and the High Courts.
The one feature common to all the decisions is that the expressions has been so widely defined as not to leave anything out of its comprehension and purview involving the area of conflict that may develop between the employer and the workmen and in respect of which a compulsory adjudication may not be available.
This is recognised to be the width and comprehension of the expression.
Keeping in view this extensive definition, let us approach the contention in this appeal.
It cannot be gain said that the dispute is between the employer 646 and their workmen.
The question is whether the dispute is connected (leaving aside the words not necessary) with the terms of employment of the workmen ? Since the introduction of the (1946 Act for short), it has been made obligatory for the employer in an industrial establishment to prepare a draft of standing orders and get them certified under the Act.
4 of the 1946 Act requires the employer to make provision in the standing orders for every matter set out in the Schedule which is applicable to the industrial establishment.
The Schedule provides amongst others for making provision in the standing orders for classification of workmen for example, whether permanent, temporary, apprentices, probationers or badlis.
This classification of workmen by the employer is thus made obligatory and has to be provided for in the standing orders.
It is also well settled that certified standing orders which have a statutory flavour prescribe the conditions of service and they shall be deemed to be incorporated in the contract of employment of each workman with his employee Sudhir Chandra Sarkar vs Tata Iron & Steel Co. Ltd. It would therefore follow as a corollary that the employer will have to classify the workmen and failure to classify would be violative of the 1946 Act.
Now if there is a statutory obligation to classify workmen under the 1946 Act, the classification would be permanent, temporary, apprentices, probationers and all other known categories such as acting, officiating etc.
In respect of the classification, a dispute can conceivably arise between the employer and the workman because failure of the employer to carry out the statutory obligation would enable the workman to question his action which will bring into existence a dispute.
It would become an industrial dispute because it would be connected with the conditions of employment.
It becomes a condition of employment because necessary conditions of service have to be statutorily prescribed, one such being classification of workmen.
Therefore, without anything more where the demand of the workmen was to confirm employees employed in an acting capacity in a grade, it would unquestionably be an industrial dispute.
This conclusion gets reinforced by a slightly different approach.
7 A of the provides that 647 the appropriate Government may by notification in the official Gazette constitute one or more Industrial Tribunal for the adjudication of industrial dispute relating to any matter whether specified in the Second Schedule or the Third Schedule.
Entry at plecitum 7 in the Third Schedule reads 'Classification by Grades '.
If there is any dispute in respect of classification by grades, it will necessarily be an industrial dispute.
This was not only not questioned but would flow indisputably from the language of Sec.
7 A, which provides for setting up of Industrial Tribunal for adjudication of industrial dispute relating to any matter specified amongst others, in the Third Schedule.
Therefore, even if one does not reach the conclusion that the dispute raised in question would be an industrial dispute by reference to the standing orders certified under the 1946 Act, a mere reference to Entry 7 of the Third Schedule read with Sec.
7 A would clinch the issue.
Let it be recalled that the demand of the workmen was for confirmation of employees promoted to the higher grade and acting in the higher grade for more than 3 months.
In other words, the demand was for classification of the workmen officiating in the higher grades either as permanent or temporary and they should not be continued indefinitely as temporary by making them permanent on rendering of continuous service in the higher grade for a period of three months.
The demand involves both the classification of employees and classification by grade.
Unfortunately, the Industrial Tribunal overlooked this obvious fact situation by mis interpreting the demand and reached a wholly untenable conclusion that the demand was for promotion which appeared to the Tribunal to be a managerial function and beyond the reach of adjudication.
It appears to have been contended before the Tribunal and vigorously re canvassed before us that removing the camouflage of language, the demand in terms seeks promotion to higher grade and promotion being a managerial function, the Industrial Tribunal had no jurisdiction to entertain the same.
The Tribunal after referring to the decision of this Court in Management of Brooke Bond India (P) Ltd. vs Workmen held that the demand shorn of verbiage is one for promotion which is the managerial function and therefore cannot be the subject matter of industrial adjudication.
To recall the words of the Tribunal, 'to seek confirmation of a workman in 648 a particular higher grade would mean a promotion as a confirmed workman who is entitled to some of the benefits such as not being removed from service without following certain procedure or promotion to higher post which benefits may not be available to a temporary hand, ' and this is nothing short of demanding promotion which is a managerial function.
We are unable to appreciate this approach unwarranted in the facts and circumstances of this case, because the decision in the Brooke Bond Case has to be understood in the context of the demand that was referred to the Industrial Tribunal for adjudication.
The demand was as under: "All things being equal, seniority shall count for promotion.
If the senior person has been overlooked in the question of promotion, he is at liberty to ask the concern for the reason why he has been overlooked, in which case the concern shall give him the reasons, provided that it does not expose the concern or the officer giving reasons, to any civil or criminal proceedings.
" The Tribunal in that case after accepting that promotion was a management function and had to be left to the discretion of the management which had to make choice from amongst the employees for promotion proceeded to hold that the action of management in the facts and circumstances of the case was malafide.
In appeal against this award of the Tribunal, a Constitution Bench of this Court observed as under: "Generally speaking, promotion is a management function; but it may be recognised that there may be occasions when a tribunal may have to interfere with promotions made by the management where it is felt that persons superseded have been so superseded on account of mala fides or victimisation.
" This view was also reiterated in the case of the present employer in The Hindustan Lever Ltd, vs The Workmen wherein the Court observed that it was not disputed before them that ordinarily promotion is a management function.
649 In the heyday of laissez faire and market economy, wage determination, hours of work, disciplinary measures including quantum of punishment, in short prescribing all enveloping conditions of service were the preserve of management, styled as managerial functions.
This relic of the past is slowly withering away since the introduction of the Constitution ushering in socioeconomic revolution through law.
Most of the managerial functions in relation to work force have been swept away by legislative enacments enacted to give effect to articles 38, 39 and 41 of the Constitution yet the Tribunal dug out from the bebris of the past, the concept of managerial function and by a distorted construction of the language of the reference comprehended it in the concept of managerial function and denied to itself the jurisdiction to adjudicate it.
In the process the Tribunal failed to take note of the development of law since the decision in Brooke Bond Case.
Since the decision of the Constitution Bench of this Court in All India S.M. and A.S.M. 's Association vs General Manager, Central Railway it is well settled that equality of opportunity in the matter of public employment guaranteed by article 16 (1) not only ensures it at the time of entry in public employment but ensures it even in the matter of promotion.
If equality in the matter of promotion is constitutionally guaranteed as the fundamental right, it is time to reconsider this archaic view of the laissez faire days that promotion is a management function.
The whole gamut of labour legislation is to check, control and circumscribe uncontrolled managerial exercise of power with a view to eschew the inherent arbitrariness in the exercise of such functions.
In the decisions of this Court it is assumed without controversy that promotion is a managerial function.
It may have to be re examined in an appropriate case.
But it is not necessary to go so far in this case and we would proceed on the assumption that the passing observation made by the Constitution Bench in Brooke Bond case settled the law as far as this country is concerned that promotion is a management function though we would like to point out that the expression 'terms of conditions of employment ' would ordinarily include not only the contractual terms and conditions but those terms which are understood and applied by the parties in practice or habitually or by common consent without ever being incorporated in the contract.
In England, it is settled law that promotion is comprehended in the 650 expression ' terms of employment of the employees. ' In British Broadcasting Corporation vs Hearn & others and in R. Industrial Disputes Tribunal & Anr.
Ex parte Queen Mary College, University of London it was held that claim for promotion is connected with terms of the employment of the employees.
Even on the footing of the law, as it stands at present in this country, that promotion is a management function, the industrial dispute referred to the Tribunal was not one for claiming promotion.
The Tribunal committed a grave error in so mis interpreting the dispute referred to it.
The Tribunal overlooked the fact that the demand was in respect of workmen already promoted i.e. in respect of whom managerial function of selecting personal for promotion had been already performed.
The demand was in respect of already promoted workmen, may be in an officiating capacity, for their classification from acting or temporary to confirmed that is permanent, in the higher grade to which they were promoted, after a reasonable period of service which according to the Union be three months of service.
By no cannon of construction, this demand could be said to be one for promotion.
Therefore, the decision in Brooke Bond case and followed in the case of this very employer had no application to the facts of this case and the Tribunal misdirected itself in rejecting the reference on this narrow ground.
Accordingly, this appeal succeeds and is allowed and the award of the Industrial Tribunal on the preliminary issue is quashed and set aside and the matter is remitted to the Tribunal for disposing of the reference on merits.
As the matter is an old one and we were told that persons continuously officiating in the higher grade for more than five years are not confirmed, the Tribunal is directed to give top priority to the reference and dispose it of as early as possible and not later than six months from today.
The respondent shall pay the costs of the appellant quantified at Rs. 2,000.
M.L.A. Appeal allowed.
| The appellant was employed in a public sector undertaking.
He was dismissed on charges of misconduct consisting of absence from duty, falsification of entries in the registers destruction of records etc.
Since an industrial dispute was pending before the Labour Court between the Management and its workman an application was filed by the management under section 33(2) (b) of the seeking approval of the Labour Court to the order of dismissal passed against the appellant.
The decision of the application was partly in favour of the appellant and partly against him.
The Labour Court held: (1) that the domestic inquiry was invalid because the Chief Medical officer was neither competent to issue the charge sheet nor to constitute the Enquiry Committee which held the appellant guilty of the charges framed against him, and (2) that the management should be given an opportunity to adduce evidence to justify the order of dismissal.
The appellant filed a writ petition against the latter part of the Court 's order contending that the management should not be allowed to lead evidence to justify the order of dismissal.
The management on the other hand filed a writ petition against the former part of the order of the Labour Court by which it held that the enquiry was vitiated.
The High Court dismissed both the writ petitions.
545 The management filed an appeal in this Court complaining of the finding of the High Court that it was not competent for the Chief Medical officer to charge sheet the appellant or to constitute the Enquiry Committee.
The appeal was, however, dismissed and the findings of the Labour Court and the High Court that the enquiry which resulted in the dismissal of the appellant was vitiated, was upheld.
After the disposal of the above appeal, the Labour Court resumed hearing of the matter and allowed the management to lead evidence in order to justify the order of dismissal.
The appellant filed an application objection to the management leading evidence but that application was dismissed.
The writ petition filed by the appellant in the High Court was also dismissed.
In the appeal to this Court, it was contended on behalf of the appellant workman that the employer did not ask for an opportunity to lead evidence to justify the order of dismissal and that the Labour Court gave that opportunity on its own accord and that it was open to him to argue even at this stage that the Labour Court ought not to have passed the particular order.
Dismissing the Appeal, ^ HELD: 1.
(i) In a proceeding under section 33(2) (b) of the it is open to the employer to lead evidence to justify the order passed against the employee.
[548E] (ii) In passing the order allowing the employers to lead evidence, the Labour Court cannot be said to have acted without jurisdiction.
[553E] Delhi Cloth and General Mills Co. vs Ludh Budh Singh ; and Shankar Chakravarti vs Britannia Biscuit Co.Ltd. ; , referred to.
In the instant case, the employers who are respondent No. 2 filed an application under section 33(2) (b) of the Act, asking for the approval of the Labour Court to the order of dismissal which was passed against the appellant.
By that application, they did not ask alternatively for an opportunity to lead evidence to justify the order of dismissal.
The tenor of the judgment of the Labour Court shows that, in all probability an oral request for permission to adduce evidence was made by the employers to the Labour Court when the hearing of the said application was coming to a close.
The contention of the appellant that the employers did not ask for such an opportunity and that the Labour Court gave them that opportunity on its own accord, is farfetched and cannot be accepted.
[550E G] 2.
A question of law which does not require a fresh investigation into facts may be allowed to be raised at a later stage of the proceedings but that is subject to the qualification that question is not concluded by a decision between the same parties.
[552F] 546 Chitturi Subbanna vs Kudappapa Subbanna, ; , referred to.
In the instant case, the question as to whether the Labour Court was right in giving an opportunity to the employers to lead evidence, is not being raised by the appellant for the first time in this Court.
It was raised in the writ petition filed in the High Court.[552G] 3.
In so far as questions of facts are concerned, the Court is not concerned with the correctness or otherwise of the earlier judgment while determining the application of the rule of res judicata.
Where however, the question is purely of law and relates to the jurisdiction of the Court or where the decision of the Court sanctions something which is illegal the party affected by that decision will not be precluded by the rule of res judicata from challenging the validity of the earlier decision.
The reason is, that a rule of procedure cannot supersede the law of the land.
[552D E] 4.
If an erroneous decision on a question of law is rendered by a Court by assuming jurisdiction which it does not possess, its decision cannot operate as res judicata even between the same parties.
[553A] Mathura Prasad Bajoo Jaiwal vs Dassibal N.B. Jeejeebohoy, [1970]3 S.C.R. 830, referred to.
In the instant case the Labour Court had the jurisdiction to decide whether to allow the employers to lead evidence or not.
It may have acted irregularly in the exercise of that jurisdiction but that is to be distinguished from cases in which the Court inherently lacks the jurisdiction to entertain a proceeding or to pass a particular order.
What seems to have happened is that the application filed by the employers under section 33(2) (b) was taken up for consideration first.
When the hearing of that Application was nearing completion, but before the final orders were passed therein, the employers asked for an opportunity to lead evidence to justify the order of dismissal.
The Labour Court disposed of both the matters together by a common judgment.
It held by one and the same order that the departmental inquiry was vitiated but that the employers should be allowed to lead evidence to justify the order of dismissal.
[553B; D E]
|
ivil Appeal No. 4460 of 1986.
From the Judgment and Order dated 16.10.1985 of the Allahabad High Court in Civil Misc.
Writ Petition No. 5440 of 1983.
S.N. Kacker and J.M. Khanna for the Appellant: Anil Dev Singh and Mrs.
Shobha Dikshit for the Respondents.
The appellant is a physically handicapped person.
He has an orthopaedic problem.
He suffers from a permanent impediment of the left leg, the result Of an old compound fracture.
His impediment did not prevent him from good academic performance.
He went further.
He appeared at the combined State Services Examina tion held in February, 1982 by the Uttar Pradesh Public Service Commission.
According to the advertisement issued by Commission, one post in the Provincial Civil Service (Execu tive Branch) was reserved for handicapped persons.
However, the appellant was offered the post of Manager, Marketing and Economic Survey instead of a post in the Provincial Civil Service (Executive Branch).
He was not offered a post in the Provincial Civil Service (Executive Branch) on the ground that the reservation of 2% in the Uttar Pradesh Civil Serv ices for physically handicapped persons had been revoked by the State Government by their letter dated 1.3.
1979 in regard to the Provincial Civil Service (Executive Branch).
Thereupon the appellant filed a Writ Petition under Article 226 of the Constitution in the Allahabad High Court.
The Writ Petition was dismissed by the High Court on the ground that there was no reservation of posts for physically handi capped persons in the Provincial Civil Service (Executive Branch).
The appellant has come before us under Article 136 of the Constitution.
As far back as 1972, the Uttar Pradesh Government by G.O. No. 43/90/66 Apptt. 4 dated July 18, 1972 announced "for the physically handicapped persons, the reservation in all the services under the Government shall be 2%.
" All the Government Departments were directed to follow the policy for reservation in services accordingly.
Latter, by G.O. No. 7/4/1971 Personnel 2 dated May 20, 1978 the Government of Uttar Pradesh while affirming the "reservation of 2% posts for the appointment of disabled persons in all the services under the Government," defined who a physically handicapped person was and added the following instruction: "That in this context, I have to make it clear that the physical disability should not be of the nature which may cause interference in discharge of duties and obligations attached to the concerned service.
Accordingly if the serv ice is as such that it require continuous use of eye, then in such case reservation cannot be given to the blind per sons.
In the same manner if some services specifically involves the hearing faculty then no reservation can be given to the deaf persons in such services and in a service where the use of a particular organ of the body 577 is to be used then the person disabled of that particular organ cannot be given reservation in that service.
On the basis of the principle every department will issue necessary orders regarding reservation for the post under their subor dination.
" It appears that there was some discussion within the department pursuant to a letter from the Public Service Commission and their was a proposal not to reserve any post for disabled persons in the Provincial Civil Service.
This proposal, however, did not result in the issuance of any G.O. by the Government.
But the Public Service Commission was informed by the Government by their letter dated 1.3.
1979 that none of the categories of disabled persons was suitable for appointment to the U.P. Civil Service (Execu tive Branch) and no reservation for disabled persons might be made in the Provincial Civil (Executive Branch) Service.
A perusal of the letter dated 1.3.
1979 indicates that it was confined to "recruitment on the basis of Combined State Services Examination, 1978".
It was not intended to be an amendment of G.O. No. 43/90/66 dated July 18, 1972 or G.O. No. 7/4/1971 dated May 20, 1978.
It was not intended to depart from general rule of reservation of 2% posts in favour of disabled persons in the case of the Provincial Civil Service (Executive Branch).
Again in 1981 the Chief Secretary, Government of Uttar Pradesh addressed all the Secretaries to the Government, Heads of Departments and Commissioners in Uttar Pradesh pointing out that though a provision for reservation of 2% posts was made for physical ly handicapped persons by G.O. No. 43/90/ 66 dated July 18, 1972 in the services under the State Government, appoint ments had not been made of handicapped persons in accordance with the reservation.
The necessity of making appointments of physically handicapped persons to the reserved posts was impressed upon all the Secretaries, Heads of Departments and Commissioners.
and it was particularly brought to their attention that 1981 had been declared as 'the International Year for the Physically Handicapped Persons '.
It was also directed that vacancies should be carried forward and ef forts should be made to ensure that the maximum number of physically handicapped persons were appointed.
In the face of this communication from the Chief Secretary, we think that it is now futile for the Government to contend that the appellant cannot be appointed to the Provincial Civil Serv ice (Executive Branch).
Having announced their determina tion, very rightly too in our opinion, to rehabilitate physically handicapped persons, by reserving posts for them in all the services of the Government, the Government cannot now create needless hurdles.
The State Civil Service (Execu tive Branch) is a large enough service which can easily accommodate physically handicapped 578 persons in suitable posts.
A direction will, therefore, be issued to the Government of Uttar Pradesh to appoint the appellant to the Uttar Pradesh Civil Service (Executive Branch) with effect from the date on which he should have been appointed in the ordinary course.
He will be entitled to all the other service benefits.
He is also entitled to costs.
The appeal is allowed accordingly.
S.R. Appeal allowed.
| The respondent was appointed as a Workshop Mechanic.
He was promoted to the post of Workshop InstrUctor on 7.8.1959 in the pay scale of Rs.100 120.
The pay scales were revised w.e.f.
1.1.1961.
Diploma holders were given the pay scale of Rs. 150 320, and Certificate holders Rs. 150 250 in the cadre of Workshop Instructor.
The respondent, a Certificate holder, was given the pay scale of Rs. 150 250.
The pay scales were again revised in 1964 and Workshop Instructors with second class Diploma or equivalent qualifications with 10 years experience were given the pay scale of Rs.260 500, but the respondent did not get this scale in spite of re peated representations made to the State Government.
The respondent filed a Writ Petition alleging discrimi nation.
The High Court allowed the petition holding: (1) that for recruitment to the post of Workshop Instructor no distinction is made between the holders of a Certificate and holders of a Diploma, (2) that at the time when the respond ent was recruited there was no difference in the pay scales prescribed for holders of Diploma and holders of Certifi cate, and the basis for recruitment was that Diploma holder and Certificate holder both were entitled to be appointed to the same post in the same pay scale, and (3) that by subse quent revision of pay scale different pay scales could not be enforced for the same post merely on the basis of a holder of a Certificate or a Diploma because as an Instruc tor the person will perform the same duties and will do the same work in spite of the fact that he may be a Certificate holder or a Diploma holder, and directed that the respondent be placed in the pay scale not lower than that of the Diplo ma holders.
580 In appeal to this Court on behalf of the Appellant State it was contended: (1) that the different pay scales on the basis of difference in educational qualifications could he justified and will mount to reasonable classification and will not he hit by Article 14 of the Constitution, (2) that a Diploma is a higher qualification than a Certificate and (3) that the view taken by the High Court is not correct.
Dismissing the Appeal, HELD: 1.
Neither there is any curriculum on record nor any other material to draw the inference that Diploma is a higher qualification than a Certificate.
At the time when respondent was recruited there was only one cadre and a Diploma holder or a Certificate holder both were entitled to he recruited as an Instructor on the same pay scale.
This circumstance indicates that the two were considered to he alike.
[582E F] 2.
There is no material on record to indicate that when the pay scales were revised and subsequently they were further revised it was done on the basis of some material indicating that the Diploma became a better qualification than the Certificate holder.
It was because of this the High Court did not go into the general question as to whether on the basis of educational qualifications different pay scales can or could not be prescribed and in the absence of any material it will not he possible for this Court to go into that question.
[582F H] 3.
On the facts of the present case it could.
not he said that the High Court committed any error.
[583A B]
|
Appeal No. 503 of 1963.
Appeal from the judgment and order dated January 31, 1962, of the Punjab High Court in I.T.R. No. 28 of 1960.
B. N. Kripal and A. N. Kripal, for the appellant.
Gopal Singh and R. N. Sachthey, for the respondent.
April 9, 1964.
The judgment of the Court was delivered by SUBBA RAO, J.
This appeal by certificate granted by the High Court of Punjab raises the question whether interest paid under section 34 of the Land Acquisition Act, 1894, herein after called the Act, is of the nature 'of a capital receipt or of a revenue receipt.
The relevant facts are not in dispute and they may be briefly stated.
The appellant, Dr. Shamlal Narula, is the Manager of a Hindu undivided family, which owned, inter alia, 40 bighas and 11 biswas of land in the town of Patiala.
The Patiala State Government initiated land acquisition proceedings for acquiring the said land under Regulation then prevailing in the Patiala State.
It is common case that the State Regulations are in pari materia with the provisions of the Act.
The State of Patiala first merged into the Union of Pepsu and later the Union of Pepsu merged into the State of Punjab.
It is also common case that there was a Land Acquisition Act in the Union of Pepsu containing provisions similar to those obtaining in the Act.
On October 6, 1953, the Act was extended to the Union of Pepsu.
On September 30, 1955, the Collector of Patiala made an award under the Act ,as a result of which the appellant received on December 1, 1955, a sum of Rs. 2,81,822/ , which included a sum of 48,660/ as interest up to the date of the award.
For the year 1956 57, the Income tax Officer included the said interest in the income of the Hindu undivided family of which the appellant is the manager, and assessed the same to income tax, after overruling the appellant 's contention that the said interest was a capital receipt and, therefore, not liable to tax.
On June 14, 1957, the Appellate Assistant Commissioner confirmed the order of the Income tax Officer.
The Appellant preferred an appeal to the Income tax Appellate Tribunal.
The said Tribunal by its order dated July 9, 1957, held that 670 the said amount representing the interest was a capital re ceipt and on that finding the said amount was excluded from the total income of the assessee.
At the instance of the Commissioner of Income tax the said Tribunal referred the following question to the High Court of Punjab under section 66 (1) of the Income tax Act, 1922: "Whether on a true interpretation of section 34 of the Land Acquisition Act and the Award given by the Collector 'of Pepsu on the 30th September, 1955, the sum of Rs. 48,660/ , was captital receipt not liable to tax under the Indian Income tax Act?" The said reference was heard by a Division Bench of the High Court and it held that the said amount was not a capital but a revenue receipt and as such liable to tax under the Indian Income tax Act.
Hence the present appeal.
Learned counsel for the appellant raised before us two contentions, namely, (i) the sum of Rs. 4.8,660/ received by the appellant under the award was compensation for deprivinl,7 him of his right to possession of his property and was therefore, a capital receipt not liable to tax; and (ii) whatever may be the character of the amount awarded under section 34 of the Act by way of interest in a case where possession of the land has been taken by the State after the award, in a case where possession of the land acquired has been taken before the award, it would be a capital receipt, for it is said that in the latter the interest necessarily takes the character of compensation for depriving the owner of the land his, right to possession.
On behalf of the Revenue the order of the High Court is sought to be sustained for the reasons stated therein.
The question raised turns upon the true meaning of the provisions of section 34 of the Act.
It reads: "When the amount of such compensation is not paid or deposited on or before taking possession of the land, the Collector shall pay the amount awarded with interest thereon at the rate 'of six per ~centum per ~annum from the time of so ~takin possession until it should have been so paid or deposited".
The section itself makes a distinction between the amount awarded as compensation and the interest payable on the, amount so awarded.
The interest shall be paid on the amount awarded from the time the Collector takes possession until the amount is paid or deposited.
To appreciate the scope of the section it is necessary to notice briefly the scope of an award and the manner in which possession is taken under the Act.
After the statutory notifications are issued and the 671 requisite notice is given to the persons interested in the land so acquired, the Collector, after holding the necessary enquiry, makes an award, inter alia, determining the amount of compensation payable for the land so acquired.
Section 15 in of the Act says that in determining the amount of compensation the Collector shall be guided by the provisions contained in sections 23 and 24.
Section 23 provides for the matters to be considered in determining compensation; section 24 describes the matters to be neglected in determining the compensation.
A perusal of the provisions of section 23 shows that interest is not an item included in the compensation for any of the matters mentioned therein; nor is it mentioned as a consideration for the acquisition of the land.
Under cl.
(2) of section 23, the Legislature in express terms states that in addition to the market value of the land the court shall in every case award a sum of 15 per cent.
of such market value in consideration of the compulsory nature of the acquisition.
If interest on the amount of compensation determined under section 23 is considered to be a part of the compensation or given consideration of the compulsory nature of the acquisition, the Legislature would have provided for it in section 23 itself.
But instead, payment of interest is provided for separately under section 24 in Part V of the Act under the heading "Payment".
It is so ,done, because interest pertains to the domain of payment after the compensation has been ascertained.
It is a consideration paid either for the use of the money or forbearance from demanding it after it has fallen due.
Therefore, the Act itself makes a clear distinction between the compensation payable for the land acquired and the interest payable on the compensation awarded.
Another approach to the problem leads to the same result.
Under section 16 of the Act when the Collector has made an award under section 11 he may take possession of the land which shall thereupon vest absolutely in the Government free from all encumbrances.
Under section 17 thereof: "In cases of urgency, whenever the appropriate Government so directs, the Collector, though no such award has been made, may, on the expiration of fifteen days from the publication of the notice mentioned in section 9, sub section (1), take possession of any waste land or arable land needed for public purposes or for a Company.
Such land shall thereupon vest absolutely in the Government, free from all encumbrances".
Under both the sections the land acquired vests absolutely in the Government after the Collector has taken possession in one case after the making of the award and in the other, even 672 before the making of the award.
In either case, some time may lapse between the taking of possession of the acquired land by the Collector and the payment or deposit of the com pensation to the person interested in the land acquired.
As the land acquired vests absolutely in the Government only after the Collector has taken possession of it, no interest therein will be outstanding in the claimant after the taking of such possession: he is divested of his title to the land and his right to possession thereof, and both of them vest thereafter in the Government.
Thereafter he will be entitled only to be paid compensation that has been or will be awarded to him.
He will be entitled to compensation, though the ascertainment thereof may be postponed, from the date his title to the land and the right to possession thereof have been divested and vested in the Government.
It is as it were that from that date the Government withheld the compensation amount which the claimant would be entitled to under the provisions of the Act.
Therefore, a statutory liability has been imposed upon the Collector to pay interest on the amount awarded from the time of the taking possession until the amount is paid or deposited.
This amount is not, therefore, compensation for the land acquired or for deprivin the claimant of his right to possession, but is that paid to the claimant for the use of his money by the State.
In this view there cannot be any difference in the legal position between a case where possession has been taken before and that where possession has been taken after the award, for in either case the title vests in the Government only after possession has been taken.
The Legislature expressly used the word "interest" with its well konwn connotation under section 34 of the Act.
It is, therefore, reasonable to give that expression the natural meaning it bears.
There is an illuminating exposition of the expression "interest" by the House of Lords in Westminster Batik, Ltd. vs Riches(1).
The question there was whettier where in an action for recovery of any debt or damages the court exercises its discretionary power under a statute and orders that there shall be included in the sum for which the judgment is given interest on the debt or damages, the sum of interest so included is taxable under the Income tax Acts.
If the said amount was "interest of money" within Schedule D and the General Rule 21 of the All Schedules Rules of the Income Tax Act, 1918, income tax was payable thereon.
that context it was contended that money awarded as damages for the detention of money was not interest and bad not the quality of interest.
Lord Wright observed: "The general idea is that he is entitled to compensation for the deprivation.
From that point of view (1) , 189.
673 it would seem immaterial whether the money was due to him under a contract express or implied, or a statute, or whether the money was due for any other reason in law.
In either case the money was due to him and was not paid or, in other words, was withheld from him by the debtor after the time when payment should have been made, in breach of his legal rights, and interest was a compensation, whether the compensation was liquidated under an agreement or statute, as for instance under section 57 of the Bills of Exchange Act, 1882, or was unliquidated and claimable under the Act as in the present case.
The essential quality of the claim for compensation is the same, and the compensation is properly des cribed as interest".
This passage indicates that interest, whether it is statutory or contractual, represents the profit the creditor might have made if he had the use of the money or the loss he suffered, because he had not that use.
It is something in addition to the capital amount, though it arises 'out of it.
Under section 34 of the Act when the Legislature designedly used the word "interest" in contradistinction to the amount awarded, we do not see any reason why the expression should not be given the natural meaning it bears.
The scheme of the Act and the express provisions there,of establish that the statutory interest payable under section 34 is not compensation paid to the owner for depriving him of his right to possession of the land acquired, but that given to him for the deprivation of the use of the money representing the compensation for the land acquired.
We shall now proceed to consider the case law cited at the Bar.
Where a Tribunal directed the Improvement Trust, under the provisions of section 28 of the Land Acquisition Act, to pay interest to the assessee from the date of taking possession ,of the property to the date of payment, a Division Bench of the Allahabad High Court held, in Behari Lal Bhargava vs Commissioner of Income tax, C. P. and U. P. (1), that the interest so awarded was in the nature of compensation for the loss of the assessee 's right to retain possession of the property acquired and, therefore, was no income liable to tax.
The reason for the said conclusion is stated thus: "It is not the "fruit of a tree" to borrow the simile used in Shaw Wallace 's case (2) but was compensation or damages for loss of the right to re (1) , 24.
(2) A.I.R. 1932 P.C. 138.
LP(D)lSC 22 .
674 tain possession; and it seems to us that Section 28 was designed as a convenient method of measuring such damages in terms of interest".
As we have pointed out earlier, as soon as the Collector has taken possession of the land either before or after the award the title absolutely vests in the Government and thereafter owner of the land so acquired ceases to have any title or right of possession to the land acquired.
Under the award he gets compensation for both the rights.
Therefore, the interest awarded under section 28 of the Act, just like under section 34 thereof, cannot be a compensation or damages for the loss of the right to retain possession but only compensation payable by the State for keeping back the amount payable to the owner.
Adverting to the said decision a Division Bench of the Madras High Court in Commissioner of Income tax, Madras vs CT.
N. Narayanan Chettiar(1) observed: ". . . with great respect we find ourselves unable to follow the reasoning.
Certainly we are not prepared to accept the judgment as a guide to the decision in the present case".
So was the interest granted to an assesse under section 18A of the Income tax Act on the advance payment of tax by him under the provision of that section held to be income taxable in his hand: see Commissioner of Income tax, Bihar and Orissa vs Maharajadhiraj Sir Kameshwar Singh(2).
There when the decision of the Allahabad High Court in Behari Lal Bhargava 's case(3) was relied upon, the learned Judges,.
refusing to follow it, observed thus: "It is not a matter of discussion for the Central Government but the duty to pay interest is imposed by statute.
Apart from this I think (with great respect) that the Allahabad decision is of doubtful authority.
The decision is not consistent with the principle laid down in Schulze vs Bensted(1) and Commissioners of Inland Revenue vs Barnato(5).
The Madras High Court expressly declined to follow the Allahabad case in Commissioner of Income tax vs Narayanan Chettiar(1).
" The Kerala High Court in P. V. Kurien vs Commissioner of Income tax, Kerala(6) held that interest paid on the enhanc ed amount of compensation directed to be paid by an appellate (1) , 477.
(2) , 225.
(3) (4) (5) (6) 675 court in an appeal against an award of compensation for compulsory acquisition of land under the Land Acquisition Act represented capital and was not income liable to be taxed under the Indian Income tax Act.
It was argued there, sum estimated in terms of interest.
In coming to the conclusion which they did, the learned Judges relied upon the decision of the Judicial Committee in Inglewood Pulp and Paper Co., Ltd. vs New Burnswick Electric Power Commission(1) and that of the Madras High Court in Revenue Divisional Officer, Trichinopoly vs Venkatarama Ayyar(2).
In the former, the Judicial Committee directed the purchaser who had taken delivery and possession of the property he had purchased before the sale to pay interest to the vendor on the purchase money from the date he had taken possession on the ground that "the right to receive interest takes the place of the right to retain possession and is within the rule"; and in the latter, though it arose under the Land Acquisition Act, possession was taken by the Government under circumstances falling outside the scope of sections 16 and 17 of the said Act.
In both the cases the title did not pass to the vendee in one case and to the State in the other when possession was taken by them and, therefore, it may be said that the owner was given interest in place of his right to retain possession of the property.
But in a case where title passes to the State, the statutory interest provided thereafter can only be regarded either as representing the profit which owner 'of the land might have made if he had the use of the money or the loss he suffered because he had not that use.
In no sense of the term can it be described as damages or compensation for the owner 's right to retain possession, for he has no right to retain possession after possession was taken under section 16 or section 17 of the Act.
We, therefore, hold that the statutory interest paid under section 34 of the Act is interest paid for the delayed payment of the compensation amount and, therefore, is a revenue receipt liable to tax under the Income tax Act.
The order of the High Court is, therefore, correct.
In the result, the appeal fails and is dismissed with costs.
Appeal dismissed.
(1) (2) L/ P(D) ISCI 22(a) .
| By a notification issued in 1937 the respondent State of Madras had made Ch.
VI A of the Hindu Religious Endowments Act, 1926, applicable to the Thiyagarajaswami temple at Tiruvarur.
In 1956 the aforesaid notification was extended for a period of five years beginning on September 30, 1956.
This was done in exercise of powers under section 64(4) of the Madras Hindu Religious and Charitable Endowments Act, 1951.
The appellant challenged the issue of the notification under section 64(4) in a writ petition before the High Court.
At the hearing it was urged that the impugned notification was invalid as it had been passed without giving a reasonable opportunity to the appellant to show cause against it.
The High Court while accepting this contention, nevertheless refused to issue.
the writ prayed for because: (1) the said plea had not been taken in the writ petition and (2) the period for which the notification had been extended was shortly due to expire.
The appellant came to the Supreme Court with certificate of fitness.
It was contended on behalf of the appellant that the two reasons given by the High Court for not issuing a writ were wrong.
The respondent State on the other hand contended that no quasi judicial enquiry was necessary for extending an existing notification under section 64(4) although such an enquiry was necessary before issuing a notification for the first time under section 64(3).
HELD: (i) ' Whether f,or issuing a notification under 64(3) or for extending an existing notification under section 64(4) the process of dec.ision is the same.
In either case the Government had to satisfy itself whether supervision by the Executive Officer under the notification is required for public good.
The Government cannot legitimately and satisfactorily consider the question as to whether the notification should be cancelled without hearing the party asking for cancellation; nor can it legitimately and reasonably decide to extend the notification without hearing the trustee.
Circumstances could arise after the issue of the first notification which would help the Trustee to claim that the notification should either be cancelled or should not be extended.
The nature of the order which can be passed under section 64(4) and its effect on the rights of the Trustee are exactly similar to the order which can be passed under section 64(3).
[25 A E] The High Court was therefore right in holding that it was obligatory on the respondent State as a matter of natural justice to give, notice to the appellant before the impugned notication was passed by it.
[25E] Shri Radeshyam Khare & Ant.
vs State of Madhya Pradesh and Ors.
, distinguished.
18 (ii) Although the plea of denial of natural justice had not been taken by the appellant in his writ petition, it had been taken in the rejoinder, and the respondent thereafter had full notice of the said plea.
Therefore the first reason given by the High Court for refusing the writ was wrong.
[25G H] (ii) The High Court ignored the fact that before it delivered its judgment a new Act had come into force, namely, Madras Act XXII of 1959, whereby the life of the impugned notification had been extended.
Therefore the second reason which weighed with the High Court in not issuing a writ in favour of the appellant, that the impugned notification would remain in operation for a very short period after it delivered its judgment, was also wrong.
[26C E]
|
Civil Appeal No. 281 of 1959.
Appeal by special leave from the judgment and order dated October 12, 1955, of the former Nagpur High Court in Misc.
Petition No. 288 of 1954.
H. R. Khanna and R. H. Dhebar, for the appellants.
section N. Kherdekar and A. G. Ratnaparkhi, for respondent No. 1 1961.
November 20.
The Judgment of the Court was delivered by SHAH, J.
Out of a total area of 2,375 acres 3 gunthas of Dhanora an Izara village in Taluka 712 Pusad in the State of Madhya Pradesh 2,283 acres and 28 gunthas is assessed land and the remaining 91 acres and 15 gunthas is unassessed.
One Surat Singh who was the proprietor of the village, by sale deed dated May 24, 1947, conveyed an undivided half share in the village to Yeshwant Madhao Mahajan hereinafter called Mahajan for Rs. 25,000/ and on the same day executed a kabulayat (lease deed) for five years in respect of the same land for cultivation at an annual rental of Rs. 3,000/ .
The Legislature of the Madhya Pradesh State enacted the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1 of 1951 hereinafter called the Act to provide for acquisition of the rights of proprietors in estates, mahals, alienated villages and alienated lands in Madhya Pradesh and to make provision for other matters connected therewith.
The Act was brought into operation on March 14, 1951.
The Compensation Officer, Yeotmal started an enquiry about assessment of compensation in respect of the village Dhanora which had vested by the operation of section 3 of the Act in the State Government.
Before the Compensation officer, Mahajan claimed to retain possession of a half share in all the fallow lands in the village which had been leased by him under the deed (kabulayat) dated May, 24, 1947, to Surat Singh on the plea that these lands were "home farm".
This claim was rejected by the Compensation Officer and the order of the Compensation Officer was confirmed in appeal by the Additional Settlement Commissioner.
Mahajan then applied to the High Court of Judicature at Nagpur under article 226 of the Constitution for a direction quashing the order of the Additional Settlement Commissioner and the Compensation Officer and for a declaration that the lands mentioned in Schedule A attached to the petition be declared home farm and for a writ of mandamus against the State of Madhya Pradesh to deliver possession of all the lands mentioned in that Schedule.
713 The High Court quashed the order of the Additional Settlement Commissioner in so far as it related to the undivided half share in Survey Nos. 1 to 91 except those in possession of the specified tenants and also those already recognised as home farm and directed the Compensation Officer to decide the claim made by Mahajan in the light of the law laid down in the judgment.
Against the order passed by the High Court, the Additional Settlement Commissioner and the State of Bombay, which had by virtue of the States Reorganization Act, 1956, been substituted for the State of Madhya Pradesh, have appealed to this Court with special leave.
The dispute in this appeal relates to a half share in those lands in the village which had remained fallow on the date of the notification under section 3 of the Act.
By virtue of the sale deed dated May 24, 1947, Mahajan was the proprietor of the undivided half share in the entire village and under the kabulayat he had granted to Surat Singh a lease for cultivation of the undivided half share purchased by him.
Undoubtedly the lands specified in Schedule A to the petition were on the crucial date lying fallow.
The question which falls to be determined is whether those lands can be regarded home far": if they be so regarded, by virtue of section 4(2) of the Act Mahajan will be entitled to retain possession of those lands.
Section 3 of the Act provides, in so far as it is material, that "on and from a date to be specified by a notification by the State Government in this behalf, all proprietary rights in an estate, mahal, alienated village or alienated land, as the case may be, in the area specified in the notification, vesting in a proprietor of such estate, mahal, alienated village, alienated land, or in a person having interest in such proprietary right through the proprietor, shall pass from such proprietor or such other person to and vest in the State for the purposes of the State free of all encumbrances." Section 4(1) sets out the 714 consequence of the vesting.
By cl.
(a) of section 4(1), all rights, title and interest vesting in the proprietor or any person having interest in such proprietary right through the proprietor in such area including land (cultivable or barren), cease and are vested in the State for the purposes of the State free from all encumbrances.
But sub section 2 provides that "Notwithstanding anything contained in subsection (1), the proprietor shall continue to retain the possession of his home stead, home farm land. . . " . 'Home farm land ' is defined, in so far as it is material, in section 2(g) as: "(1) x x x x x x (2) x x x x x x (3) in relation to Berar, all land included in holdings which is (i) under the personal cultivation of the superior holder including land allowed to lie fallow in accordance with the usual agricultural practice; (ii) held by a lessee from the superior holder; and (iii) held by a tenant from the superior holder other than a specified tenant.
" 'Land ' is defined as "including land covered with water.
" Section 7 authorises the Deputy Commissioner to take charge of all lands, other than occupied lands and home stead lands, and of all interests vesting in the State under section 3 on the date of the vesting, and, by section 8, duty is imposed on the State Government to pay every proprietor, who is divested of proprietary rights, compensation in accordance with the rules contained in Schedule I. Mahajan was undoubtedly at the date of vesting the superior holder of the half share in the fallow lands which were held by Surat Singh as lessee from him.
Prima facie the claim of Mahajan 715 was covered by cl.
(g) (3) (ii) of section 2 of the Act, and Mahajan was entitled to the benefit of the exception in section 4 (2).
But counsel for the State contends that in respect of an undivided interest in land, the superior holder is not entitled to the benefit of section 4(2), because it is not a "holding.
" Alternatively, he contends that the land which is, at the date of vesting, lying fallow otherwise than in accordance with the usual agricultural practice can never be regarded as home farm.
" In our view, there is no substance in either of these contentions.
Schedule A to the petition sets out the description of the various lands which Mahajan claimed should be treated as "home farm" land.
Each of these lands is assessed.
The expression 'holding ' is not defined in the Act, but by cl.
(d) of section 2 expressions not defined in the Act in relation to Berar but used or explained in the Berar Land Revenue Code, 1928, have the meaning assigned to those expressions in the latter Act.
The Berar Land Revenue Code defines 'holding ' as "(a) a parcel of land separately assessed to land revenue; and(b) in reference to land held by a tenant a parcel of land held from a landlord under one lease or set of conditions.
" Evidently, the survey numbers included in Schedule A to the petition were "holdings" within the meanings of the Berar Land Revenue Code and therefore within the meaning of that expression as used in the Act.
It is true that Mahajan was not entitled to the entire area of each of these holdings but by the definition in the Act all lands included in holdings in Berar, provided they fulfil the conditions in cl.
(i), (ii) or (iii) of sub cl.
(3), are "home farm" lands.
In other words a part of the holding or an undivided interest in the holding may also be "home farm" land if it otherwise fulfils the requirements of cl.(i) (ii) or (iii) of sub cl.(3).
That a half share in the village which is included in the Schedule to the petition was granted 716 to Surat Singh on lease for cultivation cannot be gain said in view of the express covenants of the kabulayat.
Certain lands in the village, it is true, were lying fallow wholly or partially at the date of the vesting, but the lands having been granted in lease for cultivation, in our judgment, they are by virtue of section 4(2) to be retained in the possession of the proprietor, provision of cl.(1) of section 4 notwithstanding.
By sub section
(2) of section 4 all "home farm" lands are to remain in possession of the proprietor: there is no express exclusion of lands lying fallow from the benefit of section 4 (2) and none such can be implied either from the scheme of the Act or the context in which section 4 (2) occurs.
If Mahajan had remained in occupation as proprietor and had allowed the lands to remain fallow they may have vested in the State and Mahajan may not have been entitled to claim the benefit of section 4 (2) unless his case fell under cls.
(i) and (iii) of section 2 (g)(3), but the grant of a lease for cultivation evidences an intention on the part of Mahajan that the land be converted to agricultural purposes and default on the part of the lessee to cultivate those lands will not, deprive the lessor proprietor of the benefit granted to him by the statute.
In our view, the High Court was right in holding that the words of cl.
(ii) of section 2(g) (3) were explicit and a survey number which was lying fallow but was held by a lessee from the superior holder fell within the definition of "home farm.
" The appeal, therefore, fails and is dismissed with costs.
Appeal dismissed.
| An arbitration agreement was filed in court under section 20 of the , and an order of reference was made thereon.
The arbitrator entered upon the reference and in due course filed his award in court.
The award was however, unstamped and on objection raised that no judgment 476 could be passed on such an award, the trial court passed an order remitting the award to the arbitrator for re submitting it to the court on duly stamped paper.
The High Court took the view that want of stamp would be an illegality apparent on the face of the award, which could therefore be remitted under section 16(1) (c) of the Act. ^ Held, that all unstamped award cannot be remitted under section 16(1) (c) of the , to the arbitrator to get it stamped, because want of stamp is a defect dehors the award or the decision of the arbitrator and does not amount to an illegality apparent upon the face of it within the meaning of that section.
Ramkumar vs Kushalchand, A.I.R. 1928 Nag.
166 and Lakshmichand vs Kalloolal, 1956 N.L.J. 504, disapproved.
Nani Bala Saha vs Ram Gopal Saha, A.I.R. 1945 Cal.
19, approved.
Held, further, that after making an award the arbitrator is functus officio, and section 151 of the Code of Civil Procedure cannot therefore give the court power to direct the arbitrator to make a fresh award and re submit it after writing it on proper stamp paper.
Mordue vs Palmer, , relied on.
Dubitante, it is doubtful if the fees and charges mentioned in section 14(1) of the Arbitration act, 1940, include the stamp duty payable on the award.
|
Appeals Nos. 223 & 224 of 1961.
Appeals from the judgment and decree dated April 25, 1956.
of the Punjab High Court in Civil Regular Second Appeals Nos. 158 and 159 of 1949 respectively.
N. section Bindra and K. L. Mehta, for the appellants.
Gurbachan Singh, Harbans Singh and M. L. Kapur, for the respondents (in C. A. No. 224/61).
February 12.
The judgment of the court was delivered by SHAH J.
These appeal arise out of two suits relating to certian agricultural lands situate in village Umri Ana, tehsil Zira District Ferozepore in the Punjab.
The dispute relates to the right to inherit the estate of one Hamam Singh who was the last male holder.
The disputing parties are descended from Sahib Singh ' as disclosed by the following genealogy 21 Sahib Singh | | | | Hamir Singh Wazir Singh | Attar Singh | | | | Chuhar Singh Ghuda Singh Kahan Singh | | | | Mangal Singh | | | Daughter | | | | | Mst.
Bishno Ramji Singh Dasau | Tehl Singh Arjan Singh (married) | ndha | (Defdt.2) (Defdt.1) Singh | Singh | again) | | Narain Singh | | (Pltff.) | | | | | Bakhshish Ajaib Mukhtar | Singh Singh Singh | (Pltff.) (Pltff.) (Pltff.) | | | | | Roor Singh Bhola Singh | | Harman Singh | | | | | | Mst.
Tejo Mst.
Gejo (Died without issue) (died without issue) 22 Harnam Singh grandson of Kahan Singh died leaving him surviving two daughters Mst.
Tejo and Mst.
Gejo and no male lineal descendant.
The property of Harnam Singh devolved upon his two daughters in equal shares.
On the death of Mst.
Tejo without issue the entire estate was entered in the name of Mst.
Gejo by the revenue authorities.
Gejo also died in 1942 without leaving any issue surviving her.
By order dated September 6, 1945 the Assistant Collector directed that the entire estate be entered in the name of Narain Singh s/o Dasaundha Singh and Bakshish Singh, Ajaib Singh and Mukhtar Singh sons of Ramji Singh who will hereinafter be referred to collectively as 'the plaintiffs. ' In appeal to the Collector of Ferozepore the order of the Assistant Collector was set aside and the estate was directed to be entered in the names of Tehl Singh and Arjan Singh sons of Mangal Singh who will hereinafter be referred to collecti vely as 'the defendants. ' The Commissioner of the Division confirmed the order of the Collector.
The plaintiffs who are the descendants of Ghuda Singh then instituted suit No. 9/1947 in the Court of the Subordinate judge, Zira for a decree for possession of the estate of Harnam Singh, barring a small area of 8 Kanals and 11 MarlasKhasra No. 325 which was in their possession.
The defendants who are the descendants of Wazir Singh in their turn commenced an action (Suit No. 13/1947) for possession of Khasra No. 325 against the plaintiffs.
Each side claimed title to the estate of Harnam Singh according to the customary law applicable to the Jats residing in tehsil Zira, District Ferozepore.
It was the case of the plaintiffs that notwithstanding the adoption of Ghuda Singh by his maternal uncle Bhan Singh, Ghuda Singh 's descendants were not excluded from inheritance to the estate of a member in the natural family of Ghuda Singh It was submitted by the plaintiffs 23 that the family of the plaintiffs and Harnam Singh was governed by Zamindara Riwaj i am (general custom obtaining amongst the Zamindars) by virtue of which a son adopted in another family and his descendants do not lose their right to inherit in their natural family, because by the adoption according to the custom of the community the adopted son does not completely sever his connections with his natural family.
The defendants, on the other hand, claimed that in the District of Ferozepore every adoption in a Hindu family is 'formal ' and according to the Riwaj i am of the District an adopted son is excluded from the right to inherit in his natural family.
Consequently Ghuda Singh, who was adopted by Bhan Singh, could not inherit the estate of Hamir Singh, his adoption operating as a complete severance from the natural family.
The sole dispute between the parties was, therefore, as to the customary law applicable to the rights of a son adopted in a jat family residing in tehsil Zira, District Ferozepore.
The two suits were consolidated for trial.
The Subordinate judge held that all ceremonies relating to adoption were performed and Ghuda Singh ceased to be a member of the family of his natural father according to the custom prevailing in the District and the plaintiffs who were the descendants of Ghuda Singh could not inherit the estate of Hamir Singh.
In so holding he relied upon the manual of Riwaji i am of Ferozepore District prepared in 1914, which, in his view, recorded that when any adoption in the District takes effect the adopted on adoption son stand transplanted to the family of the adopter.
In appeal the District Court, Ferozepore held that in the case of Jats of Ferozepore District by special custom prevailing in the District, the adopted son bad the right to inherit collaterally in the family of his adoptive father only and could not inherit collaterally in his natural father 's family.
In second appeal the High Court of Punjab set aside the decree passed 24 by the District Court.
In the view of the High Court the record disclosed no evidence that the adoption of Ghuda Singh made by his maternal uncle Bhan Singh was formal and in the absence of any such evidence it must be presumed that the adoption was a customary appointment of an heir and not a formal adoption under the Hindu Law and that there was overwhelming authority in favour of the proposition that by reason of a customary adoption the adopted son and his descendants were not excluded from the right to inherit to collaterals in the natural family.
The High Court accordingly held that the plaintiffs, as grandsons in the male line of Ghuda Singh, were entitled to inherit the estate of Hamir Singh.
With certificate of fitness granted by the High Court, these two appeals are preferred by the defendants.
It is common ground that Ghuda Singh was adopted some time before 1856 by Bhan Singh, his maternal uncle.
The dispute between the parties has to be resolved by applying the customary law applicable to the parties, because section 5 of the which governs the parties provides that : "In questions regarding succession, special property of females, betrothal and marriage, divorce, dower, adoption, guardianship, minority, bastardy, family relations, wills, legacies, gifts, partition, or any religious usage or insti tution, the rule of decision shall be (a) any custom applicable to the parties concerned, which is not contrary to justice, equity or good conscience, and has not been by this or any other enactment altered or abolished, and has not been declared to be void by any competent authority 25 (b) The Muhammadan Law in cases where the parties are Muhammadans, and the Hindu Law, in cases where the parties are Hindus, except in so far as such "law has been altered or abolished by legislative enactment, or is opposed to the provisions of this Act, or has been modified by any such custom as is above referred to.
" In Daya Ram vs Sohel Singh (1), Rober son, J., (at P. 410) in dealing with the true effect of section 5 observed : "In all cases it appears to me under this Act, it lies upon the person asserting that he is ruled in regard to a particular matter by custom, to prove that he is so governed, and not by personal law, and further, to prove what the particular custom is.
There is no presumption created by the clause in favour of custom; on the contrary, it is only when the custom is established that it is to be the rule of decision.
The Legislature did not show itself enamoured of custom rather than law, nor does it show any tendency to extend the "Principles ' of custom to any matter to which a rule of custom is not clearly proved to apply.
It is not the spirit of customary law, nor any theory of custom or deductions from other customs which is to be a rule of decisions, but only 'any custom applicable to the parties concerned which is not. . and it "therefore ' appears to me clear that when either party to a suit sets up 'custom ' as a rule of decision, it lies upon him to prove the custom which he seeks to apply; if he fails to do so clause (b) of section 5 of the applies, and the rule of decision must be the personal law of the parties subject to the other provisions of the clause.
" This view was affirmed by the judicial Committee (1) (1906) P.R. No. 110 (F.B.).
26 of the Privy Council in Abdul Hussein Khan vs Bibi Sona Dero (1).
In Vaishno Ditti vs Rameshri (2), the ,Judicial Committee observed : "x x x x their Lordships are of opinion that in putting custom in the forefront, as the rule of succession, whilst leaving the particular custom to be established, as it nece ssarily must be, the Legislature intended to recognize the fact that in this part of India inheritance and the other matters mentioned in the section are largely regulated by a variety of customs which depart from the ordinary rules of Hindu and Mohamedan law." The pleadings also disclose an unanimity that the rights of the parties have to be adjudged in the light of the customary law applicable and not by the rules of Hindu Law.
The relevant general custom which is applicable in the matter of adoption is to be found in Rattigan 's Digest of Civil law for the Punjab, 13.
p. 572 Article 48 "An heir appointed in the manner above described ordinarily does not thereby lose his right to succeed to property in his natural family, as against collaterals, but does not succeed in the presence of his natural brothers.
" Article 49 : "Nor, on the other hand, does the heir acquire a right to succeed to the collateral relatives of the person who appoints him, where no formal adoption has taken place, inasmuch as the relationship established between him and the appointer is a purely personal one.
" This adoption, according to Rattigan is irrevocable and an adopted son cannot relinquish his status.
(1) (1917) L.R. 45.
I.A. 10. 2) (1928) LR, 55 I.A. 107, 421.
27 Article 52 sets out the rights of the adopted son.
It states : "The appointed heir succeeds to all the rights and interests held or enjoyed by the appointer and, semble, would succeed equally with a natural son subsequently born.
" There is a long course of decisions in the High Court of Lahore and the High Court of Punjab in which it has been held that the relationship between the appointed heir and the appointer which is called adoption is purely a personal one and resembles the Kritrima form of adoption of Hindu Law: Mela Singh vs Gurdas (1), Sir Shadi Lal, C.J. observed in dealing with the effect of a customary adoption in the Punjab : "The tie of kinship with the natural family is not dissolved and the fiction of blood relationship with the members of the new family has no application to the appointed heir.
The relationship established between the appointer and the appointee, is a purely personal one and does not extend beyond the contracting parties on either side." Similarly in Jagat Singh vs Ishar Singh (2), it was held that the reservation as to the adopted son not succeeding in the presence of his brothers refers only to his succession to his natural father but does not apply to cases of collateral succession in his natural family A similar view was expressed in Kanshi Ram V. Situ (3), and Rahmat vs Ziledar (4).
In the last mentioned case it was stated : "Under the general custom of the province a person who is appointed as an heir to a third person does not thereby lose his right to succeed to the property of his natural father.
But (1)(1922)I.L.R.3 Lah.362(F.B.) (2)(1930)1.L.R.II Lah.615.
(3) (4) Lab.
28 the appointed heir and his lineal descendants have no right to succeed to the property of the appointed heir 's natural father against the other sons of the natural father and their descendants.
The appointed heir can succeed to the property of his natural father when the only other claimant is the collateral heir of the latter.
" But it is urged on behalf of the defendants that the general custom applicable to the Punjab as recorded by Rattigan is shown to be superseded by proof of a special custom of the District recorded in the Riwaj i am of Ferozepore District prepared by Mr. Currie at the settlement of 1914, and reliance is placed upon answers to Questions 76 and 77 which deal with the effect of adoption.
The Questions and the Answers recorded are : "Question 76 Does an adopted son retain his right to inherit from his natural father ? Can he inherit from his natural father if the natural father dies without other sons ? Answer All agree that the adopted son cannot inherit from his natural father, except as for as regards such share of the property as would come to his adoptive father as a collateral.
Sodhis 'however ' say that he can inherit his natural father 's estate if the latter has no male descendants, while the Nipale say the adopted son inherits from both fathers.
Question 77 Describe the rights of an adopted son to inherit from his adoptive father.
What is the effect of the subsequent birth of legitimate sons to the adoptive father ? Will the adopted son take equal shares with them ? If natural legitimate sons be born subsequently to the adoption where the chundawand system 29 of inheritance prevails, how will the share of the adopted son, whose tribe differs from that of the adoptive father, ' inherit from him ? Does an adopted son retain his own got or take that of his adoptive father ? Answer An adopted son has exactly the same rights of inheritance from his adoptive father as a natural legitimate son.
The inheritance would only be by chundawand, if that was the prevalent rule of the family.
The Nipals, Rajputs, Arains, Moghals, Sayyads, Gujjars and Muhammadan Jats state that if the adopted son is of a different got he takes the got of his adoptive father ; while if he is of a different tribe, he cannot inherit.
As it is, as a rule aged men without hope of sons who adopt, cases of the birth of legitimate sons after adoption has taken place must be rare.
" When there is conflict between the general custom stated in Rattigan 's Digest of Customary Law and the Riwaj i am which applies to a particular area it has been held by this Court that the latter prevails.
In Jai Kapur vs Sher Singh (1), it was observed "There is, therefore, an initial presumption of correctness as regards the entries in the Riwaj i am and when the custom as recorded in the Riwaj i am is in conflict with the general custom as recorded in Rattigan 's Digest or ascertained otherwise, the entries in the Riwaj i am should ordinarily prevail except that as was pointed out by the Judicial Committee in Mt. Subhani vs Nawab [A.I.R. 1941 (1) 979. 30 (P. C.) 21], "that where, as in the present case, the Riwaj i am affects adversely the rights of females who had no opportunity whatever of appearing before the revenue authorities, the presumption would be weak, and only a few instances would suffice to rebut it.
" Therefore when there is a conflict between the record of custom made in Rattigan 's Digest of Customary Law and the local Riwaj i am, prima facie, the latter would prevail to the extent of the inconsistency, and it would be for the person pleading a 'custom or incident thereof different from the custom recorded in the Rewaj i am to prove such custom or incident.
Attention must, therefore, be directed to the question whether there is in fact Any inconsistency between ' the custom recorded in Rattigan 's Digest of Customary Law and the relevant entries in the Riwaj i am.
The general custom recorded in Rattigan 's Digest is apparently this : a person adopted according to the custom of the community i.e. who is appointed as an heir to ' inherit the property of a person outside the family does not, by virtue of such appointment, lose his right to inherit the property in his natural family except the right to inherit the property of his natural father when there are natural brothers.
The natural brothers would take the property to the exclusion of such an adopted son and his descendants.
Question 76 in the Riwaj i am primarily refers to the right of an adopted son to retain his right to inherit the property of his natural father and the answer recorded is that the adopted son cannot inherit the property of the natural father, except such property as would devolve upon his adoptive father as a collateral (of the adopted son 's natural father).
It is to be noticed that the question was directed to ascertain the right of the adopted son to inherit the estate of his natural father : it did not seek elucidation on the right of the adopted son to inherit the estate of any collaterals of the natural 31 father, and the fact that in the answer it was recorded that to the estate which would devolve upon his adoptive father as a collateral of his natural father he has a right of inheritance, strongly supports the view that the village elders in replying to the question were only concerned with the right of an adopted son to inherit the property of his natural father and were not concerned to dilate upon any right to collateral succession in the natural family.
The answer to question 77 also supports this view.
When asked to describe the rights of an adopted 'on to inherit the estate of his adoptive father, they replied that the adopted son had exactly the same rights of inheritance from his adoptive father as a natural legitimate son.
Mr. Bindra appearing on behalf of the defendants submitted that questions 76 and 77 were in tended to ascertain the custom of the District relating to the rights of the adopted son in his natural family and the family of his adoptive father and the answers must be read in that light.
We are unable to accept this suggested interpretation of Questions 76 and 77 and the information elicited thereby.
The Riwaj i am appears to have been carefully compiled by officers of standing and experience and it is clear that they made a limited enquiry about the rights of an adopted son to inherit the property of his natural father and of his adoptive father.
There is undoubtedly some conflict between the custom recorded in Rattigan 's Digest and the custom in the Riwaj i am.
Whereas in Rattigan 's Digest it is recorded that an heir appointed in another family does not succeed to his natural father in the presence of his natural brothers, in the Riwaj i am it is recorded that the adopted son does not directly inherit the estate of his natural father in any event, But we are not concerned with that ' inconsistency in this case.
It is sufficient to observe that in article 48 of Rattigan 's Digest, it is 32 recorded that an heir appointed in the manner described (an adopted son) does not thereby lose his right to succeed to property in his natural family : and nothing inconsistent therewith is shown to be recorded in the Riwaj i am of the District.
Mr. Bindra contended that in any event there is clear evidence of instances of devolution of property in the family of the parties indicating that a son adopted in another family was totally excluded from inheritance in the natural family.
Counsel relied upon Ext.
D 5 an extract from the register of mutations relating to certain agricultural lands in village Umri Ana.
It appears from that extract that on the death of Hamir Singh the estate was in the first instance entered in the names of his three sons.
But Salig Ram, Patwari of the village, made a report on May 28, 1884 that Kahan Singh and Chuhar Singh (two of the sons of Hamir Singh) claimed that Ghuda Singh had never been in possession of the 1/3rd share of the Khata entered in his name and that Ghuda Singh himself had admitted that he had no concern with the Khata in question and that his name should be removed.
On that report the Assistant Collector ordered that the lands be entered in the names of Kahan Singh and Chuhar Singh and that the name of Ghuda Singh be removed from the mutation entry and that the Jamabandi papers be altered accordingly.
But this instance of exclusion of Ghuda Singh from the right to participate in the estate of his father is consistent with the statement of custom recorded in Rattigan 's Digest.
It is expressly recorded in article 48 that an appointed heir does not thereby lose his right to succeed to property in his natural family, as against collaterals, but he does not succeed in the presence of his natural brothers.
Kahan Singh and Chuhar Singh were brothers of Ghuda Singh and Ghuda Singh having been adopted could not, according to the custom recorded in 33 Rattigan 's Digest, inherit his fathers estate in the "presence of his brothers.
" The other instance relied upon by counsel is about the devolution of the estate of Chuhar Singh on the remarriage of his daughter Bishno.
On the death of Chuhar Singh it appears that his property was entered in the name of his daughter Bishno, and when Bishno contracted a Karewa marriage according to the custom prevalent in the community, the estate held by her was entered in the name of Rura Singh and Bhola Singh sons of Kahan Singh.
In the register of mutations Ext.
R D 1 it is recorded that Ghuda Singh who was the Lambardar appeared before the Tehsildar and identified Mst.
Bishno and stated that she had contracted Karewa marriage with jawala Singh and further admitted that Rura Singh and Bhola Singh were entitled to take her property, and pursuant to this statement the Tehsildar directed that mutation regarding succession be sanctioned in favour of Rura Singh and Bhola Singh in equal shares.
This instance also, in our judgment, does not support any case of departure from the custom recorded in Rattigan 's Digest.
It is clear from the genealogy and the extract of the register of mutations Ext.
D 1 that the occasion for making an entry of mutation was the remarriage of Bishno.
Mr. Bindra submitted that according to the custom of the community a daughter inheriting property, from her father would on marriage be divested of the property, which would devolve upon the collaterals of her father, and according to that custom when on the remarriage of Bishno the succession opened, Ghuda Singh was on his own admission excluded.
This, counsel submitted, was a stronginstance supporting a departure from the custom recorded in Rattigan 's Digest.
But if by virtue of the custom prevalent in the community, as asserted by Mr. Bindra, on her marriage Bishno would lose her interest in the property of her father, it is 34 difficult to appreciate how she acquired title or continued contrary to that custom, to remain owner of the property of her father after her first marriage.
It is clear that it was not because of her marriage, but on re marriage, that the property was alleged to have devolved upon Rura Singh and Bhola Singh.
Why Bishno did not forfeit her right to the property on her marriage and forfeited her right thereto on remarriage has been left in obscurity.
The learned judges of the High Court held that the mere circumstance that Ghuda Singh permitted the estate to go to the descendants of Kahan Singh was not by itself sufficient to establish the custom set up by the defendants and uncontested instances were of little value in establishing a custom.
They observed that the instance might have received considerable reinforcement if it had been shown that Ghuda Singh or any of his descendants had inherited collaterally in the family of Bhan Singh but except succession of Ghuda Singh to the estate of Bhan Singh which is in accordance with the general custom no proof of collateral succession was established, and the single instance of Chuhar Singh 's estate devolving upon the descendants of Kahan Singh with the consent of Ghuda Singh does not establish any custom contrary to what is stated in Rattigan 's Digest.
We are unable to disagree with the view so expressed.
On that view of the case, these appeals fail and are dismissed with costs.
Appeal dismissed.
| Harnam Singh died leaving behind two daughters.
They also died without leaving any issue surviving them.
The Revenue authorities ordered that the entire estate of Harnam Singh be entered in the revenue records in the names of the defendants.
The plaintiffs filed a suit for possession of the estate of Harnam Singh.
Their contention was that notwithstanding the adoption of Ghuda Singh, their predecessor, by his maternal uncle, they as descendants of Ghuda Singh were not excluded from inheritance to the estate of a member in the natural family of Ghuda Singh.
It was also contended that the family of the plaintiffs and Harnam Singh was governed by Zamindara Riwaj i am by virtue of which a son adopted in another family and his decendants did not lose their right to inherit in the natural family because by the adoption according to the custom of the community, the adopted son did not completely sever his connection with his natural family.
The contention of defendants appellants was that in the District of Ferozeporc, every adoption in a Hindu family was formal and according to the Riwaj i am of the District, an adopted son was excluded from the right to inherit in his natural family.
Consequently, Ghuda Singh, who was adopted by Bhan Singh, could not inherit the estate because his adoption operated as complete severance from the natural family.
The suit was dismissed by the Subordinate judge and his order was confirmed by the District judge.
However, the High Court set aside the order of the District judge and held that the record disclosed no evidence that the adoption of Ghuda Singh was formal and hence it must be presumed that the adoption was a customary appointment of an heir and not a formal adoption under the Hindu Law.
It was also held that there was overwhelming authority in favour of the proposition that by reason of a customary adoption, the adopted 20 son and his descendants were not excluded from the right to inherit to collaterals in the natural family.
The plaintiffs as grandsons in the male line of Ghuda Singh were entitled to inherit the estate.
The appellants came to this Court by a certificate of fitness granted by High Court.
Held, that the view of the High Court was correct.
A person adopted according to the customs of the community, i.e. who is appointed as a heir to inherit the property of a person outside the family, does not.
by virtue of such appointment, lose his right to inherit in his natural family except the right to inherit the property of his natural father when there are natural brothers.
The natural brothers would take the property to the exclusion of such an adopted son and his defendants.
Daya Ram vs Sohel Singh (1906) P. R. No. 110 (F.B.), Abdul Hussain Khan vs Bibi Sona Dero 1917) L.R. 45 I .A. 10, Vaishno Ditti vs Rameshri (1928) L. R. 55 I. A. 407, Mela Singh vs Gurdas, (1922) 1.
L. R. , Jagat Singh vs Ishar Singh Lah.
615, Kanshi Ram vs Situ (1934) I. L. R.16 Lah. 214, Rahmat vs Ziledar (1945) 1.
L. R.26 Lah.
504 and Jai Kapur vs Sher Singh, [1960] 3 section C. R.975, referred to.
|
: Civil Appeal No. 509(N)of 1975.
From the Judgment and Order dated 25.7.1973 of the Madhya Pradesh High Court in First Appeal No. 118 of 1966.
A.K. Ganguli and C.N. Sreekumar for the Appellant.
R.B. Misra and S.K. Agnihotri for the Respondents.
The Judgment of the Court was delivered by M.M. PUNCHHI, J.
This appeal by special leave is against a judgment and decree in reversal passed by a Division Bench of the High Court of Madhya Pradesh at Jabalpur.
One has straightaway to come to grips with some basic facts of the case alongside the historic backdrop influenc ing their course.
The property in dispute is a medium sized house bearing No. 494/1, Partap Sagar Ward, known as Gulab Rai Wala House, in the city of Chhatarpur.
In the plaint filed by the District Collector, Chattarpur, dated May 5, 1962, it was valued at Rs.40,000 and its rental value barely as Rs.114.77 NP.
In British days, the State of Chattarpur, like other such States, was an independent State, under the paramountcy of the British Crown.
The British Crown was the suzerain power as acknowledged by the Indian States which owed a modified allegiance to it, but none to the Government of India.
On India having obtained independence the suzer ainty of the British Crown over the Indian States lapsed simultaneously because of section 7 of the Indian Independ ency Act, 1947.
It is a matter of history that immediately thereafter all but three of the Indian States acceded to the Dominion by executing Instrument of Accession.
Chattarpur was one such State.
The new Dominion of India was empowered to accept such like accessions by a suitable amendment in the Government of India Act, 1935.
The sovereignty of the acceding States was expressly recognised and safeguarded.
The identical Instrument of Accession, which each Ruler 45 signed, was in the exercise of his sovereignty in and over his State and clause 8 provided: "Nothing in this Instrument affects the continuance of my sovereignty in and over this State, or, save as provided by or under this Instrument, the exercise of any powers, au thority and rights now enjoyed by me as Ruler of this State or the validity of any law at present in force in this State." To put it differently, the effect of the accession was to retain full autonomy and sovereignty to the Rulers in their respective States except on three subjects, namely, Defence, External Affairs and Communications.
These alone were trans ferred to the Central Government of the new Domimon.
On March 13, 1948, thirty five States in Bundelkhand and Baghelkhand regions agreed to unite themselves into one State which was to be called the United State of Vindhya Pradesh.
Chattarpur being one such State in Bundelkhand area was a party thereto.
The signing thirty five Rulers had brought about the new State into being purely as a domestic arrangement between themselves and not as a treaty with the Dominion of India.
Obviously there was surrender of a frac tion of the sovereignty of each Ruler to the newly created State but there was no further surrender of sovereign powers to the Dominion of India beyond those already surrendered in 1947 relating to Defence, External Affairs and Communica tions.
Despite the readjustment, the sum total of the sover ignties which had resided in each before the covenant then resided in the whole and its component parts; none of it was lost to the Dominion of India.
The articles of the covenant, so far as they are rele vant for our purposes, are articles VI and XI, which are reproduced hereafter: "ARTICLE VI (1) The Ruler of each Covenanting State shall, as soon as may be practicable, and in any event not later than the 1st May, 1948, make over the Administration of his State to the Raj Pramukh; (a) all rights, authority and jurisdiction belonging to the Ruler which appertain, or are incidental to the Govern 46 ment of the Covenanting State shall vest in the United State and shall hereafter be exerciable only as provided by this Government or by the Constitution to be framed thereunder: (b) all duties and obligations of the Ruler pertaining or incidental to the Government of Covenanting State shall devolve on the United State and shall be discharged by it; (c) all the assets and liabilities of the Covenanting State shall be the assets and liabilities of the United State.
XXX XXX XXX XXX ARTICLE XI (1) The Ruler of each Covenanting State shall be entitled to the full ownership, use and enjoyment of all private properties (as distinct from State Properties) belonging to him on the date of his making over the Adminis tration of the State to the Raj Pramukh.
(2) He shall furnish to the Raj Pramukh before the 1st May, 1948 an inventory of all the immovable properties, securities and cash balances held by him as such private property.
(3) If any dispute arises as to whether any item of property is the private property of the Ruler or State Property, it shall be referred to a Judicial Officer to be nominated by the Government of India, and the decision of that person shall be final and binding on all parties con cerned." Despite the distinction drawn in Article XI, there was in reality no distinction between State property and the property privately owned by a Ruler, since the Ruler was the owner of all the property in the State.
For the purposes of arrangement of finance, however, such a distinction was practically being observed by all Rulers.
The apparent effect of the covenant was that all the property in the State vested in the United State of Vindhya Pradesh except private property which was to remain with the Rulers.
As is evident, the Ruler was required 47 under Article XI to furnish to the Raj Pramukh before May 1, 1948 an inventory of all immovable properties, securities and cash balances held by him as such private property.
Conceivably, on a dispute arising as to whether any item of property was or was not the private property of the Ruler and hence state property, it was required to be referred to a Judicial Officer to be nominated by the Government of India and the decision of that officer was to be final and binding on all parties concerned.
Despite the stern language of Article XI, requiring a Ruler to furnish the list of his private properties by May 1, 1948, the covenant did not contain any clause or article providing penal consequences which would or were likely to follow in the event of a Ruler not furnishing the list of private properties before that date.
Nothing is available in the covenant and none was pointed out to us that if a Ruler failed to furnish an inventory of his private properties before May 1, 1948, he was debarred from furnishing it at a later stage and that failure of his part had the effect of divesting him of title to his private properties.
The House in dispute was built by the then Ruler Mahara ja Sir Vishvanath Singh Ju Deo to accommodate Gulab Rai, his Private Secretary and that is how it acquired its name as Gulab Rai Wala house.
The parties were at variance about the subsequent user of the house whether it was for State pur poses or private purposes of the Ruler.
The factual undenied positioin is that the Ruler of Chattarpur on July 5, 1948 (vide Exhibit D 13 5) submitted a list to the Raj Pramukh of the United State of Vindhya Pradesh of his private proper ties, and in the said list the house in dispute, namely, Gulab Rai Wala house, was shown as the private property of the Ruler (by the then Maharaja Shri Bhawani Singh Ju Deo).
In the following month, on August 25, 1948, the said Mahara ja Shri Bhawani Singh Ju Deo made a gift of the house in dispute in favour of his father in law Dewan Shanker Partap Singh (now deceased and represented by his legal representa tives appellants).
His gift has become the subject matter of dispute in the suit, out of which this appeal has arisen, for grounds to be taken note of later at an appropriate stage.
By means of another agreement dated December 26, 1949, between the Governor General of India and the Rulers of the States forming the United State of Vindhya Pradesh, the covenant entered into on March 13, 1948, was abrogated.
The articles of this agreement, in so far as they are relevant for our purposes, read as under: 48 "ARTICLE I As from the first day of January, 1950, the Covenant entered into in March, 1948 by the Ruler of certain States in Bun delkhand and Baghelkhand for the formation of the United State of Vindhya Pradesh (hereinafter referred to as "the Covenant") shall stand abrogated.
ARTICLE II As from the aforesaid day, the United State of Vindhya Pradesh shall cease to exist and all the property, assets and liabilities of that State, as well as its right duties and obligations shall be those of the Government of India.
ARTICLE III The Ruler of each of the States specified in the Schedule to this agreement (hereinafter referred to as the Covenanting States ') hereby cedes to the Government of India, with effect from the aforesaid day, full and exclusive authority, jurisdiction and powers for, and in relation to, the gover nance of that State; and thereafter the Government of India shall be competent to exercise the said powers, authority and jurisdiction in such manner and through such agency as it may think fit.
XXX XX XX X XX ARTICLE VII (1) The Ruler of each Covenanting State shall be entitled to the full ownership, use and enjoyment of all private proper ties (as distinct from State Properties) belonging to him on the date of his making over the Administration of the State to the Raj Pramukh in pursuance of the Covenant. (2) If any dispute arises as to whether any item of property is the private property of the Ruler or State property, it shall be referred to a judicial officer to be nominated by the Government of India, and the decision of that officer shall be final and binding on all parties concerned. ' ' 49 This Agreement of the year 1949 paved the way for the Cen tral Government appointing a Chief Commissioner as Head of the Administration of Vindhya Pradesh, followed by the Parliament making it a Part 'C ' State in the year 195 1, followed by the creation of the State of Madhya Pradesh in the year 1956 under the States Reorganisation Act.
And such position continues till date.
As is prominent, under the covenant of March 13, 1948, and as repeated in the agreement of December 26, 1949, any dispute arising, whether any item of property was the pri vate property of the Ruler or State property, was to be referred to a Judicial Officer to be nominated by the Gov ernment of India and the decision of that officer was to be final and binding on all parties concerned.
It appears, however, that a letter dated January 22, 1950 (copy whereof was Exhibit P 9) was sent by Shri N.M. Buch, Secretary in the Ministry of States, New Delhi, to the Ruler suggesting that a Conference was held between him and the Ruler at Naugong from 16th to 18th September, 1949, and some deci sions were taken with regard to the private properties of the Ruler and the list of such property as finally emerging was Exhibit P 10 attached with the letter Exhibit P 9.
Item No. 22 in that list, being Gulab Rai Wala house, was shown to be State property as per decision taken in the said Conference.
From these documents, the High Court when re solving the claims of the State and the donee has taken the view that originally the property in dispute was claimed by the ruler as his private property but on agreement it was decided that it be State property, and further the legal effect thereof was that with effect from May 1, 1948, the date of agreement of merger, the property in dispute stood vested in the new Union.
The second factor which weighed with the High Court to conclude in the aforesaid manner was that listing of properties, whether State or private, was open to objection and could be settled by a Judicial Officer to be nominated by the Government of India, as per the articles aforereferred to, and a raiseable dispute could otherwise be settled amicably mutually, Mr. Buch 's letter being indicative of that.
On that basis, the gift deed dated August 25, 1948, was held by the High Court to be ineffec tive, the said property having already vested in the State with effect from a prior date on May 1, 1948.
And since after that date, the Ruler was incompetent to effect a valid gift deed in favour of anyone, the State 's claim of posses sion and mesne profits was held irresistable.
Undeniably, the Dewan Shanker Partap Singh was in pos session of the house in dispute when the suit was instituted by the State of Madhya Pradesh on May 5, 1962.
The suit was filed almost 14 years of 50 the gift in his favour.
The gift was challenged as null and void and ineffective for the reasons: (i) the gift deed was written on an ordinary paper; (ii) was unregistered, (iii) was not signed by any witness, (iv) did not bear the seal of the Maharaja, (v) prior to the date of the gift the power of the Maharaja was transferred to Vindhya Pradesh Government and the said house was not his private property, and (vi) the house in dispute was already declared to be the property of the Vindhya Pradesh Government as per terms of the cove nant between the ex Ruler of Chattarpur and the Government of India, and the Civil Court was not competent to question the legality of the conditions of the said covenant.
On that basis, possession of the house was claimed from the donee Dewan Shanker Partap Singh as also arrears of rent from August 25, 1949 onwards at the rate of Rs.114.77 NP, totall ing Rs.18,866, before the trial court.
The suit was contested by the defendant Shanker Partap Singh contending that (i) the gift of August 25, 1948, was not void and inoperative and that there was no legal re quirement to use a particular kind of paper for executing a gift deed; (ii) non registration thereof had no legal effect as the executant had admitted execution of the document, (iii) the Transfer of Property act was not applicable at the relevant time, (iv) the deed was signed by the Ruler and the absence of seal was of no consequence, (v) the property was the private property of the Maharaja, and (vi) finally the Ruler had every right to make such gift.
Besides, a number of other pleas were raised, which are unnecessary to be dealt with for the present purposes.
Similarly, the pleas in the replication, countering the pleas in the written state ment, also need not require any attention for the present purposes, for the way in which we propose to deal with this appeal.
The trial Court framed a number of issues which attract ed voluminous evidence to be led by the parties.
The Mahara ja of Chhatarpur was examined as defendant 's witness and owned making of the gift in favour of his father in law.
He admitted, however, that Shri Buch had met him in connection with the covenant, but he denied that he had received any letter Exhibit P 9 from Shri Buch or the lists Exhibits P 10 to P 12 regarding his private and State properties, were a part thereof.
His evidence was suggestive of there being no agreement between him and Shri Buch to change the list of properties.
The trial Court 's clear findings were that the property in dispute was not that of the Maharaja but that of the defendant, as it had been gifted to hun by the Maharaja on August 25, 1948, and that the house was mistakenly shown later as 'State property '.
In that view of the matter, the trial 51 Court dismissed the suit.
The appeal of the State of Madhya Pradesh was, however, allowed by the High Court on the view taken that the property in dispute had vested in the United States of Vindhya Pradesh on May 1, 1948, and that thereaf ter no valid gift could be made by the Ruler in favour of the defendant.
The High Court further held that whatever rights and powers the Ruler had as a sovereign ceased to exist after May 1, 1948, and the said date was fixed not later than May 1, 1948, and the gift deed made thereafter on August 25, 1948, could not give the defendant a valid title to the property on that basis.
With regard to damages, the High Court took the view that the rate of Rs.56 per mensem as at one time demanded initially by the State should be the basis for assessment of damages.
In that view of the matter, the suit of the State of Madhya Pradesh Government was decreed for possession, but reducing the damages to Rs.16,735.35 paise.
And this has given rise to the present appeal.
History of the covenant entered into by the Rulers and the final integration finds recognition in Virendra Singh and others vs State of Uttar Pradesh, ; The significant passage as available at page 4 19 of the report, is worthy of reproduction here: "After this, on 13th March, 1948, thirty five States in Bundelkhand and Baghelkhand (including Charkhari and Sarila) agreed to unite themselves into one State which was to be called the United State of Vindhya Pradesh.
In pursuance of this agreement each of the thirty five Rulers signed a covenant on 18th March, 1948, which brought the new State into being.
It is important to note that this was a purely domestic arrangement between themselves and not a treaty with the Dominion of India.
Each Ruler necessarily surren dered a fraction of his sovereignty to the whole but there was no further surrender of sovereign powers to the Dominion of India beyond those already surrendered in 1947, namely, Defence, External Affairs and Communications.
Despite the readjustment, the sum total of the sovereignties which had resided in each before the covenant now resided in the whole and its camponentparts: none of it was lost to the Dominion of India." (Emphasis supplied) Only a fraction of sovereignty to the whole was surrendered by the Ruler not his total sovereignty.
Though it was expected by Article XI of the covenant of the Ruler to submit a list of his private properties 52 before May 1, 1948, his individual sovereign power did not stand taken away after May 1, 1948.
He was still sovereign, as is our view, to submit the list beyond that date and there was no penal clause in the covenant to penalise him for belated observance or to treat belated observance non est.
It is the admitted case that factually the Ruler of Chattarpur had in his list of July 10, 1948, shown the property in dispute to be his private property and this was followed by a gift of it in writing on August 25, 1948, in favour of his father in law.
It is in the assertion of his sovereign power that he gave his list on July 5, 1948 (Exhibit D 13 5) and it is in assertion of the same sover eign power as also individual that he made the gift of the house in dispute to his father in law.
Support for such view is available in Virendra Singh 's case (supra) from the following passage occurring at page 429 of the report; " . .
The Rulers of Charkhari and Sarila retained at the moment of final cession, whatever measure of sovereignty they had when paramountcy lapsed, less the portion given to the Indian Dominion by their Instruments of Accession in 1947; they lost none of it during the interlude when they toyed with the experiment of integration.
There was then redistribution of some of its aspects but the whole of whatever they possessed before the integration returned to each when the United State of Vindhya Pradesh was brought to an end and ceased to exist.
Thereafter each acceded to the Dominion of India in his own right." (Emphasis supplied).
It is thus plain that the Ruler of Chhatarpur lost none.
of his sovereignty by integrating his State with other States except to the extent in which it was arranged or redistributed on some of its aspects.
It is in exercise of that sovereign power that the Ruler, in the manner indicated above, had set apart the property in dispute as one of his private properties, in the list submitted on July 5, 1948.
It is nobody 's case that he could not submit such a list on July 5, 1948.
Further, in exercise of his sovereign as also individual right over his private property, that he trans ferred the house in dispute to his father in law on August 25, 1948.
In these circumstances, the suggested Conference which took place later in September, 1949 between him and Shri N.M. Buch, Secretary in the Ministry of States, New Delhi, evident from letter Exhibit P 9 dated January 22, 1950, and the lists Exhibits P 10 to P 12, appended there with, is not of much significance.
In the first place, the Ruler denied when appearing as a witness in the trial as having received any such letter or the lists appended there with, sug 53 gestive of the fact that he had reconverted the donated property to be a State property.
In the second place, but for the said letter, purportedly issued at a time when the State of Chhatarpur had otherwise ceded to the Central Government vide agreement dated January 1, 1950, there was no direct evidence forth coming for such conference.
In the third place, even if such Conference had taken place in September 1949, as suggested, the minutes thereof cannot be treated as amounting to a divestiture of the gift made in favour of the father in law.
Fourthly, the Ruler had no sovereign power towards administering his State which had become part of the integrated United State in terms of Article VI of the covenant, and during the integration he could not exercise such a sovereign power, so as to take away the property of a private person and treat it as State property because the property in dispute having once vested in the defendant appellants could not be divested in the manner suggested.
And lastly, there was no raiseable ques tion or issue which the Ruler could, while sitting with Shri Buch, decide amicably without the aid of the Judicial Offi cer nominated by the Government entering upon such dispute, because before integration he owned his State and its properties and there could legitimately not arise a dispute as to which was his private property or State property and thus its settlement by a mutual consent did not arise.
Taking thus the totality of these circumstances in view, we are driven to the conclusion that the High Court committed an error that the Ruler lost his sovereign right to ear mark the property in dispute as his private property after May 1, 1948, or that the said property vested in the State with effect from that date or that the letter Exhibit P 9 of Shri N.M. Buch and the lists attached thereto, had the effect of divesting the appellants of the title to the property in dispute in favour of the State with effect from that date.
In that strain, factual position having not been denied, the validity of the gift dated August 25, 1948, cannot be ques tioned on the grounds enumerated in the plaint, due to exercise of sovereign power of the Ruler in the grant there of at that point of time.
Once that is held the claim for damages too caves in.
We hold it accordingly.
For the view above taken, we allow this appeal, set aside the judgment and decree of the High Court and dismiss the suit of the State of Madhya Pradesh with costs.
R.N.J. Appeal al lowed.
| A common question of law having arisen for determination in these petitions filed under Article 32 of the Constitu tion, they are disposed of by a Common Judgment, though the petitioners dealers are different and carry on their busi ness in different states and have challenged the respective provisions of law by which their cases are governed.
The petitioners in WP 803/88 carry on the business of selling cinematographic Idms and other equipments like projector, sound recording and reproducing equipments, X Ray films etc.
in the State of U.P. and in Delhi.
The petition ers receive these goods from their manufacturers outside the State of U.P.
In U.P. there is a single point levy of Sales Tax.
The State of Uttar Pradesh issued two notifications under section 4A of the Uttar Pradesh Sales Tax Act and under Section 8(5) of the Central Sales Tax Act exempting new units of manufacturers as defined in the Act in respect of the various goods for different periods ranging from 3 to 7 years, from payment of Sales Tax.
The petitioners by these petitions challenge the constitutional validity of these Notifications.
They have also challenged the constitutional validity of section 4A of the Uttar Pradesh Sales Tax Act and sections 8(5) of the Central Sales Tax Act, and the proceedings taken by the Respondent under section 5A of 732 the said Act.
The case of the petitioners is that they are discriminated on account of these notifications as the manufacturers covered by these Notifications are entitled to sell the articles manufactured by them without liability to pay sales tax while the manufacturers in other states and non manufacturers of the same article selling the same goods in the State are liable to pay sales tax under the local Sales Tax Act as well as under the Central Sales Tax Act.
Their contention, therefore, is that they became subject to gross discrimination and their business was crippled.
In these premises the petitioners challenge the provisions as ultra vires the constitution being violative of the provi sions of Articles 301 to 305 of part III of the Constitution as also Articles 14 and 19 of the Constitution.
The Respondents counter the assertion of the petition ers.
According to them the contention put forward by the petitioners ignores the basic features of the Constitution and also the fact that the concept of economic unity may not necessarily be the same as it was at the time of the Consti tution making; the state which was technically and economi cally weak in 1950 cannot be allowed to remain in the same state of affairs.
The state has to give subsidy and grant exemptions/concessions for the economic development of the state to new industries.
It was urged that if all the states are economically strong or developed then only can economic unity as a whole be assured or strengthened.
Dismissing the petitions, this Court, HELD: Sales Tax Laws in all the States provide for exemp tion.
Power to grant exemption is inherent in all taxing Legislations.
Economic unity is a desired goal.
Development on parity is one of the commitments of the Constitution.
Directive Principles enshrined in Articles 38 and 39 must be harmonised with economic unity as well as economic develop ment of developed and under developed area.
[756H; 757A B] Taxes may sometime amount to restrictions but it is only such taxes as directly and immediately restrict trade that would fail within the mischief of article 301.
[740E] See Atiabari Tea Co. Ltd. vs The State of Assam & Ors., ; and Automobile Transport (Rajasthan) Ltd. vs The State of Rajasthan & Ors., [1963] 1 SCR 491.
The taxes which do not directly and immediately restrict or 733 interfere with trade, commerce and intercourse throughout the territory of India would therefore be excluded from the ambit of article 30 1 of the Constitution.
It has to be borne in mind that sales tax has only an indirect effect on trade and commerce.
[747F] In the instant case, the general rate applicable to locally made goods is the same as that on imported goods.
Even supposing without admitting that Sales Tax is covered by article 301 as a tax directly and immediately, hampering the free flow of trade, it does not follow that it fails within the exemption of article 304 and it would be hit by article 30 1.
Still the general rate of tax which is to be compared under article 304(a) is at par, and the same qua the locally made goods and the imported goods.
[751G H] Concept of economic barrier must be adopted in a dynamic sense with changing conditions.
What constitutes an economic barrier at one point of time often ceased to be so at anoth er point of time.
It will be wrong to denude the people of the state of the right to grant exemptions which flow from the plenary powers of legislative heads in List III of the 7th Schedule of the Constitution.
[752A B] Basically the concept of equality embodied in Articles 304(a) and 16 are the same.
Article 14 enjoins upon the state to treat every person equal before the law while Article 304(a) enjoins upon the state not to discriminate with respect to imposition of tax on imported goods and the locally made goods.
[753C] It is not that with changing times the meaning changes but changing times illustrate and illuminate the meaning of the expressions used.
The connotation of the expressions used takes its shape and colour in evolving dynamic situa tions.
[757B C] James vs Commonwealth of Australia, at 613; Firm A.T.B. Mehtab Majid & Co. vs State of Madras & Anr., ; ; A. Hajee Abdul Shakoor & Co. vs State of Madras; , at 225; State of Madras vs N.K. Nataraja Mudaliar, ; at 847; Andhra Sugars Ltd. & Anr. etc vs State of Andhra Pradesh & Ors., ; ; Bengal Immunity Co. Ltd. vs State of Bihar, at 754; State of Madhya Pradesh vs Bhailal Bhai & Ors., ; at 268 9; Rattan Lal & Co. & Anr.
vs The Assessing Authority & Anr., ; at 557; India Cement & Ors.
vs State of Andhra Pradesh & Ors.
, ; ; Weston Electroniks & Anr.
vs State of Gujarat & Ors., 568 at 571; C.A.F. Seeling Inc. vs Charles H. Baldwin, at 1038; Smt.
Ujjam Bai vs State of U.P., [1963] 1 SCR 778 at 851; Coffee Board, Bangalore vs Joint Commercial Tax Officer, Madras & Anr.
, ; at 156; V. Guruviah Naidu & Sons vs State of Tamil Nadu & Anr., ; at 1070; Kathi Raning Rawat vs The State of Saurashtra, ; ; Kalyani Stores vs The State of Orissa & Ors., ; ; Bharat General & Tex tiles Industries Ltd. vs State of Maharashtra, 72 STC 354; H. Anraj vs Government of Tamil Nadu, ; West Bengal Hosiery Assn.
& Ors.
vs State of Bihar & Anr.
, ; ; State of U. P. & Ors.
vs Babu Ram Upadhya, ; at 702; State of Tamil Nadu, vs Hind Stone etc.; , at 757; State of Mysore vs H. Sanjeeviah, ; ; Kailash Nath & Anr.
vs State of U.P. & Ors.
, AIR 1957 SC 790 at 791; State of U.P. & Ors.
vs Renu sagar Power Co. & Ors., ; at 100; M/s Narinder Chand Hem Raj & Ors.
vs Lt. Governor, Administrator, U.T., Himachal Pradesh & Ors., at 751 and Associ ated Tanners Vizianagram A.P.v.
C.T.O., Vizianagram, Andhra Pradesh & Ors., ; , reffered to.
|
ivil Appeal Nos.
1219 20(NM) of 1987.
From the Judgment and Order dated 17.3.
1987 of the Customs, Excise & Gold (Control) Appellate Tribunal, New Delhi in Appeal No. CD/BOM 398 & 399 of 1984.
M.S. Ganesh for the Appellants.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
These two appeals are under Section 130E(b) of the (hereinafter called the Act) from the orders passed by the Customs, Excise & Gold (Control) Appellate Tribunal (hereinafter called `the CEGAT).
The questions involved in these two appeals are identical.
The appellants ' claim to be the citizens of India is not disputed.
At the material time in 1983 they were based in Hong Kong and Singapore respectively.
In February, 1993, when the appellants came to India, they were charged with alleged offences under Sections 112 and 114 of the Act and also simultaneously with the alleged offences under the Foreign Exchange Regulation Act, 1973 (hereinafter called `the FERA ').The
Enforcement authorities recorded under Section 40 of the FERA the appellants ' statements at the time of their arrest.
It is alleged that these statements were obtained under duress and by using third degree methods against them, who soon thereafter retracted their statements.
No statements were, however.
recorded by the Customs authorities under the corresponding Section 108 of the Act.
In the FERA proceedings.
the Enforcement Directorate, it is stated, applied that there was no evidence against the appellant Vijay Prakash Mehta and the Directorate had no objection to his discharge.
Accordingly, by an order dated 29.10.1985, of the Additional Chief Metropolitan Magistrate, 8th Court, Esplanade, Bombay, has was discharged and his bailbond was cancelled.
So far as the appellant J.D. Mehta is concerned, he had replied to the show cause notice issued by the Enforcement Directorate and the mater is pending adjudication.
In the meantime the proceedings under Sections 111 to 114 & 118 of the Act resulted in the order dated 19.1.1984 of the Addl.
Collector of Customs (Preventive) Bombay, whereby he imposed a penalty of Rs. 3,00,000 on each of the appellants.
It may be mentioned that each of the appellants was alleged to have PG NO 437 been caught red handed with the foreign exchange to the tune of Rs. 11,90,648.
The appellants had admitted their part in the systematic illegal export of foreign exchange from India during the past several years.
Against the said order dated 19.1.
1984, the appellants preferred their respective appeals to the Appellate Tribunal under Section 129A of the Act.
The Tribunal reduced the amount of penalty to be deposited, in an application made under Section 129E of the Act.
pending hearing of the appeal, to Rs. 1 lakh for each of the appellants.
It is alleged that since neither of the appellants were in any financial position to deposit even Rs. 1 lakh, they sought further reduction.
The Appellate Tribunal, after considering the facts and circumstances of the case and taking: into consideration all the relevant material facts and factors, by its order dated 17th February, 1987, declined to do so and dismissed the appeals for non compliance with the provisions of Section 129E of the Act.
Aggrieved thereby the appellants have appealed to this Court.
Section 129E of the Act provides as follows.
"Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of the customs authorities or any penalty levied under this Act.
the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the proper officer the duty demanded or the penalty levied: Provided that where in any particular case.
the Collector (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Collector (Appeals) or, as the case may be, the Appellate Tribunal may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of revenue.
" The aforesaid Section provides a conditional right of appeal in respect of an appeal against the duty demanded or penalty levied.
Although the Section does not expressly provide for rejection of the appeal for non deposit of duty or penalty, yet it makes it obligatory on the appellant to deposit the duty or penalty, pending the appeal, failing which the Appellate Tribunal is fully competent to reject the appeal.
See, in this connection, the observations of this Court in respect of Section 129 prior to substitution PG NO 438 of Chapter XV by the Finance Act, 1980 in Navin Chandra Chhotelal vs Central Board of Excise & Customs & Ors. ; The proviso, however,gives power to the Appellate Authority to dispense with such deposit unconditionally or subject to such conditions in cases of undue hardships.
It is a matter of judicial discretion of the Appellate Authority.
The case of the appellants was that they had not gone out of India and had no assets in India.
Their passports were impounded at the time of arrest.
Their visa had lapsed and could not be renewed.
They had no money, hence, the right of appeal could be illusory unless they are permitted to deposit only Rs.60,000 each which they contend they are able to procure with the assistance of their father.
In the impugned order the Tribunal noted the several abortive and defective attempts made to get extension of time to deposit the security.
Firstly.
the prayer was to accept the deposit of Rs.35,000 and secondly, to accept the deposit of Rs.60,000 in 2 months.
The Tribunal took into account the probability of the prima facie case of the appellants.
The appeals were filed two years ago.
After taking into consideration these factors, the Tribunal rejected the prayer for reduction.
It was contended that this was wrong Shri M. section Ganesh.
learned advocate for the petitioners.
pleaded that in a situation of this type the condition for deposit of penalty was bad as it whittled down the appellants right of appeal.
This, in our opinion is incorrect Shri Ganesh tried to contend that the right of appeal is being whittled down by the procedure followed in this case, He drew our attention to certain observations of this Court in Hoosein Kasam Dada (India) Ltd. V. The State of Madhya Pradesh & Ors., ; There this Court held that when the right to appeal vests, change of law after initiation of proceedings in lower court would not divest the vested rights of the appellant.
The right of appeal is a matter of substantive right and not merely a matter of procedure, and this right becomes vested in a party when the proceedings are first initiated in, and before a decision is given by the inferior court and such a right cannot be taken away except by express enactment or necessary intendment.
The aforesaid observations, in our opinion.
have no application to the instant case.
Here the right that was granted, w as a right held with a condition.
There was o question of change of that right.
In the instant case the only substantive right is the right of appeal as contemplated under Sections 129A and 129E of the Act and that right is a conditional one and the Legislature in its wisdom has imposed that condition.
No question of whittling PG NO 439 down that right by an alteration of procedure arises in this case.
Right to appeal is neither an absolute right nor an ingredient of natural justice the principles of which must be followed in all judicial and quasi judicial adjudications.
The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant.
Counsel referred us to the decision of this Court in Collector of Customs & Excise, Cochin & Ors.
vs A.S. Bava, [l968] 1 SCR 82.
There this Court found that Section 35 of the Central Excises & Salt Act, 1944 (Excises Act) gave a right to appeal.
Under Section 12 of the Act, the Central Government was authorised to apply to appeals under the Excises Act the provisions of the dealing with the procedure relating to appeals.
In exercise of that power the provisions of Section 129 of the Act were made applicable to appeals under the Excises Act.
The Section required an appellant to deposit, pending the appeal, the duty or penalty imposed, and empowered the Appellate Authority, in his discretion, to dispense with such deposit pending the appeal in any particular case.
The respondent therein filed an appeal against the duty imposed on him under the Excises Act and prayed for dispensation of the deposit.
The Collector, who was the appellate authority, rejected the prayer and when no deposit was made within the time fixed, dismissed the appeal.
The respondent filed a petition in the High Court which was allowed, and the Collector was directed to hear the appeal on merits.
This Court held that Section 35 of the Excises Act gave a right of appeal and Section 129 of the Act whittled down that substantive right and, as such, Section 129 could not be regarded as "Procedure relating to appeals" within Section 12 of the Excises Act.
These observations cannot be applied to the facts of this case.
Here we are concerned with the right given under Section 129 A of the Act as controlled by Section 129E of the Act, and that right is with a condition and thus a conditional right.
The petitioner in this case has no absolute right of stay.
He could obtain stay of realisation of tax levied or penalty imposed in an appeal subject to the limitation of Section 129E.
The proviso gives a discretion to the authority to dispense with the obligation to deposit in case of "undue hardships".
That discretion must be exercised on relevant materials, honestly, bona fide and objectively.
Once that position is established it cannot be contended that there was any improper exercise of the jurisdiction by the Appellate Authority.
In this case it is manifest that the order of the Tribunal was passed honestly, PG NO 440 bona fide and having regard to the plea of "undue hardship ' as canvassed by the appellant.
There was no error of jurisdiction or misdirection.
Though in a different context the public policy involved in not granting interim stay has been explained by this Court in Asstt.
Collector of Central Excise West Bengal vs Dunlop India Ltd., It is not the law that adjudication by itself following the rules of natural justice would be violative of any right constitutional or statutory, without any right of appeal, as such.
If the statute gives a right to appeal upon certain conditions, it is upon fulfilment of those conditions that the right becomes vested and exercisable to the appellant.
The proviso to Section l29E of the Act gives a discretion to the Tribunal in cases of undue hardships to condone the obligation to deposit or to reduce.
It is a discretion vested in an obligation to act judicially and properly.
In the facts and circumstances of the case and all the relevant factors, namely, the probability of the prima facie case of the appellants, the conduct of the parties, have been taken into consideration by the Tribunal.
The purpose of the Section is to act in terrorem to make the people comply with the provisions of law.
In that view of the matter, we are unable to accept the submission that there was improper rejection and non consideration of material and relevant facts.
If that is the position then the appeals have no merit and are accordingly rejected.
P.S.S. Appeals dismissed.
| Section 129A of the confers right of appeal to the Appellate Tribunal.
Where, however, the order appealed against relates to duty demanded in respect of goods which are not under the control of the customs authorities or any penalty levied under the Act, section 129E requires the aggrieved person to deposit with the proper officer the duty demanded or the penalty levied, pending the appeal.
The proviso thereto, however, empowers the Appellate Authority to dispense with such deposit in case of under hardship.
The appellants, Indian citizens based in Hong Kong and Singapore respectively, were caught red handed, while on a visit to India, with huge amounts of foreign exchange.
They admitted their part in systematic illegal export of foreign exchange from the country over the past several years.
In proceedings under sections 111 to 114 and 118 of the Act the Addl.
Collector of Customs imposed a penalty of Ks.3 lacs on each of them.
They preferred appeals to the Appellate Tribunal under section 129A. In an application made under section 129E the Tribunal reduced the amount of penalty to be deposited to Rs. 1 lac for each of them.
The appellants sought further reduction.
Their case was that they had not gone out of the country and had no assets in India.
Their passports were impounded at the time of arrest.
Their visas had lapsed and could not be renewed.
They had no money and that in a situation of this type the condition for deposit of penalty was bad as it whittled down the appellants ' right of appeal.
The Tribunal after considering the relevant factors declined to reduce the penalty further and dismissed the appeal for non compliance with the provisions of section 129E. Dismissing the appeals under section 130E(b) of the .
HELD: Right to appeal is neither an absolute right nor an ingredient of natural justice the principles of which PG NO 434 PG NO 435 must be followed in all judicial and quasi judicial adjudications.
The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant.
[439A B] 2.
It is not the law that adjudication by itself following the rules of natural justice would be violative of any right, constitutional or statutory, without any right of appeal, as such.
If a statute gives a right to appeal upon certain conditions, it is upon fulfilment of those conditions that the right becomes vested and exercisable to the appellant.
[440C] 3.
The purpose of section 129E of the is to act in terrorem to make the people comply with the provisions of law.
The right of appeal provided therein is a conditional one.
The petitioner could obtain stay of realisation of tax levied or penalty imposed in an appeal subject to the limitations contemplated therein.
Although the section does not expressly provide for rejection of the appeal for non deposit of duty or penalty yet it makes it obligatory on the appellant to deposit the same pending the appeal? failing which the Appellate Tribunal is fully competent to reject the appeal.
The proviso thereto gives a discretion to the authority in cases of undue hardships to condone the obligation to deposit or reduce.
It is a discretion vested in an obligation to act judicially and properly.
[440E, 439F, 437G, 440C] In the instant case, the order of the Tribunal was passed honestly, bona fide and having regafd to the plea of `undue hardship ' as canvassed by the appellants.
All the relevant factors, namely, the probability of the prima facie case of the appellants and the conduct of the parties were taken into consideration.
The Tribunal noted the several abortive and defective attempts made to get extension of time to deposit the security.
Firstly, the prayer was to accept Rs.35,000 and secondly to accept Rs. 60,000 in two months .
It also noted the fact that the appeals were filed two years ago.
It could not therefore, be said that there was any improper exercise of jurisdiction or misdirection by the Appellate Authority.
[439H,440A,D,438C] Navin Chandra Chhotelal vs Central Board of Excise & Customs & Ors.
, ; , referred to.
Hoosein Kasam Dada (India) Ltd. vs The State of Madhya Pradesh & Ors., ; and Collector of Customs & Excise, Cochin & Ors.
vs A.S. Bava, , distinguished.
PG NO 436
|
ON: Criminal Appeal No. 60 of 1958.
Appeal from the judgment and order dated the, 19th February 1958, of the Jammu and Kashmir High Court, in Writ Petition No. 53 of 1957.
682 R. V. section Mani, for the appellants.
Jaswant Singh, Advocate General for the State of Jammu and Kashmir, G. section Pathak and T. M. Sen for the respondent.
September 10.
The Judgment of the Court was delivered by WANCHOO J.
This appeal, on a certificate granted under article 132 of the Constitution of India (hereinafter called the Constitution) by the High Court of Jammu and Kashmir, raises the constitutionality of the Enemy Agents Ordinance), No. VIII of section 2005 hereinafter called the Ordinance), promulgated by His Highness under section 5 of the Jammu and Kashmir Constitution Act, section 1996, (hereinafter called the Constitution Act).
The appellants also made an application under article 132 (3) of the Constitution to this Court for permission to urge other grounds taken by them in the High Court besides those relating to the interpretation of the Constitution.
We intimated at the outset of the arguments that this application was being allowed and learned counsel for the appellants was permitted to make his submissions on all points raised in the High Court.
The appellants are being prosecuted before a Special Court constituted under the Ordinance for offences under section 3 of the Ordinance, sections 3, 4 and 5 of the Explosive Substances Act, (VI of 1908), section 120 B of the Penal Code and section 29 of the Public Security Act read with rr. 28 and 32 of the Rules thereunder.
The incidents out of which this prosecution arose took place on June 27 and 28, 1957.
The circumstances in which the Ordinance came to be passed were these: Outside raiders began attacking Kashmir on October 22, 1947.
The State acceded to India on October 26, 1947.
It appears that the Enemy Agents Ordinance, No. XIX of section 2004 was enacted soon after in January 1948.
There was " cease fire " on January 1, 1949 and the raids came to an end.
This was followed by the present Ordinance which became law an January 24, 1949.
The preamble to the Ordin ance says that an emergency had arisen as a result of 683 wanton attacks by outside raiders and enemies of the State which made it necessary to provide for the trial and punishment of enemy agents and persons committing certain offences with intent to aid the enemy and as it was necessary to amend Ordinance XIX of section 2004, therefore, the Ordinance was passed consolidating the law and repealing the earlier Ordinance.
The main contentions of the appellants in the High Court were that the Ordinance was unconstitutional and void by reason of the violation of article 14 of the Constitution and that His Highness had no legislative competence to enact it and that in any case it came to an end when section 5 of the Constitution Act was repealed in 1951.
The High Court was of the view that there was a reasonable classification and that the classification was founded on an intelligible differentia which distinguished persons or things that were grouped together from those left out of the group and the differentia had a rational relation with the object sought to be achieved by the Ordinance.
It therefore held that the Ordinance was not hit by article 14.
It was further of the view that His Highness had legislative competence to promulgate the Ordinance when he did so and that when certain subjects were made over to the Government of India by the Instrument of Accession, the State retained its powers to legislate even on these subjects so long as the State law was not repugnant to any law made by the Central Legislature, thus holding that there was concurrent power in the State to legislate even on the subjects transferred to the Government of India.
Finally., the High Court held that the repeal of section 5 of the Constitution Act did not result in the Ordinance coming to an end, as section 6 of the Jammu and Kashmir General Clauses Act saved it.
It, therefore, dismissed the writ petition filed by the appellants.
The main contentions of the appellants before us are these : (1)The Ordinance is unconstitutional as it violates article 14 of the Constitution.
(2)There was no legislative competence in His Highness to issue the Ordinance under section 5 of the 684 Constitution Act, as His Highness had executed the Instrument of Accession on October 26, 1947 surrendering his powers regarding Defence, Communications and External Affairs to the Government of India and the Ordinance came under the head Defence ".
(3)Section 5 of the Constitution Act was repealed by an amending Act, No. XVII of section 2005, passed on November 17, 1951, and therefore the Ordinance also came to an end on the day section 5 was repealed.
(4)The Ordinance has in any case lapsed as the conditions under which it was enacted had become obsolete and did not exist any more.
(5)The Ordinance was void as it was inconsistent with article 352 of the Constitution and the Articles following.
(1) The Ordinance defines " enemy " and " enemy agent in section 2.
Section 3 provides that whoever is an enemy agent or, with intent to aid the enemy, does or attempts or conspires with any other person to do any act which is designed or likely to give assistance to the military or air operations of the enemy or to impede the military or air operations of Indian forces or His Highness ' forces or the forces of any Indian State or to endanger life or is guilty of incendiarism shall be liable to various punishments.
Section 4 provides that any offence punishable under section 3 shall be triable under this Ordinance and that where any other offence is committed along with an offence under section 3 which may be jointly tried under the Code of Criminal Procedure, a special Judge trying the offence under section 3 shall also try the other offence in accordance with the procedure laid down by the Ordinance.
Section 5 provides for appointment and jurisdiction of Special Judges.
Section 6 gives power to the government of the State to transfer proceedings from one Special Judge to another and provides for the procedure to be followed by the Special Judge to whom a case is transferred.
Section 7 lays down that the procedure for trial of warrant cases shall be followed by Special 685 Judges and no commitment proceedings would be necessary.
This action% also gives powers to Special Judges in the matter of recording evidence, summoning witnesses and adjournments and the Special Judge is deemed to be a Court of Session.
Section 8 provides for sentences to be passed by the Special Judge.
Section 9 provides for power of review by a Judge of the High Court, designated by the Government and the decision of such Judge is made final.
Section 10 gives power to the Special Judge and the Reviewing Judge to hear proceedings in camera if it is expedient in the interest of public safety or the defence of the State so to do.
Section 11 days down that an accused person triable under the Ordinance may be defended by a ' pleader if the Special Judge or the Reviewing Judge grants permission in this behalf and also gives power to the Special Judge or the Reviewing Judge to appoint a pleader for an accused who has not engaged a pleader himself.
Section 12 provides for a special rule of evidence empowering the Special Judge to admit certain statements recorded by a magistrate, when the person who made them is dead or cannot be found or is incapable of giving evidence.
Section 13 provides for powers to deal with a situation arising out of intransigent conduct of accused persons during the course of trial.
Section 14 takes away the power of all courts to interfere with the proceedings or orders of the Special Judge or to transfer any case pending before him or to make any order under section 491 of the Code of Criminal Procedure.
Section 15 prohibits the giving of copies of records of any case before a Special Judge to any one except to an accused or his pleader and makes it punishable for such accused or pleader to show the copy to any other person or to divulge its contents to anybody except in the course of proceedings for the purpose of which it was obtained.
It further provides for the return of the copies within ten days after the conclusion of the proceedings before the Special Judge.
Section 16 provides for the application of the Code of Criminal Procedure or any other law for the time being in force to proceedings under the Ordinance in so far as they are not inconsistent with its 87 686 provisions.
Section 17 makes disclosure of information prohibited under section 15 punishable.
Section 18 gives power to the Government to make rules necessary to carry into effect the purposes of the Ordinance.
Section 19.
repeals the Enemy Agents Ordinance, XlX of section 2004, but provides that all rules made, orders issued, prosecution and action taken and punishment awarded under the repealed Ordinance shall be deemed to have been made, issued, taken and awarded under the Ordinance.
It will be clear from this analysis of the provisions of the Ordinance that the procedure under the Ordinance is in material respects different from the ordinary procedure of Criminal Courts dealing with offences.
The contention of the appellants is that this amounts to discrimination and therefore the Ordinance is void and unconstitutional as it violates article 14 of the Constitution.
The provisions of article 14 of the Constitution have come up for discussion before this Court in a number of cases.
It is now well established that " while article 14 forbids class legislation, it does not forbid reasonable classification for the purposes of legislation.
In order, however, to pass the test of permissible classification two conditions must be fulfilled, namely (i) that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and, (ii) that differentia must have a rational relation to the object sought to be achieved by the statute in question.
The classification may be founded on different bases, namely, geographical, or according to objects or occupations or the like.
What is necessary is that there must be a nexus between the basis of classification and the object of the Act under consider ation.
It is also well established by the decisions of this Court that article 14 condemns discrimination not only by a substantive law but also by a law of procedure." (see Sri Ram Krishna Dalmia vs Shri Justice section R. Tendolkar (1)).
We have, therefore, to see whether there is reasonable classification for the purposes of the (1) ; 687 Ordinance.
Now the Ordinance was passed in January 1949 soon after the cease fire.
But though the attack by the outside raiders and enemies of the State had come to an end it was felt that conditions were such that the emergency continued and it was necessary to provide for trial and punishment of enemy agents and persons committing certain offences with intent to aid the enemy by a special procedure which was enacted in the Ordinance.
With that end in view, an "enemy" was defined to mean and include "any person directly or indirectly, participating or assisting in the campaign recently undertaken by raiders from outside in sub verting the Government established by law in the State." 'An " enemy agent " was defined as meaning " a person, not operating as a member of enemy armed force, who is employed by, or works for or acts on instructions received from the enemy.
" It is clear, therefore, that " enemy " and " enemy agent " are a clearly defined class of persons and would give rise to a reasonable classification for the purpose of the Ordinance.
Section 3 provides for punishment of a person who is an enemy agent or who does certain things with intent to aid the enemy.
There can be no doubt in the circumstances existing in the State then and now that the classification is reasonable and is founded on an intelligible differentia which distinguished persons brought under the Ordinance from others.
There is also no doubt that the differentia had a rational relation to the object sought to be achieved by the Ordinance.
There had recently been a campaign to subvert the government established by law in the State and though the actual raids were over, the danger of subversion of the government was not over and the threat from those who intended to aid the enemy continued.
In these circumstances the Ordinance was enacted and provided a special procedure for the trial of enemy agents or those who did certain things with intent to aid the enemy, the object of such persons being to subvert the government established bylaw in the State.
If it is said that the Ordinance does not purport to make any classification of persons at all but only creates an offence and 688 provides a stringent procedure for the punishment of that offence, then there is no discrimination at all, for anybody who commits that offence is subjected to the drastic procedure.
It has also to be remembered that in order to repel the charge of discrimination the permissible classification need not be of persons only.
Certain offences may be so heinous or serious that they may in certain circumstances be treated as a class and tried in a different way.
The offence created by section 3 of the Ordinance is not found as such in the Penal Code but is a new offence of an aggravated kind which may in the circumstances prevailing in the State mentioned above be treated as different from the ordinary offences; and may well be dealt with by a drastic procedure without encountering the charge of violation of the. equal protection clause.
We are, therefore, of opinion that on the principles laid down by this Court in the large number of cases summarised in the Dalmia case (1), the Ordinance cannot be said to be discriminatory and, therefore, violative of article 14 of the Constitution.
The contention under this head on the constitutionality of the Ordinance therefore must be rejected.
The Ordinance purports to have been promulgated under section 5 of the Constitution Act, which declared that all powers, legislative, executive and judicial, in relation to the State and its government, were always inherent in and possessed and retained by His Highness and nothing in the Act was to affect or deemed to have affected the right and prerogative of His Highness to make laws, and issue proclamations, orders and ordinances by virtue of his inherent authority.
It is, however, submitted that on account of the accession of the State to India on October 26, 1947, certain matters were surrendered to the Government of India and therefore His Highness had no power left to legislate on matters so surrendered.
These matters are to be found in the Schedule to the Instrument of Accession (2).
This Schedule consists of 20 items, grouped under (1) [19591 S.C.R. 279.
(2) Appendix VII of the White Paper on Indian States, p. 165.
689 four heads: (A) Defence, (B) External Affairs, (C) Communications and (D) Ancillary.
We are not here concerned with heads (B) and (C) and need only consider the items under (A) and (D).
There are four items under the head " Defence ", namely 1.The naval, military and air forces of the Dominion and any other armed force raised or maintained by the Dominion, any armed forces, including forces, raised or maintained by an acceding State, which are attached to, or operating with, any of the armed forces of the Dominion.
2.Naval, military and air force works, administration of cantonment areas.
Arms, fire arms, ammunition.
Explosives.
And there are four items under the head " Ancillary namely 1.Elections to the Dominion Legislature, subject to the provisions of the Act and of any Order made thereunder.
Offences against laws with respect to any of the aforesaid matters.
3.Inquiries and statistics for the purposes of any of the aforesaid matters.
4.Jurisdiction and powers of all courts with respect to any of the aforesaid matters, but except with the consent of the Ruler of the acceding State, not so as to confer any jurisdiction or powers upon any courts other than courts ordinarily exercising jurisdiction in or in relation to that State.
The contention on behalf of the appellants is that the provisions of the Ordinance were in particular covered by item (1) under the head " Defence ".
It is also urged that the High Court was not correct in holding that there was concurrent jurisdiction in the State as well as the Central Legislature even with respect to items in the Schedule and that on a correct interpretation of the Instrument of Accession, the Central Legislature alone had power to legislate with respect to the matters in the Schedule.
We do not think it necessary to decide in this case whether the State had concurrent 690 powers to legislate on matters covered by the Schedule and shall proceed on the assumption that the Central Legislature alone had the power to legislate on these matters.
The question then which immediately arises is whether the Ordinance is covered by item (1) under the head " Defence The other items either under the head " Defence or under the head " Ancillary are immaterial for this purpose.
If the Ordinance is not covered by item (1) under the head" Defence ", it would then be within the competence of the State Legislature or of His Highness to promulgate it, for all other matters besides those covered by the twenty items in the Schedule in any case remained with the State.
Item (1) under the head " Defence " deals with the naval, military and air forces of the Dominion and any other armed forces raised or maintained by the Dominion and includes any armed forces including those raised or maintained by any acceding State, which are attached to, or operating with any armed forces of the Dominion.
Howsoever wide an interpret ation is given to this entry it will be seen that it deals only with the armed forces whether on land or sea or in the air and the raising or maintenance of such forces and their operations.
The Ordinance has, in our opinion, nothing to do with the matters covered by this entry.
It is true that it defines " enemy " and " enemy agent " and creates offences with reference to certain acts done with intent to aid the enemy including giving of assistance to the military or air operations of the enemy or impeding the military or air operations of Indian forces or His Highness ' forces or the forces of any Indian State.
But it is only indirectly concerned with the operations of the armed forces and its main purpose is to deal with persons who with intent to aid the enemy commit certain acts including assistance to the military or air operations of the enemy or impediment to the military or air operations of the Indian armed forces.
Besides this reference to military or air operations, the rest of the provisions of the Act has nothing to do with the armed forces and if one looks at the pith and substance of the Ordinance it will be found that it deals with persons who are concerned with the 691 subversion of the government established by law by becoming enemy agents or doing certain acts with intent to aid the enemy.
In pith and substance therefore, the Ordinance deals with public order and criminal law and procedure; the mere fact that there is an indirect impact on armed forces in section 3 of the Ordinance will not make it in pith and substance a law covered by item (1) under the head "Defence" in the Schedule.
We are therefore of opinion that there is no force in the contention that the Ordinance was beyond the legislative competence of His Highness because certain matters were ceded in the Instrument of Accession dated October 26, 1947, to the Government of India.
This contention must also fail.
The contention is that as section 5 of the Constitution Act was repealed on November 17, 1951, the Ordinance which is stated to have been passed under that section also came to an end.
It is enough to say that there is no force in this argument.
Clause (b) of section 6 of the Jammu and Kashmir General Clauses Act, (J.K.XX of section 1977), clearly saves the Ordinance.
It is as follows: " Where this Act, or any Act made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not . (b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder;" It will be clear that the promulgation of the Ordinance was a "thing duly done" under section 5 of the Constitution Act and the repeal of section 5 of the Constitution Act would thus leave the Ordinance which was promulgated thereunder entirely unaffected.
The repeal of section 5 can only mean the withdrawal of that legislative power on and from the date of repeal.
Anything done while the power subsisted cannot be affected by such repeal.
A law enacted under a Constitution Act does not lose its vitality and would continue even though there may be repeal of parts of the Constitution Act under which it was enacted as long as the law 692 is not inconsistent with the Constitution Act as it emerges after the amendment and repeal of certain provisions thereof.
It derives its binding force from the fact that it was within the competence of the legislature when it was passed and being permanent would continue till amended or repealed under the amended Constitution Act.
We are, therefore, of opinion that the Ordinance did not come to an end on the repeal of section 5 of the Constitution Act and remained a valid piece of legislation in view of section 6 (b) of the Jammu and Kashmir General Clauses Act.
It is urged that the conditions in the State have changed considerably since 1949 and therefore the Ordinance must be held to have lapsed.
It is enough to say that there is nothing in this contention, even assuming that conditions in the State are not now exactly the same as they were in 1949.
The Ordinance was a permanent piece of legislation.
It is true that it came into existence because of an emergency, but that was only the occasion for passing the Ordinance.
The Ordinance, however, tries to reach an evil of deeper roots, an evil which cannot be said to have ceased to exist, viz., subversion of the government established by law in the State in conjunction with the enemies of the State.
Being a permanent law, it can only be brought to an end by means of repeal by competent authority.
It is not the case of the appellants that the Ordinance has been repealed by any competent authority.
It must therefore be held to be in force till such repeal even if the conditions now are assumed not to be exactly the same as in 1949.
This contention therefore also fails.
It is urged that the Ordinance was unconstitutional because it is inconsistent with article 352 and the subsequent Articles.
We must say that article 352 and the subsequent Articles in Part XVIII of the Constitution relating to Emergency Provisions have nothing whatsoever to do with the validity or otherwise of the Ordinance.
We have been unable to understand how there can be any inconsistency between the Ordinance 693 and the provisions contained in Part XVIII of the Constitution.
This contention also fails.
It now remains to notice three points that were urged during the course of arguments on behalf of the appellants, namely, (i) section 4 (1) of the Ordinance is hit by article 20 (1) of the Constitution, (ii) section 11 (1) is hit by article 22 (1) of the Constitution, and (iii) the Special Judge has no jurisdiction to try an offence under the Explosive Substances Act.
Apart from the fact that these points not having been raised by the appellants in their writ petition or urged before the High Court, we should be reluctant to permit them to raise these points for the first time in this Court, we may, in passing, point out that the offences for which the appellants are being prosecuted are said to have taken place in June 1957 and that they have been allowed to engage lawyers of their choice.
They can therefore have no grievance so far as the first two points are concerned and we leave them to be decided in a case where there is grievance.
There is no substance in the third point.
There is no force therefore in this appeal and it is hereby dismissed.
Appeal dismissed.
| On May 91 1935, one V obtained a decree against R and later assigned the same in favour of his mother M. M made an application for an order recognizing her as the assignee and for 617 execution which was disposed of on September 27, 1937.
In 1939, V was adjudicated an insolvent on the ground that the assignment was a fraudulent preference.
Thereafter M made a second application for execution which was disposed of on September 30, 1940.
The Official Receiver who had been appointed receiver in insolvency applied under section 54 of the Provincial Insolvency Act and on April, 9, 1943 obtained an order annulling the assignment.
On September 27, 1943, the Receiver applied for execution of the decree relying upon the applications made by M to save limitation under article 182, Limitation Act.
The judgment debtor objected that the execution application was time barred because, in view of the orders in the insolvency proceedings, M was not entitled to the decree on the dates she applied for execution and her applications were incompetent and could not save limitation.
The judgment debtor contended that (i) the order of annulment related back to the date of assignment and consequently M had never been entitled to the decree, (ii) the order of adjudication had the effect itself of annulling the assignment and vesting the decree in the receiver from the date of presentation of the application for adjudication, and (iii) the receiver was not entitled to take advantage of the applications made by M as he was not claiming through her but against her.
Held, (per curiam) that the application for execution made by the receiver was within time as the previous applications made by M were competent and saved the limitation.
The assignment in favour of M stood till it was annulled and till then M had the right to execute the decree.
Even if the annulment related back to the date of assignment, it did not make illegal the exercise of the rights under the assignment made prior to the annulment.
Sub sections (2) and (7) Of section 28 of the Provincial Insolvency Act which provided that upon adjudication all the assets of the insolvent vested in the receiver with effect from the date of the application for adjudication, could not have the effect of vesting the decree in the receiver.
The order of adjudication, though it was based on the ground that the assignment was a fraudulent preference amounting to an act of insolvency, did not itself annul the assignment and the assignment stood till it was annulled by an order under section 54.
As such M was competent to execute the decree and the applications made by her were in accordance with law and could be relied upon by the receiver to save the limitation for the application made by him.
The fact that the receiver did not claim through M did not disentitle him from taking advantage of the applications made by M. Article 182, Limitation Act, merely required the application for execution of a decree to be made within three years of the final order on a previous application made in accordance with law for the execution of the same decree.
Mahomed Siddique Yousuf vs Official Assignee of Calcutta, (1943) L.R. 70 I.A. 93; Ex Parte Learoyd, (1878) 10 Ch. D. 3, distinguished.
618 Subba Rao J.
The order of adjudication did not by its own force divest the title of M and vest it in the Official Receiver.
An assignment made before the filing of the application for adjudication was binding on the Official Receiver until it was annulled under sections 53, 54 or 54 A of the Act.
Mahomed Siddique Yousuf vs Official Assignee of Calcutta, (1943) L.R. 70 I.A. 93 and Ex parte Learoyd, (1878) 10 Ch.
D. 3, distinguished.
Official Receiver, Guntur vs Narra Gopala Krishnayya I.L.R. and D. G. Sahasrabudhe vs Kala Chand Deochand (i) A transfer by a debtor before insolvency with a view to give fraudulent preference conveyed a valid title to the transferee; (2) such a transfer was voidable against the Official Receiver in circumstances mentioned in section 54 of the Act; (3) when the transfer was annulled the property vested in the Official Receiver who could administer it in the interest of the creditors ; and (4) even after annulment the transfer stood as between the transferor and the transferee and the transferee was entitled to the balance of the sale proceeds remaining after satisfying the creditors.
Official Receiver, Coimbatore vs Palaniswami Chetti, Mad. 75o, Amir Hasan vs Saiyid Hasan, All. 900, and Rukhmanbai vs Govindram I.L.R. , relied on.
|
No. 71 of 1958.
23 Writ Petition under article 32 of the Constitution of India for the enforcement of Fundamental Rights.
section K. Venkataranga Ayengar and section J. section Fernandez, for the petitioner.
B. R. L. Iyengar, for respondent No. 1.
R. Gopalakrishnan and T. M. Sen, for the respondent No. 2. 1961.
April 17.
The Judgment of the Court was delivered by SARKAR, J.
This petition under article 32 of the Constitution raises a question of the constitutional validity of section 3(3)(a) of the Mysore House Rent and Accommodation Control Act, 1951 (Mysore XXX of 1951).
Shortly put, that provision enables an authority set up by the Act to select any Government, local authority, public institution, officer of a government, local authority or public institution or any other person as the tenant of a vacant house.
Under the Act the owner is bound to let the premises to the tenant so selected.
The petitioner, for whom a tenant had been selected under this provision, challenges its validity on the ground that it puts an unreasonable restriction on his fundamental right to property under article 19(1)(f) of the Constitution and is outside the protection of el.
(5) of that article.
The petitioner had a building in respect of which he had made some sort of arrangement with one Misri Lal for the making of certain alterations in it and for letting it thereafter to him for the purpose of a boarding house.
He later gave a notice as required by section 3(2)(a) of the Act to respondent No. 2, the Controller, who had the authority under section 3(3)(a) to select a tenant, that the house had become vacant.
Thereupon respondent No. 2 considered applications for the tenancy of the house of which there were two.
One was from Misri Lal mentioned above and the other was from respondent No. 1, who was a private indivi dual carrying on business of a boarding house keeper.
Respondent No. 2 selected respondent No. 1 as the 24 person to whom the house should be let by the petitioner.
He fixed the rent at Rs. 350 per month which was the rent demanded by the petitioner.
There does not appear to have been any specification of the terms of the tenancy and no question as to such terms arises in this case.
The petitioner was dissatisfied with this decision as he wanted that the premises should be let to Misri Lal, and appealed to the District Judge under section 15 of the Act.
The District Judge affirmed the decision of respondent No. 2.
The petitioner then went up in revision to the High Court under section 17 of the Act but the High Court refused to interfere.
Before the District Judge and the High Court the petitioner bad contended that Misri Lal was a more suitable tenant than respondent No. 1.
But such contention was rejected.
Having failed in the High Court he has now challenged the Act itself by the present petition.
The, only question is whether section 3(3)(a) imposes an unreasonable 'restriction on the petitioner 's right to property.
The validity of no other part of the Act has been challenged in this petition.
The provision challenged is in these words: section 3(3)(a).
On receipt of the intimation under sub section (2), the Controller shall, taking into consideration any representation made by the landlord and after making such inquiry as he considers necessary, select the State Government or the Central Government or the Government of any other State in India, or any local authority or any educational or other public institution or any officer of any Government, authority or institution, aforesaid, or any other person (hereinafter referred to as the allotted), to be inducted as a tenant in the house and direct the landlord by a written order (hereinafter referred to as the allotment order ') to let the house to such allotted at such rent as shall be specified in the allotment order and to deliver possession of the house to the allotted on such date as shall be specified in the said order: Provided that before making an allotment order in favour of any authority or person, other than 25 the State Government, the Central Government or the Government of any State in India or a local authority, the Controller shall consider any representation of the landlord about the suitability of the proposed tenant and shall not allot the house to any person who, in the opinion of the Controller, is an unsuitable tenant: The petitioner does not contend that the provision in so far as it allows the Controller to select as a tenant a Government, local authority, public institution or any of the officers mentioned, imposes any unreasonable restriction on the right to property.
As we understood learned counsel for the petitioner, it was conceded that selection of such tenant would constitute a public purpose and the restriction thereby imposed, would be reasonable.
It would therefore appear that it is not contended that the selection of a tenant by the Controller would by itself amount to imposing an unreasonable restriction on the right to property.
We do not think that such a contention, if made, would have been well founded.
It is clear that the Act deals with houses which are vacant.
It does not deprive an owner of his right to live in his own house.
It provides for vacant houses not needed for the use of the owner being made available for the use of others who are without accommodation.
The Act was necessary because of the scarcity of housing.
It was, therefore, passed to regulate the letting of houses and to control rent and also to prevent unreasonable eviction: see the preamble to the Act.
Does the Act then by leaving it to the Controller to select any person other than a Government, local authority, public institution or an officer of any of these as the tenant, impose an unreasonable restriction on the right to property? We do not think it does so.
If the Controller could validly choose a Government, a local authority or any institution which as we have said is not disputed it can make no difference that instead of such a tenant the Controller chooses a private individual as a tenant.
The idea of this provision is that people in need should be 4 26 found accommodation.
Persons in need of accommodation are the public and therefore serving their need, would be serving a public purpose.
An individual would be a member of the public and as the accommodation available can be let out to one, a restriction caused by selection of a member of the public would be one in the interest of the general public.
Such a restriction is furthermore not unreasonable.
It is enforced only when the owner does not want the house for his own use.
It can then make no reasonable difference to the owner if a private individual is chosen as the tenant.
The Act further makes ample provision to see that the tenant chosen is suitable.
By providing the appeal to the District Judge and a right to move the High Court in revision, full safeguard has been given to secure that an unsuitable person is not foisted on an owner as his tenant.
It is true that the Act does not define who would be a suitable person but we do not think that a definition was required.
Any man of experience would know who is a suitable tenant.
Further., the owner has been given the right to have the suitability of the tenant chosen examined by the highest court.
In the explanation to section 3(3)(a) certain persons have been declared to be unsuitable tenants.
We are unable to accept the contention of the learned counsel for the petitioner that the result of this explanation is that all others are suitable.
The explanation only shows that the persons coming within the description are unsuitable.
As to whether others would be suitable or not would have to be decided on the merits of each.
Thedecision as to the suitability of a tenant is not to be controlled by the explanation at all except to the extent of making certain persons unsuitable as tenants and taking it out of the discretion of the authority concerned to go into the question of their suitability If the Act had left it to the house owner to choose a tenant, then there was every likelihood of its purpose being defeated.
It would be easy for the owner to make secret arrangements for his own gain in creating a tenancy.
The tenant would obviously be 27 in a disadvantageous situation in view of the scarcity of housing, in the matter of bargaining for the house.
He could easily be made to yield to the terms imposed by the owner who has a much superior bargaining situation.
If scope was left for this kind of thing to happen, then the entire object of the Act would have been defeated.
The Act intends to avoid this situation and hence the provision for a power in the Controller to select a tenant for the owner.
Neither do we think that any objection to this pro.
vision can be based on article 14 of the Constitution on the ground that it provided no guidance as to how a tenant is to be chosen and so enabled the authority concerned to make an arbitrary choice.
This contention is not in any event open to the petitioner, an owner, for the provision does not enable any discrimination being made between one owner and another.
If a tenant had challenged the validity of the provision relying on article 14, which is not the case here, we do not think that challenge would have been of substance.
There is, in our view, ample guidance given to the authority as to how to choose a tenant.
The tenant has first to be suitable.
All persons are entitled to apply for being selected as tenants and so all have equal chance to get the house.
The choice will have to be made from amongst the applicants and that choice will depend on an examination of the comparative merits of their claims.
Further, the owner has a right to have his views in the matter being given due consideration by the authority selecting the tenant.
Again, the ultimate decision would be a judicial decision, and if required, of the highest tribunal in the State.
We, therefore, think that the challenge to the Act is ill founded.
In the result we dismiss this petition.
The petitioner will pay the costs of the appearing respondent.
Petition dismissed.
| A Muslim died leaving some property and several heirs.
Some of the heirs became evacuees and their 4/7th share in the property was declared under section 7 of the , to be evacuee property.
There after, proceedings were taken for the separation of the interest of the evacuees, but as none of the claimants appeared, the Competent Officer passed an order under section II of the , vesting the entire property in the Custodian.
Held, that the order vesting the entire property in the Cus todian was illegal.
The share of the evacuees had been determined as 4/ 7ths and the Competent Officer was only required to separate it.
Section II could not vest in the Custodian any property which was not evacuee property.
This section deals only with cases where the whole property has been declared to be evacuee property and the claim is as mortgagor or mortgagee or to an undivided share in the property.
In such cases in the absence of a claim having been filed or having been filed and found unsustainable, section
II vests the whole property in the Custodian.
Ebrahim Aboobaker vs Tek Chand Dolwani, ; , referred to.
|
Appeal No. 810 of 1967.
Appeal by special leave from the judgment and order dated August 3, 1966 of the Kerala High Court in Income tax Referred Case No. 49 of 1965.
K. Javaram, for the appellant.
S.T. Desai, R.N. Sachthey and B.D. Sharma for the respondent.
Sardar Bahadur Saharya. ,for the Intervener.
The Judgment of the Court was delivered by Shah, J.
In computing the income of the appellant 's father to tax for the assessment year 1959 60 the Income tax officer included Rs. 75,000 received under an agreement for cutting and removing trees from 500 acres of Mangayam Katchithode forest.
The Appellate Assistant Commissioner after calling ,for a report on certain facts confirmed the order.
But the Tribunal held that the receipt was of a capital nature and deleted it from the taxable income.
At the instance of the Commissioner of Income tax, the Tribunal referred the following question to the High Court of Kerala: "Whether on the ,facts and in the circumstances of the case, the Income tax Appellate Tribunal was correct in holding that Rs. 75,000/ being income from felling of trees from forests is not subject to income tax ?" The High Court answered the question in the negative.
We are of the view that the facts found by the Tribunal are not sufficient to enable us to record an answer to the question referred.
The Income tax officer held that the income was taxable because 500 acres of forest land was leased for "clear felling" by the father of the appellant and this fetched an income of Rs. 75,000/ .
What the expression "clear falling" meant was not investigated by the Income tax officer.
The Appellate Assistant Commissioner in dealing with the contention raised by the appellant that the receipt was of the nature of a Capital, observed: "The claim is based on the reasoning that the clear felling of ' forest trees amounts to sterilisation of a capital asset.
In other words clear felling is said to involve total destruction of the 549 forest.
It is admitted that the trees are of spontaneous growth and it has not been established that removal of trees has in any way affected the value of the property.
As a matter of fact, _clear felling is resorted to make the land more productive and more valuable.
At any rate the claim has not been substantiated beyond doubt and hence there is no scope for any relief.
" The Tribunal relying upon the observation of the Income tax officer "that the trees were not cut together with the roots but only 6" above the ground and that they were later on destroyed" held that there was "nothing to show that there was a diminution of capital assets".
On the other hand, the Income tax officer had given a clear finding that this was a case of "clear felling".
After making 'an extensive quotation from the Judgment of the High Court of Bombay in Commissioner of Income tax vs
N. Patwardhan(1), the Tribunal stated that the observations applied to the facts in the case before them, and on that account they upheld the claim of the 'appellant.
The High Court observed that "it was agreed that the Mangayam Katchithode forest was within the ambit of the Madras Preservation of Private Forests Act, 1949, and the statutory rules on the subject and that the expression "clear feeling" is an expression with a definite and specific meaning as far as such forests are concerned".
They then proceeded to quote r. 7 framed under the Madras Preservation of Private Forests Act, 1949, and after setting out conditions (b) & (c) observed that "the felling of the trees under the "clear felling" method will not permit a removal of the trees along with their roots.
On the other hand, the clear indications were that the felling of the trees under the clear indications were that the felling of the trees under the regeneration and future growth of the trees concerned.
In other words, what is contemplated by the clear felling method is not sterilisation of an asset but the removal of a growth ,above a particular height, leaving intact the roots and the stumps in such a manner as to ensure regeneration, future growth, further felling and subsequent income.
" On that view the Court held that the receipt of Rs. 75,000/ was a revenue receipt and not a capital receipt as held by the Appellate Tribunal.
The departmental authorities.
the Tribunal and the High Court have expressed different views on the import of the expression "clear ,felling" and about the true effect of the agreement.
The Income tax officer taxed the amount of Rs. 75,000/ on the footing that the 500 acres of forest lands were leased for clear felling.
The Appellate Assistant Commissioner held that the trees being of spontaneous growth and the falling of the trees not having (1) 550 affected the value of the property as a result of the clearance, the lands became more productive and the receipt was a revenue income.
The Tribunal held that the case being one of "clear felling" and the trees having been cut 6" above the ground and "that they were later on destroyed" it was a case of clear felling 'and the receipt was of capital nature.
The High Court was of the view that the "clear felling" of forest lands meant cutting trees and not removal of the roots so that there would be regeneration, future growth of the roots and the stumps and on that account the receipt was of revenue nature.
It appears that before the Income tax Officer the agreement dated Sept. 11, 1957 was not produced.
After the Appellate Assistant Commissioner remanded the case to the Income tax Officer the latter submitted the "remand report" and at that time the agreement was produce.
The Tribunal in support of its conclusion referred to the preamble of the document and the conditions thereof.
The learned Judges of the High Court observed that they did not place any reliance on the extracts in the lease given in paragraph 2 of the statement of the case for coming to the conclusion they had reached.
Why the High Court thought it fit to discard the recitals, is not clear from the record.
The facts found being not clear, it is difficult to record any conclusion whether the receipt was of a revenue nature or of a capital nature.
We therefore call upon the Tribunal to submit to this Court a supplementary statement setting out the terms of the agreement between the father of the appellant relating to the rights conveyed to, the lessees in the forest lands and especially about the import of the term relating to "clear felling".
The Tribunal will submit the supplementary statement of the case only on the basis of the evidence on the record and will not take any additional evidence.
The report to be submitted within three months from the date on which the papers reach the Tribunal.
Shah, J.
By our order dated February 13, 1969, we called for a supplementary statement of the case setting out the terms of the agreement conveying the rights in the forest trees to the lessees, and the true import of the expression "clear felling".
The Income tax Appellate Tribunal has submitted a supplementary statement o,f the case.
The Tribunal has set out the relevant terms of the agreement and has also observed that the import of the expression "clear felling" is that "all trees except casuring are to be felled at 'a height not exceeding six inches from the ground, the barks being left intact on the stump and adhering to it all round the stump without being torn off or otherwise changed".
There is no suggestion that there were any casurina trees in the forest lands let out to the lessees.
It is common ground also that the trees in the forest were of spontaneous growth.
The 551 Tribunal has found that by the use of the expression "clear felling" it was stipulated that the trees are to be cut so that 6" of the trunk with the barks intact and adhering to it all round the stump is left.
This is with a view to permit regeneration of the trees.
The question whether receipts from sale of trees by an owner of the land who is not carrying on 'business in timber may be regarded as income liable to tax has given rise to.
some difference of opinion in the High Courts.
In Commissioner of Income tax, Madras vs
T. Manavedan Tirumalpad,(1) a Full Bench of the Madras High Court held that the receipts ,from sale of timber trees by the owner of unassessed forest lands in Malabar were revenue and not capital.
The Court observed that if income from the sale of coal from a coal mine or stone won from a quarry or from the sale of paddy grown on land be regarded as income, but for the special exemption granted under the Income tax Act, there is no logical reason for holding that income from sale of trees is not income liable to tax.
In re Ram Prasad(2) a Division Bench of the Allahabad High Court held that receipt from sale of timber is income liable to be taxed and is not a capital receipt.
The case arose under the Government Trading Taxation Act 3 of 1926.
In Maharaja of Kapurthala vs Commissioner of Income tax, C.P. and U.P.(3) the Oudh Chief Court held that net receipt from the sale of forest trees is income liable to income tax, eventhough the ,forest may be gradually exhausted by fellings.
The Court further observed that income from the sale of forest trees of spontaneous growth growing on land which is assessed to land revenue is not agricultural income within the meaning of section 2(1 ) (a) of the Income tax Act and is not exempt from income tax under section 4(3)(viii) of the Act.
In Raja Bahadur Kamakshya Narain Singh vs Commissioner of Income tax, Bihar and Orissa(4) a similar view was expressed by the Patna High Court.
In Fringford Estates Ltd., Calicut vs Commissioner of Income tax, Madras(b) it was held that profits realised from the sale of timber were trade profits and were liable to income tax.
In that case the assessee Company formed with the object of purchasing, clearing and improving of estates and the cultivation and sale of tea, coffee etc.
in such estates, purchased a tract of land part of which had already been cultivated with tea and the rest was a jungle capable of being cleared and made fit for plantation.
The (1) I.L.R. 54 Mad.21.
(2) I.L.R.52 All.
(3) (4).
(5) 552 Company entered into an agreement with a timber merchant for clearing a part of the forest of all trees and for sale of the trees m the market.
This was held to be a part of the business activity of the Company.
The cases on the other side of the line are to be found in Commissioner of Income tax, Bombay South vs N.T. Patwardhan(1) in which a Division Bench of the Bombay High Court held that when old trees which stood on the land of the assessee were disposed of with their roots "once and for all", the receipts were capital.
The Court observed (p. 318): "The asset of the man was the land with the wild growth of trees on it.
If the land with the trees had been sold, there could have been no doubt that the sale was a realisation of capital and it would not have been possible to argue that the transaction in so far as it involved a sale of the trees was a sale producing income and the remaining part of the transaction was a capital sale.
In the present case the land is retained by the assessee but a part of the asset is disposed of in its entirety by selling the trees with roots once and for all.
" In State of Kerala vs Karimtharuvi Tea Estate Ltd.(2) the Kerala High Court held in a case arising under the Kerala Agricultural Income tax Act, 1950, that the amount realised by sale as firewood of old and useless gravelia trees grown and maintained in tea gardens for the purpose of affording shade to tea plants is capital receipt and not revenue receipt.
The Court observed: "The gravelia trees were grown and maintained for the sole purpose of providing shade to the tea bushes in the tea estates of the assessee.
That such shade is essential for the proper cultivation of tea cannot be disputed and the trees should hence be considered to be as much a part of the capital assets of the company as the tea bushes themselves or the equipment in its ,factories.
Some of the gravelia trees became old and useless with the efflux of time and they naturally had to be cut down and sold.
The sale proceeds of such trees cannot possibly amount to a revenue receipt." In Commissioner of Income tax, Mysore V.H.B. Van Ingen(3) the Mysore High Court held that the assessee who had purchased a coffee estate of which a part had been planted with coffee plants and the rest was jungle, and had cleared the jungle (1)41 I.T.R. 313.
(2) 5 I.T.P 129.
(3) 553 for the purpose of planting coffee and had sold the trees felled, price realised by the sale of the trees was a capital and not a revenue receipt, because the trees had grown spontaneously, and the assessee had purchased the estate including the trees.
It is not necessary for the purpose of this case to enter upon a detailed analysis of the principle underlying the decisions and to resolve the conflict.
On the finding in the present case it is clear that the trees were not removed with roots.
The stumps of the trees were allowed to remain in the land so that the trees may regenerate.
If a person sells merely leaves or fruit of the trees or even branches of the trees it would be difficult (subject to the special exemption under section 4(3)(viii) of the Income tax Act, 1922) to hold that the realization is not of the nature of income.
Where the trunks are cut so that the stumps remain intact and capable of regeneration, receipts from sale of the trunks would be in the nature of income.
It is true that the tree is a part of the land.
But by selling a part of the trunk, the assessee does not necessarily realise a part of his capital.
We need not consider whether in case there is a sale of the trees with the roots so that there is no possibility of regeneration, it may be said that the realisation is in the nature of capital.
That question does not arise in the present case.
The appeal fails and is dismissed with costs.
G.C. Appeal dismissed.
| By a sale deed executed on November 24, 1944 the appellant company purchased certain land located in an area now part of West Pakistan.
After the partition of India, the company, on the basis of a registered sale deed, was allotted certain land in Kapurthala in 1950 in lieu of the land abandoned in Pakistan.
On a report made by the Managing Officer, Respondeat No. 3 on August 30, 1960 recommending cancellation of the allotment of land to the company and after hearing the company, the chief Settlement Commissioner rejected the registered sale deed and came to the conclusion that at the time of partition the company did not own any land in Pakistan nor was it in occupation of any such land.
Therefore by his order dated February 27, 1961, he set aside the permanent rights acquired by the company.
HELD: The order of the Chief Settlement Commissioner must be quashed on the ground that there is no finding of the Chief Settlement Commissioner that the company had obtained allotment of the land "by means of fraud, false representation or concealment of any material fact" within the meaning of section 24(2) of the Act.
It is true that the Chief Settlement Commissioner had recorded a finding that the company had not proved its title to any land in the area now part of Pakistan and the allotment was "undeserved".
But this is not tantamount to a finding that the allotment had been obtained by a false representation or fraud or concealment of material facts.
Such a finding is a condition precedent for faking action under section 24(2) of the Act.
The condition imposed by the section is mandatory and in the absence of any such finding the Chief Settlement Commissioner had no jurisdiction to cancel the allotment made to the company under section 24(2) of the Act.
[537 A D]
|
Appeal No. 1424 of 1966.
Appeal from the order dated February 11, 1965 of the Punjab High Court, Circuit Bench at Delhi in Civil Writ No. 3 D of 1963.
H.R. Gokhale, D.R. Thadani and A.N. Goyal, for the.
appellant.
Jagdish Swarup, Solicitor General, L.M. Singhvi and R.N. Sachthey, for the respondents.
The Judgment of the Court was delivered by Grover, J.
This is an appeal from a judgment of the Punjab High Court (Circuit Bench, Delhi) involving the question of the validity of Rule 7 read with Rule 5 and its Schedule of the Delhi Factories Rules 1950 made under section 112 of the , hereinafter called the Act.
The impugned Rules relate to the grant of a licence for a factory and renewal thereof, the fees.
being prescribed by the Schedule to.
Rule 5.
The Delhi Cloth and General Mills Co. Ltd. operates within the Delhi area a number of industrial establishments which are factories within the meaning of section 2(m) of the Act.
The company has to pay a total sum of Rs. 12,775.00 as annual licence.
fee for all its factories in Delhi, the fees being calculated according to the Horse Power and the maximum in number of workers to be employed on any day during the year as given in the Schedule.
The maximum fee that is payable is Rs. 2,000/ for a factory.
The factories can be run only after registration and under a licence granted under the Act and the Rules on payment of the prescribed fee.
The licence is renewed every year under R. 7 on payment of the same fee which is paid at the time of the granting of the licence.
Every licence granted or renewed remains in force up to December 31, of the year for which it is granted or 350 renewed.
In January 1963 the company filed a petition under articles 226 and 227 o,f the Constitution in the High Court challenging the validity of the Rules under which the licence fee for renewal of the licence for each of its factories in Delhi was being levied and collected i.e.R. 7 read with R. 5 and its, Schedule.
This petition was dismissed by a division bench on February 11, 1965.
The company then filed the present appeal by certificate.
The principal point which has been canvassed on behalf of the appellant company is that the payment made ' for renewal of the licence was and is only to endorse the licence as valid ,for the next year and the amount charged for the renewal thereof cannot and does not entail services which can reasonably be regarded to be commensurate with the amount so charged.
In other words the element of quid pro quo which distinguishes a fee from a tax is absent and lacking.
The Act, it is pointed out; contains specific provisions for rendering of benefit and service to the workmen by the owners of the factories.
The Inspectors who are .appointed under the Act to ensure that its provisions are complied with by the factory owners constitute a policing agency and it is not possible to say that the power and duties of the Inspectors when exercised and carried out amount to services rendered for the benefit of the factory owners or the workmen.
Falshaw C.J., who delivered the judgment of the division bench was of the view that the work carried out by the Inspectors under the Act of seeing that all its beneficient provisions for the health and welfare of the workers employed in the factories were fully implemented must definitely be regarded as services rendered in return for the fee levied for the annual renewal of the licence for the factory.
It was further observed on an examination of 'the affidavit which had been placed before the court that at least 60.% of the amount realised as licence fee was being utilised on running the department.
Mr. H.R. Gokhale for the appellant company has contended that the High Court failed to apply the principles which are settled by certain decisions of this Court for determining whether a fee for a licence or a renewal thereof in circumstances similar to the present case is in substance and effect a tax.
He has relied largely on Corporation of Calcutta & Another vs Liberty Cinema(1).
In that case the licence fee had been raised from Rs. 400/ to Rs. 6,000/ per year.
It was observed in the majority judgment that the provision under which the licence had to be taken out for a cinema did not refer to the rendering of any service by the Corporation of Calcutta.
It was also.
not obligatory on the Corporation to make any bye law under which (1) [1955] 2S.C.R.477.
351 services were to be rendered.
If the bye laws were not made there would be no service to render.
It was further pointed out that inspection by the authorities concerned could not be regarded as a service to the licence as it was meant only to make sure that the licensee carried out the conditions on which the licence had been granted to him.
Some of the earlier decisions were considered as also the pronouncement in H.H. Sudhundra Thirtha Swamiar vs Commissioner for Hindu Religious & Charitable Endowments, Mysore(1) and with regard to the latter case it was said that a service resulting in the control of the Math adipathi conferred special benefit on the institution which alone paid the levy.
As far back as 1954 it was laid down in Mahant Sri Jagannath Ramanui Das & Anr.
vs The State of Orissa & Another(2)that the contributions levied for the. expenses of the Commissioner and his staff who were to.
exercise effective control over the trustees of the Maths and the temples was to.
be regarded as a fee and not a tax.
Two reasons were given for this: (1) The payment was demanded only for the purpose of meeting the expenses of the Commissioner and his staff which is the machinery. set up for due administration of the affairs of the religious institution.
(2) The collections made were no.t merged in the general public revenue.
Similarly in Ratilal Panachand Gandhi vs The State of Bombay & Others(3) the contribution imposed under the Bombay Public Trusts Act was held to: be fee and not tax.
it was stated that in the first place these contributions were to be credited to the Public Trusts Administration Fund which was a special fund land were not to be merged in the general revenue.
Secondly, it was not necessary that services should be rendered only at the request of particular people and it was enough that payments were demanded for rendering services which the State considered beneficial in the public interest and which the people had to accept whether they were willing or not.
The following observations in H.H. Sudhundra Thirtha Swamiar case(1) may be referred to with advantage: "A levy in the nature of a fee does not cease to be of that character merely because there is an element of compulsion or coerciveness present in it, nor is it a postulate of a fee that it must have direct relation to the actual services rendered by the authority to individual who obtains the benefit of service.
If with a view to provide a specific service, levy is imposed by law and expenses for maintaining the service are met out of the amounts collected there being a reasonable relation between the levy and the expenses incurred for render (1) [1963] Supp. 2 S.C.R. 302.
(2) ; (3) [1954] S.C.R. 1055.
352 ing the service, the levy would be in the nature of a fee and not in the nature of a tax.
" According to Mr. H.R. Gokhale the present case is of the type which would fall squarely within the decision in Liberty Cinema case(1).
It is difficult to agree.
In each case where the question arises whether the levy is in the nature of a fee the entire scheme of the statutory provisions, the duties and obligations imposed on the inspecting staff and the nature of work done by them will have to be examined for the purpose of determining the rendering of the services which would make the levy a ,fee.
It is quite apparent that in the Liberty Cinema case it was found that no service of any kind was being or could be rendered and for that reason the levy was held to be a tax and not a fee.
In our judgment the present case falls within the other class of cases to which reference has been made in which contributions for the purpose of maintaining an authority and the staff for supervising and controlling public institutions like Maths etc.
were held to be fee and not tax.
We may now look at the provisions of the Act.
Chapter II provides for the inspecting staff.
Section 9 gives the powers of the Inspectors.
They can enter any factory and inter alia make examination of the premises, plant and machinery.
Under section 10 qualified medical practitioners can be appointed to.
be certifying surgeons for the purpose of the Act.
The certifying surgeon has to.
carry out such duties as may be prescribed in connection with the examination and ,certification of young persons under the Act.
the examination of persons.
engaged in factories in dangerous occupation or process as also the exercising of medical supervision.
Chapter III deals with health.
Section Il contains detailed provisions about cleanliness.
Sections 12 to 14 relate to disposal of waste and effluents, ventilation and temperature, and dust and fume.
Sections 17 to 20 concern lighting, drinking water, latrines and urinals, and spittoons.
Chapter IV contains the provisions relating to safety.
Section 21 deals with fencing of machinery.
Section 22 with work on or near machinery in motion and section 23 with employment of young persons on dangerous machines.
The other sections which may be noticed in this Chapter are section 27 containing the prohibition of employment of women and children near cotton openers; section 35 in the matter of protection of eyes, section 36 dealing with precautions against dangerous fumes, section 37 relating to explosive or inflammable dust, gas etc., and section 38 relating to precautions in case of fire.
Under section 39 if it appears to the Inspector that any building or part of a building or any part of the ways, machinery or plant in a factory is in such a condition that it may be dangerous to human life and safety he may serve on the manager of the factory an order in writing ; 353 requiring him to.
furnish the particulars for determining whether the building, machinery, plant etc., can be used with safety or to carry out such tests as may be specified and convey the result thereof to the Inspector.
Under section 40 if it appears to the Inspector that any building or part of a building is in such a condition that it is dangerous to human life or safety he can serve an order on the manager of the factory specifying the measures which should be adopted and requiring him to carry out the same before a specified date.
Shnilarly if it 'appears to him that the use of any building or machinery or plant involves imminent danger to human life or safety he can serve an order prohibiting its use until it has been properly repaired or altered.
Chapter V deals with welfare and provisions are made therein ,for such amenities as washing facilities for storing and drying clothing, for sitting, first aid appliances, canteens and creches and every factory is required under section 49 wherein 500 or more workers are ordinarily employed to have such number of welfare officers as may be prescribed.
The Rules also contain various provisions where the Inspector has to be consulted and his approval obtained for doing certain things.
For instance R. 65(3) says that the manager of a factory shall submit for the approval of the Chief Inspector plans of the building to be constructed or adapted for use as a canteen.
It is unnecessary to refer to several other provisions contained in the Act and the Rules which show that the Chief Inspector and his staff play a very important role in the working of the factory.
In the return which was filed in the High Court to the writ petition it was stated in paragraph 8 that the fees were being charged for the running of the whole establishment including the Factory Inspectorate which in its turn "provides free inspection and expert technical advice etc., to factory owners in matters connected with safety, health welfare and the allied matters in respect of compliance with the provisions of the ".
It has further been stated that in our country matters relating to health, safety, welfare and employment have to be looked after and the desired results have been sought to be achieved by the legislature by providing statutory inspection service.
According to Mr. Gokhale the Inspectors only carry out the duties laid on them under the Act and all that they have to do is to ensure that the statutory provisions and the rules are carried out properly and launch prosecutions against factory owners under the provisions of Chapter X of_ the Act in case of any breach or default on the part of the factory owners.
We do not consider that the functions and duties of the Inspectorate are confined only to the limited task which has been suggested on behalf of the appellant company.
A large number of provisions to which reference has been made, particularly in the Chapter dealing with 354 safety, involve a good deal of technical knowledge and in the course of discharge of their duties and obligations the Inspectors are expected to give proper advice and guidance so that there may be due compliance with the provisions of the Act.
It can well be said that on certain occasions factory owners are bound to receive a good deal of benefit by being saved from the consequences of the working of dangerous machines or employment of such processes as involve danger to human life by being warned at the proper time as to the defective nature of the machinery or of the taking of precautions which are enjoined under the Act.
Similarly if a building or a machinery or a plant is in such a condition that it is dangerous to human life or safety the Inspector by serving a timely notice on the manager saves the factory owner from all the consequences of proper repairs not being done in time to the building or the machinery.
Indeed it seems to us that the nature of the work of the Inspector is such that he is to render as much.
if not more, service than a Commissioner would, in the matter of supervision, regulation and control over the way in which the management of the trustees of religious and charitable endowment was conducted.
The High Court further found, which finding being of fact, must be considered as final that 60 '% of the amount of licence fees which were being realized was actually spent on services rendered to the factory owners.
It can, therefore, hardly be contended that the levy of the licence fee was wholly unrelated to the expenditure incurred out of the total realisation.
Before the High Court the appellant company never made out any case that the collections on .account of the licence fee were merged in the general public revenue and were not appropriated in the manner laid down for the appropriation of expenses for the department concerned.
There can be no manner of doubt that the amount which the appellant company has to pay as licence fee is not in the nature of a tax but is a fee which could be properly levied.
The appeal fails and it is dismissed with costs.
G.C. Appeal dismissed.
| For the infringement of its registered trade mark "RUSTON" by the respondent 's trade mark "RUSTAM", the appellant filed a suit for permanent injunction.
The respondent pleaded that "RUSTAM" was not an infringement of "RUSTON" and stated that the words "RUSTAM INDIA" were used.
The trial court dismissed the suit holding that there was no visual or phonetic similarity between "RUSTON" and "RUSTAM".
The High Court in appeal, held that there was deceptive resemblance between the words "RUSTON" and "RUSTAM", but held that the use of "RUSTAM INDIA" did not constitute an infringement because the appellant 's engines were.
manufactured in England and the respondent 's in India, and the suffix 'INDIA ' was sufficient warning that the engine sold was not the engine manufactured in England.
Allowing the appeal this Court, HELD: In an action for infringement when the defendant 's trade mark is identical with the plaintiff 's mark, the court will not enquire whether the infringement is such as is likely to deceive or cause confusion.
But where the alleged infringement consists of using not the exact mark on the Register but something similar to it, the test of infringement is the same as in an action for passing off.
In other words, the test as to the likelihood of confusion or deception arising from similarity of marks is the same both in infringement and, passing off actions.
[225 H] In the present case the High Court found that there was deceptive resemblance between the word "RUSTON" and the word "RUSTAM" and therefore the use of the bare word "RUSTAM" constituted infringement of the appellant 's trade mark "RUSTON".
The respondent did not prefer an appeal against the judgment of the High Court on this point and it was, therefore, not open to him to challenge that finding.
If the respondent 's trade mark was deceptively similar to that of the appellant the fact that the word "INDIA" was added to the respondent 's trade mark was of no consequence and the appellant was entitled to succeed in its action for infringement of its trade mark.
[226 B] Millington vs Fox, 3 MV & Cr. 338 and Savillo Perfumery June Perfect Ltd., at 161, referred to.
|
ppeal (Civil Appeal No. 32 of 1950), from a judgment and order of the High Court of Judicature at Madras dated 5th January, 1948, reversing an order of the District Judge of East Tanjore in an applica tion under section 47 and O. XXI, r. 2, of the Civil Procedure Code.
R.K. Kesava Aiyangar (T. K. Sundararaman, with him) for the appellants.
section Ramachandra Aiyar for the respondent.
March 5.
The judgment of the Court was delivered by MUKHERJEA J.
This appeal is on behalf of the decree holders in a mortgage suit and it is directed against a judgment and order of a Division Bench of the Madras High Court dated January 5, 1948, by which the 294 learned Judges reversed, on appeal, an order of the District Judge of East Tanjore made in a proceeding under section 47 and Order 21, rule 2, of the Civil Procedure Code.
The material facts are not in controversy and may be briefly stated as follows.
The appellants before us are the representatives of three original plaintiffs who, as mortga gees, instituted a suit (being O.S. No. 30 of 1934) in the Court of the District Judge, East Tanjore, for enforcement of a mortgage, against the present respondent, who was defendant No. 1 in the suit, and six other persons.
The mortgage bond, upon which the suit was brought, was executed by defendant No. 1 for himself and his minor undivided brother, the defendant No. 2, and also as authorised agent on behalf of defendants 3 to 7 who were interested in a joint family business.
The suit was contested by all the defendants except defendant No. 1, against whom it proceeded ex parte, and there was a preliminary decree passed on May 15,1937, by which a sum of RS.
1,08,098 was directed to be paid by defendant No.1 and defendants 3 to 7, in default of which the plaintiffs were declared entitled to apply for a final decree for sale of the mortgaged properties, and the suit was dismissed against defendant No. 2.
Against this decree, two appeals were taken to the Madras High Court, one by defendants 3 to 7 being Appeal No. 48 of 1938 who contended that the mortgage was not binding on them or on their shares in the joint family property; and the other by the plaintiffs being Appeal No. 248 of 1938 who chal lenged the propriety of the judgment of the trial judge in so far as it dismissed their claim against defendant No. 2.
During the pendency of these appeals, the Madras Agricultur ists ' Relief Act (Act IV of 1938) came into force and appli cations were made by defendants 2 to 7 to the High Court, praying that in the event of a decree being passed against them, the decretal debt might be scaled down in accordance with the provisions of the Act.
The defendant No. 1, who did not appear at any stage of the proceeding, did not make any such application.
The High Court forwarded 295 these applications to the lower court for enquiry into the matter and for return, with its finding on the question as to whether the applicants were agriculturists, and if so, to what extent, the decretal dues should be scaled down.
The District Judge, ' after making enquiries, submitted a finding that the applicants were agriculturists and that the debt, if scaled down, would amount to Rs. 49,255 with interest thereupon at 6% per annum from 1st of October, 1937, exclu sive of costs.
On receipt of this finding, the appeals were set down for final hearing and by their judgment dated March 23, 1942, the learned Judges of the High Court accepted the finding of the court below and held that defendants 2 to 7 were entitled to have the debts scaled down; but as no application had been made on behalf of defendant No. 1, he was held entitled to no relief under the Act.
A decree was drawn up in accordance with the judgment.
The amount due by defendants 2 to 7 was stated to be Rs. 49,255 with inter est thereon at 6% per annum; while, so far as defendant No. 1 was concerned, the decree of the trial judge was affirmed subject to a slight modification regarding the rate of interest.
The defendant No. 1 thereupon filed an applica tion in the court of the District Judge, East Tanjore, claiming relief under the Agriculturists ' Relief Act alleg ing that he too was an agriculturist and hence entitled to the benefits of the Act.
The application was dismissed on February 25, 1943, on the ground that as the decree had already been passed by the High Court definitely negativing his claim to any relief under the Agriculturists ' Relief Act, such application was not entertainable by the lower court.
The next step taken by the defendant No. 1 was to file an application in the High Court itself, praying for setting aside the ex parte decree which excluded him from the benefits of Act IV of 1938.
This application was re jected by the High Court on December 13, 1943.
As no payment was made in accordance with the prelimi nary decree passed by the High Court, a final decree in terms of the same was passed by the 296 District Judge on September 25, 1943. ' Proceedings for execution of this final decree were started on August 16, 1944, in E.P. 2 of 1945 of the court of the District Judge, East Tanjore.
Two lots of the mortgaged properties were put up to sale and purchased by the decree holders for a total sum of Rs. 12,005 on July 15, 1946.
The sale was con firmed on August 17, 1946, and part satisfaction of the decree was entered for that amount.
Apparently, certain terms of settlement were thereafter offered by the judgment debtors.
The estate of the decree holders was in the hands of the Receivers and from the Receivers ' report dated January 10, 1947, it appears that the Receivers agreed with the sanction of the court, to receive Rs. 24,000 only from or on behalf of defendant No. 2 and release him and his share of the mortgaged property from the decretal charge.
Likewise, the Receivers were agreeable to receive Rs. 48,000 from defendants 3 to 7 and to release them and their proper ties from the decretal debt.
With regard to defendant No. 1, the proposal, which seems to have been accepted by the Receivers, was that the amount payable by him under the decree was to be settled at Rs. 37,500 and one Yacob Nadar would 'pay this amount on his behalf on consideration of the decree against defendant No. 1 being assigned to him by the Receivers excluding the rights of the latter to execute the decree against defendants 2 to 7 as scaled down by the High Court.
The records of the execution case show that on January 20, 1947, a sum of Rs. 24,000 was paid on behalf of defend ant No. 2; and his properties, namely, lots 2 and 6 were exonerated from the decree.
On January 27, 1947, a sum of Rs. 30,000 was paid by defendants 3 to 7 and on February 17 following, they paid a further sum of Rs. 18,610 12 0.
These three amounts aggregated to Rs. 72,610 12 0.
Nothing was done towards the payment of the sum of Rs. 37,500 by defend ant No. 1 or by Yacob Nadar, but on March 6, 1947, the defendant No. 1 deposited in court a sum of Rs. 3,215 and put in a petition under section 47 and 297 Order 21, rule 2, Civil Procedure Code, praying that as the amount thus deposited together with the payments already made completely wiped off the amount due under the decree as scaled down by the High Court in favour of defendants 2 to 7, full satisfaction of the decree might be recorded exoner ating the mortgaged properties and also the defendant No. 1 himself from any further liability in respect of the decre tal debt.
The position taken up by defendant No. 1, in substance, was that the mortgage debt was one and indivisible and even though different amounts were mentioned as payable by two groups of defendants in the decree, the decree holders were bound under the terms of the decree to release the entire mortgaged property even on payment of the amount directed to be paid by defendants 2 to 7.
In other words, even though the defendant No. 1 's application for relief under the Madras Agriculturists ' Relief Act was expressly rejected and he was held liable for the entire amount of the mortgage debt, he would still be entitled to avail himself of the benefit of the scaling down of the decree in favour of defendants 2 to 7.
This contention was negatived by the District Judge, but was accepted by the High Court on appeal, who allowed the application of defendant No. 1 and directed that the court below should enter up full satisfac tion of the mortgage decree.
It is against this judgment that the decree holders have come up on appeal to this court.
The learned Judges of the High Court observed at the outset that in the working of the Madras Agriculturists ' Relief Act alongside the provisions of the Transfer of Property Act several curious and novel situations had arisen for which it was not possible always to find logical solu tions.
They then proceeded to discuss the various decisions of the Madras High Court which had a bearing on this point and the conclusion which they reached may be summed up in their words as follows: "It is no doubt somewhat odd that when a person is declared liable to pay a larger amount he should on 298 payment or tender of a smaller amount get his property exonerated from liability but this is inherent in and arises out of the proposition established by the decisions already dealt with, namely, that by the application of the principle of unity and indivisibility of a mortgage decree a non agriculturist can indirectly get relief which he cannot directly get".
It seems to us that the High Court 's approach to the case has not been a proper one and the conclusion it has reached cannot be supported in law.
The learned Judges appear to have overlooked the fact that they were sitting only as an executing court and their duty was to give effect to the terms of the decree that was already passed and beyond which they could not go.
It is true that they were to interpret the decree, but under the guise of interpretation they could not make a new decree for the parties.
As said above, the mortgage decree was scaled down by the High Court in favour of defendants 2 to 7 only and the amended decree directs that the said defendants do pay into court the sum of Rs. 49,255 with certain interest and costs on payment of which the plaintiff was to bring into court all the documents in his power or possession relating to the mortgage and reconvey or retransfer the property if so required.
So far as defendant No. 1 is concerned, the decree states in clear and express terms that he is to pay the sum of Rs. 1,05,000 and odd and it is on payment of this sum only that redemption would be allowed of the mortgaged property.
If the decision of the High Court is correct, this direction in the decree would be manifestly unmeaning and without any effect.
What is said, however, on behalf of the respondent is that he is not claiming any benefit in viola tion of this clause.
By virtue of the decree against defend ants 2 to 7 being satisfied, the entire mortgaged property would, by force of the very decree, be freed from the debt and if the respondent gets any benefit thereby, such benefit would be merely incidental or consequential in its nature.
The High Court agreed in substance with this contention 299 and based its decision entirely upon the view that by opera tion of the principle of indivisibility of the mortgage decree, a non agriculturist debtor, whose debt has not been scaled down under the provisions of the Agriculturists ' Relief Act, may indirectly get the benefit of the relief which has been granted to his agriculturist co debtor under the provisions of the Act.
The general law undoubtedly is that a mortgage decree is one and indivisible and exceptions to this rule are admitted in special circumstances where the integrity of the mortgage has been disrupted at the instance of the mortgagee himself; e.g., when there is severance of the interests of the mort gagors with the consent of the mortgagee or a portion of the equity of redemption is vested in the latter.
It is to be noted, however, that the Madras Agriculturists ' Relief Act is a special statute which aims at giving relief not to debtors in general but only to a specified class of debtors, viz., those who are agriculturists as defined in the Act.
To this extent it trenches upon the general law and section 7 of the Act expressly provides that "notwithstanding any law, custom, contract or decree of court to the contrary, all debts payable by an agriculturist at the commencement of this Act shall be scaled down in accordance with the provi sions of this chapter".
Thus in case of a mortgage debt when the loan has been advanced to more than one person, if one of the debtors happens to be an agriculturist while others are not, the agriculturist debtor would certainly be enti tled to have his debts scaled down under the provisions of the Act in spite of the provision of general law which prevents a mortgagor from denying the liability of the interest which he owns in the mortgaged property to satisfy the entire mortgage debt.
There is, therefore, nothing wrong in law in scaling down a mortgage decree in favour of one of the judgment debtors, while as regards others the decree is kept intact.
The Madras High Court expressly adopted this view in Rainier vs Srinivasiah (1), which is one of the (1) [1940] 2 M. 39 39 300 decisions referred to in the judgment appealed from.
The fact that in that case it was a puisne mortgagee and not a mortgagor whose application for relief under section 19 of the Madras Agriculturists ' Relief Act was allowed, does not make any difference in principle.
The puisne mortgagee was made a party defendant in the suit instituted by the first mortgagee to recover his dues and as the puisne mortgagee was liable to pay the debt due to the first mortgagee, he was held to be a debtor and hence entitled to claim the benefit of section 19 of the Agriculturists ' Relief Act.
It may be mentioned here that section 14 of the Madras Agricul turists ' Relief Act which provides for separation of a debt incurred by a Hindu family, some members of which are agri culturists while others are not, affords a clear indication that the splitting up of a debt in such circumstances is quite in accordance with the scheme of the Act.
The catena of cases upon which the learned Judges of the High Court relied in support of their decision seems to proceed on a different principle altogether and whether that principle is right or wrong, it has, in our opinion, no application to a case like the present.
In this class of cases, the mortgagors were agriculturists and hence entitled to have their debts scaled down under the Agriculturists ' Relief Act, but there were purchasers of the mortgaged property who were not agriculturists, and the question arose whether a purchaser could get the benefit of the debt scaled down in favour of the original debtors.
This question was answered in the affirmative.
The reason for taking this view was thus given by the learned Judges in Arunachalam Pillai vs Seetharam(1), where the purchase of the equity of redemp tion was at an execution sale: "When the 12th respondent purchased the properties in court auction, he took them subject to the burden of the appellant 's mortgage and if the burden is by reason of the provisions of section 8 refer.red to above reduced without pay ment, the purchase proves to that (1) 301 extent an advantageous one, and there is nothing in the Act to deprive him of the fruits of his.
lucky purchase, even though he is not an agriculturist.
He gets the benefit of the scaling down not because the provisions of the Act apply to him, for obviously they do not, but because such benefit is a necessary incident of his purchase under the general law and the Act does not deprive him of it.
" A somewhat different reason was assigned in Pachigola vs Karatam(1) which however was a case where a portion of the.
equity of redemption was transferred to a purchaser by a private sale.
It was held that the court by allowing the mortgagor to redeem the mortgage sale was not conferring on the purchaser, a non agriculturist, the benefit of the Act, as he would have to refund to his vendor the purchase money reserved with him which as a result of the scaling down he would not have to pay to the mortgagee.
In both these cases, the question was raised in the proceeding for scaling down of the decree under the provisions of the Agricultur ists ' Relief Act itself and not at the execution stage.
There is however the case of Subramanian vs Ramachandra (2), where the question arose in course of execution pro ceedings and a purchaser of a portion of the equity of redemption was held to be entitled to the benefit of the scaled down decree in favour of the mortgagors, although his own application for relief under the Act was refused.
It is not necessary for purposes of this case to express any opinion as to the correctness or otherwise of these deci sions.
It is enough to say that the ratio decidendi in all these cases is not applicable to the case before us.
In the present case there is no purchaser of the mortgaged property and consequently there is no question of the pur chaser, who is not an agriculturist himself, being entitled to the benefit of a decree which has been scaled down in favour of the agriculturist mortgagor.
Here the judg ment debtors are the mortgagors themselves and according to the plain provisions of the Agriculturists ' Relief Act there could (1) (2) 302 not be any objection to a decree for reduced amount being passed against an agriculturist debtor, while the same relief is not given to his co debtors who do not fulfil that description.
Some exception could undoubtedly be taken to the form and wording of the decree that has been passed in the present case.
The decree, in our opinion, should not only have stated the amount payable by defendant No. 1 and that by defendants 2 to 7 separately but should have expressly directed ,that on payment of the amount directed to be paid by defendants 2 to 7 their interest alone in the mortgaged property would not be liable to be sold.
The further direc tion should have been that in case they did not pay this amount, the whole of the mortgaged property including their interest would be sold for the entirety of the mortgage debt for which defendant No. 1 was made liable.
It is true that the decree contains no such clear directions but reading the decree as a whole and having regard to the actual decision in the case, this must be taken to be its plain implica tions.
The subsequent agreement between the parties arrived at in course of the execution proceedings by which the decreeholders agreed to release the interest of defendant No. 2 and that of defendants 3 to 7 separately on payment of certain specified amounts by 'them proceeds clearly on the assumption that the mortgage debt and the security have been split up, and in our opinion it is not possible for the defendant No. 1 to contend that the mortgage debt remained indivisible.
Our conclusion is that the view taken by the District Judge was right and should not have been disturbed.
The result is that the appeal is allowed, the order of the High Court is set aside and that of the District Judge restored.
We make no order as to costs of this appeal.
Appeal allowed.
| Under the Madras Agriculturists ' Relief Act, 1938, a mortgage decree can be sealed down in favour of some of the judgment debtors alone, while as regards the others it is kept intact.
In a suit to enforce a mortgage executed by defendant No. 1 on his own behalf and on behalf of defendants Nos. 2 to 7, the defendant No. 1 remained ex parte, and the others contested the suit.
A decree for Rs. 1,08,098 was passed by the trial court.
The Madras Agriculturists ' Relief Act, 1938, was passed during the pendency of an appeal and cross appeal, and on the application of defendants Nos. 2 to 7 under the said Act the amount of the decree was sealed down to Rs. 49,255 so far as defendants Nos. 2 to 7 were con cerned.
So far as defendant No. 1 was concerned the decree for the full amount remained as it was.
Defendant No. 1 thereupon applied for scaling down, but his 293 application was rejected.
Defendants Nos. 2 to 7 deposited certain amounts and got their properties released.
Defend ant No. 1 deposited the balance of the amount that remained due under the decree as scaled down on the application of defendants Nos. 2 to 7, and prayed that full satisfaction of the decree may be recorded.
The Subordinate Judge rejected this application but the High Court, on appeal, held that defendant No. 1 was entitled to the benefit of the scaling down in favour of defendants Nos. 2 to 7, as the mortgage debt was one and indivisible.
On further appeal: Held, that the ratio decidendi of the cases in which it was held that a purchaser of mortgaged properties was enti tled to the benefit of a decree which has been scaled down, even though the purchaser himself was not an agriculturist was not applicable to the present case.
According to the plain provisions of the Act, there was no objection to a decree for a reduced amount being passed against an agricul turist debtor, while the same relief is not given to his co debtors, and defendant No. 1 was not entitled to claim the benefit of the scaling down of the decree debt in favour of defendants No. 2 to 7.
Judgment of the Madras High Court reversed.
Ramier vs Srinivasiah ( referred to.
Arunachalam Pillai vs Seetharam (119413 1 M.L.J. 561), Pachigola vs Karatam ( , Subramaniam vs Ramachandra ( distinguished.
|
Appeal No. 486 of 1962.
Appeal by special leave from the judgment and decree dated September 24, 1959, of the Patna High Court in Miscellaneous judicial Case No. 318 of 1957.
A.V. Viswanatha Sastri and P. K. Chatterjee, for the appellants.
K. N. Rajagopal Sastri and R. N. Sachthey, for the respondent.
March 27.
The judgment of the Court was delivered by HIDAYATULLAH J.
This is an assessee 's appeal by special leave of this Court against an order of the High Court of Patna, answering in favour of the Department the question "whether in the circumstances of the case the amount of Rs. 51,000 being the value of high denomination notes encashed by the assessee, has been validly taxed as profits from some undisclosed business".
The original assessee, Rai Bahadur H. P. Banerjee, is dead.
His son, who was substituted in his place, also died during the pendency of the proceedings in the High Court.
The present appeal has been filed by the widow of the son and other legal representatives.
Banerjee was the owner of several collieries in the Jharia Coal fields in the State of Bihar and 555 was also a contractor for raising coal.
This matter relates to the assessment year 1946 47.
For that year, Banerjee was assessed on an income of Rs. 1,28,738.
The assessment was then re opened under section 34 of the Indian Income Tax Act, and was enhanced, but subsequently on appeal, it was reduced to a sum a little below the original assessment.
The present assessment was made on a second re opening of the case under section 34 in the following circumstances.
On January 22, 1946, Banerjee encashed high denomination notes of the value of Rs. 51,000/ .
In his application under the Ordinance which demonetized high denomination notes, Banerjee gave the reason for the possession of the notes as follows: "I am engaged in business as colliery proprie tor, contractor under Messrs. Kilburn & Co. in the name and style of H.P. Banerjee & Son and also under the State Rly.
Bokaro, Swang, Hazaribagh district in the name of Jharia Dhanbad Coal & Mica Mining Co. . .
For conducting the business and payment to labour, I have to pay every week between 30/40 thousand as I did not get payment for work done every week.
I had to keep large sum of money to meet emergency. . . .
It is neither profit nor part of profit it is very floating capital for purpose of conducing business.
It is not an excess of profit".
He stated that he had accounts with (1) Imperial Bank of India, (2) Nath Bank Ltd., jharia, and (3) Central Bank of India Ltd., Bhowanipore Branch, but added that he did not remember exactly from which Bank the notes came into his possession, as his transanctions were frequent.
The notice which was issued to him under section 34 of the Income Tax Act, was not questioned on any of the grounds which are usual in such cases.
Banerjee 's explanation 556 was not accepted.
The Income Tax Officer pointed out that although his business was large and the withdrawals from the various banks were large and frequent, he had not maintained a central account showing withdrawals from the banks and remittances made to his various businesses, and that none of the books maintained by the assessee and produced by him, contained a bank account.
The Income Tax Officer found a discrepancy of nearly Rs. 50,000 in the statements filed by the assessee.
He, accordingly, treated the high denomination notes as profits from some undisclosed source and assessed them as assessable income.
Banerjee appealed to the Appellate Assistant Commissioner and further to the Tribunal.
Both the authorities upheld the order of the Income Tax Officer.
The assessee demanded a case which was refused, but the High Court directed a statement of the case on the question already quoted.
The High Court decided the question against the assessee, and hence this appeal.
The connection of the appellants is that since the Department had issued a notice under section 34 of the Income Tax Act, it was incumbent on the department to establish that the amount in question was income which had escaped assessment.
The appellants also contend that even if the assessee was required to prove the source of the high denomination notes, he had sufficiently proved it by showing that he had large amounts on hand, which were held for convenience in high denomination notes.
The appellants thus submit that the burden, if any, upon the assessee was discharged in the case, and the evidence being unrebutted, the additional assessment could not be made.
The appellant rely upon Kanpur Steel Co., Ltd. vs C. 1.
T. (1) where, according to the appellants, the Allahabad High Court explained the nature of burden of proof in the way contended for by the appellants.
They (1) 557 claim that the Allahabad case applies to the facts here and point out that the said ruling was considered and approved by this Court in Lalchand Bhagat Ambica, Ram vs Commissioner of Income Tax, Bihar and Orissa (1).
Other cases have been cited on behalf of the department.
The cases involving the encashment of high denomination notes are quite numerous.
In some of them the explanation tendered by the tax payer has been accepted and in some it has been rejected.
The manner in which evidence brought on behalf of the tax payer should be viewed, has of course, depended on the facts of each case.
In these cases in which the assessee proved that he had on the relevant date a large sum of money sufficient to cover the number of notes encashed, this Court and the High Courts, in the absence of something which showed that the explanation was inherently improbable, accepted the explanation that the assessee held the amount or a part of it in high denomination notes.
In other words, in such cases, the assessee was held prima facie to have discharged the burden which was upon him.
Where the assessee was unable to prove that in his normal business or otherwise, he was possessed of so much cash, it was held that the assessee started under a cloud and must dispel that cloud to the reasonable satisfaction of the assessing authorities, and that if he did not, then, the Department was free to reject his explanation and to hold that the amount represented income from some undisclosed source.
The case which is strongly relied upon by the assessee is Kanpur Steel Co., Ltd. vs C. I. T.(2).
In that case, 32 notes of Rs. 1,000 were encashed.
It was claimed that they were part of the cash balance of the company which amounted to Rs. 34,000 odd.
The Income Tax Officer examined the entries regarding sales preceding the encashment of the notes and (1) (2) 568 found that those sales brought in sums under Rs. 1,000 and could not have resulted in the accumulation of so many high denomination notes.
The Tribunal then came to the conclusion that Rs. 7,000 only could have been held in high denomination notes.
On a reference, the Allahabad High Court held that the burden lay upon the Department to prove that Rs. 32,000 was suppressed income and there was no burden on the assessee to show whence he got the notes, because until demonetization, there was no idea that possession of high denomination notes would have to be explained.
The High Court also found that the explanation was fairly satisfactory, because big notes might have been received even in small transactions and change taken, and that the High Court could not make a conjecture how many notes could or could not have accumulated.
It is contended before us that the burden in such cases lies as stated by the Allahabad High Court.
On the other hand, in Manindranath Das vs Commissioner of Income Tax, Bihar & Orissa (1), the tax payer had encashed Notes of the value of Rs. 28,600, which he contended were his accumulated savings.
His explanation was accepted in respect of Rs. 15,000, because 15 notes could be traced to a bank, but was rejected in respect of the balance.
The Patna High Court pointed out that if an assessee received an amount in the year of account, it was for him to show that the amount so received did not bear the character of income, and the tax payer in the case had failed to prove this fact in respect of the remaining notes.
The Patna case finds support in A. Govindaraju Mudaliar vs Commissioner of Income Tax Hyderabad; (2), where it is laid down by this Court that if an assessee fails to prove satisfactorily the source and nature of an amount received by him during the accounting year, the Income Tax Officer is entitled to draw the inference that the (1) (2) [1958] 94 I.T.R .8.70 559 receipts are of an assessable nature.
In that case, the explanation of the assessee in respect of the amounts shown as credits for him in the account books of a firm of which he was a partner, was rejected as un true.
It was held that it was open to the Income Tax Officer and the Appellate Tribunal to hold that the amounts represented the concealed income of the assessee.
From the last two cases, it is plain that if there is receipt of an amount in the accounting year, it is incumbent in the first instance upon the assessee to show that it does not bear the character of income.
If be fails to do this, the Income Tax Officer may hold that it represents income of the assessee either from the sources he has disclosed or from some undisclosed source.
In applying this principle to the cases of encashment of high denomination notes, there is some difficulty when the assessee has books of account which are accepted and in which there is a cash balance sufficient to cover the amount of high denomination notes.
Each case must depend upon its own peculiar facts.
A few illustrative cases may be noticed, because they show some differences in the approach to the problem.
In Chunilal Ticamchand Coal Co., Ltd., vs Commissioner of Income Tax, Bihar and Orissa (1), high denomination notes of the value of Rs. 68,000 were encashed.
Evidence showed that the assessee was in the habit of keeping large sums which he kept intact for emergencies and meeting the current needs from withdrawals from the banks.
This explanation was supported by receipts and disbursement in the books of account.
The explanation was rejected as to a part because the accounts did not mention the high denomination notes and further because such notes were hardly needed to pay wages to labourers.
The Tribunal, however, held that the explanation might be true as to a part (1) 560 and accepted it in respect of Rs. 35,000, rejecting it in respect of Rs 33,000.
The Patna High Court held that the explanation which was held to be reasonable as to a part must be good for the whole, because there was no material on which it could be held that the balance constituted income from some undisclosed source to distinguish the case about the part rejected from the part accepted.
In Mehta Parikh & Co. vs Commsioner of Income Tax, Bombay, (1) high denomination notes of the value of Rs.61,000 were encashed.
The explanation was that they were part of the cash balance on hand.
The accounts disclosed that in order to sustain the explanation, it would have to be presumed that the entire balance on January 1, 1946, was held in 18 notes of Rs. 1,000 each and that all receipts up to. ' January 18,1946, when the notes were encashed, were also in High denomination notes.
The affidavits of persons who stated that they had paid amounts in Rs.1,000 notes were not accepted.
The Tribunal accepted the explanation as to Rs.31,000 only.
This Court held that if the account books were accepted and the deponents were not crossexamined on their affidavits, the rejection of the explanation as to a part proceeded only on surmise and the finding that Rs.30,000 were income from some undisclosed source was based on no evidence.
It may be pointed out that Venkatarama Ayyar J., in that case, chose to rest his decision on the second ground only, treating the decision as involving an error of law.
But in Sovachand Baid vs Commissioner of Income Tax, (2) high denomination notes of the value of Rs.2,28,000 were encashed.
The assessee stated that he had inherited that amount from his father in 1942, and produced account books from 1926 to 1942.
He did not produce earlier account books.
The Tribunal found that the books were such as could be written at any time and did not contain full dealings even between 1926 and (1) (2) , 561 1942, and there were no entries showing that any amount as such was received from business.
The Tribunal, however, held that Rs.1,28,000 only was income from some undisclosed source.
The assessee 's appeal in this Court was dismissed, because the rejection of the account books was held to be reasonable in the circumstances of the case.
This Court observed that the partial rejection of the explanation by the Tribunal must be treated as a concession rather than a reasoned conclusion.
We now come to Lalchand Bhagat 's case which is strongly relied upon, particulary, as it has cited the Allahabad case, so it is said, with omplete approval.
It is therefore, necessary to examine it closely to see if there is such an approval.
In that case, 291 high denomination notes of the value of Rs.2,91,000 were encashed.
The assessee was maintaining for a long time past two accounts: one was known as "Almirah Account", and other, "Rokar Account".
On the date the notes were encashed there was a balance of Rs.2,81,397 in the almirah account and Rs.29,284 in the rokar account.
These two amounts between them were sufficient to cover the encashed notes.
The explanation was that for the purposes of the business which was distributed in many branches, a large amount of ready cash was always kept at the head office, so that any emergency might be met.
The business of the assessee was admittedly extensive and the almirah account had also existed for several years.
Except in the previous year in which the high denomination notes were encashed, even the numbers of the high denomination notes used to be shown in the almirah account.
The explanation was rejected on the ground that those were the days of emergency and the assessee, as a grain dealer, could have secretly made money by smuggling grain, and that he had once been prosecuted, though acquitted.
It was also said that the area where he did his business was 562 notorious for smuggling and also that he had speculated in the year and might easily have made profits, though he had returned a loss from speculation.
Emphasis was also laid upon the fact that in the year of account, the numbers of the high denomination notes were written subsequently.
The Tribunal accepted the two books of account as genuine and also that there was a balance of Rs.3,10,681 with the assessee.
Before the Tribunal it was explained that in the year of account the numbers of the high denomination notes were inserted in the almirah account out of nervousness owing to the demonetization of the notes.
The Tribunal accepted the explanation with regard to Rs. 1,50,000 and rejected it with regard to Rs.1,41,000.
No reasons were given for distinguishing the good part of the explanation from the bad.
This Court examined the reasons and held that except for the insertion of the numbers of notes in the book, none of the other reasons had any probative value and that they were mere conjectures and surmises.
This court pointed out that if the explanation for the interpolations was good for the acceptance of the explanation as to Rs.1,50,000, it must be held to be good also for the balance, because there was nothing to distinguish between the two parts.
This Court, therefore, pointed out that the main question about Rs.1,41,000 was whether there was any material to justify a different conclusion in respect of that amount and pointed to the following facts.
The assessee had established the need for keeping a large sum on hand and had proved the almirah account as a genuine account.
The almirah account contained the numbers of the high denomination notes in the years previous to the year relative to the assessment.
In that year, the numbers were inserted subsequently and this was the only substantial point against the assessee.
This Court also pointed out that there were statements of banks and accounts 563 of the branches and of beparis, showing that large amounts were received by the assessee, which made up the amount in the almirah account.
Between February 6, 1945 and January 11, 1946, when the notes were encashed, sum,, above Rs. 1,000 received by the assessee aggregated to as much as rupees five lakhs.
As the almirah account was not questioned by the Tribunal at all, and out of that amount, more than half was held to be in the shape of high denomination notes, this Court posed the following question: "Was there any material on record which would legitimately lead the Tribunal to come to the conclusion that the nature of the source from which the appellant derived the remaining 141 high denomination notes of Rs. 1000 remained unexplained".
The Court, therefore, concluded "If the entries in the books of account in regard to the balance in the Rokar and the balance in the Almirah were held to be genuine logically enough there was no escape from the conclusion that the appellant had offered reasonable explanation as to the source of the 291 high denomination notes of Rs. 1000 each which it had encashed on January 19, 1946".
The case of assessee was thus accepted in toto.
This Court did not hold that the assessee need not prove anything.
As we have said earlier, the burden of proof must depend on the facts of the case.
One such fact may be the existence of a large floating cash balance on hand, and taken with other facts, may be sufficient to show that the high denomination notes constituted the whole or part of that balance.
In the Allahabad case, such a balance was proved and was accepted as to a part by the 564 Tribunal.
The High Court held that the explanation was good for the whole of the amount of the notes.
No doubt, this Court, in referring to that case, summarised the reasons, but it pointed out that it was not open to the Tribunal to make a guess as to the number of high denomination notes which could be accepted, and cited the Allahabad case and some others in that connection.
It seems to us that the correct approach to questions of this kind is this.
If I here is an entry in the account books of the assessee which shows the receipt of a sum or conversion of high denomination notes tendered for conversion by the assessee himself, it is necessary for the assessee to establish, if asked, what the source of that money is and to prove that it does not bear the nature of income.
The Department is not at this stage required to prove anything.
It can ask the assessee to bring any books of account or other documents or evidence pertinent to the explanation if one is furnished, and examine the evidence and the explanation.
If the explanation shows that the receipt was not of an income nature, the Department cannot act unreasonably and reject that explanation to hold that it was income.
If, however, the explanation is unconvincing and one which deserves to be rejected, the Department can reject it and draw the inference that the amount represents income either from the sources already disclosed by the assessee or from some undisclosed source.
The Department does not then proceed on no evidence, because the fact that there was receipt of money, is itself evidence against the assessee.
There is thus prima facie evidence against the assessee which he fails to rebut, and being unrebutted, that evidence can be used against him by holding that it was a receipt of an income nature.
The very words "an undisclosed source" show that the disclosure must come from the assessee and not form the Department.
In cases of high denomination notes, 565 where the business and the state of accounts and dealings of the assessee justify a reasonable inference that he might have for convenience kept the whole or a part of a particular sum in high denomination notes, the assessee prima facie discharges his initial burden when he proves the balance and that it might reasonably have been kept in high denomination notes.
Before the Department rejects such evidence, it must either show an inherent weakness in the explanation or rebut it by putting to the assessee some information or evidence which it has in its possession.
The Department cannot by merely rejecting unreasonably a good explanation, convert good proof into no proof.
It is within the range of these principles that such cases have to be decided.
We do not think that the Allahabad view puts no burden upon the assessee and throws the entire burden on the Department.
The case itself does not bear this out.
If it does, then, it is not the right view.
In the present case, the assessee claimed that the high denomination notes were a part of the cash balance at the head office.
The Income Tax Officer found that at first the cash on hand was said to be Rs. 1,62,022, but on scrutiny, it was found to be wrong.
Indeed, the assessee himself corrected it before the Appellate Assistant Commissioner and stated there that the balance was Rs. 1,21,875.
Ordinarily, this would have prima facie proved that the assessee might have kept a portion of this balance in high denomination notes.
But the assessee failed to prove this balance, as books of the assessee did not contain entries in respect of banks.
Though cash used to be received from banks and sent to the various places where works were carried on and vice versa, no central account of such transfers was disclosed.
There was also no account of personal expenses of the assessee and he had failed to prove why such large sums were kept on hand in one place when at each of the places where work was carried 566 on, there were banks with which he had accounts.
The Appellate Assistant Commissioner also went into the question and found that on the same day when the high denomination notes were encashed, a sum of Rs. 45,000 was drawn by cheque.
The next remittance immediately afterwards was of Rs. 16,000 to Bokaro, but Rs. 17,000 were withdrawn a few days before to meet this expense.
A withdrawal of Rs. 8,000 was made a day later and Rs. 20,000 were withdrawn ten days later to finance the business.
It appears that the money on hand (Rs. 45,000) was not touched at all, but on January 30, 1946, a further sum of Rs. 6,000 was withdrawn and not utilized, which made up the sum of Rs. 51,000 for which the high denomination notes were encashed.
On these facts, the Tribunal came to the conclusion that the high denomination notes represented not the cash balance but some other money which remained unexplained, and the Tribunal treatted it as income from some undisclosed source.
The High Court held on the above facts and circumstances that there were materials to show that Rs. 51,000 did not form part of the cash balance, and the source of money not having been satisfactorily proved, the Department was justified in holding it to be assessable income of the assessee from some undisclosed source.
In this conclusion, the High Court was justified, regard being had to the principles we have explained above.
The argument that as this was a case under section 34 of the Income Tax Act, it cast a special burden on the Department to show that this income had escaped earlier, need not detain us.
No doubt, proceedings under section 34 can only be commenced under the conditions prescribed in the section, but when the proceedings are validly commenced, there is no difference between an ordinary assessment and an additional assessment under section 34, and the same rule 567 as to burden of proof governs the additional assessment.
In our opinion, this appeal has no substance; it fails and is dismissed with costs.
Appeal dismissed.
| The assessee had encashed 51 high denomination notes of Rs. 1,000/ each in january, 1946.
The assessee 's explanation in his application for encashment of the notes was that he was a colliery proprietor and contractor, that for conducting the business and for payment to labour which came to about Rs.30,0001 to 40,000/ every week he had to keep large sums of money to meet emergency and that the sum of Rs. 50,000/realised by encashment of the notes was neither profit nor part of profit but was floating capital for the purpose of,conducting business.
The Income tax Officer did not accept this explanation and treated this amount as profit from some undisclosed 553 source and assessed it as assessable income.
The assessee contended that the burden lay on the department to establish that the amount in question was income liable to tax and that the department had failed to establish this.
Held that the department was justified in holding that Rs. 51,000/ was assessable income of the assessee from some undisclosed source.
It was not correct that the assessce was not required to prove anything and that the burden was entirely upon the department to prove that the amount received from the encashment of high denomination notes was income.
The correct position is as follows.
If there is an entry in the account books of the assessee which shows the receipt of a sum or conversion of the notes by the assessee himself, it is necessary for the asscssee to establish, if asked, what the source of that money was and to prove that it did not bear the nature of income.
The department is not at this stage required to prove anything.
If tile business, the state of accounts and dealing of the assewsee show that be might have, for convenience, kept the whole or part of a particular sum in high denomination notes, the assessee prima facie discharges his initial burden.
If the assessee does this the department cannot act unreasonably and reject that explanation to hold that it was income.
If the explanation is unconvincing, the department can reject it and draw the inference that the amount represents income either from the source already disclosed by the assessee or from some undisclosed source.
Before the department rejects such evidence it must either show an inherent weakness in the explanation or rebut it by putting to the assessee some information or evidence which it has in its possession.
The fact that there was receipt of money or conversion of notes is itself prima facie evidence against the assessee on which the department can Proceed in absence of good explanation.
In the present case though cash used to be received from Banks and sent to the various places where works were carried on by the asscssee and vice versa, no central account of such transfers was disclosed.
There was also no account of personal expenses of the assessee and he failed to prove why such large sums were kept at hand in one place when at each of the places where work was carried on, there were Banks with which he had accounts.
Further though this large sum was kept on hand, further cheques were drawn to meet current needs and this amount remained untouched.
Kanpur Steel Co. Ltd. vs C. I. T. , Lalchand Bhagat Ambica Ram vs Commissioner of Income tax, Bihar and Orissa, ; Mahindranath vs
Commissioner of Income tax, Bihar and Orissa, [1955] 554 27 , A. Govindarajulu Mudaliar vs Commissioner of Income tax, Hyderabad, [1958] 34 , Chunilal Ticamchand Coal Co. Ltd. vs Commissioner` of Income tax, Bihar and Orissa,[1955] , Mehta Parikh & Co. vs Commissioner of Income tax, Bombay [1956] 30 and Soyachand Baid vs Commissioner of Income tax, [1958] 34 1.
T. R. 650, referred to.
|
N: Criminal Appeal No. 105 of 1975.
Appeal by Special Leave from the Judgment and Order dated 6 8 1974 of the Delhi High Court in Criminal Revision No. 58 of 1973.
Frank Anthony, K. C. Dua and O. P. Soni for the Appellants.
J. Sorabjee, Additional Soli.
General, B. P. Maheshwari and Suresh Sethi for the Respondents.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by special leave is directed against the Judgment of the Delhi High Court convicting the appellant under section 7/16 of the , read with Section 2(ix) clause (a) & (g) of the Act and sentenced to rigorous imprisonment of six months and a fine of Rs. 1,000/ .
This order was passed by the High Court in a revision filed by the Municipal Corporation of Delhi against the Order of the Trial Court which convicted the appellant under section 7/15 of the read with Section 2(ix) (k) of the Act and sentenced him to imprisonment till the rising of the Court and a fine of Rs. 500/ , a revision against this order to the Sessions Judge was unsuccessful and hence a further revision was taken by the Delhi Administration before the High Court.
The facts of the case are detailed in the Judgment of the High Court and the Magistrate and we need not repeat the same all over again.
The food Inspectors, namely, one Mr. James and Mr. Sinha took samples of a preparation called Para Excellant and Para Asli from the shop of the appellant who according to the Food Inspectors sold these preparations as saccharin, a fact which is not admitted by the appellant.
The Trial Court after considering the evidence and the report of the Chemical Examiner found that the case of mis branding under section 2(ix) (a) & (g) was not made out by the Prosecution, but it was certainly mis branding as contemplated by section 2(ix) (k) of the Act.
He, accordingly convicted the appellant as indicated above.
Mr. Frank Anthony, Learned Counsel for the appellant has submitted that the High Court was wrong in law in interfering with the Order of the Magistrate, firstly, because the findings of fact by the 553 Magistrate was binding on the High Court in revision and secondly, because the High Court took a legally erroneous view of the law on the interpretation of Section 2(ix) (a) & (g) of the .
We have heard learned counsel for the parties and have perused the judgment of the High Court and we are of the opinion that the contentions raised by the learned counsel for the appellant is well founded and must prevail.
We have perused the original label which described the preparation sold to the food inspectors.
There is nothing to show that the appellant in any way tried to give an impression to the purchaser that either saccharin or some preparation of the type of saccharin was being sold so as to amount to misbranding as contemplated by Section 2(ix) (a) & (g) of the Act.
All that the appellant purported to convey under the label was that the preparation sold was as sweet as saccharin but not as bitter as saccharin.
This was intended merely to lay emphasis on the sweetness of the preparation when it was compared to the sweetness of saccharin.
When the label clearly described the fact that the preparation was not as bitter as saccharin it clearly intended to convey that it was neither something like saccharin nor saccharin itself, in any form or of any type.
Mr. Sorabjee appearing for the respondent submitted that the use of the word saccharin itself amounts to mis branding and gives the impression that the preparation sold was saccharin or something akin to saccharin.
We are unable to agree with this contention.
In the facts and circumstances of the present case and the contents of the label and the description of the preparation, we are satisfied that there was no misbranding, nor was there any attempt on the part of the appellant to sell his preparation as saccharin or some sort of saccharin.
Section 2.(ix) (a) runs as follows: "Misbranded" an article of food shall be deemed to be misbranded (a) "If it is an imitation of, or is a substitute for, or resembles in a manner likely to deceive, another article of food under the name of which it is sold, and is not plainly and conspicuously labelled so as to indicate its true character.
" According to the Additional Solicitor General of India, the sale, by the appellant, of the preparation clearly falls within (iii) clause of sub section (a), that is to say the preparation resembles saccharin so as to deceive a person who wanted to purchase the article of food 554 known as saccharin.
After having examined the label, its description and the contents of the tin and packets, sold to the food inspectors, we are unable to find any evidence of any intention on the part of the appellant to sell a preparation which resembles saccharin in any respect.
The words, as sweet as saccharin were merely meant to convey one of the qualities of the preparation itself and not the quality of saccharin at all.
That, by itself, would not attract the provision of Section 2(ix) (a) of the Act.
It was, then submitted that in one of the labels under the directions it was mentioned that the preparation was para saccharin which also shows that the appellant intended to pass on the preparation as some sort of saccharin.
In the first place, the use of the word para saccharin appears to be a mistake in the facts of the present case because this word is completely absent from the Hindi portion of the directions contained in the same label.
Secondly, the word para saccharin would not indicate that the preparation sold was saccharin in any form or of any kind.
It was just a way of describing it because according to the manufacturers the preparation was as sweet as saccharin.
This was mentioned because saccharin being 500 times sweeter than sugar, the manufacturer wanted to convey that the preparation was also much sweeter than sugar and could be used for preparing soda water bottles.
It is obvious that if any person who purchased the preparation was not conversent with the English language, he would not be misled at all.
Having regard to these circumstances we are of the opinion that the case of the appellant does not fall within the clauses (a) & (g) of Section 2(ix) of the Act and the High Court erred in law in convicting the appellant for misbranding under these provisions.
For the reasons given above, the appeal is allowed.
The order of the High Court is set aside and the sentence of imprisonment of six months is also set aside and the fine is reduced to Rs. 500/ .
In other words, the order of the Trial Court Magistrate is hereby restored.
The appeal is accordingly allowed.
N.V.K. Appeal allowed.
| Under the Punjab Police Service Rules, 1959, recruitment to Punjab Police Service (Deputy Superintendent of Police) is made from two sources, namely 80% by promotion and 20% through direct recruitment.
Under Rule 10, seniority in the cadre of Deputy Superintendent of Police is reckoned according to the date of confirmation.
Consideration for nomination to Indian Police Service is done according to seniority cum merit.
Respondents 1 and 2 in C.A. 2903/78 who were promotees to the cadre of Deputy Superintendents of Police in February, 1961 and January, 1961 respectively were not confirmed even though appellants and respondents 5 to 8 who were recruited to the same cadre by direct appointment commencing from May, 1961 to May, 1965 were confirmed.
They, therefore, filed a Writ Petition praying for a direction to confirm them in the Punjab Police Service, adhering to the quota rule at the time of confirmation as well.
They alleged that as seniority in the cadre of Deputy Superintendent of Police is reckoned under rule 10, according to date of confirmation failure to confirm in the post available to them in breach of the relevant rules, had resulted in the denial of equality of opportunity in public service enshrined in article 16 of the Constitution at the time of consideration of their cases for nomination to the Indian Police Service which is done according to seniority cum merit.
Allowing the Writ Petition and directing the State to confirm them, the learned single judge held that the quota rule would operate not only at the time of initial recruitment but also at the time of confirmation, as he was of the opinion that the quota rule is linked with the seniority rule.
Two Letters Patent Appeals, one filed by appellant No. 1 and another by the State, were heard along with another Writ Petition filed by one Ram Rakha urging identical contentions.
The Writ Petition was allowed and the appeals were dismissed by a common judgment modifying the direction given by the learned single judge to the extent that the State should consider the case of the Writ petitioners for confirmation afresh according to quota rule and then refix their inter se seniority.
Dismissing the appeals, by special leave the Court 585 ^ HELD: 1.
When a first appointment or promotion is made on probation for a specific period and the employee is allowed to continue in the post after the expiry of the period without any specific order of confirmation he should be deemed to continue in his post as a probationer only in the absence of any communication to the contrary in the original order of appointment or promotion or the Service Rules.
In such a case, an express order of confirmation is necessary to give the employee a substantive right to the post.
From the mere fact that he is allowed to continue in the post after the expiry of the specific period of probation he should not be deemed to have been confirmed.
This is so, when the relevant rules permitted extension of the Probationary period for an indefinite time.
[592 A C] Sukhbans Singh vs State of Punjab, ; , G. section Ramaswamy vs The Inspector General of Police, Mysore State Bangalore, ; State of U.P. vs Akbar Ali, ; referred to.
Where the rules provide for a fixed period of probation with a power in the Government to extend it up to a specific period and not any unlimited period, either by express provision or by necessary implication, at the end of such specified period beyond which the Government had no power to extend the probation, the probationer, if he continues beyond that period, should be deemed to have been confirmed in the post.
[592 C E] State of Punjab vs Dharam Singh, ; explained.
Rule 8 of the Punjab Service Rules, 1959 prescribes a period of probation of two years and the proviso confers power to extend the period of probation by not beyond one year meaning thereby that in any case the Government would not have the power to extend the period of probation beyond a period of three years.
[593 A B] In this situation, (a) the ratio of Dharam Singh 's case would mulatis mutandis apply and the direct recruits who completed the period of probation of two years and in the absence of an extension of probationary period would be deemed to be confirmed by necessary implication.
[593 B C] (b) If seniority is to be reckoned from the date of confirmation and if promotees are not confirmed for years together in some cases, while direct recruits who came much later got confirmed and ipso facto became senior to the promotees, if quota rule is only applied at the time of initial recruitment, this undesirable result is wholly unavoidable.
[593 C D] 4.
Where recruitment to a cadre is from two sources and the Service Rules prescribe quota for recruitment for both sources, a question would always arise, whether the quota rule would apply at the initial stage of recruitment or also at the stage of confirmation.
Ordinarily, if quota is prescribed for recruitment to a cadre, the quota rule will have to be observed at the recruitment stage.
The quota would then be co related to vacancies to be filled in by recruitment but after recruitment is made from two different sources they will have to be integrated into a common cadre and while so doing the question of their inter se seniority would surface.
[593 F G] 586 Seniority is ordinarily determined from the date of entry into cadre on the principle of continuous officiation.
Confirmation in a post would ordinarily depend upon such circumstances as satisfactory completion of probationary period, efficiency in the discharge of duty, capacity to discharge functions of the post, availability of permanent vacancy etc.
Now, if seniority is to be determined according to the date of confirmation and the quota rule is not made relatable to confirmation in various posts falling vacant in the cadre it would directly impinge upon the seniority of members of the service.
[593 G H, 594 A] section B. Patwardhan and Ors.
vs State of Maharashtra; , @ 797; referred to.
A harmonious reading of rules 3, 4, 6, 8, and 10 makes it clear that the quota rule is operative both at the time of initial recruitment and at the time of confirmation.
The recruitment to Punjab Police Service is from two sources.
Recruits from both the sources have to be on probation.
Adopting the construction that the proviso to Rule 8 (b) permitting a maximum period of probation of three years at the end of which the direct recruit would automatically be confirmed unless his services are dispensed with simultaneously enjoying seniority from the date of such automatic confirmation without applying quota rule at the time of confirmation would put the promotee to an unintended disadvantage who may be continued in an officiating capacity without confirming him and consequently denying or relegating him down in seniority for years as has happened in the case of respondents 1 and 2.
Such an approach would be wholly unreasonable more so when there was not the slightest suggestion that their services were not satisfactory and that the confirmation was denied on any such ground, thereby directly affecting their places in the seniority list.
[594 C F, H] If the other view that the quota rule would apply both at the time of recruitment and at the time of confirmation, is adopted rule 10 which provides for seniority according to the date of confirmation would certainly be saved from the vice of unreasonableness.
[594 G] The quota rule is linked up with the seniority rule.
Quota rule is linked up with seniority rule because, not the date of entry in service determines the seniority but the date of confirmation determines seniority.
Quota rule being inextricably intertwined with the seniority rule any delinking would render the seniority rule wholly unreasonable.
After recduitment, members of the service, though drawn from two different sources direct recruits and promotees constitute a single integrated cadre.
They discharge identical functions, bear similar responsibilities and, acquire an equal amount of experience in the respective assignments.
If quota rule were to be applied at the stage of initial recruitment and wholly ignored at the time of confirmation the rule would suffer from the vice of unreasonableness and would offend article 16, because, in that event, while direct recruits would get confirmation automatically, the promotees would hang out for years as has happened in the case of respondents 1 and 2 and if they are not confirmed they would never get seniority and their chances of being considered for promotion to the higher post would be wholly jeopardised.
[595 A B, C, D E] section G. Jaisinghani vs Union of India and Ors. ; @ 717 and 718; section B. Patwardhan vs State of Maharashtra, ; @ 797; followed.
587 6.
Where recruitment is from two sources and the seniority in the cadre is determined according to the date of confirmation to accord utmost fair treatment a rotational system has to be followed while giving confirmation.
The quota rule would apply to vacancies and recruitment has to be made keeping in view the vacancies available to the two sources according to the quota.
If the quota rule is strictly adhered to there will be no difficulty in giving confirmation keeping in view the quota rule even at the time of confirmation.
A roster is introduced while giving confirmation ascertaining every time which post has fallen vacant and the recruit from that source has to be confirmed in the post available to the source.
This system would breakdown the moment recruitment from either source in excess of the quota is made.
In fact a strict adherance to the quota rule at the time of recruitment would introduce no difficulty in applying the rule at the time of confirmation because vacancies would be available for confirmation to persons belonging to different sources of recruitment.
The difficulty would arise when recuruitment in excess of the quota is made and it would further be accentuated when recruits from one source viz. direct recruits get automatic confirmation on completion of the probationary period, while the promotees hang out for years together before being confirmed.
[596 F H, 597 A B] Mervyn Coutindo and Ors.
vs Collector of Customs, Bombay and Ors.
, ; A. K. Subraman and Ors.
vs Union of Indian and Ors.
, [1975] 2 SCR 979; explained and distinguished.
|
iminal Appeal No. 58 of 1962.
Appeal by special leave from the judgment and order dated June 27, 1961 of the Gujarat High Court in Criminal Appeal No. 656/1960.
B. K. Banerjee, for the appellant.
D. R. Prem, R. H. Dhebar and B. R. G. K. Achar, for the respondent.
March 19, 1964.
The Judgment of the Court was delivered by SUBBA RAO, J.
This appeal raises the question of the defence of insanity for an offence under section 302 of the Indian Penal Code.
The appellant was the husband of the deceased Kalavati.
She was married to the appellant in the year 1958.
On the night of April 9, 1959, as usual, the appellant and his wife slept in their bed room and the doors leading to that room were bolted from inside.
At about 3 or 3.30 a.m. on the next day Kalavati cried that she was being killed.
The neighbours collected in front of the said room and called upon the ac cused to open the door.
When the door was opened they found Kalavati dead with a number of wounds on her body.
The accused was sent up for trial to the sessions on the charge of murder.
Before the Additional Sessions Judge, Kaira, a defence was set up that the accused was insane when the incident was alleged to have taken place and was not capable of understanding the nature of his act.
The learned Additional Sessions Judge considered the entire evidence placed before him, and came to the conclusion that the accused had failed to satisfy him that when he committed the murder of his wife he was not capable to knowing the nature of the act and that what he was doing was either wrong or contrary to law.
Having rejected his plea of insanity, the learned Additional Sessions Judge convicted him under section 302 of the Indian Penal Code and sentenced him to undergo rigorous imprisonment for life.
On appeal 363 the High Court agreed with that finding, though for different reasons, and confirmed the conviction and sentence of the accused.
Hence the present appeal.
Learned counsel for the appellant contended that the High Court, having believed the evidence of the prosecution witnesses, should have held that the accused had discharged the burden placed on him of proving that at the time he killed his wife he was incapable of knowing the nature of his act or what he was doing was either wrong or contrary to law.
He further contended that even if he had failed to establish that fact conclusively, the evidence adduced was such as to raise a reasonable doubt in the mind of the Judge as regards one of the ingredients of the offence, namely, criminal intention, and, therefore, the court should have acquitted him for the reason that the prosecution had not proved the case beyond reasonable doubt.
Before we address ourselves to the facts of the case and the findings arrived at by the High Court, it would be convenient to notice the relevant aspects of the law of the plea of insanity.
At the outset let us consider the material provisions without reference to decided cases.
The said provisions are: INDIAN PENAL CODE Section 299 Whoever causes death by doing an act with the intention of causing death, or with the intention of causing such bodily injury as is likely to cause death, or with the knowledge that he is likely by such act to cause death, commits the offence of culpable homicide.
Section 84 Nothing is an offence which is done by a person who, at the time of doing it, by reason of unsoundness of mind, is incapable of knowing the nature of the act, or that he is doing what is either wrong or contrary to law.
INDIAN EVIDENCE ACT Section 105 When a person is accused of any offence, the burden of proving the existence of circumstances bringing the case within any of the General Exceptions in the Indian Penal Code (XLV of 1860) or within any special exception or proviso contained in any other part of the same Code, or in any law defining the offence, is upon him, and the Court shall presume the absence of such circumstances.
364 Section 4 "Shall presume": Whenever it is directed by this Act that the Court shall presume a fact, it shall regard such facts as proved unless and until it is disproved. "Proved" A fact is said to be "proved" when after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists.
"Disproved" A fact is said to be disproved when, after considering the matters before it, the Court either believes that it does not exist, or considers its non existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it does not exist.
Section 101 Whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of fact which he asserts, must prove that those facts exist.
When a person is bound to prove the existence of any fact. it is said that the burden of proof lies on that person.
It is a fundamental principle of criminal jurisprudence that an accused is presumed to be innocent and, therefore, the burden lies on the prosecution to prove the guilt of the accused beyond reasonable doubt.
The prosecution, therefore, in a case of homicide shall prove beyond reasonable doubt that the accused caused death with the requisite intention described in section 299 of the Indian Penal Code.
This general burden never shifts and it always rests on the prosecution.
But, as section 84 of the Indian Penal Code provides that nothing is an offence if the accused at the time of doing that act, by reason of unsoundness of mind was incapable of knowing the nature of his act or what he was doing was either wrong or contrary to law.
This being an exception, under section 105 of the Evidence Act the burden of proving the existence of circumstances bringing the case within the said exception lies on the accused; and the court shall presume the absence of such circumstances.
Under section 105 of the Evidence Act, read with the definition of "shall presume" in section 4 thereof, the court shall regard the absence of such circumstances as proved unless, after considering the matters before it, it believes that said circumstances existed or their existence was so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that they did exist.
To put 365 it in other words, the accused will have to rebut the presumption that such circumstances did not exist, by placing material before the court sufficient to make it con sider the existence of the said circumstances so probable that a prudent man would act upon them.
The accused has to satisfy the standard of a "prudent man".
If the material placed before the court.
such as, oral and documentary evidence, presumptions, admissions or even the prosecution evidence, satisfies the test of "prudent man", the accused will have discharged his burden.
The evidence so placed may not be sufficient to ' discharge the burden under section 105 of the Evidence Act, but it may raise a reasonable doubt in the mind of a judge as regards one or other of the necessary ingredients of the offence itself.
It may, for instance, raise a reasonable doubt in the mind of the judge whether the accused had the requisite intention laid down in section 299 of the Indian Penal Code.
If the judge has such reasonable doubt, he has to acquit the accused, for in that event the prosecution will have failed to prove conclusively the guilt of the accused.
There is no conflict between the general burden, which is always on the prosecution and which never shifts, and the special burden that rests on the accused to make out his defence of insanity.
The textbooks placed before us and the decisions cited at the Bar lead to the same conclusion.
In Halsbury 's Laws of England, 3rd edn., Vol. 10, at p. 288, it is stated thus: "The onus of establishing insanity is on the accused.
The burden of proof upon him is no higher than which rests upon a party to civil proceedings.
" Glanville Williams in his book 'Criminal Law", The General Part, 2nd Edn., places the relevant aspect in the correct perspective thus, at p. 516: "As stated before, to find that the accused did not know the nature and quality of his act is, in part, only another way of finding that he was ignorant as to some fact constituting an ingredient of the crime; and if the crime is one requiring intention or recklessness he must, on the view advanced in this book, be innocent of mens rea.
Since the persuasive burden of proof of mens rea is on the prose cution, on question of defence, or of disease of the mind, arises, except in so far as the prisoner is called upon for his own safety to neutralise the evidence of the prosecution.
No persuasive burden of proof rests on him, and if the jury are uncertain whether the allegation of mens rea is made out . . the benefit of the doubt must be given to the prisoner, for, in the words 366 of Lord Reading in another context, "the Crown would then have failed to discharge the burden imposed on it by our law of satisfying the jury beyond reasonable doubt of the guilt of the prisoner.
" This Court in K. M. Nanavati vs State of Maharashtra(1) had to consider the question of burden of proof in the context ofa defence based on the exception embodied in section 80 of the Indian Penal Code.
In that context the law is summarized thus: "The alleged conflict between the general burden which lies on the prosecution and the special burden imposed on the accused under section 105 of the Evidence Act is more imaginary than real.
Indeed, there is no conflict at all.
There may arise three different situations: (1) A statute may throw the burden of proof of all or some of the ingredients of an offence on the accused: (see sections 4 and 5 of the Prevention of Corruption Act).
(2) The special burden may not touch the ingredients of the offence, but only the protection given on the assumption of the proof of the said ingredients: (see sections 77, 78, 79, 81 and 88 of the Indian Penal Code).
(3) It may relate to an exception, some of the many circumstances required to attract the exception, if proved, affecting the proof of all or some of the ingredients of the offence: (see section 80 of the Indian Penal Code). . . .
In the third case, though the burden lies on the accused to bring his case within the exception the facts proved may not discharge the said burden, but may affect the proof of the ingredients of the offence.
" After giving an illustration, this Court proceeded to state: "That evidence may not be sufficient to prove all the ingredients of section 80 of the Indian Penal Code, but may prove that the shooting was by accident or inadvertence, i.e., it was done without any intention or requisite state of mind, which is the essence of the offence, within the meaning of section 300, Indian Penal Code, or at any rate may throw a reasonable doubt on the essential ingredients of the offence of murder. . .
In this view it might be said that the general burden to prove the ingredients of the offence, unless there is a specific statute to the contrary, is always on the prosecution, but the burden to prove the circumstances coming under the exceptions lies upon the accused." (1) [1962] Supp. 1 S.C.R. 567, 597, 598.
367 What is said of section 80 of the Indian Penal Code will equally apply to section 84 thereof.
A Division Bench of the Patna High Court in Kamla Singh vs The State (1) invoked the same principle when the plea of insanity was raised.
A Division Bench of the Nagpur High Court in Ramhitram vs State(1) has struck a different note inasmuch as it held that the benefit of doubt which the law gives on the presumption of innocence is available only where the prosecution had not been able to connect the accused with the occurrence and that it had nothing to do with the mental state of the accused.
With great respect, we cannot agree with this view.
If this view were correct, the court would be helpless and would be legally bound to convict an accused even though there was genuine and reasonable doubt in its mind that the accused had not the requisite intention when he did the act for which he was charged.
This view is also inconsistent with that expressed in Nanavati 's case(3).
A Scottish case, H.M. Advocate vs Fraser(4), noticed in Glanville Williams ' "Criminal Law", The General Part, 2nd Edn., at p. 517, pinpoints the distinction between these two categories of burden of proof.
There, a man killed his baby while he was asleep; he was dreaming that he was struggling with a wild beast.
The learned author elaborates the problem thus: "When the Crown proved that the accused had killed his baby what may be called an evidential presumption or presumption of fact arose that the killing was murder.
Had no evidence been adduced for the defence the jury could have convicted of murder, and their verdict would have been upheld on appeal.
The burden of adducing evidence of the delusion therefore lay on the accused.
Suppose that, when all the evidence was in, the jury did not know what to make of the matter.
They might suspect the accused to be inventing a tale to cover his guilt, and yet not be reasonably certain about it.
In that event the accused would be entitled to an acquittal.
The prosecution must prove beyond reasonable doubt not only the actus reus but the mens rea. " The doctrine of burden of proof in the context of the plea of insanity may be stated in the following propositions: (1) The prosecution must prove beyond reasonable doubt that the accused had committed the offence with the requisite mens rea, and the burden of proving that always rests on the prosecution from the beginning to the end of the trial.
(2) There is a rebuttable presumption that the accused was not insane, when he committed the crime, in the sense laid down by section 84 of the (1)A.I.R. 1955 Pat. 209.
(2) A.I.R. 1956 Nag.
(3)[1962] Supp. 1 S.C.R. 567.
(4) 368 Indian Penal Code: the accused may rebut it by placing be fore the court all the relevant evidence oral, documentary or circumstantial, but the burden of proof upon him is no higher than that rests upon a party to civil proceedings.
(3) Even if the.accused was not able to establish conclusively that he was, insane at the time he committed the offence, the evidence placed before the court by the accused or by the prosecution may raise a reasonable doubt in the mind of the court as regards one or more of the ingredients of the offence, including mens rea of the accused and in that case the court would be entitled to acquit the accused on the ground that the general burden of proof resting on the prosecution was not discharged.
Now we come to the merits of the case.
Ordinarily this, Court in exercise of its jurisdiction under article 1.36 of the Constitution accepts the findings of fact arrived at by the High Court.
But, after having gone through the judgments of the learned Additional Sessions Judge and the High Court, we are satisfied that this is an exceptional case to depart from the said practice.
The learned Additional Sessions Judge rejected the evidence of the prosecution witnesses on the ground that their version was a subsequent development designed to belly the accused.
The learned Judges of the High Court accepted their evidence for two different reasons.
Raju, J., held that a court can permit a party calling a witness to put questions under section 154 of the Evidence Act only in the examination inchief of the witness; for this conclusion, he has given the following two reasons: (1) the wording of sections 137 and 154 of the Evidence Act indicates it, and (2) if he is permitted to put questions in the nature of cross examination at the stage of re examination by the adverse party, the adverse party will have no chance of cross examining the witness with reference to the answers given to the said questions.
Neither of the two reasons, in our view, is tenable.
Section 137 of the Evidence Act gives only the three stages in the examination of a witness, namely, examination in chief, cross examination and re examination.
This is a routine sequence in the examination of a witness.
This has no relevance to the question when a party calling a witness can be permitted to put to him questions under section 154 of the Evidence Act: that is governed by the provisions of section 154 of the said Act, which confers a discretionary power on the court to permit a person who calls a witness to put any questions to him which might be put in cross examination by the adverse party.
Section 154 does not in terms, or by necessary implication confine the exercise of the power by the court before the examination in chief is concluded or to any particular stage of the examination of the witness.
It is wide in scope and the discretion is entirely left to the court to exercise the power when the circumstances demand.
To confine this power to the stage of examination in chief is to make 369 it ineffective in practice.
A clever witness in his examination in chief faithfully conforms to what he stated earlier to the police or in the committing court, but in the cross examination introduces statements in a subtle way contradicting in effect what he stated in the examination in chief.
If his design is obvious, we do not see why the court cannot, during the course of his cross examination, permit the person calling him as a witness to put questions to him which might be put in cross examination by the adverse party.
To confine the operation of section 154 of the Evidence Act to a particular stage in the examination of a witness is to read words in the section which are not there.
We cannot also agree with the High Court that if a party calling a witness is permitted to put such questions to the witness after he has been cross examined by the adverse party, the adverse party will not have any opportunity to further cross examine the witness on the answers elicited by putting such questions.
In such an event the court certainly, in exercise of its discretion, will permit the adverse party to crossexamine the witness on the answers elicited by such questions.
The court, therefore, can permit a person, who calls a witness, to put questions to him which might be put in the crossexamination at any stage of the examination of the witness, provided it takes care to give an opportunity to the accused to cross examine him on the answers elicited which do not find place in the examination in chief.
In the present case what happened was that some of the witnesses faithfully repeated what they had stated before the police in the examination inchief, but in the cross examination they came out with the story of insanity of the accused.
The court, at the request of the Advocate for the prosecution, permitted him to cross examine the said witnesses.
It is not suggested that the Advocate appearing for the accused asked for a further opportunity to cross examine the witnesses and was denied of it by the court.
The procedure followed by the learned Judge does not conflict with the express provisions of section 154 of the Evidence Act.
Mehta, J., accepted the evidence of the witnesses on the ground that the earlier statements made by them before the police did not contradict their evidence in the court, as the non mention of the mental state of the accused in the earlier statements was only an omission.
This reason given by the learned Judge is also not sound.
This Court in Tahsildar Singh vs The State of U.P.(1) laid down the following test for ascertaining under what circumstances an alleged omission can be relied upon to contradict the positive evidence in court: ". . . (3) though a particular statement is not expressly recorded, a statement that can be deemed to be part of that expressly recorded can be used (1)[1959] Supp. 2 S.C.R. 875, 903. 370 for contradiction, not because it is an omission strictly so called but because it is deemed to form part of the recorded statement; (4) such a fiction is permissible by construction only in the following three cases: (i) when a recital is necessarily implied from the recital or recitals found in the statement . . ; (ii) a negative aspect of a positive when the statement before the police and that before the Court cannot stand together ".
Broadly stated, the position in the present case is that the witnesses in their statements before the police attributed a clear intention to the accused to commit murder, but before the court they stated that the accused was insane and, therefore, he committed the murder.
In the circumstances it was necessarily implied in the previous statements of the witnesses before the police that the accused was not insane at the time he committed the murder.
In this view the previous statements of the witnesses before the police can be used to contradict their version in the court.
The judgment of the High Court, therefore, in relying upon some of the important prosecution witnesses was vitiated by the said errors of law.
We would, therefore, proceed to consider the entire evidence for ourselves.
When a plea of legal insanity is set up, the court has to consider whether at the time of commission of the offence the accused, by reason of unsoundness of mind, was incapable of knowing the nature of the act or that he was doing what was either wrong or contrary to law.
The crucial point of time for ascertaining the state of mind of the accused is the time when the offence was committed.
Whether the accused was in such a state of mind as to be entitled to the benefit of section 84 of the Indian Penal Code can only be established from the circumstances which preceded, attended and followed the crime.
The first question is, what is the motive for the appellant to kill his wife in the ghastly manner he did by inflicting 44 knife injuries on her body? Natverlal Atmaram, the father of the deceased Kalavati, was examined as P.W. 13.
He said that about 20 days before his daughter was murdered he received a letter from the accused asking him to take away his daughter on the ground that he did not like her, that he went to Bherai with that letter, showed it to Chhaganbhai, the father of the accused, and had a talk with him about it; that Chhaganbhai took that letter from him and promised to persuade the accused not to discard his wife , that, after a week be again went to Bherai and asked the accused why he did not like the deceased and the accused replied that he did not like her as she was not working properly; and that thereafter he went back to his village and sent a message through someone that he would go 371 to Bherai to take his daughter on Chaitra Sudi 1.
The murder took place on the night before Chaitra Sudi 1.
In the cross examination he admitted that he did not tell the police that he ' had given the letter to the father of the accused, but he told the Sub Inspector that he had shown the letter to him.
Chhaganlal, the father of the accused, as P.W. 7, no doubt denied that Natverlal gave him the letter written by the accused, but he admitted that Natverlal came to his village 10 or 15 days before the incident to take his daughter away.
The evidence of Natverlal that he went to the village of the accused is corroborated by the evidence of P.W. 7.
It is, therefore, likely that the accused wrote a letter to Natverlal to take away Kalavati and it is also likely that Natverlal gave that letter to P.W. 7 to persuade his son not to discard his wife.
P.W.s 2 to 7 said in the cross examination that the accused and his wife were on cordial terms, but, as we will indicate later in our judgment, all these witnesses turned hostile in the sessions court and made a sustained attempt to support the case of insanity.
That apart, their evidence does not disclose what opportunities they had to notice the cordial relation that existed between the accused and the deceased.
The learned Additional Sessions Judge rightly disbelieved their evidence.
The learned Additional Sessions Judge, who had seen Natverlal in the witness box, has accepted his evidence.
We, having gone through his evidence.
see no reason to differ from the opinion of the learned Additional Sessions Judge.
It is also not denied that though the accused was in Ahmedabad for ten months, he did not take his wife with him.
We accept the evidence of Natverlal and hold that the accused did not like his wife and, therefore, wanted his father in law to take her away to his home and that his father in law promised to do so before Chaitra Sudi 1.
The next question is, what was the previous history of the mental condition of the accused? Here again, the prosecu tion witnesses, P.W.s. 2 to 7, deposed for the first time in the sessions court that 4 or 5 years before the incident the accused was getting fits of insanity.
But all these witnesses stated before the police that the accused had committed the murder of his wife, indicating thereby that he was sane at that time.
Further, their evidence is inconsistent with the facts established in the case.
During this period, it was admitted by P.W. 7, the accused was not treated by any doctor.
Prior to the incident he was serving in Ahmedabad in Monogram Mills for about a year and a half.
Though the father of the deceased was staying in a village only a few miles away from the village of the accused and though the betrothal was fixed 5 years before the marriage, he did not know that the accused was insane, for if he had known that such was the mental condition of the accused he would not have given his daughter in marriage to 372 him.
It is impossible to conceive that he would not have known that the accused was insane if he was really so, and particularly when it is the case of the accused that it was not kept secret but was well known to many people and to some of the witnesses, who came to depose for him.
A month and a half prior to the incident Chhaganlal had one to Ahmedabad for medical treatment and during that period the accused came from Ahmedabad to manage his father 's shop in his absence.
The fact that he was recalled from Ahmedabad was not disputed: but, while Natverlal said that the accused was recalled in order to manage Chhaganlal 's shop in his absence, Chhaganlal said that he was recalled because he was getting insane.
The best evidence would have been that of the relative in whose house the accused was residing in Ahmedabad.
But the relative was not examined.
It appears to us that the accused was serving in Ahmedabad in Monogram Mills and he was asked to come to the village of his father to attend to the latter 's business a month and a half before the incident, as the father was leaving for Ahmedabad for medical treatment.
Before the commencement of the trial in the sessions court on June 27, 1959, an application was filed on behalf of the accused, supported by an affidavit field by the father of the accused, praying that, as the accused had become insane, he should be sent for proper medical treatment and observation.
In that affidavit it was not stated that the accused was getting fits of insanity for the last 4 or 5 years and that he had one such fit at that time.
If that was a fact, one would expect the father to allege prominently the said fact in his affidavit.
These facts lead to a reasonable inference that the case of the accused that he had periodical fits of insanity was an afterthought.
The general statements of witnesses, P.W.s 1 to 6 that he had such fits must, therefore, necessarily be false.
therefore, hold that the accused had no antecedent history of insanity.
Now coming to the date when the incident took place, P.W. 7, the father of the accused, said that the accused was insane for 2 or 3 days prior to the incident.
His evidence further discloses that he and his wife had gone to Ahmedabad on the date of the incident and returned in the same evening.
If really the accused had a fit of insanity a day or two before the incident, is it likely that both the parents would have left him and ,,one to Ahmedabad" To get over this incongruity P.W. 7 said that he went to Ahmedabad to see a bridegroom for his daughter and also to get medicine for the accused.
But he did not say which doctor he consulted and wherefrom he purchased the medicines or whether in fact he bought any medicines at all.
If the accused had a fit of insanity.
is it likely that the wife would have slept with him in the same room? We must, therefore, hold that it had not been established that 2 or 3 days before the incident the accused had a fit of insanity.
373 Now we come to the evidence of what happened on the night of the incident.
Nobody except the accused knows what happened in the bed room.
P.W.s 2 to 7 deposed that on the 10th April, 1959, corresponding to Chaitra Sudi 1, between 3 and 4 a.m. they heard shouts of the deceased Kalavati to the effect that she was being killed; that they all went to the room but found it locked from inside; that when the accused was asked to open the door, he said that he would open it only after the Mukhi (P.W. 1) was called; that after the Mukhi came there, the accused opened the door and came out of the room with a blood stained knife in his hand; that the accused began talking irrelevantly and was speaking "why, you killed in ,; mother?" "why, you burnt my father 's house?"; that afterwards the accused sat down and threw dust and mud at the persons gathered there; and that he was also laughing without any cause.
In short, all the witnesses in one voice suggested that the accused was under a hallucination that the deceased had murdered his mother and burnt his father 's house and, therefore, he killed her in that state of mind without knowing what he was doing.
But none of these witnesses had described the condition of the accused immediately when he came out of the room, which they did so graphically in the sessions court, at the time when they made statements before the police.
in effect they stated before the police that the accused came out of the room with a blood stained knife in his hand and admitted that he had murdered his wife; but in the witness box they said that when the accused came out of the room he was behaving like a mad man and giving imaginary reasons for killing his wife.
The statements made in the depositions are really inconsistent with the earlier statements made before the police and they are, therefore, contradictions within the meaning of section 162 of the Code of Criminal Procedure.
We cannot place any reliance on the evidence of these witnesses: it is an obvious development to help the accused.
The subsequent events leading up to the trial make it abundantly clear that the plea of insanity was a belated after thought and a false case.
After the accused came out of the room, he was taken to the chora and was confined in a room in the chora.
P.W. 16, the police sub inspector, reached Bherai at about 9.30 a.m.
He interrogated the accused, recorded his statement and arrested him at about 10.30 a.m.
According to him, as the accused was willing to make a confession, he was sent to the judicial magistrate.
This witness described the condition of the accused when he met him thus: "When I went in the Chora he had saluted me and he was completely sane.
There was absolutely no sign of insanity and he was not behaving as an insane man.
He was not abusing.
He had replied to 374 my questions understanding them and was giving relevant replies.
And therefore I had sent him to the Magistrate for confession as he wanted to confess.
" There is no reason to disbelieve this evidence, particularly when this is consistent with the subsequent conduct of the accused.
But P.W. 9, who attested the panchnama, exhibit 19, recording the condition of the accused 's body and his clothes, deposed that the accused was murmuring and laughing.
But no mention of his condition was described in the panchnama.
Thereafter, the accused was sent to the Medical Officer, Mater, for examination and treatment of his injuries.
The doctor examined the accused at 9.30 p.m. and gave his evidence as P.W. 11.
He proved the certificate issued by him, exhibit 23.
Nothing about the mental condition of the accused was noted in that certificate.
Not a single question was put to this witness in the cross examination about the mental condition of the accused.
On the same day, the accused was sent to the judicial Magistrate, First Class, for making a confession.
On the next day he was produced before the said Magistrate, who asked him the necessary questions and gave him the warning that his confession would be used against him at the trial.
The accused was given time for reflection and was produced before the Magistrate on April 13, 1959.
On that date he refused to make the confession.
His conduct before the Magistrate, as recorded in exhibit 31, indicates that he was in a fit condition to appreciate the questions put to him and finally to make up his mind not to make the confession which he had earlier offered to do.
During the enquiry proceedings under Ch.
XVIII of the Code of Criminal Procedure, no suggestion was made on behalf of the accused that he was insane.
For the first time on June 27, 1959, at the commencement of the trial in the sessions court an application was filed on behalf of the accused alleging that he was suffering from an attack of insanity.
On June 29, 1959, the Sessions Judge sent the accused to the Civil Surgeon, Khaira, for observation.
On receiving his report, the learned Sessions Judge, by his order dated July 13, 1959, found the accused insane and incapable of making his defence.
On August 28, 1959, the court directed the accused to be sent to the Superintendent of Mental Hospital, Baroda, for keeping him under observation with a direction to send his report on or before September 18, 1959.
The said Superintendent sent his report on August 27, 1960, to the effect that the accused was capable of understanding the proceedings of the court and of making his defence in the court.
On enquiry the court held that the accused could understand the proceedings of the case and was capable of making his defence.
At the commencement of the trial, the pleader for the accused stated that the accused could understand the proceedings.
The proceedings before the 375 Sessions Judge only show that for a short time after the case had commenced before him the accused was insane.
But that fact would not establish that the accused was having fits of insanity for 4 or 5 years before the incident and that at the time he killed his wife he had such a fit of insanity as to give him the benefit of section 84 of the Indian Penal Code.
The said entire conduct of the accused from the time he killed his wife upto the time the sessions proceedings commenced is inconsistent with the fact that he had a fit of insanity when he killed his wife.
It is said that the situation in the room supports the ver sion that the accused did not know what he was doing.
It is asked, why the accused should have given so many stabs to kill an unarmed and undefended woman? It is said that it discloses that the accused was doing the act under some hallucination.
On the other hand the existence of the weapons in the room, the closing of the door from inside, his reluctance to come out of the room till the Mukhi came, even if that fact is true, would indicate that it was a premeditated murder and that he knew that if he came out of the room before the Mukhi came he might be manhandled.
Many sane men give more than the necessary stabs to their victims.
The number of blows given might perhaps reflect his vengeful mood or his determination to see that the victim had no escape.
One does not count his strokes when he commits murder.
We, therefore, do not see any indication of insanity from the materials found in the room, on the other hand they support the case of premeditated murder.
To summarize: the accused did not like his wife; even though he was employed in Ahmedabad and stayed there for about 10 months, he did not take his wife with him; he wrote a letter to his father in law to the effect that the accused did not like her and that he should take her away to his house; the father in law promised to come on Chaitra Sudhi 1; the accused obviously expected him to come on April 9, 1959 and tolerated the presence of his wife in his house till then; as his father in law did not come on or before April 9, 1959, the accused in anger or frustration killed his wife.
It has not been established that he was insane; nor the evidence is sufficient even to throw a reasonable doubt in our mind that the act might have been committed when the accused was in a fit of insanity.
We, therefore, though for different reasons, agree with the conclusion arrived at by the High Court and dismiss the appeal.
| The appellant was charged with murdering his wife.
Before the Sessions Judge a defence was set up that the appellant was insane when the incident took place and was not capable of understanding the nature of his act.
The Sessions Judge rejected the plea of insanity and convicted him under section 302 of the Indian Penal Code.
On appeal the High Court confirmed the conviction.
Held (i) There is no conflict between the general burden to prove the guilt beyond reasonable doubt, which is always on the prosecution and which never shifts, and the special burden that restson the accused to make out his defence of insanity.
(ii) The doctrine of burden of proof in the context of the plea of insanity may be stated in the following propositions:(1).The prosecution must prove beyond reasonable doubt that the accused had committed the offence with the requisite, mensrea; and the burden of proving that always rests on the prosecution from the beginning to the end of the trial.
(2) There is a rebuttable presumption that the accused was not insane, when he committed the crime, in the sense laid down by section 84 of the Indian Penal Code: the accused may rebut it by placing before the court all the relevant evidence oral, documentary or circumstantial, but the burden of proof upon him is no higher than that which rests upon a party to civil proceedings.
(3) Even if the accused was not able to establish conclusively that he was insane at the time he committed the offence, the evidence placed before the court by the accused or by the prosecution may raise a reasonable doubt in the mind of the court as regards one or more of the ingredients of the offence, including mens rea of the accused and in that case the court would be entitled to acquit the accused on the ground that the general burden of proof resting on the prosecution was not discharged.
K. M. Nanavati vs State of Maharashtra, [1962] Supp. 1 S.C.R.567.
followed.
Ramhitram vs State, A.I.R. 1956 Nag. 187, disapproved.
Kamla Singh vs State, A.I.R. 1955 Pat.
209, approved.
H. M. Advocate vs Fraser, (1878)4 Couper 70, referred to.
(iii)The court can permit a person, who calls a witness, to put questions to him which might be put in cross examination, at any stage of the examination of the witness, provided it takes care to give an opportunity to the accused to cross examine him on the answers elicited which do not find place in the examination in chief.
362 Section 137 of the Evidence Act, gives only the three stages in the examination of a witness, and it has no relevance to the question when a party calling a witness can be permitted to put to him questions under section 154 of the Evidence Act: that is governed by the provisions of section 154 of the said Act, which confers a discretionary power on the court to permit a person who calls a witness to put any questions to him which might be put in cross examination by the adverse party.
Tahsildar Singh vs The State of U.P., [1959] SUPP.
2 S.C.R. 875, followed.
|
Special Leave Petition (Civil) No. 15667 of 1987.
813 From the Judgment and Order dated 11.11.1987 of the Patra High Court in Appellate Decree No. 133 of 1983.
G.L. Sanghi, S.K. Mehta, M.K. Dua, S.M. Sarin and Aman Vachher for the Petitioner.
Salman Khurshid, Irshad Ahmad, V.D. Phadke and L.R. Singh for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This is a petition for leave to appeal against the judgment and order dated 11th November, 1987 of the High Court of Patna.
On 16th January, 1958 a lease deed was executed between the lessee Latifur Rehman and lessor Khaja Midhat Noor (hereinafter called the respondent) with permission to sub lease the same.
The said Latifur Rehman sub leased the premises to Burmah Shell Oil Distributing Company (the petitioner herein) for running a petrol pump and making necessary constructions thereon.
The lease was for a period of ten years which expired on 16th January, 1968.
It appears further that after the lease period had expired, the sub lessee, petitioner continued to pay the rent which was being accepted continuously from month to month by the respondent, the lessor.
A notice was issued by the respondent to the lessee terminating the lease and for giving vacant possession of the land by the 15th January, 1973 and also requiring the removal of the buildings, plant, etc., by the 16th January, 1973.
In the last two paras of the said notice, it was stated that the lessee was to surrender the lease hold land on the expiry of 15th January, 1973.
No notice was given separately to the petitioner terminating its lease.
A suit for ejectment was filed thereafter.
The lessee Latifur Rehman did not contest the suit for ejectment.
The petitioner, however, contested that proceeding.
The learned Munsiff I, Gaya, by his judgment dated 8th May, 1979 dismissed the suit holding that the notice terminating the lease was necessary and the notice in this case was invalid.
The plea of the landlord that the tenancy expired by afflux of time, was rejected.
On 22nd February, 1983 the 1st Additional Sub Judge, Gaya allowed the appeal of the landlord and held that the notice terminating the tenancy and asking the petitioner to surrender by the 15th January, 1973 was a valid notice.
The main question involved is, whether there was a valid termination of the lease and as such the sub lessee, the petitioner herein was 814 bound to deliver vacant possession.
A written statement had been filed by the petitioner, the sub lessee, wherein it was, inter alia, stated that it was holding over the lease hold property after the expiry of the lease by paying rent.
No notice terminating tenancy was received by it.
The validity of the notice to the lessee was also challenged.
The trial Court held that the lease was not extended for a fixed period of five years in absence of any written instrument.
The following two questions of law were re formulated by the High Court: (1) In absence of any registered instrument executed by both the parties i.e. the lessor and the lessee after the period stipulated in Ext.
4 i.e. the period of ten years, can it be said that the lease was extended automatically for a period of five years in terms of Ext. 4 or further whether the lessee was holding the suit property as tenancy from month to month? (2) If the first part of question (1) is held in negative and second part in the affirmative, as a consequence of which it must be held that the lease was required to be determined, whether the notice as contained in Ext.
7 validly terminated the lease of the lessee? Indubitably, the lessee came in possession of the property in question on 16th January, 1958.
The lease was for a period of ten years with a right of renewal for a further period of five years.
After the expiry of ten years, no instrument was executed by the parties and the lessee continued to remain in possession of the suit property.
The lessor accepted the rent and allowed the lessee to continue.
It is relevant in this connection to refer to the provisions of the (hereinafter called 'the Act ').
Section 106 of the Act deals with the duration of certain leases in absence of written contract or local usage and section 107 deals how leases are to be made.
These sections read as follows: "106.
In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months ' notice expiring with the end of a year of the tenancy; and a lease of immovable property for 815 any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days ' notice expiring with the end of a month of the tenancy.
Every notice under this section must be in writing, signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party, or to one of his family or servants, at his residence, or if such tender or delivery is not practicable affixed to a conspicous part of the property.
A lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument.
All other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession.
Where a lease of immovable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee: Provided that the State Government may, from time to time, by notification in the Official Gazette, direct that leases of immovable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by unregistered instrument or by oral agreement without delivery of possession.
" In view of the paragraph 1 of section 107 of the Act, since the lease was for a period exceeding one year, it could only have been extended by a registered instrument executed by both the lessor and the lessee.
In the absence of registered instrument, the lease shall be deemed to be "lease from month to month".
It is clear from the very language of section 107 of the Act which postulates that a lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument.
In the absence of registered instrument, it must be a 816 monthly lease.
The lessee and the sub lessee in the facts of this case continued to remain in possession of the property on payment of rent as a tenant from month to month.
The High Court so found.
We are of the opinion that the High Court was right.
Section 116 of the Act which was placed before the High Court deals with the effect of holding over and provides as follows: "116.
If a lessee or under lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in section 106.
" It was submitted before the High Court that this was not a case of continuing of old tenancy for a period of five years but in view of the clear provisions of section 107 which we have noted hereinbefore and in the absence of a registered instrument, it must be held that it was holding over and not continuation of old tenancy for a further period of five years.
That would be the harmonious construction of section 107 read with section 116 in the facts of this case.
We are of the opinion that the High Court was right that the tenancy was automatically determined on the expiry of ten years which was stipulated in Ext.
Thereafter the lessee continued to hold the property and the lessor accepted the rent.
The lease was, therefore, renewed from month to month because it was not the case of any party that it was for agricultural purposes.
In that view of the matter, the termination of the lease could only be by giving a valid notice.
Such notice was given to the lessee but not to the sub lessee.
The respondent 's case is that a notice to sub lessee was not necessary.
It was contended on behalf of the appellant that by Ext.
7 the lessee was asked to quit the lease hold premises on the expiry of 15th June, 1973.
Admittedly, in this case, the lease was executed on 16th January, 1958 and from that date the lease came into existence.
For computing the period of ten years the 16th January, 1958 had to be excluded.
The tenancy was, therefore, terminated on the expiry of 16th of the month.
The notice in the instant case of the quit which was Ext.
7 before the Court dated 30th November, 1972, 817 was given on behalf of the respondent to Latifur Rehman lessee.
In paragraph 4 of Ext.
7 it was stated that the lessee was to deliver the possession of the lease hold property by 16th January, 1973.
In paragraph 5 of Ext.
7 the lessee and sub lessee were required to remove the buildings, plants etc.
by the 16th January, 1973.
In the last but one and the last paragraph of Ext.
7 it was stated that the lessee was to surrender the properties of the lease hold land on the expiry of 15th January, 1973.
The question is whether there was a valid notice.
The High Court held that in the facts of this case, there was a valid notice of termination and after the valid notice of termination of the lease to the lessee, there was no need to give a fresh notice to the sub lessee.
Notice must be read in the context of the facts of each particular case having regard to the situation of the parties to whom it is addressed.
In Harihar Banerji and others vs Ramasashi Roy and others, 45 Indian Appeals 222 at page 225, the Judicial Committee observed as follows: ".
.that notices to quit, though not strictly accurate or consistent in the statements embodied in them, may still be good and effective in law; that the test of their sufficiency is not what they would mean to a stranger ignorant of all the facts and circumstances touching the holding to which they purport to refer, but what they would mean to tenants presumably conversant with all those facts and circumstances; and, further, that they are to be construed, not with a desire to find faults in them which would render them defective, but to be construed ut res magis valeat quam pereat.
" This is how the notices should be literally construed.
This decision was relied upon by this Court in Mangilal vs Suganchand Rathi; , There, however, the facts were different.
There the defendant was a tenant of the plaintiffs.
The defendant was in arrears of rent for one year to the extent of Rs. 1020.
On April 11, 1959 the plaintiffs served a notice on the defendant requiring him to remit to them Rs.1020 within one month from the date of service of notice, failing which suit for ejectment would be filed.
This notice was received by the defendant on April 16, 1959.
On June 25, 1959 the defendant sent a reply to the notice enclosing with it a cheque for Rs.1320.
This amount consisted of the rental arrears as well as the rent due right up to June 30, 1959.
The plaintiffs accepted the cheque and cashed it and gave a fresh notice on July 9, 1959 requiring the defen 818 dant to vacate the premises by the end of the month of July.
The defendant did not vacate the premises.
Then the plaintiffs filed a suit to eject the defendant upon the ground that the latter was in arrears of rent for one year and had failed to pay the arrears within one month of the service of the notice dated April 11, 1959 upon him.
From the undisputed facts it was clear that the defendant was in fact in arrears of rent and had failed to pay it within the time prescribed by cl.(a) of section 4 of the Madhya Pradesh Accommodation Control Act, 1953.
It was held that though the notice dated 11th April, 1959 could be construed to be composite notice under section 4(a) of the Accommodation Act and section 106 of the it was ineffective under section 106 of the because it was not a notice of 15 clear days.
In that case, the defendant had only 14 clear days ' notice.
Reference was made to the aforesaid decision of Harihar Banerji vs Ramsashi Roy (supra) which was distinguished by this Court.
This Court held that notice under section 106 of the Act must be strictly complied with.
In so holding this Court relied on a decision of the Calcutta High Court in Subadini vs Durga Charan Law, I.L.R. which was construing a notice contemplated by section 106 of the Act and had held that in calculating the 15 days ' notice the day on which the notice was served was excluded and even if the day on which it expired was taken into account it would be clear that the defendant had only 14 clear days ' notice.
This position was again reiterated by the Calcutta High Court in Gobinda Chandra Saha vs Dwarka Nath Patita, A.I.R. This Court affirmed this view that notice must be understood in the light of Harihar Banerji vs Ramsashi Roy (supra).
This Court held that the suit was actually based upon the notice dated July 9, 1959 which gave more than 15 days ' clear notice to the defendant to vacate the premises.
This notice was a valid notice under section 106 of the Act.
In the instant case if all the paragraphs of Ext. 7 which is a notice in the instant case are read together in harmony it would be manifest that the lessee was directed to hand over the lease hold property on 16th January, 1973.
In the aforesaid view of the matter, in our opinion, there was a valid notice of termination of the lease of the lessee.
In any event the lessee did not dispute this contention.
The lessee accepted a valid termination of the lease hold property.
In Roop Chand Gupta vs Raghuvanshi (Pvt.) Ltd. and another; , , it was held by this Court that it is quite clear that law does not require that the sub lessee need be made a party, if there was a valid termination of the lease.
This Court reiterated that in 819 all cases where the landlord instituted a suit against the lessee for possession of the land on the basis of a valid notice to quit served on the lessee and did not implead the sub lessee as a party to the suit, the object of the landlord is to eject the sub lessee from the land in execution of the decree and such an object is quite legitimate.
The decree in such a suit would bind the sub lessee.
This Court noted at page 1892 of the report that this might act harshly on the sub lessee; but this was a position well understood by him when he took the sub lease.
The law allows this and so the omission cannot be said to be an improper act.
In the facts of this case these observations apply more effectively.
The termination of the lease was not disputed by the lessee.
There is no allegation of any collusion between the lessee and the respondent.
In that view of the matter, we are of the opinion that the High Court was right.
The suit in question was instituted in May, 1979 and the valid notice to quit was given long after the expiry of the period of lease.
The sub lessee had long innings.
It is time for him to quit.
There is no merit in this petition.
The special leave petition fails and is, therefore, dismissed with costs.
R.S.S. Petition dismissed.
| These appeals raised an identical question.
Civil Appeals Nos 4291 and 4292 of 1984 were preferred against the judgment of the Madras High Court in Writ Appeals Nos.
561 and 562 of 1983.
The appellant in these two appeals, an employee in the Bank of India, which is a Nationalised Bank, was dismissed.
Aggrieved, he preferred an appeal under section 41(2) of the Tamil Nadu Shops and Establishments Act, 1947 (the Tamil Nadu Shops Act).
A preliminary objection was raised by the Bank to the effect that the Tamil Nadu Shops Act was not applicable to the Bank in view of the exemption contained in Section 4(1)(c) thereof.
The Appellate Authority held that the preliminary objection might be decided along with the appeal.
The bank thereupon filed two writ petitions in the High Court, one for a direction to the Appellate Authority to dispose of the preliminary objection before disposing of the appeal on merits, and the other, for a direction to the Appellate Authority not to proceed with the appeal.
Both the Writ Petitions were allowed by a Single Judge of the High Court on the ground that the Bank was an establishment under the Central Government and consequently the provisions of the Tamil Nadu Shops Act were not applicable to it in view of the exemption contained in this behalf in section 4(1)(c).
Against that decision, two writ appeals aforementioned were filed, which were dismissed by a Division Bench of the High Court by the Judgment under appeal in these two appeals.
The same judgment of the High Court had disposed of Writ Petition No. 1550 of 1981 also, which had arisen out of an application under section 51 of the Tamil Nadu Shops Act made by the employees of the State Bank of India before the Commissioner of Labour for a direction that all the provisions of that Act would apply to them, being employed in the State Bank.
The State Rank had contended that it was an establishment under the Central 663 Government within the meaning of Section 4(1)(c) of the Tamil Nadu Shops Act and consequently the provisions of that Act were not applicable to it.
The Commissioner of labour had rejected the plea of the State Bank and held that the provisions of the Act were applicable to it.
Civil Appeal No. 4329 of 1984 was preferred against the said Judgment by the State Bank 's Staff Union and Civil Appeal No. 4735 of 1984 was preferred by the employees concerned.
Civil Appeal No. 1120 of 1976 was preferred by Syndicate Bank, a Nationalised Bank, against the judgment of the Andhra Pradesh High Court (Division Bench), dismissing the Writ Appeal No. 268 of 1975 and upholding the order of a Single Judge dismissing the Writ Petition No. 5973 of 1973 filed by the appellant Syndicate Bank.
The services of Respondent No. 3 in the appeal had been terminated by the appellant Syndicate Bank.
An appeal was preferred by the said respondent before the Labour officer under the Andhra Pradesh Shops and Establishment Act, 1966 (the Andhra Pradesh Shops Act).
The Labour officer allowed the appeal which was confirmed in a second appeal by the Labour Court.
Aggrieved by these orders, the Bank filed the Writ Petition above said.
It was urged by the appellant Bank that it being an establishment under the Central Government within the meaning of Section 64(1)(b) of the Andhra Pradesh Shops Act, the provisions of that Act including the provisions of appeal were not applicable to it in view of the exemption contained in this behalf.
Civil Appeal No. 1042 was preferred by the Syndicate Bank against the judgment of the Andhra Pradesh High Court, dismissing the Writ Petition No. 86 of 1979.
Respondent No. 3 in the appeal had been dismissed by the appellant bank.
He preferred an appeal which was allowed.
The Bank preferred a second appeal before the Labour Court, which was dismissed.
The Bank filed the aforesaid writ Petition before the High Court and urged that it being an establishment under the Central Government within the meaning of Section 64(1)(b) of the Andhra Pradesh Shops Act, the provisions of that Act were not applicable to it in view of the exemption contained in this behalf.
The High Court dismissed the Writ Petition.
Civil Appeal No. 837 of 1984 was preferred by the Bank of India a nationalised bank, against the judgment of the Kerala High Court dismissing the Writ Petition No. 1419 of 1978.
Respondent No. 1 in the appeal had preferred an appeal under section 18 of the Kerala Shops and Commercial Establishments Act, 1960 (the Kerala shops Act) against an order passed by the appellant Bank, discharging him from service.
A preliminary objection was raised by the Bank with regard to the maintainability of the appeal on the ground that it being an establish 664 ment under the Central Government within the meaning of section 3(1)(c) of that Act, the provisions thereof including section 18 above said were not applicable to it.
The objection was overruled by the appellate authority.
The Bank filed the original Petition abovementioned in the High Court which dismissed the same.
Dismissing the Civil Appeals Nos . 4291 and 4292 of 1984, 4329 of 1984 and 4735 of 1984, and allowing the Civil Appeal Nos. 1120 of 1976, 1042 of 1979 and 837 of 1984, the Court, ^ HELD: The common question which arose for consideration in all these appeals was as to whether the Nationalised Banks and the State Bank of India were establishments under the Central Government within the meaning of the Acts above said and consequently the provisions of the said Acts were not applicable to these Banks in view of the exemption contained therein in this behalf.
[670E] In view of the definition of the term "establishment" read with that of "commercial establishment" contained in the said Acts, it was not disputed even by counsel for the banks, that a bank is an establishment.
Consequently, unless exempted, the provisions of the said Acts would apply to the State Bank of India and the nationalised banks also.
[670F G] A conspectus of the provisions of the (Act No. 23 of 1955) and the (Act No. 5 of 1970), read with the dictionary meaning of the term "under" leaves no manner of doubt that the State Bank of India and the nationalised banks are clearly establishments under the Central Government.[677D] For the employees of these banks, it was urged that these banks were autonomous corporations having distinct juristic entity with a corporate structure of their own and could not as such be treated to be owned by the Central Government.
According to counsel, the word "under" used in the expression "under the Central Government" con noted complete control in the sense of being owned by the Central Government.
Disagreeing with that submission it was held that the mere fact that the State Bank of India and the nationalised banks are different entities as corporate bodies for certain purposes cannot by itself be a circumstance from which it may be deduced that they cannot be establishments under the Central Government.
[677E F; 678A] 665 If the criteria laid down in Ajay Hasia, etc.
vs Khalid Mujib Sehravardi & Ors. etc.
; , decided by a Constitution Bench of this Court, was applied to the facts of these cases, it is obvious that even though the State Bank of India and the nationalised banks may not be owned as such by the Central Government and their employees may not be the employees of the Central Government, they certainly will fall within the purview of the expression "under the Central Government", in view of the existence of deep and pervasive control of the Central Government over these banks.
As pointed out by this Court in Biharilal Dobray vs Roshan Lal Dobray; , , the true test of determination of the question whether a statutory corporation is independent of the Government depends upon the degree of control.
[679G H;682E F] In view of these considerations, no exception could be taken to the view of the Madras High Court in its judgments which were the subjectmatter of the Civil Appeal Nos. 4291 and 4292 of 1984, 4375 of 1984 and 4329 of 1984.
As regards the judgment of the Kerala High Court and the judgment of the Andhra Pradesh High Court under appeal even if the decisions dealing with Article 12 of the Constitution are not made the foundation for deciding the point in issue, the principles enumerated therein particularly with regard to deep and pervasive control are relevant for deciding the point in issue, and also it was sufficient to point out that for holding that the State Bank of India and the nationalised banks are establishments under the Central Government which have a corporate structure and have freedom in the matter of day to day administration, it is not necessary that these banks should be owned by the Central Government or be under its absolute control in the sense of a department of the Government.
As regards the circumstances that even though the Reserve Bank of India is mentioned specifically in the relevant clause containing exemption, neither the State Bank of India nor the nationalised banks are so mentioned, it is to be pointed out that the Reserve Bank of India was established as shareholders ' Bank under Act 2 of 1934.
The Kerala Shops Act and the Andhra Pradesh shops Act, of the years 1960 and 1966, were modelled almost on the pattern of the Tamil Nadu Shops Act, which is of the year 1947.
When section 4(1)(c) of this Act referred to the Reserve Bank of India in 1947, it obviously referred to it as the Shareholders ' Bank.
The Reserve Bank Transfer to Public ownership Act (Act 82 of 1948) came into force on 1st January, 1949, and it was thereafter that the shares in the capital of the Reserve Bank came to belong to the Central Government.
In this background, no undue emphasis could be placed on the circumstances that the State Bank of India or the nationalised banks did 666 not find mention in the provision containing exemption even though the Reserve Bank of India was specially mentioned therein.
For the response stated above, the aforesaid decisions of the Kerala High Court and the Andhra Pradesh High Court deserved to be set aside.[683C H] On the view the Court had taken that the State Bank of India and the nationalised banks are establishments under the Central Government, the Court did not consider the question as to whether these banks were establishment, which not being factories within the meaning of the , were, in respect of matters deal with in the Tamil Nadu Shops Act, governed by a separate law for the time being in force in the State so as to be entitled to claim exemption under clause (f) of sub section (1) of section 4 of the said Act or of the corresponding provisions in the Kerala Shops Act and the Andhra Pradesh Shops Act.
[684A B] Civil Appeals Nos.
4291 and 4292 of 1984, 4329 of 1984 and 4735 of 1984 were dismissed.
Civil Appeal No. 1120 of 1976 was allowed and the judgment of the High Court in Writ Appeal No. 268 of 1975 as also the Judgment of the Single judgement the Writ Petition No. 5973 of 1973 as well as the orders of the Labour officer in the appeal filed by respondent No. 3 and of the Second Appellate Authority m the second appeal filed by the appellant Bank under the provisions of the Andhra Pradesh Shops Act were set aside.
Civil Appeal No. 1042 of 1979 was allowed and the judgment of the Andhra Pradesh High Court in the Writ Petition No. 86 of 1979 as also the orders passed by the first and second appellate authorities in the appeals preferred by respondent No. 3 and the bank under the Andhra Pradesh Shops Act were set aside.
Civil Appeal No. 837 of 1984 was allowed and the judgment of the Kerala High Court in Writ Petition No. 1419 of 1978 was set aside.
The preliminary objection raised by the bank before the Appellate Authority in the appeal filed by respondent No. I under section 18 of the Kerala Shops Act to the effect that the said appeal was not maintainable was upheld, with the result that if the said appeal was still pending would be disposed of as not maintainable and in case it had been decided, the said decision should be treated as without jurisdiction.[684C F] The various employees whose appeals preferred under the Kerala Shops Act or the Andhra Pradesh Shops Act referred to above had been held to be not maintainable and the orders passed therein had been set aside, would be at liberty to take recourse to such other remedies as might be available to them in law.
[684G] 667 Ajay Hasia, etc.
vs Khalid Mujib Sehravardi & etc.
; , ; Heavy Engineering Mazdoor Union vs The State of Bihar & Ors., ; Hindustan Aeronautics Ltd. vs The Workmen and Ors., ; ; Graham vs Public Works Commissioner, ; Regional Provident Fund Commissioner, Karnataka vs Workmen represented by the General Secretary, Karnataka Provident Fund Employees ' Union and Another, [1984] II L.L.J. 503; Western Coalfields Ltd. vs Special Area Development Authority, Korba and Anr., ; ; Rashriva Mill Mazdoor Sangh, Nagpur vs The Model Mills, Nagpur and Anr., ; ; Union of India & Ors.
vs N. Hargopal and Ors., ; Thote Bhaskara Rao vs The A.P. Public Service Commission and Ors., Judgment Today and Biharilal Dobray vs Roshan Lal Dobray, ; , referred to.
|
Appeal No. 196 of 1958.
Appeal by special leave from the judgment and order dated April 27, 1953, of the Assam High Court in Civil Rule No. 66 of 1953.
Sukumar Mitter and Sukumar Ghose, for the appel.
Veda Vyasa and Naunit Lal, for the respondents.
October 18.
The Judgment of the Court was delivered by SHAH J.
The appellants are dealers registered under the Assam Sales Tax Act XVII of 1947 hereinafter referred to as the Act.
For the account period April 1, 1948 to September 30, 1948, the appellants submitted a return of their turnover which included sales in Assam of all goods other than jute.
The Superintendent of Taxes, Dhubri, summarily assessed the appellants under sub section
4 of section 17 of the Act to pay tax on sales of jute despatched by them to Calcutta during the account period.
Appeals against the order of assessment to the Assistant Commissioner of Taxes and to the Commissioner of Taxes, Assam, proved unsuccessful.
The appellants then applied to the Commissioner of Taxes to refer certain questions arising out of the assessment to the High Court in Assam under section 34 of the Act.
The Commissioner referred the following questions and another to the High Court of Judicature in Assam: (1) Whether, in view of the aforesaid facts and circumstances the turnover from 20,515 maunds of 6 42 jute mentioned under item (i) is taxable under the Act ? (2) Whether, in view of the aforesaid facts and circumstances the turnover from 5,500 maunds of jute mentioned under item (ii) is taxable under the Act ? (3) Whether, in view of the aforesaid facts and circumstances, the turnover from 25,209 maunds of jute mentioned under item (iii) is taxable under the Act ? In respect of each of the three questions 1 to 3, the High Court recorded the following answer: section " Not being a sale within the meaning of sub12 of section 2 of the Act, the consignments are riot taxable ".
The High Court, however observed: " As to whether these consignments can hereafter be assessed if they fall within the purview of the Explanation to sub section
12 of section 2, we express no opinion ".
As required by section 32(8) of the Act, the Commissioner of Taxes by his order dated August 1, 1952, directed the Superintendent of Taxes to dispose of the case in accordance with the judgment of the High Court.
The Superintendent of Taxes thereafter issued on January 30, 1953, the following notice to the appellants: " In view of the Hon 'ble High Court 's order in Sales tax Reference No. 3 of 1951, the assessment order dated 30th September, 1950, for the return period 30th September, 1948, has been set aside and you are directed to produce necessary evidence, con.
tract papers, account books, etc. . . in order to see whether the contract of sale involved in this case come within the purview of the Explanation to sub.s.
12 of section 2 of the Act ".
By their letter dated March 23, 1953, the appellants called upon the Commissioner of Taxes to direct the Superintendent of Taxes not to proceed with the notice.
The Commissioner having failed to direct as requested, the appellant petitioned the High Court in Assam under article 226 of the Constitution for a writ 43 prohibiting the Superintendent of Taxes from re opening and proceeding with the assessment of the appellants under the Assam Sales Tax Act and for a writ quashing the order dated August 1, 1952, passed by the Commissioner.
The High Court summarily dismissed the petition.
Against the order passed by the High Court, this appeal is filed with special leave under article 136 of the Constitution.
The High Court, in answering the questions submitted to it, was exercising an advisory jurisdiction and could not and did not give any direction to the sales tax authorities to proceed to assess or not to assess the appellants to sales tax : it merely recorded its opinion that the transactions referred to in the questions were not sales within the meaning of section 2, sub section 12, of the Act and were accordingly not taxable.
Pursuant to the opinion of the High Court, the Commissioner directed the Superintendent of Taxes to dispose of the case " in accordance with" the judgment of the High Court; but the Superintendent of Taxes thought that he was entitled to re open the assessment proceedings and to assess the appellants in the light of the Explanation to section 2, sub section 12.
In so doing, the Superintendent of Taxes, in our judgment, acted without authority.
The Superintendent had made the assessment, and that assessment was confirmed in appeal by the Assistant Commissioner.
On the questions arising out of that assessment, the High Court had opined that the transactions sought to be assessed were not liable to tax.
The Superintendent of Taxes, on this opinion was right in vacating the order of assessment.
But any further proceeding for assessment which he sought to commence by issuing a notice requiring the appellants ' to produce evidence, contract papers, account books, etc.
so as to enable him to determine whether the transactions were taxable under the Explanation to sub section
12 of section 2 had to be supported by some authority under the Act.
The Superintendent of Taxes has not referred to the authority in exercise of which he issued this notice.
It is true that tinder section 19 of the Act, the " taxation Officer " if satisfied upon information coming into his possession that any 44 dealer has been liable to pay tax under the Act in respect of any period and has failed to apply for registration and to make the return required of him, may at any time within three years of the end of the aforesaid period serve on the dealer a notice containing all or any of the requirements which may be included in a notice under sub section 2 of section 16 and may proceed to assess the dealer in respect of such period.
But admittedly, the appellants were registered as dealers and had submitted their returns: the power to reassess could not therefore be exercised by virtue of section 19 of the Act.
Under section 19 A, the Commissioner has also power, if satisfied upon information coming into his possession, that any turnover in respect of sales of any goods chargeable to tax has escaped assessment during the return period, to serve at any time within three years of the aforesaid period, on the dealer liable to pay the tax in respect of such turnover a notice containing all or any of the requirements which may be included in a notice under sub section 2 of section 16 and may proceed to assess or reassess the dealer in respect of such period.
But the Commissioner bad not issued any such notice under section 19A. Nor had the Commissioner in exercise of his revisional authority under section 31 of the Act set aside the original order of assessment.
The Commissioner merely directed under section 32, sub section 8, that the case be disposed of in accordance with the judgment of the High Court, and acting under that direction, the Superintendent of Taxes had no power to reopen the assessment and to call upon the appellants to produce documentary evidence with a view to commence an enquiry whether the sales involved in the case fell " within the purview of the Explanation to section 2 sub section 12 ".
In any event, the account period as has already been observed was April 1, 1948 to September 30, 1948, and three years from the end of that period, expired before the date on which the notice was issued.
Fresh proceedings for reassessment could not be initiated by the Superintendent of Taxes under section 19 after the expiry of three years from the assessment period assuming that this could be regarded as a case of failure to apply for 45 registration and to make a return required of the appellants.
In support of his contention that the Superintendent of Taxes had authority to proceed to reassess the appellants in the light of the observations made in the judgment of the High Court, counsel for the appellants invited our attention to the judgment of the Privy Council in Commissioner of Income Tax, Bombay Presidency and Aden and others vs Bombay Trust Corporation Ltd. (1).
In that case, a foreign company was assessed by the Income Tax authorities in the name of a resident company for profits and gains received by the latter as its agent under sections 42(1) and 43 of the Indian Income tax Act, 1922.
In a reference under section 66 of the Income tax Act, the High Court at Bombay opined that the assessment was illegal.
The Commissioner of Income tax, thereafter sent back the case with a direction to set aside the assessment and to make a fresh assessment after making such further enquiry as the Income tax Officer might think fit.
Acting upon that order, the Income tax Officer requir ed the resident company as agent of the foreign company to produce or cause to be produced books of account for the year of assessment and also to produce such other evidence on which it might seek to rely in respect of its return, and the resident company having failed to produce the books of the foreign company, he proceeded to make an assessment under section 23(4) of the Income tax Act, 1922.
By its petition under section 45 of the Specific Relief Act filed in the High Court at Bombay, the resident company prayed for an order for refund of the taxes already Paid under the original assessment, and for an order for disposal of certain proceedings initiated by it before the Assistant Com missioner and the Income tax Officer.
The High Court made an order directing refund of tax paid, and further directing cancellation of assessment.
In an appeal preferred by the Commissioner of Income tax against the order of the High Court, it was observed by the Privy Council that the Commissioner was not obliged to discontinue proceedings against the resident 46 company as agent of the foreign company in respect of the year of assessment, and it was within the jurisdiction of the Commissioner under section 33(2) of the Income tax Act to direct further enquiry if he thought such an enquiry to be reasonable and to be profitable in the public interest.
The principle of this case has in our judgment no application to the present case.
The High Court at Bombay in its advisory jurisdiction had declared the assessment already made to be illegal.
But the Commissioner was under section 33 of the Indian Income tax Act invested with jurisdiction to direct further enquiry, and he purported to exercise that jurisdiction.
The Privy Council rejected the challenge to the exercise of that jurisdiction.
In the present case, no proceedings were started by the Commissioner of Taxes in exercise of his revisional authority.
The Commissioner of Taxes had directed the Superintendent of Taxes merely to dispose of the case according to the judgment of the High Court, and the Superintendent had to carry out that order.
If he was competent and on that question, we express no opinion he could, if the conditions precedent to the exercise of his jurisdiction existed, proceed to reassess the appellants.
But the proceedings for reassessment were clearly barred because the period prescribed for reassessment had expired.
The Superintendent therefore had no power to issue a notice calling upon the appellants to produce evidence to enable him to start an enquiry which was barred by the expiry of the period of limitation prescribed by the Act.
In the Bombay Trust, Corporation case (supra), the Income tax Officer acted in pursuance of the direction of the Commissioner lawfully given in exercise of revisional authority and reopened the assessment.
In the present case, no such direction has been given by an authority competent in that behalf: and the Superintendent had no power to reassess the income under section 19 assuming that the section applied to a case where the assessee though registered had failed to include his sales in a particular commodity in his turnover, because the period of limitation prescribed in that behalf had expired.
47 The appeal must therefore be allowed and the order passed by the High Court set aside.
In the circumstances of the case, no useful purpose will be served ' by remanding the case to the High Court.
We accordingly direct that a writ quashing the proceedings commenced by the Superintendent of Taxes, Dhubri, by his notice dated January 30, 1953, be issued.
The appellants will be entitled to their costs of the appeal.
Appeal allowed.
| The appellants who were dealers registered under the Assam Sales Tax Act, 1947, submitted a return of their turnover for the account period April 1, 1948 to September 30, 1948, which included sales in Assam of all goods other than jute.
The Superintendent of Taxes, however, summarily assessed the appellants under sub section
4 of section 17 of the Act by order dated September 30, 1950, to pay tax on sales of jute despatched by them to Calcutta during the account period.
The order of assessment was confirmed by the Commissioner of Taxes.
On an application by the appellants the Commissioner referred certain questions of law arising out of the assessment to the High Court, which then gave its opinion that as the consignments in question were not sales within the meaning of sub section
12 of section 2 of the Act, they were not taxable, and that as to whether the sales could thereafter be assessed if they fell within the purview of the Explanation to sub section
12 of section 2, it expressed no opinion.
On receipt of the opinion the Commissioner directed the Superintendent of Taxes to dispose of the case in accordance with the judgment of.
the High Court.
The Superintendent of Taxes then set aside the order of assessment dated September 30, 1950, and issued a notice to the appellants on January 30, 1953, directing them to produce the necessary evidence in order in the case came within the purview of the Explanation to sub s.12 of section 2 of the Act.
The appellant claimed that the Superintendent had no jurisdiction to commence any further proceeding for assessment as the notice issued to him was beyond three years from the end of the assessment period as provided by section 19 of the Act.
Held, that the High Court in answering the questions referred to it was exercising an advisory jurisdiction and could not and did not give any direction to the sales tax authorities to proceed to assess or not to assess the appellants to sales tax ; it merely gave its opinion that the transactions were not sales within the meaning of section 2, sub section
12 of the Act and were accordingly not taxable.
41 Held, further, that the Commissioner not having issued any notice under section 19A of the Act or exercised his revisional authority under section 31, but having merely directed the case to be disposed of in accordance with the judgment of the High Court, the Superintendent of Taxes had no jurisdiction to initiate fresh proceedings for reassessment under section 19 after the expiry of three years from the assessment period.
Commissioner of Income Tax, Bombay Presidency and Aden and others vs Bombay Trust Corporation Ltd., (1936) L.R. 63 1.
A. 408, distinguished.
|
Petition No. 7667 of 1987.
In Writ Petition Nos.
348 352 of 1985.
(Under Article 32 of the Constitution of India).
Madan Lokur for the Petitioners.
G. Viswanatha Iyer, P.K. Pillai, M.K.D. Namboodary for the State of Kerala J.R. Das and D.K. Sinha for the State of West Bengal.
A.K. Ganguli, Mariapputham for the State of Himachal Pradesh.
A.M. Khanwilkar and A.S. Bhasme for the State of Maharashtra.
353 K.H. Nobin Singh for the State of Karnataka.
B.R. Aggarwala, and Ms. section Manchanda for Medical Council of India.
D.N. Devedi, R.P. Srivastava, Mrs. Halida Khatun and Ms. A. Subhashini for the Union of India.
P.H. Parekh, E.K. Jose, B.D. Sharma, M.I. Khan, D.N. Devedi, R.P. Srivastava, P, Parmeshwaran, Mrs. section Dikshit, A.V. Rangam, R. Bana, M. Veerappa, B.R. Aggarwal, B.D. Sharma, R.C. Verma, C.V. Subba Rao, D.K. Sinha, J.R. Dass, M.E. Sardhana, S.K. Nandy, A.S. Bhasme, A.M. Khanwilkar, P.P. Singh, R.K. Mehta, T.V.S. Chari, A.K. Sanghi, M.N. Shroff, D. Goburdhan, Suryakant, H.K. Puri, M.K.D. Namboodary, B.P. Singh, K. Ramkumar, E.M.S. Anam T.V. Ratnam, L.R. Singh, D.R. Agarwal, R.S. Sodhi Mrs. Sushma Suri, A. Subba Rao, Prabir Choudhary, D.N. Mukherjee, S.K. Mehta, M.K. Garg, P. Parmeshwarn M. Karanjawala, L.K. Pandey, K. Rajindera Choudhary, P.C. Kapur, Pramod Swarup, T. Sridharan, Rajesh, N.M. Ghatate, Ravi P. Wadhvani, S.K. Gambhir, D.N. Mishra for the other appearing parties.
The following order of the Court was delivered: ORDER By the main judgment of this Court delivered on 22nd June, 1984 in Dr. Pradeep Jain etc.
vs Union of India & Ors.
, ; this Court decided that admission for a fixed percentage of seats in different courses of study in the Medical Faculties should be on an All India basis.
Dealing with Post Graduate Courses such as MDS and MS and the like and taking into consideration broader aspects of equality of opportunity and institutional continuity in education which as its own value and relevance, this Court took the view that though residential requirement within the State should not be a ground for reservation in admissions to Post Graduate Courses, a certain percentage of seats may be reserved on the basis of institutional preference in the sense that a student who has passed MBBS course from a Medical College may be given preference for admission to Post Graduate Course in the same Medical College or University, but such reservation on the basis of institutional preference should not in any event exceed 50 per cent of the total number of seats available for admissions to the Post Graduate course.
By a subsequent order made on 21st of 354 July, 1986 it has been directed that the total number of seats for admission to Post Graduate courses in each Medical College or institution on the basis All India Entrance Examination shall be limited to 25 per cent.
Thereafter we had given direction in regard to finalising the courses of study and holding of All India Entrance Examination both for the MBBS as also the Post Graduate Courses.
So far as the Bachelor 's counsel is concerned, by order dated August, 1987, we have finalised the matter.
The question of finalising the scheme in regard to Post Graduate courses had been left to be dealt with separately.
We have heard counsel for the Union of India, the Medical Council of India and such of the other parties as chose to appear when the matter came up on 18th September, 1987, and we have perused the papers relevant to the matter.
Three aspects of the matter require consideration of this Court apart from the question of finalising the schedule relating to holding of the selection examination and those are: (1) structuring the Post Graduate courses (2) the question of diploma being a qualification for n admission in Post Graduate course as prevailing in the State of Tamil Nadu and (3) Provision in regard to super specialities like MD and other higher degrees.
It appears that in some States at present the Post Graduate course is for a term of two years with housemanship of one year while in other States it is a full term of three years.
We find that many of the States are of the view that this situation should continue.
If a common pattern is directed to be adopted immediately there may be some difficulty.
A uniform practice has to be evolved so that the discipline would be introduced.
We accordingly allow the present arrangement to continue for a period of five years i.e. upto 1992 inclusive.
For admission beginning from 1993 there would be only one pattern, namely, a three year course without any housemanship.
All Universities and institutions shall take timely steps to bring about such amendments as may be necessary to bring statutes, regulations, and rules obtaining in their respective institutions in accord with this direction before the end of 199 1 so that there may be no scope for raising of any dispute in regard to the matter.
The uniform pattern has to be implemented for 1993.
It is proper that one uniform system is brought into vogue throughout the country.
The justification for such a course has been appropriately emphasised both in the main judgment as also in the intermediate order made by us and there is no necessity to reiterate the reasoning now.
We, however, allow the system now prevailing in 355 the State of Tamil Nadu regarding the diploma until 1992.
From 1993 there would be no necessity for the diploma to be a qualification for A admission to Post Graduate courses.
We do not intend to make any provision in our order in regard to super specialities and other higher degrees.
The number of such seats are not many.
We are of the view that there is no necessity to make any directions in regard to admissions therefor at present and until necessity arises it is not appropriate that the Court should consider that question.
What remains now to be dealt with is the finalisation of the programme relating to the selection examination.
As already decided the selection examination shall be conducted by the All India Institute of Medical Sciences, New Delhi.
The announcement for holding of the selection examination shall be made on the 1st of October of every year and a full four weeks ' time would be made available to candidates for making their applications.
After the applications are received not later than six weeks from October, the some would be scrutinised and duly processed and admit cards would be issued.
Examination shall be held on the second Sunday of January.
The results of examination shall be announced within four weeks from holding of the examination.
Admission shall commence two weeks after the declaration of results.
The last date for taking admission shall be six weeks from the date of the announcement of results but the Head of every institution shall be entitled to condone delay upto seven days for reasons shown and grounds recorded in special cases.
The courses of study shall commence in every institution providing such study throughout the country from Second May. Notification Announcing Examination publication of result and allotment of place of admission (keeping preferences in view and our directions regarding preference of lady candidates in places of proximity to residence) shall be published in two successive issues of one national paper in English having large circulation in every State and at least in two local papers in the language of the State as quickly as possible.
We have already directed that the scheme for post Graduate course shall be operative in 1988, we accordingly direct that for the selection of 1988, the announcement for holding of examination be made on 1st of October, 1987.
All directions necessary for the Post Graduate courses are now complete.
We direct the Union of India, the Medical Council of India, H 356 the State Governments, Universities, Medical Institutions and all other authorities that may be involved in implementation of the scheme to give full effect to the orders and direction made by this Court in the proper spirit so that the scheme may become operative as directed.
We make it clear that no application for any modification of matters already covered by our order henceforth shall ordinarily be entertained.
A copy of this order shall be communicated forthwith to the Chief Secretary of every State and Union Territory for compliance.
A copy of it be also sent to the Director General, All India Radio and Doordarshan for appropriate publicity of the order in general interest.
| Sequel to the main judgment delivered on June 22, 1984 by this Court in Dr. Pradeep Jain, etc., etc.
vs Union of India and others, [198413 SCR 942 regarding admission for fixed percentage of seats in different courses of study in the medical faculties on an All India basis, the question of finalising the scheme for holding the All India Examination to fill up 25% seats reserved on the basis of institutional preference for admission to the post graduate courses like MDS, MS etc. came up before this Court.
Laying down a detailed programme relating to selection examination, the Court, ^ HELD: Apart from finalising the schedule for holding of the selection examination, three aspects of the matter, viz. (1) structuring the Post Graduate courses, (2) the question of diploma being a qualification for admission to such courses as in Tamil Nadu, and (3) provision in regard to super specialities, like M.D. and other higher degrees require consideration.
[354D] In some States at present the post graduate course is for a term of two years with housemanship of one year while in other States it is a full term of three years.
If a common pattern is directed to be adopted immediately there may be some difficulty.
A uniform practice has to be evolved so that the discipline would be introduced.
The present arrangement will, therefore, continue for a period of five years.
i.e., upto 1992.
[354E F] For admission beginning from 1993, there would be only one pattern, namely, a three year course without any housemanship.
All 352 Universities and institutions shall take timely steps to bring about such A amendments as may be necessary in accord with this direction before the end of 1991 so that there may be no scope for raising of any dispute.
The uniform pattern has to be implemented for 1993.
[354F G] It is proper that one uniform system is brought into operation throughout the country.
The system now prevailing in the State of Tamil Nadu regarding the diploma shall continue until 1992 from 1993 there would be no necessity for the diploma to be a qualification for admission to post graduate courses.
[354G H; 355A] In regard to super specialities and other higher degrees, the number of such seats are not many and, therefore, there is no necessity to make any directions in regard to admissions therefor at present and until necessity arises it is not appropriate that the Court should consider that question.
[355B] The announcement for holding of examination for the selection of 1988 shall be made on October 1, 1987.
As already decided, the examination shall be conducted by the All India Institute of Medical Sciences, New Delhi.
[355G ]
|
ivil Appeal No. 3492 of 1990.
From the Judgment and Order dated 3.8.1988 of the Jammu & Kashmir High Court in L.P.A. No. 110 of 1988.
N.S. Mathut, Ramesh C. Pathak, G. Venkatesh Rao and Baby Lal for the Appellant.
E.C. Agarwala, Ms. Purnima Bhatt, V.K. Pandita and Atul Sharma, for the Respondents.
The Judgment of the Court was delivered by KULDIP SINGH, J.
Special leave granted.
The School of Buddhist Philosophy, Leh (hereinafter called the 'School ') is an affiliate institution of the Sampurnanand Sanskrit University, Banaras.
The management of the School is in the hands of a society called Central Institute of Buddhist Studies, Leh which is registered under the Jammu and Kashmir Registration of Societies Act.
Ap pointments to various posts in the School are regulated by the rules framed by the Board of management in the year 1973.
The academic and other qualifications for the post of Principal under the rules, are as under: 517 "Academic Qualification At least Master 's Degree in Humanities or Social Sciences, with knowledge of Rules and Regulations, procedures and Accounts.
Experience Minimum experience of 7 years, out of which at least 2 years should be in administration such as administrative Asstt.
and not less than 3 years in teaching in Higher Secondary and/or Degree classes.
" The qualifications for the post of Administrative Officer under the 1973 rules are identical.
M.L. Mattoo (Respondent No. 1), who was functioning as the Administrative Officer, was given the additional charge of the post of Principal by an order dated March 26, 1973 issued by the Ministry of Education and Social Welfare, Government of India, New Delhi.
The Board of Management in its meeting held on August 22, 1978 decided that apart from the qualifications pre scribed under the Rules, the person selected for the post of Principal should have a thorough academic background in Buddhist Philosophy.
Pursuance to the said decision the qualifications/experience for the post of Principal pre scribed under the Rules were revised as under: "Essential: (a) A consistently good academic record possessing eminent scholarship in Buddhist Philosophy as a subject of specialisation at M.A. or Doctoral level.
or Acharya Degree with research experience to Buddhist Philoso phy or equivalent.
or An equivalent degree of traditional monastic education in Buddhism.
518 (b) Evidence of research work and/or public work in the field.
Desirable: (a) 5 years teaching experience in Buddhist Philosophy and allied subject at the degree level.
(b) 5 years of administrative experience.
" The Board of Management constituted a selection commit tee to appoint a suitable person as Principal of the School.
By an order dated January 9, 1979 one Shri Tashi Pal jot, who fulfilled the revised qualifications, was appointed as Principal of the School.
Aggrieved by the said appointment M.L. Mattoo filed Civil Writ Petition No. 256 of 1979 in the High Court of Jammu and Kashmir on the ground that he was removed from the additional charge without affording an opportunity of heating to him and further that he was not considered by the selection committee.
He contended that selection was liable to be quashed being violative of Arti cle 16 of the Constitution of India.
The writ petition was resisted by the Management on the ground that it was not a 'State ' under Article 12 of the Constitution of India and as such the writ petition was not competent.
At the hearing of the writ petition the counsel for the Management conceded that the society was a 'State ' within Article 12 of the Constitution of India and as such the writ petition could not be dismissed on that ground.
The High Court rejected the contention of M.L. Mattoo that he was entitled to an oppor tunity of hearing or Article 311 was attracted.
The High Court, however, allowed the writ petition on the ground that the petitioner was not considered for the post of Principal and as such his right under Article 16 of the Constitution of India stood infringed The operative part of the High Court judgment is as under: "Mr. V.K. Gupta has on the authority of Ajay Hasia 's case (supra) frankly conceded that the society being an instru mentality or agency of Government of India, was 'state ' for the purpose of Part III of the Constitution as such, the petitioner had a fundamental right to be considered for the post alongwith the third respondent.
He not having been so considered, and it also being admitted that he possessed the requisite qualifications, the rule of equality enshrined in Articles 14 and 16 of the Constitution stood clearly violat ed.
That being so, as in fact it is, the impugned order 519 passed by the second respondent appointing the third re spondent as the Principal of the School has to be quashed.
" Thereafter the Management advertised the post of Princi pal to be filled by direct recruitment on the basis of revised qualifications.
The advertisement was published in the 'Kashmir Times ' of January 5, 1982.
M.L. Mattoo filed another writ petition being Civil Writ Petition No. 29 of 1982 challenging the advertisement on the ground that the revised qualifications had not been validly prescribed and as such the post of Principal could only be filled on the basis of the pre revised qualifications.
According to him the revised qualifications were advertised only to make him ineligible for the post.
The main thrust of Mattoo 's argument was that his earlier writ petition was decided by the High Court on October 29, 1981 wherein the counsel for the Management conceded that he possessed the requisite qualifications for the post of Principal.
Admit tedly Matto does not possess the revised qualifications.
According to him the earlier writ petition was filed in the year 1979 and had the qualifications been revised by amend ing the rules in 1978, the counsel for the management would have certainly brought the same to the notice of the Court and since it was not done there was factually no amendment to the rules.
The High Court accepted the contention of Mattoo and allowed the writ petition by its judgment dated June 9, 1988 on the following reasoning: "It is stated in para No. 13 of their counter that qualifi cations were changed in August, 1978 with the approval of the Govt.
of India.
This statement is not accepted for two reasons one, that this was not the defence of the respond ents in writ petition No. 256/1979 in which petitioner 's eligibility was granted by the High Court for the post of Principal; and second, that after the decision of the High Court granting eligibility to the petitioner for the post of Principal in writ petition No. 256/1979, the respondents plea on the basis of some policy or note whereby qualifica tions were changed in 1978 prior to the filing of the writ petition No. 256/1979 cannot be now pressed into service nor would be permitted to be made because same will be barred by doctrine of constructive res judicata.
" The High Court quashed the advertisement dated January 5, 520 1982 and restrained the management from filling the post of Principal on the basis of the impugned advertisement.
The management has come up to this Court in appeal against the above said judgment of the High Court of Jammu and Kashmir.
The learned counsel for the appellant has invited our attention to the proceedings of the meeting of the manage ment of the School held on August 22, 1978.
It was decided in the said meeting that the person selected for the. post of Principal of the School must have academic background in Buddhist Philosophy in addition to the qualifications pre scribed under the Rules.
Thereafter the amended qualifica tions which have been reproduced above were prescribed by the Board of Management.
3 It is not disputed that the recruitment Rules could be altered by the Board of Management at any time with the sanction of the Government of India.
Mr. E.C. Agarwala appearing for the respondent M.L. Mattoo has, however, contended that the recruitment rules were never amended and in any case there was no sanction of the Government of India regarding the amended Rules.
Learned counsel for the appellant has invited our atten tion to the affidavit of Dr. (Mrs.) Kapila Vatsyayan, Chair man, Board of Management of the School filed before the High Court.
Dr. Kapila Vatsyayan is the Additional Secretary to Government of India in the Ministry of Education and Cul ture.
Para 13 of the affidavit is as under: "When in the year 1978, the question of appointment of a Principal of the school on regular basis was under the consideration of the Board of Management, it was held that keeping in view the objects of the school being a research Institution to propogate Buddhist Philosophy a thorough academic background in Buddhist Philosophy was considered as one of the essential qualifications for the post of Princi pal of the School as will be evident from the extract from brief note on Agenda item I considered in the meeting of the Board of Management held on 22nd August, 1978 Annexure IV.
Shri Tashi Paljore was appointed as Principal as stated in para No. 5 of the petition as he possessed this qualifica tion and was selected by a duly appointed Selection Commit tee.
The contention of the petitioner that this qualifica tion has been added now after the decision of writ petition No. 256 of 1979 is incorrect.
As 521 stated above, the qualifications were changed in August 1978 with the approval of Govt.
of India.
These qualifications are obviously very necessary for the fulfilling of the objectives of the Schools of Buddhist Philosophy, Leh (Ladakh).
In the absence of these qualifications, the very object for which the Institution exists is bound to be defeated.
The qualification has been provided the interest of the Institution and for the attain ment of the object for which it exists, namely imparting and propagating Buddhist Philosophy.
The Recruitment Rules of 1975, Annexure 'D ' to the petition were framed by the Board at that time.
Under the Rules and Regulations of the Board, the Board of Management is competent to amend the same. ' ' it is obvious from the affidavit of Dr. Kapila Vatsyayan reproduced above that the qualifications for the post of Principal were revised by amending the Rules and the revised qualifications were approved by the Government of India.
No. 1 rejoinder was filed by M.L. Mattoo to the above affidavit, The High Court was not justified in disbelieving the contents of the affidavit.
The rules are not statutory.
The Board of Management is fully competent to alter or amend the rules in any manner and at any time.
The affidavit by the Chairman of the Board of Management who is additional Secre tary to Government of India to the effect that the rules were amended in 1978 with the approval of the Government of India, should have put an end to the controversy.
We have no hesitation in holding that the qualifications for the post of Principal of the School stood validly revised by the amendment of the Rules in August, 1978.
Since respondent No. 1 Shri M.L. Mattoo does not possess the revised qualifica tions, he is not eligible to be considered for the said post.
In the earlier writ petition No. 256/1979 the question as to whether the qualifications for the post of Principal had been revised was not before the High Court.
The main contention of the Management, before the High Court, was that the Management society was not a 'State ' under Article 12 and as such no writ petition was competent.
At the hear ing the counsel for the management, however, conceded that the society was a 'State ' under Article 12 of the Constitu tion of India.
It is no doubt that the High Court has men tioned that it 522 was admitted by the counsel for the Management that Mattoo possessed the requisite qualifications for the post but we do not understand how in the face of categoric affidavit of Dr. Kapila Vatsyayan such a statement could be made before the High Court.
We, therefore, hold that the qualifications/experience for the post of Principal were validly revised by amending the Rules in August, 1978.
The advertisement issued on January 5, 1982 was in accordance with the Rules and the High Court was not justified in quashing the same.
We, therefore, allow the appeal, set aside the judgment of the High Court and dismiss the writ petition filed by M.L. Mattoo before the High Court.
There shall be no order as to costs.
Y. Lal Petition dismissed.
| S and R were brothers who carried on the business of gold smithery, and a partition took place between them in 1918.
R got 2 houses and land in Survey No. 71.
Later on, one of the sons of R instituted a suit claiming that Survey No. 71 was an ancestral property and that some of the suit properties were purchased by R out of the income, and subsequently the sale proceeds, of the land.
The defendants, viz., the other children of R contended that Survey No. 71 was purchased by S and R with the income they derived from gold smithery and the suit properties except the two houses which were admittedly the ancestral properties, were not the joint family properties in which the plaintiff could claim his share.
The Trial Court decreed the suit in favour of the plain tiff.
On appeal by the defendants, the First Appellate Court reappreciated the evidence, found infirmities in the conclu sions arrived at by the Trial Court and dismissed the suit except to the extent of plaintiff 's share in the two ances tral houses, on the basis of its finding that the other properties were self acquired properties of R. During the pendency of the suit R died.
By virtue of his will the self acquired properties of R went to the defend ants and the plaintiff was left out.
The plaintiff preferred an appeal before the High Court against the order of the First Appellate Court.
The High Court interfered with the said findings of facts and held that since Survey No. 71 had come to the share of R in general partition, it was ancestral property.
it further observed that since the said property was yielding income with the help of which the other properties could have been purchased and since 436 further the gold smithery business was an ancestral busi ness, the properties purchased with the help of such income should be held to be joint family properties.
Aggrieved, the defendants have filed this appeal.
Allow ing the appeal, HELD: 1.
There was, no question of law involved in the second appeal.
Yet the High Court chose to interfere with the finding ignoring the mandatory provisions of Section 100 of the Civil Procedure Code that unless it was satisfied that the case involved substantial question of law it could not entertain it and that before it could entertain it, the Court had to formulate such question.
[440F] 2.1 It was not disputed at any time that the property in Survey No. 71 had all along stood in the name of Supadu and, therefore, the presumption drawn by the First Appellate Court that this showed that in all probability the property was purchased after the death of his father cannot be said to be unreasonable.
There is no evidence brought on record by the plaintiff with regard to the quantum of income from Survey No.71.
In fact, the uncontroverted evidence on record shows that Ramchandra had no implements and bullocks for cultivating the land and the land was always cultivated with the help of the labourers who brought their own implements and bullocks.
This shows that the family derived less than normal income from the said land.
It was admitted by the plaintiff that Ramchandra was a skilled goldsmith and was well known in the locality as such, and was doing his busi ness as goldsmith and earning sufficient income.
[440A D] 2.2 The High Court ignoring the fact that it was not the case of the plaintiff that goldsmithery was an ancestral business and that it was not his case that the suit proper ties were purchased with the help of the income from the said business held that it was so.
What is further, the plaintiff 's case was that the suit properties were purchased with the income from Survey No. 71.
Thus it is obvious that the conclusions which were arrived at by the First Appellate Court were reasonable and legal besides being conclusions of facts.
[440D E]
|
Appeals Nos. 668, 669, 670 and 672 of 1957.
Appeal by special leave from the judgment and order dated August 6, 1957, of the Assam High Court in Civil Rule No. 65 of 1957.
A. V. Viswanatha Sastri and Dipak Datta Choudhury, for the appellants in C. As.
Nos. 668 and 669 of 1957 and respondent No. 2 in C.A. No. 670 of 1957.
section M. Lahiri, Advocate General for the State of Assam and Naunit Lai, for the appellants in C.A. No. 670 of 1957 and respondent No. 2 in C.A. No. 669 of 1957.
February 7.
The following Judgment of the Court was delivered by 1342 SINHA J.
These appeals by special leave are directed against the judgments and orders of the Assam High Court, exercising its powers under articles 226 and 227 of the Constitution, in respect of orders passed by the Revenue Authorities under the provisions of the Eastern Bengal and Assam Excise Act, 1910 (E. B. and Assam Act I of 1910) (hereinafter referred to as the Act).
They raise certain common questions of constitutional law, and have, therefore, been heard together, and will be disposed of by this Judgment.
Though there are certain common features in the pattern of the proceedings relating to the settlement of certain country spirit shops, when they passed through the hierarchy of the authorities under the Act, the facts of each case are different, and have to be stated separately in so far as it is necessary to state them.
(1) Civil Appeal No. 668 of 1957.
The two appellants Nagendra Nath Bora and Ridananda Dutt are partners, the partnership having been formed in view of the Government notification dated November 30, 1956, amending rule 232 of the Assam Excise Rules, to the effect that the settlement of the country spirit shops which may be declared by the Government to be 'big shops ', shall be made with two or more partners who shall not belong to the same family nor should be related to one another (vide correction slip at p. 106 of the Assam Excise Manual, 1946).
In accordance with the rules framed under the Act, tenders were invited by the Deputy Commissioner of Sibsagar, for the settlement of Jorhat country spirit shop for the financial year 1957 58, in December, 1956.
The appellants as members of the partnership aforesaid, submitted a tender in the prescribed form.
Respondents 3 and 4, Dharmeshwar Kalita and Someswar Neog, respectively, also were amongst the tenderors.
The Commissioner of Hills Division and Appeals,, Assam, and the Commissioner of Excise, Assam, are the first and the second respondents in this case It is necessary to state at this stage that in respect of the financial year 1956 57, the shop in 1243 question was ordered by the first respondent as the Excise Appellate Authority to be settled with the first appellant Nagendra Nath as an individual, setting aside the orders of the Deputy Commissioner and the Excise Commissioner.
The other competitors for the settlement of the said shop being dissatisfied with the orders of the first respondent, moved the Assam High, Court and challenged the validity of the settlement made in the first appellant 's favour.
Similar writ cases challenging orders of settlement by the first respondent as the Excise Appellate Authority, had been instituted in the High Court.
All those cases were heard together, and the High Court, by its judgment dated May 22, 1956, quashed the orders passed by the first respondent, chiefly on the ground that the Appellate Authority had been illegally constituted.
The matter was brought by way of special leave to this Court, and was heard by the Constitution Bench which, by its judgment dated January 31, 1957, decided that the constitution of the Commissioner of Hills Division and Appeals as the ultimate appellate Authority under the Act, was not unconstitutional.
The judgment of this Court is reported in the case of The State of Assam vs A. N. Kidwai (1).
It will be necessary, in the course of this judgment, to make several references to that decision which, for the sake of brevity, we shall call the ruling of this Court '.
The result of the ruling of this Court, was that the determination by the Assam High Court that the orders passed by the first respondent, were void, was set aside, and the settlement made by that Authority, consequently, stood restored.
But in the meantime, as the orders of the first respondent stood quashed as a result of the judgment of the High Court, the direction of the Excise Commissioner that the shop in question be resettled, was carried out, and the settlement was made with the third respondent aforesaid as an individual.
He continued in possession of the shop until February 26, 1957, on which date, the first appellant was put in possession as a result of the ruling (1) [1957] S.C.R. 295.
158 1244 of this Court.
Even so, the first appellant could exercise his rights as a lessee of the shop only for a few months during the financial year ending March 31, 1957.
For the financial year 1957 58, the Deputy Commissioner, in consultation with the local Advisory Committee, settled the shop in question with the third and the, fourth respondents aforesaid.
The tender submitted by the appellants, was not considered by the licensing authority on the erroneous ground that the orders passed by the first respondent as the ultimate Revenue Authority in the matter of settlement of excise shops, had been rendered null and void as a result of the decision of the High Court, referred to above.
The appellants, as also others who were competitors for the settlement aforesaid, preferred appeals to the Excise Commissioner who set aside the settlement made in favour of the respondents 3 and 4, and ordered settlement of the shop with the appellants.
The Excise Commissioner took into consideration the fact that the order of the High Court, nullifying the proceedings before the first respondent, had been set aside by the ruling of this Court.
The consequence of the order of this Court, was, as the Commissioner of Excise pointed out, that a supposed disqualification of the appellants as competent tenderers, stood vacated as a result of the first respondent 's order.
The third and the fourth respondents, as also other dissatisfied tenderers preferred appeals to the first respondent against the order of the second respondent (the Excise Commissioner).
The first respondent dismissed those appeals and confirmed the order settling the shop with the appellants, by his order dated June 10, 1957.
The respondents 3 and 4, then, moved the High Court under articles 226 and 227 of the Constitution, for an appropriate writ for quashing the order passed by the first respondent.
The High Court, by its order dated August 6, 1957, quashed the aforesaid order of settlement in favour of the appellants by the first respondent.
The High Court further directed that all the tenders be reconsidered in the light of the observation made by it.
The main ground of decision in the 1245 High Court, was that the Excise Appellate Authority had acted in excess of its jurisdiction, and that its order was vitiated by errors apparent on the face of the record.
The prayer for a certificate that the case was a fit one for appeal to this Court, having been refused by the High Court, the appellants obtained special leave to appeal.
(11) Civil Appeal No. 669 of 1957.
This appeal relates to the settlement of the Murmuria country spirit shop in the district of Sibsagar, for the financial year 1957 58.
The appellant Lakhiram Kalita and the first respondent Bhanurani Pegu, amongst others, had submitted their tenders for the settlement of the shop.
The Deputy Commissioner, after consulting the Advisory Committee, settled the shop with the first respondent aforesaid.
The appeals filed by the appellant and other disappointed tenderers, were dismissed by the Excise Commissioner by his order dated March 25, 1957.
Against the said order, the appellant and another party filed further appeals to the Commissioner of Hills Division and Appeals, who, by his order dated May 30, 1957, set aside the settlement in favour of the first respondent, and ordered settlement with the appellant.
In pursuance of that order, the appellant took possession of the shop with effect from June 5, 1957.
The first respondent 's application for review of the order aforesaid, stood dismissed on June 11, 1957.
Against the aforesaid orders of the Commissioner of Hills Division and Appeals, the first respondent moved the High Court under articles 226 and 227 of the Constitution, for a proper writ for quashing them.
On June 17, 1957, the writ petition was heard ex parte, and the High Court issued a rule to show cause why a writ as prayed for, should not be issued.
The rule was made returnable within three weeks.
The High Court also made the further order in these terms: "Meanwhile, the status quo ante will be maintained.
" This last order was misinterpreted by the first respondent and his advisers as entitling them to be put in 1246 possession of the shop, and it is stated that the first respondent threatened the appellant to oust him from the shop on the basis of the order of the High Court quoted above.
The appellant moved the High Court for a clarification of its order aforesaid.
The High Court naturally observed that by I maintaining status quo ante ', the High Court meant that whoever was in possession of the shop on June 17, 1957, will continue to be in possession during the pendency of the case in the High Court.
But, curiously enough, the Deputy Commissioner, by an ex parte order, on June 21, 1957, directed that the first respondent be put in charge of the shop forthwith, and the order was carried out.
When the Deputy Commissioner was approached by the appellant to restore him to possession in view of the observation of the High Court, he asked the appellant to obtain further order from the High Court.
Thereafter, the appellant again moved the High Court on June 28, 1957, stating all the facts leading to his wrongful dispossession, and seeking relief in the High Court.
No order was passed on that petition.
Ultimatey, the High Court, by its order dated July 31, 1957, set aside the order of the Commissioner of Hills Division and Appeals.
The appellant 's prayer for a certificate that the case was a fit one for appeal to this Court, having been refused by the High Court, he moved this Court and obtained special leave to appeal.
(III) Civil Appeal No. 670 of 1957.
This appeal is on behalf of the Commissioner of Hills Division and Appeals, Assam, against the judgment and order of the High Court relating to the Murmuria shop which is the subject matter of Civil Appeal No. 669 referred to in the previous paragraph.
The first respondent to this appeal is Bhanuram Pegu who is also the first respondent in Civil Appeal No. 669 of 1957.
The second respondent is Lakhiram Kalita who is the appellant in Civil Appeal No. 669 of 1957.
Both these respondents, as already indicated, are the competing tenderers for the shop in question.
The facts of this case have already been stated in relation 1247 to Civil Appeal No. 669 of 1957.
This appeal has been brought with a view to getting the legal position clarified in view of the frequent appeals made to the appellant in the matter of settlement of excise shops.
(IV) Civil Appeal No. 672 of 1957.
This appeal relates to the Tinsukia country spirit shop in the district of Lakhimpur.
The appellants, Rafiulla Khan and Mahibuddin Ahmad, are partners, and as such, are interested in the settlement of the shop for the financial year 1957 58.
This shop had been jointly settled with the first appellant and his father for a number of years.
For the year 1956 57 also, the lease had been granted to them by the Deputy Commissioner, after consultation with the Advisory Committee.
A number of unsuccessful tenderers filed appeals before the Commissioner of Excise questining the settlement with the first appellant and his father in respect of the year 1956 57.
The Excise Commissioner set aside the settlement, and ordered a resettlement.
The first appellant and his father filed an appeal before the Excise Appellate Authority, against the order of the Commissioner of Excise.
The Appellate Authority allowed the appeal, and set aside the orders of the Commissioner and the Deputy Commissioner.
One Rafiqul Hussain, one of the competitors for the shop, filed a writ petition before the High Court under articles 226 and 227 of the Constitution.
This writ application, along with other similar applications, was heard and decided by the High Court, as afore.
said, by its judgment dated May 23, 1956.
Against the judgment of the High Court, the first appellant and his father appealed to this Court by special leave, with the result indicated above.
During the pendency of the appeal in this Court in the absence of a stay order, the direction of the Commissioner for a resettlement, was carried out.
The Deputy Commissioner, with the unanimous advice of the Advisory Committee settled the shop with the first appellant on July 25, 1956.
The first respondent and some others preferred appeals before the Commissioner of Excise, against the order aforesaid of the Deputy Commissioner.
As the 1248 special leave appeals to this Court were pending at that time, the Excise Commissioner, under a misapprehension of the effect of this Court 's order refusing interim stay, set aside the Deputy Commissioner 's order, and directed the settlement to be made with the first respondent.
As there was no Excise Appellate Authority functioning at the time as a result of the decision, aforesaid, of the High Court, declaring the constitution of such an Authority to be void, the first appellant moved the High Court under articles 226 and 227 of the Constitution, on the ground that the order of the Excise Commissioner was vitiated by an error apparent on the face of the record in so far as he had misunderstood the order of the Supreme Court passed on the stay petition.
The High Court admitted the application but rejected the prayer for maintenance of status quo in the sense that the first appellant 's possession be maintained.
On the stay petition being rejected by the High Court, the first respondent took possession of the shop from the first appellant as a result of the Excise Commissioner 's order in his favour.
The High Court ultimately dismissed the writ application by its order dated December 6, 1.956.
The appeal filed by the appellant and his father, already pending in this Court, was heard and determined as aforesaid, in January, 1957.
This Court reversed the decision of the High Court, and restored the status of the Excise Appellate Authority.
As a result of the ruling of this Court, the Excise Appellate Authority, by its order dated February 25, 1957, directed delivery of possession back to the first appellant and his father, holding that the order of resettlement and the resettlement, itself, in pursuance of that order, were all wiped out.
Against the said order, the first respondent moved the High Court under articles 226 and 227 of the Constitution for quashing the order for delivery of possession, on the ground of want of jurisdiction, and for ad interim stay.
The High Court issued a rule and passed an order for interim stay on February 26, 1957.
The High Court made the rule absolute by its order dated March 26, 1957, taking the view that the attention of this Court had not been drawn to the interim 1249 settlement of the shop in the absence of an order of stay.
It appears further that during the pendency of the appeal in this Court, fresh settlement for the financial year 1957 58, took place towards the end of 1956, and the beginning of 1957.
The Tinsukia shop was settled with respondents I and 2 though the appellants also had jointly submitted a tender for the same.
The appellants and other parties preferred appeals against the said order of settlement made by the Deputy Commissioner.
The Excise Commissioner set aside the settlement by the Deputy Commissioner, and directed settlement in favour of the appellants by his order dated April 16, 1957.
Against that order, respondents I and 2 and others preferred appeals before the Excise Appellate Authority who, by an order dated June 3, 1957, dismissed the appeals.
Accordingly, the appellants were given possession of the shop on June 7, 1957.
The respondents I and 2 again moved the High Court for quashing the order of the Excise Appellate Authority, affirming that of the Excise Commissioner, and also prayed for the status quo being maintained.
The High Court admitted the petition and ordered " meanwhile, status quo ante be maintained.
" This took place on June 10, 1957.
In pursuance of the aforesaid order of the High Court, the appellants were dispossessed of the shop even though they had been put in possession only three days earlier.
This was done on a complete misapprehension of the true effect of the order of the High Court maintaining status quo ante.
If the High Court had passed its order in a less sophisticated and more easily understood language in that part of the country, perhaps, the party in possession, would not have been dispossessed of the shop settled with it.
The appellants moved the High Court against the Commissioner 's order directing possession to be given to the respondents 1 and 2.
The High Court issued a rule but refused to grant stay of the operation of the order directing possession to be given.
During the final hearing of the rule before the High Court, the appellants again moved a petition on July 5, 1957, for vacating the 1250 order of possession which was based on a misapprehension of the order of the High Court maintaining status quo ante, but apparently, no order was passed because possession had already been given to the respondents I and 2.
During the hearing of the rule by the High Court, an unfortunate incident occurred, for which the appellants cannot altogether be absolved of some responsibility, as a result of which, one of the learned judges constituting the Bench, namely, Deka J. expressed his unwillingness to proceed with the hearing of the case.
The hearing had, therefore, to be adjourned on July 15, 1957, until a new Bench could be constituted.
The appellants renewed their application already made on July 5, as aforesaid, for undoing the unintended effect of the order of the High Court, that the status quo ante was to continue.
But on July 30, the Chief Justice directed that the matter be placed before a Division Bench.
As there was no third judge at the time, the disposal of the case, naturally had to stand over until the third judge was available.
The matter of delivery of possession was again mentioned before the Division Bench of the Chief Justice and Deka J.
The High Court rejected the application on grounds which cannot bear a close scrutiny.
The petitioners also approached the Excise Appellate Authority, but it refused to reconsider the matter as the case was then pending before the High Court.
Again on August 14, 1957, a fresh application was made to the High Court, along with a copy of the orders passed by the Excise Appellate Authority and the Deputy Commissioner, Lakhimpur, giving delivery of possession to respondents 1 and 2.
But, this time, Deka J. refused to hear the matter, and naturally, the Chief Justice directed the matter to be placed before him, sitting singly.
on August 19, 1957, the matter was placed before the Chief Justice sitting singly, and he directed a rule to issue on the opposite party cited before that Court, to show cause.
Apparently, the learned Chief Justice treated the matter as a new case and not as an off shoot of the case already pending before the High Court.
The High Court closed for the long vacation on September 2, and was to reopen on 1251 November 3, 1957.
The vacancy of the third judge had not been filled till then, and as the appellants felt that they had been wrongfully deprived of their right to hold their shop, as a result of an erroneous interpretation of the order of the High Court, passed on June 10, as aforesaid, and as there was no prospect of the case being disposed of quickly, the appellants moved this Court and obtained special leave to appeal.
As is evident from the statement of facts in connection with each one of the appeals, set out above, these cases have followed a common pattern.
They come from the 'non prohibited areas in the State of Assam where sale of 'country spirit ' is regulated by licences issued by the authorities under the provisions of the Act.
Settlement of shops for the sale of such liquor is made for one year April I to March 31.
According to the present practice contained in Executive lnstructions, intending candidates for licences, have to submit tenders to the Deputy Commissioner for the Sadar Division and to Sub Divisional officers for Sub Divisions, in accordance with the terms of notices published for the purpose.
Such tenders are treated as strictly confidential.
Settlement is made by the Deputy Commissioner or the Sub Divisional Officer concerned, as the case may be, in consultation with an Advisory Committee consisting of 5 local members or less.
The selection of a particular tenderer is more or less a matter of administrative discretion with the officer making the settlement.
Under the Act, an appeal from an order of settlement made by a Deputy Commissioner or Sub Divisional officer, lies to the Commissioner of Excise, and from an order of the Commissioner of Excise to the Excise Appellate Authority whose decision becomes final.
Section 9 of the Act, dealing with appeal and revision, has undergone a series of amendments, and the section as it has emerged out of the latest amendment by the Amending Act The Assam Act 23 of 1955 which received the assent of the Governor of Assam on December 22, 1955, and was published in the Assam Gazette dated 159 1252 December 28, 1955, is in these terms: "9.
(1) Orders passed under this Act or under any rule made hereunder shall be appealable as follows in the manner prescribed by such rules as the State Government may make in this behalf (a) to the Excise Commissioner, any order passed by the District Collector or a Collector other than the District Collector, (b) to the Appellate Authority appointed by the State Government for the purpose, any order passed by the Excise Commissioner.
(2) In cases not provided for by clauses (a) and (b) of sub section (1), orders passed under this Act or under any rules made hereunder shall be appealable to such authorities as the State Government may prescribe.
(3) The Appellate Authority, the Excise Commissioner or the District Collector may call for the proceedings held by any officer or person subordinate to it or him or subject to its or his control and pass such orders thereon as it or he may think fit.
" Rules 339, 340, 341 and 345 of the Assam Excise Manual, have, thus, become obsolete and have been deleted as a result of the latest amendment aforesaid.
The power of hearing appeals and revisions under the Act, has been vested successively in the Board, the Assam Revenue Tribunal, the Commissioner for Hills Division and Appeals; and ultimately, under the amended section, in the Appellate Authority.
The history of the legislation relating to the highest Revenue Authority under the Act, has been traced in the judgment of this Court in the State of Assam vs A.N. Kidwai (supra), and need not be repeated here.
It is convenient, first, to deal with the general questions of public importance raised on behalf of the appellant in Civil Appeal No. 670 of 1957.
At the forefront of the arguments advanced on behalf of the Appellate Authority, was the plea that the several authorities already indicated, concerned with the settlement of excise shops like those in question in these appeals, are merely administrative bodies, and, 1253 therefore, their orders whether passed in the first instance or on appeal, should not be amenable to the writ jurisdiction or supervisory jurisdiction of the High Court under articles 226 and 227 of the Constitution.
If the matter had rested only with the provisions of the Act, apart from the rules made under section 36 of the Act, much could have been said in support ' of this contention.
As observed by this Court in the case of Cooverjee B. Bharucha vs The Excise Commissioner and the Chief Commissioner, Ajmer and others(1) there is no inherent right in a citizen to sell liquor.
It has further been observed by this Court in the recent case of the State of Assam vs A. N. Kidwai, (supra), at page 301 as follows: " A perusal of the Act and rules will make it clear that DO person has any absolute right to sell liquor and that the purpose of the Act and the rules is to control and restrict the consumption of intoxicating liquors, such control and restriction being obviously necessary for the preservation of public health and morals, and to raise revenue.
" It is true that no one has an inherent right to settlement of liquor shops, but when the State, by public notice, invites candidates for settlement to make their tenders, and in pursuance of such a notice, a number of persons make such tenders each one makes a claim for himself in opposition to the claims of the others, and the public authorities concerned with the settlement, have to choose from amongst them.
If the choice had rested in the hands of only one authority like the District Collector on his subjective satisfaction as to the fitness of a particular candidate without his orders being amenable to an appeal or appeals or revision, the position may have been different.
But section 9 of the Act has laid down a regular hierarchy of authorities, one above the other, with the right of hearing appeals or revisions.
Though the Act and the rules do not, in express terms, require reasoned orders to be recorded, yet, in the context of the subject matter of the rules, it becomes necessary for the (I) ; , 880.
1254 several authorities to pass what are called I speaking orders '.
Where there is a right vested in an authority created by statute, be it administrative or quasijudicial, to hear appeals and revisions, it becomes its duty to hear judicially, that is to say, in an objective manner, impartially and after giving reasonable opportunity to the parties concerned in the dispute, to place their respective cases before it.
In this connection, the observations of Lord Haldane at p. 132, and of Lord Moulton at p. 150, in Local Government Board vs Arlidge (1), to the following effect are very apposite: appeal is imposed, those whose duty it is to decide it must act judicially.
They must deal with the question referred to them without bias, and they must give to each of the parties the opportunity of adequately presenting the case made.
The decision must be come to in the spirit and with the sense of responsibility of a tribunal whose duty it is to mete out justice.
But it does not follow that the procedure of every such tribunal must be the same." Lord Moulton: " In the present case, however, the Legislature has provided an appeal, but it is an appeal to an administrative department of State and not to a judicial body.
It is said, truthfully, that on such an appeal the Local Government Board must act judicially, but this, in my opinion, only means that it must preserve a judicial temper and perform its duties conscientiously, with a proper feeling of responsibility, in view of the fact that its acts affect the property and rights of individuals.
Parliament has wisely laid down certain rules to be observed in the performance of its functions in these matters, and those rules must be observed because they are imposed by statute, and for no other reason, and whether they give much or little opportunity for what I may call quasi litigious procedure depends solely on what Parliament has thought right.
These rules are beyond the criticism of the Courts, and it is not their business to add to or (1) 1255 take away from them, or even to discuss whether in the opinion of the individual members of the Court they are adequate or not.
" The legal position has been very succinctly put in Halsbury 's Laws of England(1), as follows: "Moreover an administrative body, whose decision is actuated in whole or in part by questions of policy, may be under a duty to act judicially in the course of arriving at that decision.
Thus, if in order to arrive at the decision, the body concerned had to consider proposals and objections and consider evidence, if at some stage of the proceedings leading up to the decision there was something in the nature of a lis before it, then in the course of such consideration and at that stage the body would be under a duty to act judicially.
If, on the other hand, an administrative body in arriving at its decision has before it at no stage any form of lis and throughout has to consider the question from the point of view of policy and expediency, it cannot be said that it is under a duty at any time to act judicially.
Even where the body is at some stage of the proceedings leading up to the decision under a duty to act judicially, the supervisory jurisdiction of the Court does not extend to considering the sufficiency of the grounds for, or otherwise challenging, the decision itself.
" The provisions of the Act are intended to safeguard the interest of the State on the one band, by stopping, or at any rate, checking illicit distillation, and on the other band, by raising the maximum revenue consistently with the observance of the rules of temperance.
The authorities under the Act, with Sub divisional Officers at the bottom and the Appellate Authority at the apex of the 'hierarchy, are charged with those duties.
The rules under the Act and the executive instructions which have no statutory force but which are meant for the guidance of the officers concerned, enjoin upon those officers, the duty of seeing to it that shops are settled with persons of character and experience in the line, subject to certain reservations in (1) Vol.
3rd Edn., PP.
56 57.
1256 favour of tribal population.
Except those general con siderations, there are no specific rules governing the grant of leases or licences in respect of liquor shops, and in a certain contingency, even drawing of lots, is provided for, vide Executive Instructions 110 at p. 174 of the Manual.
The words of sub section
(3) of section 9 as amended, set out above, vest complete discretion in the Appellate Authority, the Excise Commissioner or the District Collector, to 'pass such orders thereon as it or he may think fit. ' The sections of the Act do not make any reference to the recording of evidence or hearing of parties or even recording reasons for orders passed by the authorities aforesaid.
But we have been informed at the bar that as a matter of practice, the authorities under the Act, hear counsel for the parties, and give reasoned judgments, so as to enable the higher authorities to know why a particular choice has been made.
That is also apparent from the several orders passed by them in course of these few cases that are before us.
But when we come to the rules relating to appeals and revisions, we find that the widest scope for going up in appeal or revision, has been given to persons interested, because r. 344 only lays down that no appeal shall lie against the orders of composition, thus, leaving all other kinds of orders open to appeal or revision.
Rule 343 provides that every memorandum of appeal shall be presented within one month from the date of the order appealed against, subject to the requisite time for obtaining a certified copy of the order being excluded.
Rule 344 requires the memorandum of appeal to be accompanied by a certified copy of the order appealed against.
The memorandum of appeal has to be stamped with a requisite court fee stamp.
Rule 343 was further amended by the Notification dated March 14, 1957, by adding the following proviso and explanations to that rule: " Provided further that the competent Appellate Authority shall have the power to admit the appeal after the prescribed period of limitation when the appellant satisfies the Appellate Authority that he had sufficient cause for not preferring the appeal 1257 within such period.
Explanation (1).
The fact that the appellant was misled by any order, practice or judgment of any Appellate Authority in ascertaining or computing the prescribed period of limitation may be sufficient cause within the meaning of this Rule.
Explanation (2).
The fact that the Appellate Authority was unable to function for any period by reason of any judicial pronouncement shall be sufficient cause within the meaning of this Rule.
The amendment shall be deemed to have been made on 23rd May, 1956, and shall have retrospective effect since that date.
" These rules, read along with the recent amendments, set out above, approximate the procedure to be followed by the Appellate Authorities, to the regular procedure observed by courts of justice in entertaining appeals.
As would appear from the ruling of this Court at p. 304, where the provisions and effect of the Assam Revenue Tribunal (Transfer of Powers) Act, 1948, (Assam IV of 1948) have been set out, the ultimate jurisdiction to hear appeals and revisions, was divided between the Assam High Court and the Authority referred to in section 3(3) of that Act.
Appeals and revisions arising out of cases covered by the provisions of the enactments specified in Schedule 'A ' to that Act, were to lie in and to be heard by the Assam High Court, and the jurisdiction to entertain appeals and revisions in matters arising under the provisions of the enactments specified in Schedule 'B ' to that Act, was vested in the Authority to be set up under section 3(3), that is to say, for the purposes of the present appeals before us, the Excise Appellate Authority.
Thus, the Excise Appellate Authority, for the purposes of cases arising under the Act, was vested with the power of the highest appellate Tribunal, even as the High Court was, in respect of the other group of cases.
That does not necessarily mean that the Excise Appellate Authority was a Tribunal of co ordinate jurisdiction with the High Court, or that that Authority was not amenable to the supervisory jurisdiction of the 1258 High Court under articles 226 and 227 of the Constitution.
But the juxtaposition of the two parallel highest Tribunals, one in respect of predominantly civil cases, and the other, in respect of predominantly revenue cases (without attempting any clear cut line of demarcation), would show that the Excise Appellate Authority was not altogether an administrative body which had no judicial or quasi judicial functions.
Neither the Act nor the rules made thereunder, indicate the grounds on which the first Appellate Authority, namely, the Excise Commissioner, or the second Appellate Authority (the Excise Appellate Authority), has to exercise his or its appellate or revisional powers.
There is no indication that they make any distinction between the grounds of interference on appeal and in revision.
That being so, the powers of the Appellate Authorities in the matter of settle ment, would be co extensive with the powers of the primary authority, namely, the District Collector or the Sub Divisional Officer.
See in this connection, the observations of the Federal Court in Lachmeshwar Prasad Shukul and others vs Keshwar Lal Chaudhuri and others (1), and of this Court in Ebrahim Aboobakar and another vs Custodian General of Evacuee Property(2).
In the latter case, this Court, dealing with the powers of the Tribunal (Custodian General of the Evacuee Property), under section 24 of Ordinance No. 27 of 1949, observed: " Like all courts of appeal exercising general jurisdiction in civil cases, the respondent has been constituted an appellate court in words of the widest amplitude and the legislature has not limited his jurisdiction by providing that such exercise will depend on the existence of any particular state of facts.
Thus, on a review of the provisions of the Act and the rules framed thereunder, it cannot be said that the authorities mentioned in section 9 of the Act, pass purely administrative orders which are beyond the ambit of the High Court 's power of supervision and control.
Whether or not an administrative body or (1) , 102.
(2) ; , 704.
1259 authority functions as a purely administrative one or in a quasi judicial capacity, must be determined in each case, on an examination of the relevant statute and the rule,,; framed thereunder.
The first contention raised on behalf of the appellant must, therefore, be overruled.
Now, turning to the merits of the High Court 's order, it was contended on behalf of the appellant that the High Court had misdirected itself in holding that the Appellate Authority had exceeded its jurisdiction in passing the order it did.
There is no doubt that if the Appellate Authority whose duty it is to determine questions affecting the right to settlement of a liquor shop, in a judicial or quasi judicial manner, acts in excess of its authority vested by law, that is to say, the Act and the rules thereunder, its order is subject to the controlling authority of the High Court.
The question, therefore, is whether the High Court was right in holding that the Appellate Authority had exceeded its legal power.
In this connection, it is best to reproduce, in the words of the High Court itself, what it conceived to be the limits of the appellate jurisdiction: "In other words, it is not for the Appellate Authority to make the choice, since the choice has already been made by the officers below; and it is not only where the choice is perverse or illegal and not in accordance with the Rules that the Appellate Authority can interfere with the order and make its own selected (sic.) out of the persons offering tenders.
If the Appellate bodies chose to act differently and consider themselves free to make their own choice of the person to be offered settlement irrespective of the recommendations of the Deputy Commissioner or the Officer conducting the settlement, the Appellate bodies will be obviously exceeding the jurisdiction, which they possess under the law or going beyond the scope of their authority as contemplated by the Rules.
" In our opinion, in so circumscribing the powers of the Appellate Authority, the High Court has erred.
See in this connection, the decision of this Court in Raman 160 1260 and Raman Ltd. vs The State of Madras(1).
In that case, this Court dealt with the powers of the State Government, which had been vested with the final authority in the matter of grant of stage carriage permits.
This Court held that as the State Government had been constituted the final authority under the "Motor Vehicles Act, to decide as between the rival claimants for permits, its decision could not be interfered with under article 226 of the Constitution, merely because the Government 's view may have been erro neous.
In the instant cases, the Appellate Authority is contemplated by section 9 of the Act, to be the highest authority for deciding questions of settlement of liquor shops, as between rival claimants.
The appeal or revision being undefined and unlimited in its scope, the highest authority under the Act, could not be deprived of the plenitude of its powers by introducing considerations which are not within the Act or the rules.
It is true that the Appellate Authority should not lightly set aside the selection made by the primary Authority, that is to say, a selection made by a Subdivisions Officer or by a District Collector, should be given due weight in view of the fact that they have much greater opportunity to know local conditions and local business people than the Appellate Authority, even as the appeal courts are enjoined not to interfere lightly with findings of fact recorded by the original courts which had the opportunity of seeing witnesses depose in court, and their demeanour while deposing in court.
But it is not correct to hold that because the Appellate Authority, in the opinion of the High Court, has not observed that caution, the choice made by it, is in excess of its power or without jurisdiction.
The next ground of attack against the order of the High Court, under appeal, was that the High Court had erred in coming to the conclusion that there had been a failure of natural justice.
In this connection, the High Court has made reference to the several affidavits filed on either side, and the order in which they (1) ; 1261 had been filed, and the use made of those affidavits or counter affidavits.
As already indicated, the rules make no provisions for the reception of evidence oral or documentary, or the hearing of oral arguments, or even for the issue of notice of the hearing to the parties concerned.
The entire proceedings are marked by a complete lack of formality.
The several authorities have been left to their own resources to make the best selection.
In this connection, reference may be made to the observations of this Court in the case of New Prakash Transport Co., Ltd. vs New Suwarna Transport Co., Ltd. (1).
In that case, this Court has laid down that the rules of natural justice vary with the varying constitutions of statutory bodies and the rules prescribed by the Act under which they function ; and the question whether or not any rules of natural justice had been contravened, should be decided not under any pre conceived notions, but in the light of the statutory rules and provisions.
In the instant case, no such rules have been brought to our notice, which could be said to have been contravened by the Appellate Authority.
Simply because it viewed a case in a particular light which may not be acceptable to another independent tribunal, is no ground for interference either under article 226 or article 227 of the Constitution.
It remains to consider the last contention raised on behalf of the appellants in these cases, namely, whether there has been any error apparent on the face of the record, in the order of the Appellate Authority, which would attract the supervisory jurisdiction of the High Court.
In this connection, the following observations of the High Court are relevant: " But the most glaring error on face of the order of the Appellate Authority is that it does not even refer to the report of the Deputy Commissioner on which the Excise Commissioner had so strongly relied.
In my opinion, it was under the Rules obligatory on the Appellate Authority to consider that report before disposing of the appeal, and in failing to do so, the officer (1) 1262 acted arbitrarily and in excess of his powers as an Appellate Authority.
" It may be that durinly the prolonged hearing of these cases before the High Court where, counsel for the different parties placed their respective view points after making copious references to the documents, the ', High Court was greatly impressed that the order of settlement in one case (Murmuria shop), made by the Deputy Commissioner, as confirmed by the Excise Commissioner, was the right one and that the choice made by the Appellate Authority did not commend itself to the High Court.
It may further be that the conclusions of fact of the High Court were more in consonance with the entire record of the proceedings, and that the choice made by the ultimate Revenue Authority, was wrong.
But, under the law as it stands, the High Court exceeded its powers in pronouncing upon the merits of a controversy which the Legislature has left to the discretion of the Appellate Authority.
But is that a mistake apparent on the face of the record, as understood in the context of article 226 of the Constitution ? That leads us to a consideration of the nature of the error which can be said to be an error apparent on the face of the record which would be one of the grounds to attract the supervisory jurisdiction of the High Court under article 226 of the Constitution.
The ancient writ of certiorari which now in England is known as the order of certiorari, could be issued on very limited grounds.
These grounds have been discussed by this Court in the cases of: Parry & Co. vs Commercial Employee 's Association, Madras (1), Veerappa Pillai vs Raman and Raman Ltd., and others (2), Ibrahim Aboobaker vs Custodian General of Evacuee Property (3), T. C. Basappa vs T. Nagappa All these cases have been considered by this Court in (1) ; (2) ; (3) ; (4) ; 1263 the case of Hari Vishnu Kamath vs Syed Ahmad Ishaque and others (1).
Venkatarama Ayyar J., speaking for the full Court, laid down four propositions bearing on the character and scope of the writ of certiorari as established upon the authorities.
The third proposition out of those four, may be stated in the words of that learned Judge, as follows: " The Court issuing a writ of certiorari acts in exercise of a supervisory and not appellate jurisdiction.
One consequence of this is that the Court will not review findings of fact reached by the inferior Court or Tribunal, even if they be erroneous.
" While considering the fourth proposition whether the writ can be issued in the case of a decision which was erroneous in law, after considering the recent Authorities, the same learned Judge, in the course of his judgment, at p. 1123, has observed as follows: " It may therefore be taken as settled that a writ of certiorari could be issued to correct an error of law.
But it is essential that it should be something more than a mere error: it must be one which must be manifest on the face of the record.
" The High Court appears to have been under the impression that the expression "error apparent on the face of the record" may also be in respect of findings of fact.
For example, in Civil Appeal No. 668 of 1957, relating to Jorhat shop, the High Court has observed as follows: " The Appellate Authority further reinforced its suspicion by mentioning that Dharmeswar, his father and brother are summoned in connection with some complaint, but that was a matter purely extraneous, ,to speak the least and it could have found that the complaint was filed after the settlement.
The complaint had no reference to any offence of smuggling or the like as has been conceded.
These were errors ap.
parent on the face of the record.
" Later, in the course of the same judgment, it has been observed as follows: " This is another instance where I find that the Excise Appellate Authority has misconceived its (1) ; , 1121.
1264 powers as such and purported to decide the appeal either on errors of record, speculations or on irrelevant considerations, irrespective of all that happened in the earlier stages of the matter.
It starts with an apparent error of record when it says that in the judgment of the Excise Commissioner it finds 'a clear admission that Shri Garela Kalita, father of Shri Dharmeswar Kalita, is a suspected smuggler. ' In fact, there was no such admission.
It was held by the Commissioner on the contrary that 'the learned Deputy Commissioner and members of the Advisory Committee thought that the major son who bears an excellent character should not be punished for the alleged sin of his father '.
" These excerpts from the judgment of the High Court are not exhaustive, but only illustrative of the observation that the High Court appears to have treated an error of fact on the same footing as an error of law apparent on the face of the record.
The question, naturally, arises whether an error of fact can be invoked in aid of the power of the High Court to quash an order of a subordinate court or Tribunal.
The High Court would appear to have approximated it to an 'error apparent on the face of the record ' as used in r. 1 of 0.
47 of the Civil Procedure Code, as one of the grounds for review of a judgment or order; but that is clearly not the correct position.
Ordinarily, a mistake of law in a judgment or an order of a court, would not be a ground for review.
It is a mistake or an error of fact apparent on the face of the record, which may attract the power of review as contemplated by r. I of 0.
But is the power of a High Court under article 226 of the Constitution, to interfere on certiorari, attracted by such a mistake, and not the reverse of it, in the sense that it is only an error of law apparent on the face of the record, which can attract the supervisory jurisdiction of a High Court ? This question, so far as we know, has not been raised in this form in this Court in any one of the previous decisions bearing on the scope and character of the writ of certiorari.
It is, therefore, necessary to examine this question directly raised in this batch of appeals, 1265 because, in each case, the High Court has been invited to exercise its powers under article 226, to issue a writ of certiorari on the specific ground that the orders impugned before it, had been vitiated by errors apparent on the face of the record errors not of law but of fact.
The ancient case of the Queen vs James Bolton(1), is treated as a landmark on the question of the power to issue a writ or order of certiorari.
That was a case in which an order of justices for delivering up a house to parish officers, under a statute, was called up on certiorari.
Lord Denman C. J. while discharging the rule, made the following observations in the course of his judgment, which have been treated as authoritative and good law even now: " The first of these is a point of much importance, because of very general application ; but the principle upon which it turns is very simple: the difficulty is always found in applying it.
The case to be supposed is one like the present, in which the Legislature has trusted the original, it may be (as here) the final, jurisdiction on the merits to the magistrates below; in which this Court has no jurisdiction as to the merits either originally or on appeal.
All that we can then do, when their decision is complained of, is to see that the case was one within their jurisdiction, and that their proceedings on the face of them are regular and according to law.
Even if their decision should upon the merits be unwise or unjust, on these grounds we cannot reverse it.
" While dealing with the argument at the Bar, complaining of the unsoundness of the conclusions reached by the magistrates and the hardships to be caused by their erroneous order, the Court made the following observations which are very apposite to the facts and circumstances disclosed in the instant appeals, and which all courts entrusted with the duty of administering law, should bear in mind, so that they may not be deflected from the straight path of enforcing the law, by considerations based on hardship or on vague (1) [1841] (I) Queen 's Bench p. 66, 72, 76; 113 English Reports I054,1057,1058.
1266 ideas of what is sometimes described as justice of the cause: " Beyond this we cannot go.
The affidavits, being before us, were used OD the argument; and much was said of the unreasonableness of the conclusion drawn by the magistrates, and of the hardship on the defendant if we would not review it, there being no appeal to the sessions.
We forbear to express any opinion on that which is not before us, the propriety of the conclusion drawn from the evidence by the magistrates: they and they alone were the competent authority to draw it; and we must not constitute ourselves into a Court of Appeal where the statute does not make us such, because it has constituted no other.
It is of much more importance to hold the rule of law straight than, from a feeling of the supposed hardship of any particular decision, to. interpose relief at the expense of introducing a precedent full of inconvenience and uncertainty in the decision of future cases" The case of Reg vs Bolton (supra) was approved and followed by the Privy Council in the case of the King vs Nat B 11 Liqutors, Limited (1).
In that case their Lordships of the Judicial Committee held that a conviction by a magistrate for a non indictable offence, cannot be quashed on certiorari on the ground that the record showed that there was no evidence to support the conviction, or that the magistrate had misdirected himself in considering the evidence.
It was further laid down that the absence of evidence did not affect the jurisdiction of the magistrate to try the charge.
In the course of their judgment, their Lord.
ships further observed that the law laid down in Reg vs Bolton (supra) has never been seriously questioned in England, and that the same rules were Applicable to other parts of the Commonwealth, except in so far as they may have been modified by statute.
They also observed that the decision in Reg vs Bolton (supra) undoubtedly is a landmark in the history of certiorari, for it summarises in an impeccable form the principles of its application. .
But latterly, the rule (1) 1267 laid down in Bolton 's case, appears to have been slurred over in some decided cases, in England, which purported to lay down that a writ or order of certiorari could be obtained only if the order impugned disclosed an error of jurisdiction, that is to say, complete lack of jurisdiction or excess of jurisdiction or the refusal to exercise jurisdiction, and not to correct an error of law, even though apparent on the face of the record.
The question was brought to a head in the case of Rex vs Northumberland Compensation Appeal Tribunal (1).
It arose out of an application for an order of certiorari for quashing a decision reached by the respondent Northumberland Compensation Appeal Tribunal.
Lord Goddard C. J. began his judgment by observing that the point involved in the case was " of the very greatest importance " which had " necessitated the examination of a large number of cases and consideration of the principles which apply to the doctrine of certiorari ".
He further observed that certiorari is a remedy of a very special character.
He, then, discussed the object and scope of the writ of certiorari and the history of the jurisdiction as exercised in the English courts.
He then dealt with the contention directly raised for the determination of the court that an order of certiorari, can issue only to remove a defect of jurisdiction and that it does not extend to removing an order out of the way of the parties on account of a mistake of law apparent on the face of the record.
The court then considered the relevant authorities, and came to the conclusion that it was wrong to hold that the ground of interference on certiorari, was only an error or excess of jurisdiction, and that it did not extend to correction of an error of law apparent on the face of the record.
The Lord Chief Justice then pointed out that the examination of the authorities bearing on the exercise of the power of certiorari, yielded the result that it was open to the High Court to examine the record and to see whether or not there was an error of law apparent on the face of the record.
The Lord Chief Justice concluded his observations with these remarks: (1) 161 1268 " The tribunal have told us what they have taken into account, what they have disregarded, and the contentions which they accepted.
They have told us their view of the law, and we are of opinion that the construction which they placed on this very complicated set of regulations was wrong.
" This decision was challenged, and on appeal, the Court of Appeal dealt with this point in Rex vs Northumberland, Compensation Appeal Tribunal(1).
The Court of Appeal affirmed the proposition laid down by the High Court that an order for certiorari, can be granted and the decision of an inferior court such as a statutory tribunal, quashed on the ground of an error of law apparent on the face of the record.
Singleton L. J. in the course of his judgment, observed that an error on the face of the proceedings, which in that case was an error of law, has always been re. cognized as one of the grounds for the issue of an order of certiorari.
Denning L. J. also, in the course of his judgment, examined the question whether the High Court could intervene to correct the decision of a statutory tribunal which is erroneous in point of law.
On an examination of the authorities from ancient times, the Lord Justice made the following observations: " Of recent years the scope of certiorari seems to have been somewhat forgotten.
It has been supposed to be confined to the correction of excess of jurisdiction, and not to extend to the correction of errors of law ; and several judges have said as much.
But the Lord Chief Justice has, in the present case, restored certiorari to its rightful position and shown that it can be used to correct errors of law which appear on the face of the record even though they do not go to jurisdiction.
I have looked into the history of the matter, and find that the old cases fully support all that the Lord Chief Justice said.
Until about 100 years ago, certiorari was regularly used to correct errors of law on the face of the record.
It is only within the last century that it has fallen into disuse, and that is only because there has, until recently, been little occasion for its exercise.
(I) ; 1269 Now, with the advent of many new tribunals, and the plain need for supervision over them, recourse must once again be had to this well tried means of control.
" The other Lord Justice who took part in the hearing of the appeal, Morris L. J. also examined that question and concluded as follows: " It is plain that certiorari will not issue as the, cloak of an appeal in disguise.
It does not lie in order to bring up an order or decision for rehearing of the issue raised in the proceedings.
It exists to correct error of law where revealed on the face of an order or decision, or irregularity, or absence of, or excess of, jurisdiction where shown.
" I It is clear from an examination of the authorities of this Court as also of the courts in England, that one of the grounds on which the jurisdiction of the High Court on certiorari may be invoked, is an error of law apparent on the face of the record and not every error either of law or fact, which can be corrected by a superior court, in exercise of its statutory powers as a court of appeal or revision.
So far as we know, it has never been contended be.
fore this Court that an error of fact, even though apparent on the face of the record, could be a ground for interference by the court exercising its writ jurisdiction.
No ruling was brought to our notice in support ,of the proposition that the court exercising its powers under article 226 of the Constitution, could quash an order of an inferior tribunal, on the ground of a mistake of fact apparent on the face of the record.
But the question still remains as to what is the legal import of the expression 'error of law apparent on the face of the record. ' Is it every error of law that can attract the supervisory jurisdiction of the High Court, to quash the order impugned ? This court, as observed above, has settled the law in this respect by laying down that in order to attract such jurisdiction, it is essential that the error should be something more than a mere error of law; that it must be one which is manifest on the face of the record.
In this respect, the law in India and the law in England, are, therefore, the same.
It is also clear, on an examination of all 1270 the authorities of this Court and of those in England, referred to above, as also those considered in the several judgments of this Court, that the Common Law writ, now called order of certiorari, which was also adopted by our Constitution, is not meant to take the place of an appeal where the statute does not confer a right of appeal.
Its purpose is only to determine, on an examination of the record, whether the inferior tribunal has exceeded its jurisdiction or has not proceeded in accordance with the essential requirements of the law which it was meant to administer.
,Mere formal or technical errors, even though of law, will not be sufficient to attract this extraordinary jurisdiction.
The principle underlying the jurisdiction to issue a writ or order of certiorari, is no more in doubt, but the real difficulty arises, as it often does, in applying the principle to the particular facts of a given case.
In the judgments and orders impugned in these appeals, the High Court has exercised its supervisory jurisdic note in respect of errors which cannot be said to be errors of law apparent on the face of the record.
If at all they are errors, they are errors in appreciation of documentary evidence or affidavits, errors in drawing inferences or omission to draw inferences.
In other words, those are errors which a court sitting as a court of appeal only, could have examined and, if necessary, corrected.
As already indicated, the Appellate Authority had unlimited jurisdiction to examine and appreciate the evidence in the exercise of its appellate or revisional jurisdiction.
Section 9(3) of the Act, gives it the power to pass such orders as it thought fit.
These are words of very great amplitude.
The jurisdiction of the Appellate Authority, to entertain the appeals, has never been in doubt or dispute.
Only the manner of the exercise of its appellate jurisdiction was in controversy, It has not been shown that in exercising its powers, the Appellate Authority disregarded any mandatory provisions of the law.
The utmost that has been suggested, is that it has not carried out certain Executive Instructions.
For example, it has been said that the Appellate Authority did not observe the 1271 instructions that tribal people have to be given certain preferences, or, that persons on the debarred list, like ,smugglers, should be kept out (see p. 175 of the Manual).
But all these are only Executive Instructions which have no statutory force.
Hence, even assuming, though it is by no means clear, that those instructions have been disregarded, the non observance of those instructions cannot affect the power of the Appellate Authority to make its own selection, or affect the validity of the order passed by it.
The High Court, in its several judgments and orders, has scrutinized, in great detail, the orders passed by the Excise Authorities under the Act.
We have not thought it fit to examine the record or the orders below in any detail, because, in our opinion, it is not the function of the High Court or of this Court to do so.
The jurisdiction under article 226 of the Constitution is limited to seeing that the judicial or quasi judicial tribunals or administrative bodies exercising quasijudicial powers, do not exercise their powers in excess of their statutory jurisdiction, but correctly administer the law within the ambit of the statute creating them or entrusting those functions to them.
The Act has created its own hierarchy of officers and Appellate authorities, as indicated above, to administer the law.
So long as those Authorities function within the letter and spirit of the law, the High Court has no concern with the manner in which those powers have been exercised.
In the instant cases, the High Court appears to have gone beyond the limits of its powers under articles 226 and 227 of the Constitution.
In one of the cases, the High Court has observed that though it could have interfered by issuing a writ under article 226 of the Constitution, they would be content to utilize their powers of judicial superintendence under article 227 of the Constitution vide its judgment dated July 31, 1957, in appeals relating to Murmuria shop (Civil Appeals Nos. 669 and 670 of 1957).
In exercise of that power, the High Court set aside the order of the Appellate Authority, and directed it to re hear the appeal 'according to law in the light of the principles indicated in this judgment '.
1272 A Constitution Bench of this Court examined the scope of article 227 of the Constitution in the case of Waryam Singh and another vs Amarnath a rid another (1).
This Court, in the course of its judgment, made the following observations at p. 571 : " This power of superintendence conferred by article 227 is, as pointed out by Harries C. J. in Dalmia Jain Airways Ltd. vs Sukumar Mukherjee (2), to be exercised most sparingly and only in appropriate cases in order to keep the Subordinate Courts within the bounds of their authority and not for correcting mere errors.
" It is, thus, clear that the powers of judicial interference under article 227 of the Constitution with orders of judicial or quasi judicial nature, are not greater than the powers under article 226 of the Constitution.
Under article 226, the power of interference may extend to quashing an impugned order on the ground of a mistake apparent on the face of the record.
But under article 227 of the Constitution, the power of interference is limited to seeing that the tribunal functions within the limits of its authority.
Hence, interference by the High Court, in these cases, either under article 226 or 227 of the Constitution, was not justified.
After having dealt with the common arguments more or less applicable to all the cases, it remains to consider the special points raised on behalf of the respondents in Civil Appeal No. 672 of 1957, relating to the Tinsukia country spirit shop.
It was strenuously argued that the appeal was incompetent in view of the fact that the rule issued by the High Court, was still pending, and that this Court does not ordinarily, entertain an appeal against an interlocutory order.
It is true that this Court does not interfere in cases which have not been decided by the High Court, but this case has some extraordinary features which attracted the notice of this Court when special leave to appeal was granted.
As already stated, the shop in question was settled with the appellants by the Excise Commissioner, and his order was upheld by the Appellate Authority.
Accordingly, the appellants, (1) ; (2) A.I. R. (195i) Cal.
1273 had been put in possession of the shop on June 7, 1957.
The High Court, while issuing the rule, passed an order on the stay application, which, as already indicated, had been misunderstood by the District Excise authorities, and the appellants were dispossessed and the respondents I and 2 put back in possession, without any authority of law.
This was a flagrant interference with the appellants ' rights arising out of the settlement made in their favour by the highest revenue authorities.
The High Court had not and could not have authorized the dispossession of the persons rightfully in possession of the shop.
The appellants brought this flagrant abuse of power to the notice of the High Court several times, but the High Court felt unduly constrained to permit the wrong to continue.
We heard the learned counsel for the respondents at great length as to whether he could justify the continuance of this undesirable and unfortunate state of affairs.
It has to be remembered that the appellants, as a result of fortuitous circumstances, had been deprived of the possession of the shop during the best part of the financial year 1956 57 The appellants had been deprived of the fruits of their hard won victory in the revenue courts, without any authority of law, and the High Court failed to right the wrong in time, though moved several times.
In these circumstances, we found it necessary to hear both the parties on the merits of the orders passed by the Commissioner of Excise and the Appellate Authority, in favour of the appellants, against which, the respondents had obtained a rule.
After having heard both sides, we have come to the conclusion that no grounds have been made out for interference by the High Court, under its powers under articles 226 and 227 of the Constitution.
This case shares the common fate of the other cases before us, of having run through the entire gamut of the hierarchy created under the Act, read along with the amending Act and the rules thereunder.
We do not find any grounds in the orders of the Excise Authorities which could attract the supervisory jurisdiction of the High Court, there being no error of law apparent on the face of the record, 1274 or a defect of jurisdiction in the Authorities whose orders have been impugned in the High Court.
We would, however, like to make it clear that we are interfering with the interlocutory order passed by the High Court in this case because of its unusual and exceptional features.
It is clear that our decision on the main points urged in the other appeals necessarily leads to the inference that, even if all the allegations made by the respondents in their petition before the Assam High Court are accepted as true, there would be no case whatever for issuing a rule.
Indeed, the respondent found it difficult to resist the appellant 's argument that, if the other appeals were allowed on the general contentions raised by the appellants, the dismissal of his petition before the Assam High Court would be a foregone conclusion.
It is because of these special circumstances that we have decided to interfere with the interlocutory order in this case in the interests of justice.
As a result of these considerations, the appeals must be allowed and the orders passed by the High Court in the several cases, set aside.
On the question of costs, we direct that the appellants in each case, should get their costs here and in the High Court, except the appellant in Civil Appeal No. 670, who has failed on the main point raised on his behalf, and who, therefore, must bear his own costs.
Appeals allowed.
| The High Court has no power under article 226 of the Constitu tion to issue a writ of certiorari in order to quash an error of fact, even though it may be apparent on the face of the record.
It can do so only where the error is one of law and that is apparent on the face of the record.
Any error of law or fact which it can correct as a court of appeal or revision cannot be a ground for the exercise of its power under that Article.
Hari Vishnu Kamath vs Syed Ahmed Ishaque and others, [1955] I S.C.R. 1104, relied on.
Queen vs James Bolton, (1841) (1) Queen 's Bench 66, King vs Nat Bell Liquors, Limited, , Rex vs Northumberland Compensation Appeal Tribunal, (1951) 1 K.B. 711 and Rex vs Northumberland Compensation Appeal Tribunal, ; , referred to.
The jurisdiction of the High Court under article 226 of the Constitution is limited to seeing that the judicial or quasi judicial tribunals or administrative bodies exercising quasi judicial powers, 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 a statute function within their ambit, the manner in which they do so can be no ground for interference.
The powers of judicial supervision of the High Court under article 227 Of the Constitution are not greater than those under article 226 and must be limited to seeing that the tribunal functions within the limits of its authority.
Waryam Singh and another vs Amarnath and another; , , referred to.
Consequently, where the High Court in exercise of its powers under articles 226 and 227 Of the Constitution interfered with 1241 certain orders made by the Excise Appellate Authority under the Assam Excise Act as being in excess of its jurisdiction on the ground that they were vitiated by errors of fact apparent on the face of the record, such interference was without jurisdiction and the orders passed by the High Court must be set aside.
Held further, that where an appellate Authority, as in the instant case, is constituted the highest authority by the statute for deciding as between the claims of rival parties, its powers cannot be circumscribed nor can it be held to have acted in excess of its powers or without jurisdiction on considerations foreign to the statute or the rules.
Raman and Raman Ltd. vs The State of Madyas, [1956] S.C.R. 256, referred to.
In the absence of anything to show that the appellate Authority had contravened any rules of natural justice, which must be understood in the context of the ' rules laid down by the statute itself, it would be wrong to say that there has been a failure of natural justice simply because the view it took of the matter might not be acceptable to another tribunal.
New Prakask Transport Co. Ltd. vs New Suwarna Transport Co. Ltd., , relied on.
The question whether an administrative authority functions merely in an administrative or quasi judicial capacity must be determined on an examination of the statute and its rules under which it acts, and there can be no doubt on such examination that the Authorities mentioned in section 9 of the Eastern Bengal and Assam Excise Act, 1910, as amended by Assam Act 23 Of 1953, are no mere administrative bodies and their orders are, therefore, amenable to the powers of control and supervision vested in the High Court by articles 226 and 227 Of the Constitution.
|
il Appeal No. 2341 of 1978.
From the Judgement and Decree dated 16.11.1977 of the Andhra Pradesh High Court in Writ Appeal No. 358 of 1976.
Altaf Ahmed, Additional Solicitor General, P. Parmeshwaran and Dilip tandon for the Appellant.
128 A.S. Nambiar and B. Parthasarthy for the Respondent.
The Judgement of the Court was delivered by AHMADI, J.
This appeal, on certificate, is directed against the decision of the High Court of Andhra Pradesh which was quashed the imposition of duty and levy of penalty on the ground that the show cause notice was issued after the expiry of the period of six months from the accrual of the cause of action.
The facts leading to this appeal are as follows: The respondent M/s. Ramdev Tobacco Company, a sole proprietory concern, was at all material times a dealer in tobacco having a licenced warehouse at Guntur.
The dealer was liable to pay duty on the tobacco received at his warehouse and transported to another dealer.
On August 30, 1972 the appellant issued a notice calling upon the respondent to show cause why duty should not be demanded under Rule 160 of Central Excise Rules, 1944 (`the Rules ' hereafter) on 64,444 kgs.
of VFC Farmash Tobacco removed from his warehouse and not accounted for in the warehouse register maintained under the Rules.
The respondent was also asked to show cause why penalty should not be imposed for infraction of Rules 151 and 32(1) of the Rules for illicit removal of the aforementioned quantity of tobacco.
This show cause notice was founded on the allegation that in 1970 the respondent obtained six transport permits (T.P. 2) dated January 13, 1970, February 10, 1970, March 26, 1970, May 16, 1970, July 24, 1970 and August 5, 1970 and transported under each permit more than the quantity of tobacco allowed thereunder in contravention of the aforementioned rules.
The respondent sent a detailed reply to the said show cause notice on November 4, 1972.
After giving a personal hearing to the respondent on September 18, 1973 the appellant came to the conclusion that the respondent had evaded payment of duty on 1272 bags weighing 48,304 Kgs, of VFC Farmash tobacco and issued a demand under Rule 160 in the sum of Rs.1,66,165.76 under adjudication order No. 173/74 dated April 9, 1974.
In addition thereto the appellant imposed a penalty of Rs. 100 for contravention of Rules 151 and 32(1) of the Rules.
Thereupon the respondent filed a writ petition No.2600 of 1974 under Article 226 of the Constitution challenging the aforesaid order of the appellant.
This writ petition was heard and disposed of by a learned Single Judge of the High Court who took the view that the appellant 's action was time barred inasmuch as it was initiated after the expiry of the period of six months from the accrual of the cause of action.
According to the learned Judge under section 129 40(2) of the (`the ' hereinafter) no suit, prosecution or other legal proceeding could be instituted for anything done or ordered to be done under the law after the expiration of six months from the accrual of the cause of action.
Since a period of more than six months had indisputably expired from the dates on which the excess tobacco was transported under the six transport permits in question, the action was clearly time barred.
In this view of the matter the writ petition was allowed and the demand made under the impugned adjudication order both in respect of duty and penalty was quashed.
The present appellant questioned the correctness of this view in appeal, Writ Appeal No. 358 of 1976, but in vain.
The Division Bench found the view taken by the learned Single Judge in accord with its view in Writ Petition No. 2516 of 1974 decided on April 1, 1976.
It, therefore, dismissed the appeal but since it had granted a certificate to appeal in the case relied on, it also granted a similar certificate which has given rise to this appeal.
Sub section (2) of section 40 of the as it stood at the relevant point of time before its amendment by Amendment 22 of 1973 read as under: "No suit, prosecution or other legal proceeding shall be instituted for anything done or ordered to be done under the after the expiration of six months from the accrual of the cause of action or from the date of the act or order complained of".
Before we proceed to analyse this sub section it would be advantageous to bear in mind that sub section (1) of this section bars the institution of any suit, prosecution or other legal proceeding against the Central Government or its officer in respect of any order passed in good faith or any act in good faith done or ordered to be done under the .
The second sub section prescribes a period of limitation for suits, prosecutions and other legal proceedings instituted, lodged or taken for anything done or ordered to be done under the .
That is why in Public Prosecutor, Madras vs R.Raju & Anr., etc.; , it was urged on a conjoint reading of the two sub sections that sub section (2) applied only to Government and could not come to the rescue of a tax payer.
Rejecting this contention this Court held: "The two sub sections operate in different fields.
The first sub section contemplates bar of suits against the Central Government or against the officers by protecting them in 130 respect of orders passed in good faith or acts done in good faith.
It is manifest that the second sub section does not have any words of restriction or limitation of class of persons unlike sub section (1).
Sub section (2) does not have any words of qualification as to persons.
Therefore, sub section (2) is applicable to any individual or person.
" This the appellant 's contention that sub section (2) was confined only to the Government officers was found to be unwarranted on the plain words of the provision and was also repelled by reference to other comparable statutes which went to show that whenever the legislature intended to limit the application against the Government officers, the Legislature had chosen appropriate words of limitation to restrict the operation of the provision.
It follows, therefore, that the application of the sub section extended to any person, not being a Government Officer, against whom any suit, prosecution or other legal proceeding was commenced for anything done or ordered to be done under the .
The next contention convassed in that case by the learned counsel for the appellant was that the words "anything done or ordered to be done" employed in the sub section would not include anything done in violation of the .
This Court after referring to the definition of the word `act ' in the , which extended to illegal omissions also, and the case law on the subject observed at page 820 as under: "These decisions in the light of the definition of the word `act ' in the establish that non compliance with the provisions of the statute by omitting to do what the act enjoins will be anything done or ordered to be done under the .
The complaint against the respondents was that they wanted to evade payment of duty.
Evasion was by using and affixing cut and torn banderols.
Books of account were not correctly maintained.
There was shortage of banderols in stock.
Unbanderolled matches were found.
These are all infraction of the provisions in respect of things done or ordered to be done under the .
" It is, therefore, clear from the above observation that any omission or infraction of the statutory provision would also fall within the ambit of the provision.
Non payment of duty or dues which a dealer is under an obligation to pay under the statute was, therefore, held to fall within 131 the scope of the provision.
In that case the complaint against the respondents was that to evade the payment of duty they had used and affixed cut and torn banderols and had failed to maintain the accounts correctly resulting in shortage in stocks.
The respondents were prosecuted for contravention of the Rules punishable under sections 9(b) and 9(d) of the as also under section 420 read with section 511 and 109, I.P.C. The respondents pleaded the bar of section 40 of the as it then stood.
The High Court upheld the contention that the prosecution was barred by the rule of limitation incorporated in section 40 as the same was instituted after the expiry of six months from the date of the commission of the alleged offences.
This Court on the aforesaid line of reasoning affirmed the High Court 's decision.
But the question is whether the issuance of a show cause notice and the initiation of the consequential adjudication proceedings can be described as `other legal proceedings ' within the meaning of sub section (2) of section 40 of the ? If the said departmental action falls within the expression `other legal proceeding ' there can be no doubt that the action would be barred as the same indisputably was initiated six months after the accrual of the cause action.
So the crucial question is whether the issuance of the show cause notice dated August 30, 1972 and the passing of the impugned order in adjudication proceedings emanating therefrom constitutes `other legal proceeding ' within the meaning of section 40(2) of the to fall within the mischief of that sub section which bars such proceedings if commenced after a period of six months from the accrual of the cause of action.
The learned Additional Solictor General submitted that the expression `other legal proceeding ' must be read ejusdem generis with the proceeding expressions `suit ' and `prosecution ' and if so read it becomes crystal clear that the department 's action cannot come within the purview of `other legal proceeding '.
How valid is this contention is the question which we are called upon to answer in the present appeal.
The rule of ejusdem generis is generally invoked where the scope and ambit of the general words which follow certain specific words (which have some common characteristic and constitute a genus) is required to be determined.
By the application of this rule the scope and ambit of the general words which follow certain specific words constituting a genus is restricted to things ejusdem generis with those preceding them, unless the context otherwise requires.
General words must ordinarily bear their natural and larger meaning and need not be confined ejusdem generis to things previously enumerated unless the language of the statute spells out an intention to that effect.
Courts 132 have also limited the scope of the general words in cases where a larger meaning is likely to lead to absurd and unforeseen results.
To put it differently, the general expression has to be read to comprehend things of the same kind as those referred to by the preceding specific things constituting a genus, unless of course from the language of the statute it can be inferred that the general words were not intended to be so limited and no absurdity or unintended and unforeseen complication is likely to result if they are allowed to take their natural meaning.
The cardinal rule of interpretation is to allow the general words to take their natural wide meaning unless the language of the statute gives a different indication or such meaning is likely to lead to absurd results in which case their meaning can be restricted by the application of this rule and they may be required to fall in line with the specific things designated by the preceding words.
But unless there is genus which can be comprehended from the preceding words, there can be no question of invoking this rule.
Nor can this rule have any application where the general words precede specific words.
There can be little doubt that the words `other legal proceeding ' are wide enough to include adjudication and penalty proceedings under the .
Even the learned Additional Solicitor General did not contend to the contrary but what he said was that since this wide expression is preceded by particular words of a certain genus, namely, words indicating reference to proceedings taken in courts only, the wide words must be limited to things ejusdem generis and must take colour from the preceding words and should, therefore, receive a limited meaning to exclude proceedings of the type in question.
There can be no doubt that `suit ' or `prosecution ' are those judicial or legal proceedings which are lodged in a court of law and not before any executive authority, even if a statutory one.
The use of the expression `instituted ' in section 40(2) strengthens this belief.
Since this sub section has been construed by this Court in Raju 's case (supra) not to be confined in its application to only Government servants but to extend to others including the assessees and since the words `for anything done or ordered to be done under this ' are found to be comprehensive enough to include acts of non compliance or omissions to do what the and the Rule enjoin, the limitation prescribed by section 40(2) would undoubtedly hit the adjudication and penalty proceedings unless the expression `other legal proceeding ' is read ejusdem generis to limit its ambit to legal proceedings initiated in a court of law.
The scope of section 40(2) as it stood before its amendment pursuant to Raju 's case came up for consideration before a Division 133 Bench of the Madhya Pradesh High Court in Universal Cables Ltd. vs Union of India, [1977] ELT (J92) wherein the question raised for determination was whether penalty procedings taken under Rule 173Q for the infraction of Rule 173C with a view to evading payment of duty fell within the expression `other legal proceeding ' used in the said sub section.
The High Court conceded that the expression when read in isolation is wide enough to include any proceeding taken in accordance with law, whether so taken in a court of law or before any authority or tribunal but when read with the preceding words `suit ' or `prosecution ' it must be given a restricted meaning.
This is how the High Court expressed itself at page J 106: "Now the language of section 40 (2) is: `no suit, prosecution or other legal proceeding shall be instituted '.
`Suit ' and `prosecution ' which precede the expression `other legal proceeding ' can be taken only in a Court of Law".
After stating the expanse of the ejusdem generis rule, as explained in Amar Chandra vs Excise Collector, Tripura, AIR.
at 1868 (Sutherland, Volume 2 pages 399 400) the High Court observed that there was no indication in the said sub section or elsewhere in the that the said general words were intended to receive their wide meaning and were not to be construed in a limited sense with the aid of the ejusdem generis rule.
A departmental proceeding like penalty proceedings were, therefore, placed outside the scope of the said sub section.
This view was quoted with approval by a learned Single Judge of the Bombay High Court in C.C. Industries & Others vs H.N. Ray and Another, at 453.
These two cases, therefore, clearly support the view canvassed before us by the learned Additional Solicitor General.
We have given our careful consideration to the submission made on behalf of the appellant, reinforced by the view expressed in the aforesaid two decisions.
In considering the scope of the expression `other legal proceeding ' we have confined ourselves to the language of sub section (2) of section 40 of the before its amendment by 22 of 1973 and should not be understood to express any view on the amended provision.
On careful consideration we are in respectful agreement with the view expressed in the aforesaid decisions that the wide expression `other legal proceeding ' must be read ejusdem generis with the preceding words `suit ' and `prosecution ' as they constitute a genus.
In this view of the matter we must uphold the contention of the learned Additional Solicitor General that the penalty and adjudication 134 proceedings in question did not fall within the expression `other legal proceeding ' employed in section 40 (2) of the as it stood prior to its amendment by 22 of 1973 and therefore, the said procedings were not subject to the limitation prescribed by the said sub section.
Mr. Nambiar, the learned counsel for the respondents strongly argued that we should not entertain the submission based on the ejusdem generis rule since it was not raised before the High Court.
That indeed is true but being a pure question of law we have though it fit to entertain the same.
We therefore, do not entertain this objection.
In the result we allow this appeal and set aside the order passed by the learned Single Judge as well as the Division Bench which affirmed it and dismiss the respondent 's writ petition itself.
We also set aside the order by which the appellant was directed to pay costs.
We restore the adjudication order dated April 4, 1974 and all consequential orders, if any, passed thereunder.
Interim stay granted on August 16, 1979 is vacated and the appellant will be entitled to recover the dues from the security furnished pursuant to that order.
The appeal is allowed accordingly with no order as to costs.
R.S.S. Appeal allowed.
| When cloth control was introduced in Rewa State, 25 cloth dealers of Budhar, including the thirteen appellants, formed themselves into an Association to collect the quota of cloth to be allotted to them and to sell it on profit.
The Association functioned through a President and a pioneer worker; they kept accounts and distributed profits.
After cloth had been decontrolled and the work of the Association had come to an end, the appellants filed a suit against the first respondent for rendition of accounts for a portion of the period that he had been President of the Association and for realisation of the amount found due with interest.
The suit was decreed by the trial Court but was, on appeal, dismissed by the judicial Commissioner.
In appeal before the Supreme Court, the first respondent raised, for the first time, a preliminary objection that the suit was not maintainable as the Association consisting of more than 20 persons was not registered as required by section 4(2) Of the Rewa State Companies Act, 1935, and that consequently the members of the Association had no remedy against each other in respect of its dealings and transactions.
The appellants objected to the raising of the new plea and contended that, nevertheless, the suit was maintainable Held, that the suit was not maintainable.
In view of section 4(2) of the Act the Association was illegal.
The reliefs claimed for rendition of accounts in enforcement of the illegal contract of partnership necessarily implied recognition by the Court that the Association existed of which accounts were to be taken.
The Court could not assist the plaintiffs in obtaining their share of the profits made by the illegal Association.
U.Sein Po vs U. Phyu, Rang.
540, not applicable.
Held further, that the new point ought to be allowed to be raised.
The question was a pure question of law and did not require the investigation of any facts.
The objection rested on the provisions of a public statute which no court could exclude from its consideration.
Surajmull Nargoremull vs Triton Insurance Company Ltd., (1924) L.R. 52 I.A. 126; Sri Sri Shiba Prasad Singh vs Maharaja Srish Chandra Nandi, (1949) L.R. 76 I.A. 244, followed.
The analogy of section 69(3)(a) of the , did not apply, an under that Act an unregistered firm was 97 770 not illegal.
Besides, the suit was not one for accounts of a dissolved firm but of an illegal Association which was in existence id at the relevant time.
|
No. 723 of 1989 etc.
(Under Article 32 of the Constitution of India).
G. Ramaswamy, Additional Solicitor General (N.P.), F.S. Nariman, G.L. Sanghi, G.Prabhakar, M. Rangaswamy, N.D.B. Raju, Ms. C.K. Sucharita, S.K. Agnihotri, P.R. Ramashesh, K.R. Nagaraja and Ms. Anita Sanghi for the appearing par ties.
The following Judgments of the Court were delivered: RANGANATH MISRA, J. I have the benefit of reading the judgment prepared by my esteemed brethren Sawant and K. Ramaswamy, JJ.
Brother Sawant has taken the view that section 20 of the Karnataka Act has not become void with the enforce ment of the , while Brother K. Ramaswamy has come to the contrary conclusion.
Agreeing with the conclusion of Sawant, J., I have not found it possible to concur with Ramaswamy, J. Since an interesting question has arisen and in looking to the two judgments I have found additional reasons to support the conclusion of Sawant.
J., I proceed to indicate the same in my separate judgment.
These applications under Article 32 of the Constitution by a group of disgruntled applicants for contract carriage permits call in question action of the concerned transport authorities in not entertaining their applications under the provisions of the .
(4 of 1939) made provision for grant of contract carriage permits.
The Karnataka Contract Car riages (Acquisition) Act (Karnataka Act 21 of 1976) received assent of the President on 11th of March.
but was declared to have come into force from 30th of January, 1976, when the corresponding Karnataka Ordinance 7 of 1976 had come into force.
The long title of the Act indicated that it was an Act to provide for the acquisition of contract car riages and for matters incidental.
ancillary or subservient thereto, and the preamble stated: 625 "Whereas contract carriages and certain other categories of public service vehicles are being operated in the State in a matter highly detrimental and prejudicial to public interest; And whereas with a view to prevent such misuse and also to provide better facilities for the transport of passengers by road and to give effect to the policy of the State towards securing that the ownership and control of the material resources of the community are so distributed as best to subserve the common good and that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment; And whereas for the aforesaid purposes it is considered necessary to provide for the acquisition of contract carriages and certain other categories of public service vehicles in the State and for matters incidental, ancillary or subservient thereto . " Section 2 contains the declaration to the following effect: "It is hereby declared that this Act is for giving effect to the policy of the State towards securing the principles specified in clauses (b) and (c) of Article 39 of the Con stitution of India and the acquisition therefore of the contract carriages and other property referred to in section 4." Under ss 4 contract carriages owned or operated by contract carriage operators along with the respective per mits and/or certificates of registration, as the case may be, vested in the State absolutely free from encumbrances, and compensation for such acquisition was provided under the scheme of the Act.
Section 14 prohibited application for any permit or fresh permit or renewal of existing permits for running of any contract carriage in the State by any private operator and all pending proceedings in relation to grant or renewal abated.
Consequential provisions were made in sections 15 and 16 of the Act.
Section 20 gave the Corporation the exclusive privilege of running contract carriages within the State to the exclusion of any provision under the 1939 Act.
The vires of the Act was the subject matter of the decision of this 626 Court in a group of appeals in the case of the State of Karnataka & Anr.
vs Shri Ranganatha Reddy & Anr., ; A Seven Judge Bench upheld the validity of the statute holding that the impugned statute was an 'acquisi tion Act ' within the ambit of Entry 42 of the Concurrent List under Schedule VII of the Constitution.
The Court took note of the fact that even though it may have had some incidental impact on inter State trade or commerce it did not suffer from any lacuna on that count.
Since the Act had been reserved for Presidential assent, to the extent section 20 made provisions contrary to those in the of 1939, was taken to be valid under article 254(2) of the Constitution.
The (59 of 1988) being a Parliamen tary legislation was brought into force with effect from 1.7. 1989.
Under section 1(2), the Act extended to the whole of India and, therefore, the Act became applicable to the State of Karnataka by the notification appointing the date of commencement of the Act.
The 1988 Act has admittedly liberalised the provisions relating to grant of permits of every class including con tract carriages.
Sections 73, 74 and 80 contain the relevant provisions in this regard.
While section 73 provides for an application for such permit, section 74 contains the procedure for the consideration of the grant and section 80 contains a general provision that the transport authority shall not ordinarily refuse to grant an application for permit of any kind made at any time under the Act.
It is the contention of the petitioners that with the enforcement of the of 1988 as a piece of central legislation, the provisions of section 20 of the Karnataka Act became void to the extent the state law was inconsistent with the provisions of the 1988 Act and, therefore, by operation of the provisions contained in article 254 of the Constitution, section 20 stood abrogated and the scheme of the 1988 Act became operative.
The applications of the petitioners for grant of contract carriage permits were maintainable and should have been entertained and disposed of in accordance with the provi sions of the 1988 Act.
It is the stand of the respondents, in particular of the Karnataka State Transport Undertaking, that the State Act is a legislation under a different entry and was not on the same subject.
Therefore, the matter did not come within the ambit of article 254 of the Constitution.
The State Act contin ues to hold the field and the transport authorities had rightly refused to entertain the petitioners ' applications.
627 The question for consideration is: Whether article 254( I) of the Constitution applies to the situation in hand and whether section 20 of the Karnataka Act being inconsistent with the provisions of sections 73, 74 and 80 of the 1988 Motor Vehi cles Act became void.
It would be convenient to extract the provisions of article 254 of the Constitution at this stage and recount the background in which such provision was warrant ed.
It is the common case of the parties that with the introduction of federalism and distribution of legislative powers and accepting a Concurrent List wherein in regard to specified subjects the Federal and the Federating State Legislatures had power to legislate, a provision of ration alisation became necessary.
Section 107 of the Government of India Act, 1935, contained the provision to deal with such a situation.
The Constituent Assembly accepted a similar mechanism and added a proviso to clause (2) of article 254 to meet the difficulties experienced in the intervening years.
The Article reads thus: "254(1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of any existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repug nancy, be void.
(2) Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concur rent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legis lature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State: Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State.
" 628 Though for some time there was difference of judicial opinion as to in what situation article 254 applies, decisions of this Court by overruling the contrary opinion have now concluded the position that the question of repugnancy can arise only with reference to a legislation falling under the Concurrent List: Bar Council of Uttar Pradesh vs State of U.P. & Anr., ; and Kerala State Electricity Board vs Indian Aluminium Company, [1976] 1 SCR 552.
This Court in Deep Chand vs State of Uttar Pradesh & Ors., ; ; T. Barai vs Henry Ah Hoe & Anr., ; and Hoechst Pharmaceuticals Ltd. & Anr.
vs State of Bihar & Ors.
, ; has laid down that cl.
(1) of article 254 lays down the general rule and cl.
(2) is an exception thereto; the proviso qualifies the exception.
Therefore, while interpreting article 254 this position has to be kept in view.
The situation of the 1939 being existing law and the Karnataka Act containing provision repugnant to that Act with Presidential assent for the State Act squarely came within the ambit of cl.
(2) of the Article.
That is how the State Act had over riding effect.
The consideration of the present question has to be within the ambit of cl.
(1) as the State law is the earlier legislation and the Parliamentary Act of 1988 came later and it is contended that the State legislation has provisions repugnant to provisions made in the 1988 Act.
There can be no controversy that if there is repugnancy, the Parliamen tary legislation has to prevail and the law made by the State Legislature to the extent of repugnancy becomes void.
In cl.
(1) of article 254 it has been clearly indicated that the competing legislations must be in respect of one of the matters enumerated in the Concurrent List.
The seven Judge Bench examining the vires of the Karnataka Act did hold that the State Act was an Act for acquisition and came within Entry 42 of the Concurrent List.
That position is not disputed before us.
There is unanimity at the Bar that the is a legislation coming within Entry 35 of the Concurrent List.
Therefore, the Acquisition Act and the 1988 Act as such do not relate to one common head of legislation enumerated in the Concurrent List and the State Act and the Parliamentary statute deal with different mat ters of legislation.
The language of cl.
(2) is also similar though applica ble in a different situation.
Apparently in one sense both the clauses operate on a similar level though in dissimilar context.
In cl.
(2) what is rele 629 vant is the words: 'with respect to that matter '.
A Consti tution Bench of this court in Zaverbhai Amaidas vs State of Bombay, [1955] 1 SCR 799 emphasised that aspect.
Venkatarama Ayyar, J. pointed out: "The important thing to consider with reference to this provision is whether the legislation is 'in respect of the same matter '.
If the later legislation deals not with the matters which formed the subject of the earlier legisla tion but with other and distinct matters though of a cognate and allied character, then article 254(2) will have no applica tion.
" A lot of light relevant to the aspect under considera tion is available from another decision of a Constitution Bench of this Court: (M. Karunanidhi vs Union of India, ; Atp. 263 of the Reports, it has been said: "It would be seen that so far as clause (1) of Article 54 is concerned it clearly lays down that where there is a direct collision between a provision of a law made by the State and that made by Parliament with respect of one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the State law would be void to the extent of the repugnancy.
This naturally means that where both the State and Parliament occupy the field contemplated by the Concurrent List then the Act passed by Parliament being prior in point of time will prevail and consequently the State Act will have to yield to the Central Act.
In fact, the scheme of the Constitution is a scientific and equitable distribution of legislative powers between Parlia ment and the State Legislatures.
First, regarding the mat ters contained in List I, i.e., the Union List to the Sev enth Schedule, Parliament alone is empowered to legislate and the State Legislatures have no authority to make any law in respect of the Entries contained in List I. Secondly, so far as the Concurrent List is concerned.
both Parliament and the State Legislatures are entitled to legislate in regard to any of the Entries appearing therein, but that is subject to the condition laid down by Article 254(1) discussed above.
Thirdly, so far as the matters in List II, i.e., the State List are concerned, the State Legislatures alone are competent to legislate on them and only under certain condi tions Parliament can do so.
It is, therefore, obvious that in such matters repugnancy may result from the following circumstances: 630 1.
Where the provisions of a Central Act and a State Act in the Concurrent List are full.v inconsistent (Emphasis added) and are absolutely irreconcilable, the Central Act will prevail and the State Act will become void in view of the repugnancy.
Where, however, a law passed by the State comes into collision with a law passed by Parliament on an Entry in the Concurrent List, the State Act shall prevail to the extent of the repugnancy and the provisions of the Central Act would become void provided the State Act has been passed in accordance with clause (2) or Article 254.
Where a law passed by the State Legislature while being substantially within the scope of the entries in the State List entrenches upon any of the Entries in the Central List the constitutionality of the law may be upheld by invoking the doctrine of pith and substance if on an analysis of the provisions of the Act it appears that by and large the law fails within the four corners of the State List and en trenchment, if any, is purely incidental or inconsequential.
Where, however, a law made by the State Legislature on a subject covered by the Concurrent List is inconsistent with and repugnant to a previous law made by Parliament, then such a law can be protected by obtaining the assent of the President under Article 254(2) of the Constitution.
The result of obtaining the assent of the President would be that so far as the State Act is concerned, it will prevail in the State and overrule the provisions of the Central Act in its applicability to the State only.
Such a state of affairs will exist only until Parliament may at any time make a law adding to, or amending, varying or repealing the law made by the State Legislature under the provision to Article 254.
" In Deep Chand vs State of Uttar Pradesh, supra, this court had pointed out that repugnancy between two statutes would arise if there was direct conflict between the two provisions and if the law made by Parliament and the law made by the State Legislature occupied the same field.
It has already been stated that the State Act intended to eli 631 minate private operators from the State in regard to con tract carriages acquired under the existing permits, vehi cles and ancillary property and with a view to giving effect to a monopoly situation for the State undertaking made provision in section 20 for excluding the private operators.
The 1988 Act does not purport to make any provision in regard to acquisition of contract carriage permits which formed the dominant theme or the core of the State Act.
Nor does it in section 73 or section 74 indicate as to who the applicant shall be while laying down how an application for a contract carriage permit shall be made and how such a permit shall be granted.
Section 80 of the 1988 Act does contain a liberalised provi sion in the matter of grant of permits but here again it has to be pointed out that the ancillary provision contained in section 20 of the Acquisition Act to effectuate acquisition does not directly run counter to the 1988 provision.
Section 20 of the State Act creates a monopoly situation in favour of the State undertaking qua contract carriages by keeping all private operators out of the filed.
Since sections 73, 74 and 80 of the 1988 Act do not contain any provision relating to who the applicants for contract carriages can or should be, and those sections can be applied without any difficulty to the applications of the State undertaking, and there does not appear to be any repugnancy between the two Acts for invoking article 254 of the Constitution.
A provision in the State Act excluding a particular class of people for operating contract carriages or laying down qualifications for them would not run counter to the relevant provisions of the 1988 Act.
A number of precedents have been cited at the hearing and those have been examined and even some which were not referred to at the bar.
There is no clear authority in support of the stand of the petitioners where the State law is under one head of legislation in the Concurrent List; the subsequent Parliamentary legislation is under another head of legislation in the same List and in the working of the two it is said to give rise to a question of repugnancy.
The State Act had done away with the private operators qua contract carriages within the State.
It is true that the 1988 Act is applicable to the whole of India and, therefore, is also applicable to the State of Karnataka in the absence of exclusion of the State of Karnataka from its operation.
But as has been pointed out already, there is no direct inconsistency between the two and on the facts placed in the case there is no necessary invitation to the application of cl.
(1) of article 254 of the Constitution.
632 The writ petitions fail and are dismissed.
SAWANT, J.
This group of petitions raises a common question of law viz. whether the (hereinafter referred to as the MV Act 1988) has impliedly repealed the Karnataka Contract Carriages (Acquisition) Act, 1976 (hereinafter referred to as the Karnataka Act).
The petitioners claim a declaration that the provisions of Sec. 14 and 20 of the Karnataka Act are invalid because of their repugnancy with the provisions of the MV Act, 1988, and a direction to respondent nos.
2 and 3, namely the Karnataka State Transport Authority and the Karnataka Re gional Transport Authority respectively, to consider their applications for the grant of contract carriage permits under Sec. 74 and 80 of the MV Act, 1988, without reference to the provisions of the Karnataka Act.
The precise question that falls for consideration, therefore, is whether there is a repugnancy between the two legislations.
The Karnataka Act, as its title shows, was enacted to provide for the acquisition of contract carriages and for matters incidental, ancillary and subservient thereto.
It was enacted under Entry 42 of the Concurrent List read with Article 31 of the Constitution, in furtherance of Article 39(b) and (c) thereof.
This is evident from the preamble, and Section 2 of the Act.
The preamble states that since the contract carriages and certain other categories of public service vehicles were being operated in the State in a manner highly detrimental and prejudicial to public inter est, it was necessary to prevent the misuse, and to provide better facility for the transport of the passengers by road.
It was also necessary to give effect to the policy of the State towards securing that the ownership and control of the material resources of the community were so distributed as best to subserve the common good and that the operation of the economic system did not result in the concentration of wealth and means of production to the common detriment.
To effectuate the said intention it was considered necessary to enact the legislation.
Section 2 of the Act makes a declara tion in the following words: "It is hereby declared that this Act is for giving effect to the policy of the State towards securing the principles specified in Clauses (b) and (c) of Article 39 of the Con stitution of India and the acquisition therefor of the contract carriages and other property referred to in Section 4.
" 633 Under Section 4 of the Act every contract carriage owned or operated by contract carriage operator along with the permit or the certificate of registration or both as the case may be, vested in the State Government absolutely and free from all encumbrances.
Further, a11 rights, title and interest of the contract carriage operators in the lands, buildings, workshops and other places and all stores, in struments, machinery, tools, plants, apparatus and other equipments used for the maintenance, repair of, or otherwise in connection with the service of the contract carriage as the State Government may specify in that behalf and all books of accounts, registers, records and all other docu ments of whatever nature relating to the contract carriages vested in the State Government absolutely and free from all encumbrances, and all the said property was deemed to have been acquired for public purpose.
Section 6 provided for payment of compensation for the acquisition of all the said property.
Since the avowed object of the Act was two fold, namely (i) to prevent the misuse of the operation of the contract carriages and to provide better facilities for the transport of passengers, and (ii) to give effect to the policy under lying Clauses (b) and (c) of Article 39 of the Constitution, it was also necessary to prevent the issue of fresh permits or renewal of the existing permits for running the contract carriages in the State to any private individual.
Hence, Section 14 provided for a prohibition of the issue of fresh permit or renewal of the existing permit to any individual or the transfer of such permit to anyone except to the State Government or the Corporation which it may establish under the Karnataka State Road Transport Corporation Act, 1950.
To make an alternative arrangement for running the contract carriages and to prevent both the misuse of the permits as well as concentration of wealth in the hands of a few indi viduals, Section 20 of the Act provided that all contract carriage permits granted or renewed till then would stand cancelled and the Corporation alone would be entitled to the grant or renewal of the said permits to the exclusion of all other persons, and that applications from persons other than the Corporation for the grant of such permit shall not be entertained.
In State of Karntaka & Anr.
vs Shri Ranganatha Reddy & Anr.
; , this Court upheld the validity of the said Act holding, among other things, that the Act was for acquisition of property and was in the public interest and for a public purpose.
The Act, according to the Court, had nationalised the contract transport serv ice in the State and that was also for a public purpose as declared in the Act.
It was also observed that if Articles 38 and 39 are to be given 634 effect to, then the State has progressively to assume the predominant and direct responsibility for setting up new industrial undertakings which would also include development of transport facilities.
The State has also to become agency for planned national development, and the socialistic pat tern of society as the national objective required that public utility services should be in the public sector.
The acquisition of road transport undertaking by the State, therefore, undoubtedly served the public purpose.
It is thus clear from the provisions of the Karnataka Act that the whole object of the Act is to nationalise the contract carriage service in the State with a view to put an end to the abuse of the contract carriage services by the private operators and to provide better transport facilities to the public, and also to prevent concentration of the wealth in the hands of the few and to utilise the resources of the country to subserve the interests of all.
To secure the objective of the Act, it was also necessary to prohibit the grant of the contract carriage permits to private indi viduals and to reserve them exclusively to the State Under taking which was done by Sections 14 and 20 of the Act.
Unlike the MV Act 1988, which is admittedly enacted by the Parliament under Entry 35 of the Concurrent List, to regu late the operation of the motor vehicles, the object of the Karnataka Act is not only the regulation of the operation of the motor vehicles.
Nor is its object merely to prevent the private owners from operating their vehicles with the exclu sive privilege of such operation being reserved in favour of the State or the State Undertaking.
For if that were the only object, the same could have been achieved by the Trans port Undertakings of the State following the special provi sions relating to State Transport Undertakings in Chapter IV A of the which was in operation when the Karnataka Act was brought into force.
The very fact that instead, the State undertook the exercise of enacting the Karnataka Act shows that the object of the State Legis lature in enacting it was materially different.
This is also obvious from the various provisions of the enactment pointed out above.
It is for this reason that the contention advanced by the petitioners that the object of the Karnataka Act and that of the MV Act, 1988 is the same and that both of them occupy the same field, cannot be accepted.
A comparison of the provisions of the MV Act, 1939 (Old Act) and MV Act, 1988 (New Act) further shows that the latter has merely replaced the former.
All that it has done is to update, simplify and rationalize the law on the subject.
For this purpose it has made important provisions in the following matters, namely: 635 "(a) rationalisation of certain definitions with additions of certain new definitions of new types of vehicles; (b) Stricter procedures relating to grant of driving li cences and the period of validity thereof; (c) laying down of standards for the components and parts of motor vehicles; (d) standards for anti pollution control devices; (e) provision for issuing fitness certificates or vehicles also by the authorised testing stations; (f) enabling provision for updating the system of registra tion marks; (g) liberalised schemes for grant of stage carriage permits on non nationalised routes, all India Tourist permits and also national permits for goods carriages; (h), (i), (j), (k), (l) . . 6.
The special provisions relating to the State Trans port Undertakings which are contained in Chapter VI of the new Act are pari materia with those of Chapter IV A of the old Act, with only this difference that whereas under the old Act it was the State Transport Undertaking which had to prepare a scheme for running and operating the transport service by it in relation to any area or route or portion thereof exclusively, under the new Act such a scheme has to be prepared by the State Government itself.
There is no difference in the legal consequences of the schemes under the two enactments.
Both envisage the operation of the services by the State Transport Undertaking to the exclusion of the rest, and cancellation of the existing permits and compensation only for the deprivation of the balance of the period of the permit.
No acquisition of the vehicles or the paraphernalia connected with such vehicles is envisaged as is the case under the Karnataka Act.
It is also not correct to say that the new Act, i.e. MV Act 1988 incorporates a special policy of liberalisation for private sector operations in the transport field.
We see no such provision in the Act nor was any pointed out to us.
The provisions with regard to the grant of 636 permits under both the old and the new Act are the same.
In any case there is no provision for liberalisation of the grant of contract carriage permits in favour of the private individuals or institutions so as to come in conflict with the Karnataka Act.
Thus the Karnataka Act and the MV Act, 1988 deal with two different subject matters.
As stated earlier the Karna taka Act is enacted by the State Legislature for acquisition of contract carriages under entry 42 of the Concurrent list read with Article 31 of the Constitution to give effect to the provisions of Articles 39(b) and (c) thereof.
The MV Act 1988 on the other hand is enacted by the Parliament under entry 35 of the Concurrent list to regulate the operation of the motor vehicles.
The objects and the subject matters of the two enactments are materially different.
Hence the provisions of Article 254 do not come into play in the present case and hence there is no question of repugnancy between the two legislations.
Shri Nariman, the learned counsel for the petitioners however, contended that the provisions of Section 14 and 20 of the Karnataka Act were in direct conflict with the provi sions of Sections 74 and 80(2) of the MV Act 1988.
According to him while the Regional Transport Authority (RTA) is enjoined by the provisions of Section 74 read with Section 80(2) of the MV Act 1988, ordinarily not to refuse to grant an application for permit of any kind, the provisions of Section 14 and 20 of the Karnataka Act prohibit any person from applying for, and any officer or authority from enter taining or granting, application for running any contract carriage in the State.
Thus there is a direct conflict between the two legislations, and since the MV Act 1988 is a later legislation, operating in the same area, it should be deemed to have impliedly repealed the provisions of Section 14 and 20 of the Karnataka Act, even if the latter Act had received the assent of the President.
This is so because of the proviso to sub clause (2) of Article 254 of the Consti tution.
This contention proceeds on the footing that the two legislations occupy the same field.
As has been pointed out earlier, the objects of the two legislations are materially different.
The provisions of Sections 51 and 57 of the old Act further correspond to provisions of Sections 74 and 80 of the new Act.
The Karnataka Act had received the assent of the President inspite of the provisions of Sections 51 and 57 of the old Act.
The assent of the President, further as stated by the respondents, was taken by way of abundant precaution, although the subject matters of the two Acts were different.
The provisions of Sections 14 and 637 20 of the Karnataka Act were incidental and necessary to carry out the main object of the said Act.
Without the said provisions, the object of the said Act would have been frustrated.
In the case of State of Karnataka & Anr.
vs Ranganatha Reddy & Anr.
Etc., (supra) while repelling the contention that there was a legislation encroachment by the Karnataka Act because it impinged on the subject of Inter State Trade & Commerce in the Union List as it provided also for acquisition of transport carriages running on inter state routes, this Court in para 32 of the Judgment has observed as follows: " . .
It (the Karnataka Act) is not an Act which deals with any Inter State Trade and Commerce.
Even assuming for the sake of argument that carriage of passengers from one state to the other is in one sense a part of the InterState Trade and Commerce, the impugned Act is not one which seeks to legislate in regard to the said topic.
Primarily and almost wholly it is an Act to provide for the acquisition of contract carriages, the Intra State permits and the other properties situated in the State of Karnataka.
In pith and substance it is an Act of that kind.
The incidental en croachment on the topic of inter state trade and commerce, even assuming there is some, cannot invalidate the Act.
The MV Act 1939 was enacted under Entry 20 of List III of Sched ule Seven of the Government of India Act 1935 corresponding to Entry 35 of List III of the Seventh Schedule to the Constitution.
The subject being in the Concurrent List and the Act having received the assent of the President, even the repugnancy, if any between the Act and the Motor Vehi cles Act stands cured and cannot be a ground to invalidate the Act.
Entry 42 of List 111 deals with acquisition of property.
The State has enacted the Act mainly under this entry . " (emphasis supplied) According to me these observations should put an end to any controversy on the subject, namely, whether the two Legislations are enacted under two different entries in the Concurrent List, and whether they occupy different areas or not.
I am also unable to appreciate the contention that the provisions of Sections 14 and 20 of the Karnataka Act are in conflict with the provisions of Sections 74 and 80 of the New MV Act 1988.
Section 98 of the MV Act 1988 in terms clearly states (as did Section 68B of the 638 MV Act 1939) that Chapter VI relating to the special provi sions about the State Transport Undertaking and the rules and orders made thereunder, shall have effect notwithstand ing anything inconsistent therewith contained in Chapter V or in any other law for the time being in force or in any instrument having effect by virtue of any such law.
Sections 74 and 80 relating to the grant of the contract carriage permit and the procedure in applying for the grant of such permits respectively, are in Chapter V.
This means that when under Chapter VI, a scheme is prepared by the State Govt.
entrusting the contract carriage services in relation to any area or route or portion thereof, to a State Transport Undertaking to the exclusion complete or partial of other persons, the provisions of Sections 74 and 80 would have no application, and the private transport operators cannot apply for the grant of contract carriage permits under Section 80 nor can such permits be granted by the Transport Authority.
In other words, the MV Act 1988 also makes a provision for nationalisation of routes, and envisages a denial of permits to private operators when routes are so nationalised.
Hence it is not correct to say that there is a conflict between the provisions of the two Acts.
It was then contended that when there is a repugnancy between the legislations under Article 254 of the Constitu tion, the doctrine of pith and substance does not apply, and even if some of the provisions of the impugned State legis lation are in conflict with some of the provisions of the Central legislation, the conflicting provisions of the State legislation will be invalid.
In support of this contention, reliance was placed on two decisions one of the Federal Court in the case of Meghraj & Ors.
vs Allahrakhiya & Ors., 29 AIR 1942 FC 27 and the other of the Privy Council report ed in AIR 34 confirming the former.
The Federal Court in the above decision has observed that when a provincial Act is objected to as contravening not Section 100 but Section 107(1) the Govt.
of India Act 1935 (corresponding to Article 254(1) of the Constitution) the question of the pith and substance of the impugned Act does not arise.
In that case, the validity of the Punjab Restitution of Mortgage Lands Act was challenged on the ground that some of its provisions were repugnant to certain provisions of the Contract Act and of the Civil Procedure Code.
The Court held that there was no repugnancy between the legislations.
But while holding so, the Court made a one sentence observation as follows: "In the judgment of the High Court there is some discussion of the question of the "pith and substance" of the Act; but that question does not 639 arise as objection is taken not under Section 100 of the Constitution act but Sec.
" There is no discussion on the point.
The arguments, if any advanced on the question are neither reproduced nor dealt with.
The observation further was not necessary for the decision in that case, since as is pointed out above, the Court had held that there was no repugnancy between the two statutes since they cov ered two different subject matters.
Hence the issue as to whether the impugned Punjab Restitution of Mortgage Lands Act was valid because the pith and substance of the Act covered an area different from the one covered by the Con tract Act and the Civil Procedure Code, did not fall for consideration before the Court.
What is more, when the matter went in appeal before the Privy Council, the said point was not even remotely referred to and I find no obser vation in the judgment either confirming, or dissenting from the said observations.
This being the case the said observa tions cannot be regarded as more than general in nature.
They are not even an obiter dicta much less are they the ratio decidendi of the case Hence the said observations do not have a binding effect.
Even otherwise, I am of the view that not to apply the theory of pith and substance when the repugnancy between the two statutes is to be considered under Article 254 of the Constitution, would be illogical when the same doctrine is applied while considering whether there is an encroachment by the Union or the State legislature or a subject exclu sively reserved for the other.
When the legislative en croachment is under consideration the doctrine of pith and substance comes to the aid to validate a legislation which would otherwise be invalid for the very want of legislative competence.
When the repugnancy between the two legislations is under consideration, what is in issue is whether the provision of the State enactment though otherwise constitu tionally valid, has lost its validity because the Parliament has made a legislation with a conflicting provision on allegedly the same matter.
If it is open to resolve the conflict between two entries in different Lists, viz. the Union and the State List by examining the dominant purpose and therefore the pith and substance of the two legisla tions, there is no reason why the repugnancy between the provisions of the two legislations under different entries in the same List, viz. the Concurrent List should not be resolved by scrutinizing the same by the same touchstone.
What is to be ascertained in each case is whether the legis lations are on the same subject matter or not.
In both cases the cause of conflict is the apparent identity of the sub ject matter.
The tests for resolving it therefore cannot be different.
640 10.
I may in this Connection refer to some of the au thorities relied upon by the parties.
In Municipal Council Palai vs
T.J. Joseph & Ors., ; this Court had to consider the repugnancy between the presolution passed by the appellant Municipal Council in exercise of the powers vested in it under Section 286 and 287 of the Travancore District Municipalities Act 1941, and the provisions of Section 42 of the Travancore Cochin Motor Vehicles Act 1950 which came into force on January 5, 1950, providing for the use of a public bus stand constructed for Stage Carriage buses starting from and returning to the Municipal limits or passing through its limits.
The respondent operators challenged the resolution of the Council by contending that the provisions of Sections 286 and 287 of the Municipalities Act stood repealed by implication by virtue of the provisions of Section 42 of Travancore Cochin Motor Vehicles Act, 1950.
That Section read as follows: "Government or any authority authorised in this behalf by Government may, in consultation with the local authority having jurisdiction in the area concerned, determine places at which motor vehicles may stand either indefinitely or for a specified period of time, and may determine the places at which public service vehicles may stop for a longer time than is necessary for the taking up and setting down of passengers. ' ' The High Court accepted the contention of the respondents and allowed the Writ Petition.
In appeal against the said decision, this Court discussed the law relating to the repugnancy between two legislations by referring to various decided cases foreign as well as Indian.
The Court pointed out that in Daw vs The Metropolitan Board of Works, ; after stating the general principles of con struction, the Court there had said that when the legisla tion was found dealing with the same subject matter in two Acts, so far as the later statute derogates from and is inconsistent with the earlier one, the legislature must be held to have intended to deal in the later statute with the same subject matter which was within the ambit of the earli er one.
This Court further observed that in that case the English Court was concerned with the statutes which covered more or less the same subject matter and had the same object to serve.
That decision further had kept open the question whether the powers conferred upon one authority by an earli er Act, could continue to be exercised by that authority after the enactment of a provision in a subsequent law which 641 conferred wide powers on another authority which would include some of the powers conferred by the earlier statute till the new authority chose to exercise the powers con ferred upon it.
Referring to the case of The Great Central Gas Consumers Co. vs Clarke, ; the Court observed that the foundation of that decision was that the later statute was a general one whereas the previous one was a special one and, therefore, the special statute had to give way to the later general statute.
Referring to the case of Goodwin vs Phillips, the Court observed that the doctrine of implied repeal was well recognised, and that repeal by implication was a convenient form of legislation and that by using this device, the legislature must be presumed to intend to achieve a consistent body of law.
The Court then went on to say that it is undoubtedly true that the legislature can exercise the powers of repeal by implication, but it is an equally well settled principle of law that there is a pre sumption against an implied repeal.
Upon the assumption that the legislature enacts laws with a complete knowledge of all existing laws pertaining to the same subject, the failure to acid a repealing clause indicates that the intent was not to repeal existing legislation.
This presumption is rebutted if the provisions of the new Act are so inconsistent with the old ones that the two cannot stand together.
Then the Court referred to the following observations from page 631, para 311 of Crawford on Statutory Construction: "There must be what is often called 'such a positive repug nancy between the two provisions of the old and the new statutes that they cannot be reconciled and made to stand together '.
In other words they must be absolutely repugnant or irreconcilable.
Otherwise, there can be no implied repeal . . for the intent of the legislature to repeal the old enactment is utterly lacking.
" The Court then referred to the observations made in Crosby vs Patch, 18 Calif. 438 quoted by Crawford "Statutory Con struction" p. 633 to point out the reasons of the rule that an implied repeal will take place in the event of clear inconsistency or repugnancy.
The said observations are as follows: "As laws are presumed to be passed with deliberation, and with full knowledge of all existing ones on the same sub ject, it is but reasonable to conclude that the Legislature, in 642 passing a statute, did not intend to interfere with or abrogate any former law relating to the same matter, unless the repugnancy between the two is irreconcilable.
Bowen vs Lease, 5 Hill 226.
It is a rule, says Sedgwick, that a general statute without negative words will not repeal the particular provisions of a former one, unless the two acts are irreconcilably inconsistent. 'The reason and philosophy of the rule ', says the author, 'is, that when the mind of the legislator has been turned to the details of a subject, and he has acted upon it, a subsequent statute in general terms, or teating the subject in a general manner, and not expressly contradicting the orginal act, shall not be con sidered as intended to affect the more particular or posi tive previous provisions, unless it is absolutely necessary to give the latter act such a construction, in order that its words shall have any meaning at all.
" The Court then pointed out that for implying a repeal the next thing to be considered is whether the two statutes relate to the same subject matter and have the same purpose.
The Court in this connection quoted the following passage at page 634 from Crawford: "And, as we have already suggested, it is essential that the new statute covers the entire subject matter of the old; otherwise there is no indication of the intent of the legis lature to abrogate the old law.
Consequently, the later enactment will be construed as a continuation of the old one." (emphasis supplied) These observations are very material for considering the question with which we are concerned in the present case, namely whether the doctrine of pith and substance is ap plicable while examining the repugnancy of the two statutes.
The Court then stated that the third question to be considered was whether the new statute purports to replace the old one in its entirety or only partially, and the Court observed that where replacement of an earlier statute is partial, a question like the one, which the Court did not choose to answer in Daw 's case (supra) would arise for decision.
The Court also stated that it has to be remembered that at the basis of the doctrine of implied repeal is the presumption that the legislature which must be deemed to know the existing law did not intend to create any confusion in the law by retaining conflicting provi 643 sions on the statute book and, therefore, when the court applies this doctrine, it does no more than give effect to the intention of the legislature ascertained by it in the usual way, i.e., by examining the scope and the object of the two enactments, the earlier and the later.
The Court then referred to its earlier decision in Deep Chand vs State of U.P. & Ors., and pointed out that in that case the following principles were laid down to ascertain whether there is repugnancy or not: 1.
Whether there is direct conflict between the two provi sions; 2.
Whether the legislature intended to lay down an exhaus tive code in respect of the subject matter replacing the earlier law; 3.
Whether the two laws occupy the same field.
The Court then referred to Sutherland on Statutory Construc tion (Vol.
13rd Edn.
p. 486) on the question of "repeal of special and local statutes by general statutes".
The para graph reads as follows: "The enactment of a general law broad enough in its scope and application to cover the field of operation of a special or local statute will generally not repeal a statute which limits its operation to a particular phase of the subject covered by the general law, or to a particular locality within the jurisdictional scope of the general statute.
An implied repeal of prior statutes will be restricted to statutes of the same general nature since the legislature is presumed to have known of the existence of prior special or particular legislation, and to have contemplated only a general treatment of the subject matter by the general enactment.
Therefore, where the later general statute does not propose an irreconcilable conflict, the prior special statute will be construed as remaining in effect as a quali fication of or exception to the general law.
" The Court, however, hastened to add that there is no rule of law to prevent repeal of special and local statute by a later general statute and therefore, where the provisions of the special statute are wholly repugnant to the general statute, it would be possible to infer that the special statute was repealed by the general enactment.
However, the Court observed that where it is doubtful whether the special statute 644 was intended to be repealed by the general statute, the Court should try to give effect to both the enactments as far as possible, since the general statute applies to a11 persons and localities within its jurisdiction and scope as distinguished from the special one which in its operation is confined to a particular locality.
Where the repealing effect of a statute is doubtful, the statute is to be strictly construed to effectuate its consistent operation with previous legislation as observed by Sutherland on Statutory Construction.
The Court also approved of the observations of Suleman J., in Shyamakant Lal vs Rambhajan Singh, that repugnancy must exist in fact, and not depend merely on a possibility.
After discussing the principles of repugnancy as above, the Court answered the question that fell for consideration before it in favour of the Municipal Council by observing as follows: "It seems to us however, clear that bearing in mind the fact that the provisions of section 72 of the Travancore Cochin Motor Vehicles Act were intended to apply to a much wider area than those of sections 286 and 287 of the Travancore District Municipalities Act it cannot be said that section 72 was intended to replace those provisions of the Travancore Distt.
Municipalities Act.
The proper way of construing the two sets of provisions would be to regard section 72 of the Travancore Cochin Motor Vehicles Act as a provision inconti nuity with sections 286 and 287 of the Travancore District Munic ipalities Act so that it could be availed of by the appro priate authority as and when it chose.
In other words the intention of the legislature appears to be to allow the two sets of provisions to co exist because both are enabling ones.
Where such is the position, we cannot imply repeal.
The result of this undoubtedly would be that a provision which is added subsequently, that is, which represents the latest will of the legislature will have an overriding effect on the earlier provision in the sense that despite the ' fact that some action has been taken by the Municipal Council by resorting to the earlier provision the appropri ate authority may nevertheless take action under section 72 of the Travancore Cochin Motor Vehicles Act, the result of which would be to override the action taken by the Municipal Council under section 287 of the District Municipalities Act.
No action under section 72 has so far been taken by the Govern ment and, therefore, the resolutions of the Municipal Coun cil still hold good.
Upon this view it is not necessary to consider certain other points raised by learned counsel.
" 645 It would thus appear from this decision that the Court held there that the allegedly conflicting provisions of Travancore Cochin Motor Vehicles Act were intended to apply to much wider area than the relevant provisions of the Distt.
Municipalities Act and, therefore, it could not be said that the provisions of the Motor Vehicles Act were intended to replace the provisions of Municipalities Act.
The Court also held that the proper way of construing the two sets of provisions would be to regard the conflicting provisions of the Motor Vehicles Act as provisions in conti nuity with the relevant provisions of the Municipalities Act so that it could be availed of by the appropriate authority as and when it chose.
The Court, therefore, read into the relevant provisions, the intention of the legislature to allow the two sets of provisions to co exist because both were enabling ones, and in such circumstances no repeal could be implied.
The Court also rested the said decision by relying on the fact that since no action was taken by the Government under the relevant provisions of the Motor Vehi cles Act, till such time as the action was taken under the said provisions, the Municipal Council could act under the provisions of the Municipalities Act.
What is important from our point of view, is the view taken in that case that when repugnancy is alleged between the two statutes, it is necessary to examine whether the two laws occupy the same field, whether the new or the later statute covers the entire subject matter of the old, whether legislature intended to lay down an exhaustive code in respect of the subject matter covered by the earlier law so as to replace it in its entirety and whether the earlier special statute can be construed as remaining in effect as a qualification of or exception to the later general law, since the new statute is enacted knowing fully well the existence of the earlier law and yet it has not repealed it expressly.
The decision further lays down that for examining whether the two statutes cover the same subject matter, what is necessary to examine is the scope and the object of the two enactments, and that has to be done by ascertaining the intention in the usual way and what is meant by the usual way is nothing more or less than the ascertainment of the dominant object of the two legislations.
In Ratan Lal Adukia vs Union of India, the conflict was between the provisions of Section 80 of the Railways Act 1890 as amended by the Railways (Amendment) Act 1961 on the one hand and the provisions of Section 20 of the Code of Civil Procedure, 1908 and section 18 of the Presi dency Small Causes Courts Act 1882, on the other.
Section 80 of the Railways Act before its amendment had 646 provided that a suit for compensation for loss of life or injury to a passenger or for loss, destruction and deterio ration of animals or goods, would lie where the passengers or the animals or goods were booked through over the Rail ways of two or more Railway Administrations, against the Railway Administration from which the passengers and the goods were booked or against the Railway Administration on whose railway the loss injury, destruction or deterioration occurred.
By the amendment of 1961, the aforesaid provisions of Section 80 were changed and such a suit was made main tainable (a) if the passenger or the animals or goods were booked from one station to another on the railway of the same Railway Administration, against that Railway Adminis tration.
(b) if they were booked through over the railway of two or more Railway Administrations, against the Railway Administration from which they were booked or against the Railway Administration on whose railway the destination station lay or the loss etc.
occurred.
It was further pro vided that in either of these two cases the suit may be instituted in a court having jurisdiction over the place at which the passenger or the goods were booked or the place of destination or over the place in which the destination station lies or the loss etc.
occurred.
Thus the changes brought about by the amendment were significant.
The old section did not deal with the liability of claims in respect of goods etc.
carried by single railway.
It only concerned itself with them when they were carried by more than one railway and provided that the suit for loss of such goods could he brought against either the Railway Administration with which the booking was made or against the Railway Administration of the delivery station.
The old section further did not speak of the places where such suits could be laid.
The choice of the forum was regulated by section 20 of the Code of Civil Procedure or section 18 of the Presi dency Small Causes Courts, as the case may be.
The amendment of the section however, made a departure in this respect, namely, it also named the place where such suits could be instituted and it is with this change the decision in ques tion was concerned.
Confirming the High Court 's view, the Court held that the new Section 80 prevailed over the provi sions of Section 20 of the Code of Civil Procedure and of Section 18 of the Presidency Small Causes Courts Act.
The Court took the view that in view of the fact that the provi sions of the new Section 80 as well as the relevant provi sions of the Code of Civil Procedure and the Presidency Small Causes Courts Act dealt with the same subject matter, namely, the forum for suits, and since the new Section 80 was a special provision relating to special suits against the Railway Administration the special provisions would prevail over the general provisions.
The Court also stated that Section 80, looking into its earlier history 647 and the other changes which were brought in it, was a code in itself dealing with the relevant subject matter, and therefore, it repealed the provisions of Section 20 of the Code of Civil Procedure and of Section 18 of the Presidency Small Causes Courts Act by necessary implication.
The Court also held that since the provisions of the latter two gener al statutes related to territorial jurisdiction of courts and since the amendment to Section 80 also dealt with the same subject, but in case of only suits for compensation against the Railway, Section 80 being the special statute should be deemed to have supplanted the general statutes like the Code of Civil Procedure and general provisions of section 20 of the Code and Section 18 of the Presidency of Small Causes Courts Act.
It will thus be apparent that in that case the provi sions which were in conflict related to the same subject matter unlike in our case.
The provisions with regard to application and grant of permits in Sections 14 and 20 have nothing in common with the provisions of Sections 74 and 80 of the .
The former provisions are ancillary to giving effect to the acquisition and nationali sation of the road transport within local territorial lim its.
The later provisions are general in nature and in furtherence of the object of the Act which is to regulate transport.
The subject matters of both the statutes and the object of the two sets of provisions are, therefore, materi ally different.
In our case both the statutes can stand together.
The legislative intent is clear.
Since, further, the Parliament had enacted the later statute knowing fully well the existence of the earlier statute and yet it did not expressly repeal it, it will be presumed that the Parliament felt that there was no need to repeal the said statute.
In Ch.
Tika Ramji & Ors.
vs State of U.P. & Ors.
, ; what fell for consideration was the alleged repugnancy between the U.P. Sugarcane (Regulation of Supply and Purchase) Act 1953 and two Notifications issued by the State Government under it on September 27, 1954 and November 9, 1955 on the one hand, and Industries (Development & Regulation) Act 1951 and the and the Sugar Cane Control Order 1955 issued under it on the other.
The Court has stated there that no question of repug nancy under Article 254 of the Constitution can arise where Parliamentary legislation and State legislation occupy different fields and deal with separate and distinct matters even though of a cognate and allied nature, and whereas in that case there was no inconsistency in the actual terms of the Act enacted by Parliament and the State Legislature, the test of repugnancy would be whether Parliamentary 648 and the State Legislature in legislating under an Entry in the Concurrent List exercised their powers over the same subject matter or whether the laws enacted by Parliament were intended to be exhaustive so as to cover the entire field.
The Court then referred to three tests of inconsistency or repugnancy listed by Nicholas on p. 303 2nd Edn. of his Australian Constitution, namely, (1) there may be inconsist ency in the actual terms of the competing statutes, (2) though there may be no direct conflict, a State law may be inoperative because the Common Wealth Law, or the Award of Common Wealth Court is intended to be a complete exhaustive code, (3) even in the absence of intention, the conflict may arise when both State and Common Wealth Law seek to exercise their powers over the same subject matter.
The Court also quoted with approval, observations of the Calcutta High Court in G.P. Stewart vs
B.K. Roy Choudhary, AIR 1939 Cal.
628 on the subject which are as follows: "It is sometimes said that two laws cannot be said to be properly repugnant unless there is a direct conflict between them, as when one says "do" and the other "don 't", there is no true repugnancy according to this view, if it is possible to obey both the laws.
For reasons which we shall set forth presently, we think that this is too narrow a test: there may well be cases of repugnancy where both laws say "don 't" but in different ways.
For example, one law may say, "No person shall sell liquor by retail, that is, in quantities of less than five gallons at a time" and another law may say, "No person shall sell liquor by retail, that is, in quantities of less than ten gallons at a time".
Here, it is obviously possible to obey both laws, by obeying the more stringent of the two namely the second one; yet it is equally obvious that the two laws are repugnant, for to the extent to which a citizen is compelled to obey one of them, the other, though not actually disobeyed, is nullified".
"The principle deducible from the English cases, as from the Canadian cases, seems therefore to be the same as that enunciated by Issacs, J.in the Australian 44 hours case if the dominant law has expressly or impliedly evinced its intention to cover the whole field, then a subordinate law in the same field is repugnant and therefore inoperative.
Whether and to what extent in a 649 given case, the dominant law evinces such an intention must necessarily depend on the language of the particular law".
The Court also approved the observations of Sulaiman, J. in Shyamakant Lal vs Rarnbhajan Singh, (supra) on the subject which are as follows: "When the question is whether a Provincial legisla tion is repugnant to an existing Indian law, the onus of showing its repugnancy and the extent to which it is repug nant should be on the party attacking its validity.
There ought to be a presumption in favour of its validity, and every effort should be made to reconcile them and construe both so as to avoid their being repugnant to each other; and care should be taken to see whether the two do not really operate in different fields without encroachment.
Further, repugnancy must exist in fact, and not depend merely on a possibility.
Their Lordships can discover no adequate grounds for holding that there exists repugnancy between the two laws in districts of the Province of Ontario where the prohibitions of the Canadian Act are not and may never be in force: (Attorney General for Ontario vs Attorney General for the Dominion, 11.
Referring to the case in hand; the Court then stated that there was no question of any inconsistency in the actual terms of the two Acts.
The only questions that arose there were whether the Parliament and the State Legislature sought to exercise their powers over the same subject matter or whether the laws enacted by Parliament were intended to be a complete exhaustive code, or in other words, expressly or impliedly evinced an intention to cover the whole field.
The Court then compared the provisions of Industries (Devel opment and Regulation) Act, 1951 as amended by Act XXVI of 1953, the X of 1955 and the Sugar Control order 1955 issued thereunder with the U.P. Act and Order of 1954 issued by the State Government thereunder.
By comparing the impugned State Act with the Central Act of 1951 as amended by the Act, 1953, the Court held that the Central Act related to sugar as a finished product while the State legislation covered the field of sugar cane.
Thus the fields of operation of the two legislations were different and hence there was no repugnancy between the Central Act and the State Act.
It was also further pointed out there that even assuming that sugar cane 650 was an article or class of articles relatable to the sugar industry within the meaning of Section 18(g) of the Central Act, no order was issued by the Central Government in exer cise of the powers vested in it under that Section, and hence no question of repugnancy could ever arise because repugnancy must exist in fact and not depend merely on a possibility.
The possibility of an Order under Section 18(g) being issued by the Central Government would not be enough.
The existence of such an Order would be the essential pre requisite before any repugnancy could ever arise.
As far as the was concerned, the Court pointed out that the Parliament was well within its powers in legislating in regard to sugar cane, and the Central Government was also well within its powers in issuing the Sugar Cane Control Order, 1955 because all that was in exercise of the concurrent powers of legis lation under Entry 33 of List 111.
That, however, did not affect the legislative competence of the U.P. State Legisla ture to enact the law in regard to sugar cane and the only question which had to be considered was whether there was any repugnancy between the provisions of the and the State legislation in that behalf.
The Court then pointed out that the State Government did not at all provide for the fixation of minimum price for sugar cane.
Neither had it provided for the regulation of movement of sugar cane as was done by the Central Government in Clauses (3) and (4) of the Sugar Cane Control Order 1955.
Likewise, the provision contained in Section 17 of the State Act in regard to the payment of sugar cane price (as fixed by the Central Govt.) and the recovery thereof as if it was an arrear of land revenue, did not find its place in the Central Government Sugar Cane Control Order 1955.
The provi sions in the two legislations were, therefore, mutually exclusive and did not impinge upon each other.
By referring to the provisions of Central Government Sugar Cane Control Order 1955 and the U.P. Govt.
Sugar Cane (Regulation and Purchase) Order 1954 issued under the respective statutes, the Court pointed out that none of those provisions also overlapped.
The Centre was silent with regard to some of the provisions which had been enacted by the State and the State was silent with regard to some of the provisions which had been enacted by the Centre.
There was no repugnancy whatever between those provisions, and neither the State Act nor the rules flamed thereunder as well as the State Government 's Order issued under it, trenched upon the field covered by the .
The Court therefore held that since there was no repugnancy between the two, the provi sions of Article 254(2) of the Constitution did not come into play.
The Court then considered 651 whether the repealing Section 16 of the Essential Commodi ties Act and clause 7 of the Sugar Cane Control Order 1955 had repealed the State Act to the extent mentioned therein.
Section 16(1)(b) provides as follows: "16(1) The following laws are hereby repealed (a) x x x x (b) any other law in force in any State immediately before the commencement of this Act in so far as such law controls or authorises the control of the production, supply and distribution of, and trade and commerce in, any essential commodity".
The contention was that the expression "any other law" covered the impugned State Act which was in force in the State immediately before the commencement of the in so far as it controlled or authorised the control of production, supply and distribution of and trade and commerce in sugar cane (which was), an essential commod ity under the Central Act and Clause (7) of the Sugar Cane Control Order.
The contention advanced on behalf of the U.P. State was that under the proviso to Article 254(2), the power to repeal a law passed by the State Legislature was incidental to enacting a law relating to the same matter as is dealt with in the State legislation and that a statute which merely repeals a law passed by the State Legislature without enacting substantive provisions on the subject would not be within the proviso, as it could not have been the intention of the Constitution that on a topic within the concurrent sphere of the legislation, there should be a vaccum.
The Court observed that there was considerable force in the said contention and there was much to be said for the view that a repeal simpliciter was not within the scope of the proviso.
The Court however, stated that it was not necessary to give its decision on the said point as the petitioner in that case would fail on another ground.
The Court then observed that while the proviso to Article 254(2) does confer on Parliament a power to repeal a law passed by the State Legislature, that power is, under the terms of the proviso, subject to certain limitations.
It is limited to enacting a law with respect to the same matter adding to, amending, varying or repealing a "law so made by the State Legislature".
The law referred to here is the law mentioned in the body of Article 254(2).
It is a law made by the State Legislature with reference to a matter in the Concurrent List containing provisions repugnant to an earlier law made by 652 Parliament and with the consent of the President.
It is only such a law that could be altered, amended or repealed under the proviso.
The impugned Act was not a law relating to any matter, which is the subject of an earlier legislation by Parliament.
It was a substantive law covering a field not occupied by Parliament, and no question of its containing any provisions inconsistent with a law enacted by Parliament could therefore arise.
To such a law, the proviso had no application and Section 16(1)(b) of Act X of 1955 and clause 7(1) of the Sugar Cane Control Order 1955 must, in this view, be held to be invalid.
(Sic).
The aforesaid review of the authorities makes it clear that whenever repugnancy between the State and Central Legislation is alleged, what has to be first examined is whether the two legislations cover or relate to the same subject matter.
The test for determining the same is the usual one, namely, to find out the dominant intention of the two legislations.
If the dominant intention, i.e. the pith and substance of the two legislations is different, they cover different subject matters.
If the subject matters covered by the legislations are thus different, then merely because the two legislations refer to some allied or cognate subjects they do not cover the same field.
The legislation, to be on the same subject matter must further cover the entire field covered by the other.
A provision in one legis lation to give effect to its dominant purpose may inciden tally be on the same subject as covered by the provision of the other legislation.
But such partial coverage of the same area in a different context and to achieve a different purpose does not bring about the repugnancy which is intend ed to be covered by Article 254(2).
Both the legislations must be substantially on the same subject to attract the Article.
In this view of the matter I am of the view that there is no repugnancy in the provisions of Sections 14 and 20 of the Karnataka Act and Sections 74 and 80 of the MV Act 1988.
The petitions must therefore fail and are hereby dismissed with costs.
ORDER 15.
In view of the decision of the majority the Writ Petitions stand dismissed and the rule in each is discharged with costs.
K. RAMASWAMY, J. 1.
Despite my deep respect to my learned brother, I express my inability to persuade myself to agree with the result proposed in the draft judgments of my brothers.
653 The notoriety of open and uninhibited misuse of contract carriage as stage carriages in picking up and setting down the passengers en route the route for hire or reward sabo taging the economic, efficient and co ordinated transport service by the respective State Transport Undertakings (for short, "the S.T.U.") had been taken cognizance of by the Karnataka State Legislature.
It provided the remedy making the Karnataka Contract Carriages (Acquisition) Act (21 of 1976), for short, "the Acquisition Act" by taking aid of the Entry 42, List III (Concurrent List) of the Seventh Schedule to the Constitution and Articles 31, 39(b) and (c) of the Constitution.
It was reserved for consideration and has received the assent of the President on March 11, 1976.
It came into force with effect from March 12, 1976.
Section 3(g) of the Acquisition Act defines "Contract Carriage" as one covered under section 2(4) of the (4 of 1939), for short, "the Repealed Act" including public serv ice vehicle defined under section 63(6), etc.
section 3(a) defines "acquired property" means the vehicles and other immovable and movable property vesting in the State Government under section 4 thereof.
The Acquisition Act excluded tourist vehicles, motor cabs, etc.
Section 4 declares that on and from the notified date, every contract carriage along with permit or certificate of registration or both, lands, buildings, workshop, etc.
shall stand vested in the State Government free from encumbrances.
Section 6 provides machinery to determine the amount for the vesting of the acquired proper ty under section 4.
Section 14 which is relevant for the purpose of this case read thus: "Fresh permit or renewal of the existing permit barred Except as otherwise provided in this Act (1) No person shall on or after the commencement of this Act apply for any permit or fresh permit or for renewal of an existing permit for the running of any contract carriage in the State; and (2) every application for the grant of a permit or fresh permit or for the renewal of the existing permit and all appeals or revisions arising therefrom relating thereto made or preferred before the commencement of this Act and pending in any Court or with any Officer, Authority or Tribunal constituted under the shall abate.
" A reading thereof manifests its unequivocal declaration that on and 654 from the date of vesting viz., March 12, 1976, the statute prohibits any person to apply for, any fresh permit or renewal of an existing permit to run any contract carriage in that State and all applications, appeals or revisions pending before the appropriate authority as on the notified date, statutorily declared to have been abated.
Section 20 declares by employing non obstenti clause in sub section
(1) that notwithstanding anything in the repealed Act with effect from March 12, 1976 all contract carriage permits granted or renewed in respect of any vehicle other than a vehicle acquired under the Acquisition Act, or belonging to the S.T.U., Karnataka; or referred to in section 24 thereof shall stand canceled.
Sub section
(2) accords with mandatory language that the S.T.U. "shall be entitled for or renewal of con tract carriage permits to the exclusion of all other per sons" and sub section
(3) prohibits by employing a negative language that "no officer or authority shall invite any application or entertain any such application of persons other than the Corporation (S.T.U.) for grant of permit or the running of the contract carriage.
" By conjoint operation of sections 14 and 20, the right of any person other than S.T.U., Karnataka to apply for and to obtain any permit or renewal of an existing permit to run a motor vehicle as a contract carriage has been frozen and issued statutory injunction restraining the authority concerned from either inviting or entertaining any application from him for the grant or renewal of contract carriage permit.
Monopoly to obtain permit or renewal to run contract carriage was conferred on S.T.U., Karnataka.
The constitutional validity of the Acqui sition Act was upheld by this Court in State of Karnataka vs Ranganatha Reddy, 1.
The contention that the Acquisition Act fails under Entry 42 of List I of Seventh Schedule to the Constitution, viz., inter state trade and commerce and that therefore the State Legislature lacked competence to make the Acquisition Act was negatived.
It was held that in pith and substance, it is an act of acquisition of the contract carriages falling in Entry 42 of List III.
It was further held that the effect of operation of sections 14 and 20 is incidental or ancillary to the acquisition.
Having received the assent of the President, it is saved by article 254(2) of the Constitution.
When an attempt to obtain renew al or fresh special permits to run contract carriages taking aid of section 62(1) or section 63(6) respectively of the repealed Act 4 of 1939 was made on the ground that the Acquisition Act had saved their operation, this Court in Secretary, R.T.A., Bangalore vs P.D. Sharma, ; held that by operation of sections 14 and 20(3), a public service vehicle be it a contract carriage or stage carriage for which temporary permits under sections 62(1) and 63(6) were issued and were in force on January 30, 1976 are not entitled to fresh permits and exclusive monopoly to run contract carriages was given to S.T.U., Karnataka.
655 2.
The (Act 59 of 1988), for short, "the Act", came into force with effect from July 1, 1989.
Section 2(7) defines 'contract carriage '.
Section 2(8) defines 'motor vehicle ' or 'vehicle ' to mean any mechanical ly propelled vehicle adapted for use upon road whether the power of propulsion is transmitted thereto from an external or internal source and includes a chasis to which a body has not been attached and a trailer . .
Section 2(34) de fines 'public place ' to mean, a road, street, way or other place whether a thoroughfare or not, to which the public have a right of access and includes any place or stand at which passengers are picked up or set down by a stage car riage.
Section 2(35) defines 'public service vehicle ' to mean, any motor vehicle used or adapted to be used for the carriage of passengers for hire or reward, and includes a . . , contract carriage and stage carriage.
Section 2(47) defines 'transport vehicle ' to mean, a public service vehicle . . , or a private service vehicle.
Chapter V deals with Control of Transport Vehicles, section 66 mandates an owner of a motor vehicle to obtain permit to run it in accordance with the conditions of a permit thus: "(1) No owner of a motor vehicle shall use or permit the use of the vehicle as a transport vehicle in any public place whether or not such vehicle is actually carrying any passen gers or goods save in accordance with the conditions of a permit granted or countersigned by a Regional Transport Authority or any prescribed authority authorising him the use of the vehicle in that place in the manner in which the vehicle is being used." (Emphasis supplied) (The provisos are not necessary for the purpose of this case.
Hence omitted) Section 73 requires him to make an application for permit of a contract carriage with particulars specified therein.
Section 74 deals with grant of contract carriage permit.
Sub section
(1) thereof provides that "subject to provisions of sub section
(3), a Regional Transport Authority may, on an appli cation made to it under section 73, grant a contract carriage permit in accordance with the application or with such modifications as it deems fit or refuse to grant such a permit, provided that no such permit shall be granted in respect of any area not specified in the application." Sub section (2) empowers the Regional Transport Authority to impose any one or more conditions enumerated therein to be attached to the permit, the details thereof are redundant.
Sub section
(3) empowers a State 656 Government, when directed by the Central Government, to limit the number of contract carriages generally or a speci fied type as may be fixed in the notification published in this behalf for their operation on the city routes.
The details are also not necessary for the purpose of this case.
Under section 80(1), an application for a permit of any kind may be made at any time.
Sub section
(2) posits that "a Regional Transport Authority shah not ordinarily refuse to grant an application for permit of any kind made at any time under this Act." (Emphasis Supplied).
The proviso are omitted as not being relevant.
The petitioners have applied under sections 73, 74 and 80 of the Act for grant of contract carriage permits.
Placing reliance on sections 14 and 20 of the Acquisi tion Act, the concerned authorities have refused to enter tain their applications.
Calling them in question the above writ petitions have been filed under article 32 of the Consti tution.
The contention of Sri Nariman, learned senior counsel for the petitioners, is that the object of the Act is to liberalise grant of contract carriages which do not ply on any particular routes.
Contract carriage defined under section 2(7) of the Act is a public service vehicle within the meaning of section 2(35) of the Act.
Section 66 obligates the owner to obtain permits to run contract carriages.
Section 14(1) read with section 80(1) accords the right to the petition ers to apply for, and enjoins the authorities under section 80(2) to consider and to grant permits to run public service vehicles as contract carriages.
Section 217(1) repealed all the laws, save such of the laws which are not inconsistent with the provisions of the Act.
The operation of sections 14 and 20 of the Acquisition Act is inconsistent with sections 74 and 80 of the Act.
Grant of permit to run contract carriage is covered by Entry 35 of List III of the Seventh Schedule.
Though, the Acquisition Act was made under Entry 42 of List III and has received the assent of the President, by opera tion of section 74 read with section 80 and section 2 17, the operation of sections 14 and 20 became void under proviso to article 254(2).
Sections 14 and 20 also stood repealed by implication.
The authorities are, hereby, enjoined to consider the petition ers ' applications for grant of contract carriage permits as per the provisions of the Act and the relevant rules.
Mr. Sanghi, learned senior counsel for the S.T.U., Karnataka, contended that the Acquisition Act was made in exercise of the power under Entry 42 of List III of Seventh Schedule to the Constitution.
Its constitutional validity was upheld by this Court.
It does not occupy the same field as under the Act.
The Acquisition Act, having been reserved for consider ation under article 254(2) and has received the assent of the President, it prevails over the Act in the State of Karnata ka.
The Acquisition Act is a "special law" in juxtaposition to the general law under the 657 Act.
The argument of Mr. Sanghi, though apparently at first blush is alluring and attractive, but on a deeper probe, I find insurmountable difficulties in his way to give accept ance to them.
The main questions are whether sections 14 and 20 of the Acquisition Act and sections 73, 74 and 80 of the Act is "in respect of the same matter" and whether the Act evinces its intention to occupy the same field.
At the cost of repetition, it may be stated that sections 49 to 51 and the relevant rules under the Repealed Act govern the grant of contract carriage permits and in partic ular the rigour imposed in section 50 thereof is absent in the Act.
The Acquisition Act aimed to acquire the contract carriages.
They stood vested in the State Government under section 4.
Incidental and ancillary thereto, the operation of the existing permits or seeking renewal thereof and the pendency of the proceedings in that regard either by way of an appli cation or in appeal or in revision, having statutorily been declared under section 14(2) to have been abated, the right to obtain permits or special permits afresh or renewal thereof to run contract carriages or stage carriages after expiry of the term, has been frozen to all citizens.
Exclusive monopo ly to obtain permits or of the renewal to run them has been given to the S.T.U., Karnataka.
On and from March 12, 1976, section 20(3) prohibits the authorities concerned to invite or entertain an application or to grant or renew the permits to a contract carriage or special permit, except to the S.T.U., Karnataka.
The non obstenti clause makes clear any cloud of doubts of the applicability of the repealed Act 4 of 1939.
After the receipt of the assent of the President, though it is inconsistent with the Repealed Act, its operation is saved by article 254(2) of the Constitution.
Sections 73 and 74 read with section 80 of the Act gives to an applicant the right to apply for and to obtain, and obligates the Regional Transport Authority to grant permit to run any public serv ice vehicle as contract carriage throughout the country including the State of Karnataka.
Though, section 80(1) gives discretionary power to grant permit but sub section
(2) of section 80 manifests that refusal to grant contract carriage permits appears to be an exception for stated grounds and obviously for reasons to be recorded.
4A. Constitutionalism is the alter to test on its anvil the constitutionality of a statute and article 254 is the sole fountain source concerning a State law in the Concurrent List.
Article 254(1) deals with inconsistency of law made by Parliament and the law made by the Legislature of a State.
Clause (1) adumbrates that the existing law, if it is repug nant with the law made by the Parliament, subject to the provisions of cl.
(2), the law made by the Parliament wheth er passed before or after the law made by the Legislature of such state, or, as the case 658 may be, the existing law shall prevail and the law made by the Legislature of the State shall, to the extent of repug nancy, be void.
Clause (2) deals with the law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by the Parliament or an existing one "with respect to that matter", then the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the Presi dent and has received his assent, prevails in that State; provided that nothing in this clause shall prevent Parlia ment from enacting "at any time any law with respect to the same matter ' ', including a law adding to, amending, varying or repealing the law so made by the Legislature of the State.
(Emphasis supplied) 5.
In a federal system like ours, there are two streams of law, viz., Union and State.
At times, the citizen sub jected to both of laws Central and State will find incon sistency between the obligations imposed on him by those laws or finds variance to avail both laws.
In fact, both the Union and State Legislatures are competent to make laws on a subject enumerated in the Concurrent List.
We are not con cerned in this case with regard to Union List or State List.
it is quite possible that while legislating upon the sub ject, they might end up in handing down inconsistent law and the observance of one law may result is non observance of the other.
The citizen will, in such a situation, be at a loss to decide which of the two laws he should follow.
To resolve the inconsistency, in other words, to bring about operational uniformity Constitution presses into Service article 254.
Its forerunner is section 107 of the Government of India Act, 1935.
Both the Parliament and a State Legislature derive their power only under article 254 and article 246(2) to legislate concurrently on the subjects enumerated in the Concurrent List.
The enumeration of the subjects in the Concurrent List is only for demarcation of legislative heads or distribution of the subject/subjects over which the Parliament and the State Legislature have competence to make law.
However, paramouncy has been accorded to the Union Law, making provision in article 254 firstly as to what would happen in case of repugnancy between the Central and the State law in the concurrent field and secondly resolving such a con flict.
The reason is that there are certain matters which cannot be allocated exclusively either to the Parliament or to a State Legislature and for which, though often it is desirable that the State Legislature should make a provision in that regard.
Local conditions necessarily vary from State to State and the State Legislature ought to have the power to adopt general legislation to meet the particular circum stances of a State.
It is equally necessary that the 659 Parliament should also have plenary jurisdiction to enable it in some cases to secure uniformity in the main principles of law throughout the country or in other matters to guide and encourage the States ' efforts and to provide remedies for mischiefs arising in the State sphere extending or liable to extent beyond the boundaries of a single State.
The subjects like the Indian Penal Code, Civil Procedure Code, Criminal Procedure Code, Labour Laws, the Motor Vehi cles Act, etc.
occupy this area.
The essential condition for the application of article 254(1) is that the existing law or a law made by the Parliament subsequent to State law, must be with respect to one of the matters enumerated in the Concur rent List.
In other words, unless it is shown that the repugnancy is between the provisions of a State law and an existing or subsequent law or amended law etc.
of the Par liament in respect of the same specified matter, article 254 would be inapplicable, 6.
The Court has to examine in each case whether both the legislations or the relevant provisions therein occupy the same field with respect to one of the matters enumerated in the Concurrent List and whether there exists repugnance between the two laws.
The emphasis laid by article 254 is "with respect to that matter".
Clause (1) of article 254 posits as a rule that in case of repugnancy or inconsistency between the State law and the Union law relating to the same matter in the Concurrent List occupying the same field, the Union law shall prevail and the State law will fail to the extent of the repugnancy or inconsistency whether the Union law is prior or later in point of time to the State law.
To this general rule, an exception has been engrafted in cl.
(2) thereof, viz., provided the State law is reserved for con sideration of the President and it has received his assent, and then it will prevail in that State notwithstanding its repugnancy or inconsistency with the Union law.
This excep tion again is to be read subject to the proviso to cl.
(2) thereof, which empowers the Parliament to make law afresh or repeal or amend, modify or vary the repugnant State law which will become void even though it received President 's assent.
In short, cl.
(1) lays down a general rule; cl.
(2) is an exception to cl.
(1) and proviso qualifies that excep tion.
The premise is that the law made by the Parliament is paramount and Union and State law must relate to the same subject matter in the Concurrent List.
It is, thus, made clear that the Parliament can always, whether prior or subsequent to State law, make a law occupied by the State law.
An absurd or an incongruous or irreconcilable result would emerge if two inconsistent laws or particular provi sions in a statute, each of equal validity, could coexist and operate in the same territory.
660 7.
Repugnancy between the two pieces of legislation, generally speaking, means that conflicting results are produced when both laws are applied to the same set of facts.
Repugnancy arises when the provisions of both laws are fully inconsistent or are absolutely irreconcilable and that it is impossible to obey without disobeying the other.
Repugnancy would arise when conflicting results are produced when both the statutes covering the same field are applied to a given set of facts.
The Court should, therefore, make every attempt to reconcile the provisions of the apparently conflicting enactments, and would give harmoneous construc tion.
There is no repugnancy unless the two Acts or provi sions are wholly incompatible with each other or the two would lead to absurd result.
The purpose of determining the inconsistency is to ascertain the intention of the Parlia ment which would be gathered from a consideration of the entire field occupied by the State Legislature.
The proper test is whether the effect can be given to the provisions of both the laws or whether both the laws can stand together.
There is no repugnaney if these two enactments relate to different fields or different aspects operating in the same subject.
In my considered views, article 254 was engrafted in the Constitution by the rounding fathers to obviate such an absurd situation.
The reason is obvious that there is no provision in the Constitution that the law made by the Parliament is to be void by reason of its inconsistency with the law made by the Legislature of a State.
It may be dif ferent if the State law is only to supplement the law made by the Parliament.
If both the laws without trenching upon another 's field or colliding with each other harmoneously operate, the question of repugnancy does not arise.
It is also axiomatic that if no law made by Parliament occupies the field, the State Legislature is always free to make law on any subject/subjects in the Concurrent List III of the Seventh Schedule of the Constitution.
It is seen that the Acquisition Act was made in exercise of the power under Entry 42 of the Concurrent List and sections 14 and 20 thereof are integral part of the Acquisi tion Act.
Undoubtedly, they are consequential or ancillary to section 4 thereof.
It had received the assent of the Presi dent.
But after the Act was brought on statute, the question emerges whether there exists no repugnancy between sections 14(1) and 20(3) of the Acquisition Act in juxtaposition to sections 66(1), 73, 74 and 80 of the Act.
Before embarking upon an enquiry into the results produced by these provisions in the light of above discussion, let us consider the relevant decisions and the ratio laid down therein in this context.
661 Occupied Field: 1n Tika Ramji vs State of U.P., ; Bhag wati, J. speaking for the Constitution Bench, applied three tests propounded by Nicholas in his Australian Constitution, Second Edition, page 303, to find the inconsistency or repugnancy thus.
(1) There may be inconsistency in the actual terms of competing statutes; (2) Though there may be no direct conflict, a State law may be inoperative because the Commonwealth law, or the award of the Commonwealth Court, is intended to be a complete and` exhaustive Code; and (3) Even in the absence of intention, a conflict may arise when both State and Commonwealth seek to exercise their power over the same subject matter.
(Emphasis sup plied).
The repugnancy between the two statutes should exist in fact and not depend merely on a possibility.
In that case, the question was whether the U.P. Sugarcane (Regula tion of Supply and Purchase) Act (Act 24 of 1953) is ultra vires of the U.P. Legislature in view of article 246 read with Entry 52 of List I and Item 33 of List III of Seventh Sched ule to the Constitution.
In that context, it was held that if both the Central Legislature and the Provincial Legisla tures were entitled to legislature in regard to this subject of production, supply and distribution of sugarcane, there would arise no question of legislative competence of the Provincial Legislature in the matter of having enacted the impugned Act.
Repugnancy falls to be considered when the law made by the Parliament and the law made by the Legislature occupy the same field, because if both these pieces of legislation deal with separate and distinct matters, though of a cognate and allied character, repugnancy does not arise.
(Emphasis supplied) So far as our Constitution is concerned, repugnancy is dealt with in article 254.
On a com parison of various provisions of the State and Central laws, it was held that there was no question of any inconsistency in the actual terms of the Act enacted by the Parliament and the impugned Act and they did not occupy the same field.
In A.S. Krishna vs Madras State, ; , the question was whether section 4(2) of the Madras Prohibition Act which lays down a presumptive evidence is repugnant to the Central legislation, viz., Criminal Procedure Code.
Dealing with section 107 of the Government of India Act, 1935 which is in pari material to article 254 read with Schedule VII, List II, Items 2 and 31 and List III, Items 2 and 5 of Schedule VII to the Constitution, Venkatarama Ayyar, J. speaking for the Constitution Bench, held that for applying section 107 of the Government of India Act 1935, two conditions must be ful filled the provisions of the provincial law and those of the Central legislation must both be in 662 respect of a matter which is enumerated in the Concurrent List; and they must be repugnant to each other.
It is only when both these requirements are satisfied that the provi sional law will to the extent of repugnancy becomes void.
Section 4(2) of the Prohibition Act was held to be void.
In Prem Nath Kaul vs State of J & K, [1959] 2 Supp.
SCR 273, another Constitution Bench held that the essential condition for application of article 254(1) is that the exist ing law must be with respect to one of the matters enumerat ed in the Concurrent List; in other words, unless it is shown that the repugnancy is between the provisions of a subsequent law and those of an existing law in respect of the specified matters, the Article would be inapplicable.
In Bar Council of U.P.v.
State of U.P.; , the question arose was whether the State Government is empowered to impose stamp duty on the certificate of enrollment under section 22 of the Advocates Act.
In considering schedule VII, List I, Entries 77, 78 and 96; List II, Entry 63 and List III, Entries 44 and 26 and the relevant provisions of the Stamp Act and its Schedules, this Court held that the ques tion of repugnancy can only arise in respect of matters where both the parliament and the State Legislature have competence to pass laws.
In other words, when the Legisla tive power is located in the Concurrent List, the question of repugnancy arises.
In Deep Chand vs State of U.P., [1959] Supp. 2 SCR 8 relied on by Sri Nariman, the Uttar Pradesh legislature made U.P. Transport Service (Development) Act, which had received the assent of the President, introduced a scheme of nationalisation of the transport service.
Subse quently, Parliament has amended Act IV of 1939 through Amendment Act 100 of 1956.
By reason thereof, it was con tended that the U.P. Amendment Act became void by reason of article 254 of the Constitution.
The matter was examined by the Constitution Bench of this Court.
Subba Rao, J. (as he then was) per majority, while considering the question, laid three propositions to determine the repugnancy thus: (1) Whether there is direct repugnancy between the two provi sions; (2) Whether Parliament intended to lay down an ex haustive code in respect of the subject matter replacing the Act of the State Legislature; and (3) Whether the law made by the Parliament and the law made by the State Legislature occupy the same field.
After examining in detail the provi sions of the respective Acts, it was held that after the Central Amendment Act 100 of 1956, it prevailed over the U.P. Act and prospectively became void as the Central Amend ment Act occupied the same field in respect of the same schemes initiated under the U.P. Amendment Act and to that extent the State Act must yield its place to the Central Act.
663 In State of Orissa vs
M.A. Tulloch & Co., ; another Constitution Bench of this Court held that the inconsistency may be demonstrated not by a detailed compari son of provisions of the two statutes but by the mere exist ence of the two pieces of legislation.
Meeting the argument as to on which Entry in the list the subject falls, it was held thus: "If by reason of the declaration by Parliament the entire subject matter of 'conversation and development of minerals ' has been taken over for being dealt with by Parliament, thus depriving the State of the power which it therefore pos sessed, it would follow that the 'matter ' in the State List is, to the extent of the declaration, (substracted from the scope of the declaration) and ambit of Entry 23 of the State List.
There would, therefore after the Central Act 67 of 1957, be no matter in the List to which the fee could be related in order to render it valid.
" It was accordingly held that the Orissa Mining Areas Devel opment Fund Act (27 of ' 1952) to be void.
Of course, this was in considering the question under Article 246, Entry 54 of List I, and Entry 23 of List 11.
In State of Assam vs Horizon Union, ; the facts are that under the , Section 7 A(3)(a) provided that the appropriate Government may by notification constitute an Industrial Tribunal con sisting of one person to be appointed by the appropriate Government.
The person shall not be qualified for appoint ment as presiding officer of the Tribunal unless he is or has been a Judge of a High Court or he has held the office of Chairman or any other member of the Labour Appellate Tribunal constituted under the Industrial Disputes (Appel late Tribunal) Act, 1950, or of any Tribunal, for a period of not less than two years.
Assam Act 8 of 1962 made an amendment to the above procedure and had received the assent of the President, introducing clause (aa) to sub section (3)(a) of Section 7 A thus: "He has worked as a District Judge or as an Additional District Judge or as both for a total period of not less than three years or is qualified for appointment as a Judge of a High Court; provided that the appointment to a Tribunal of any person qualified under this clause shall not be made without consultation with the Assam High Court." 664 In 1964, the Parliament made an amendment viz.
Industri al Disputes (Amendment) Act (36 of 1964) amending Section 7 A(3)(a) stating that "he has, for a period of not less than three years, been a District Judge or an Additional District Judge.
" The contention raised was that the Assam Act became void by reason of the subsequent Amendment Act of 1964.
Both the Parliament and the State Legislature have exercised their power under the Concurrent List of VII Schedule.
Another Constitution Bench of this Court has held that the Central Amendment Act 36 of 1964 intended to be an exhaustive code in respect of the subject matter and occu pies the same field.
Therefore, the Assam Act 8 of 1962 was repugnant to the Central Amendment Act 36 of 1964 as it does not require the consultation with the High Court for the appointment of an Industrial Tribunal.
Accordingly, it was held to be void.
In State ofJ & K vs
M.S. Farooqi; , the facts were that the respondent was a member of the Indian Police Service governed by the All India Services Act, 1951 and the All India Services (Discipline and Appeal) Rules, 1955.
They provided an exhaustive procedure to enquire into the misconduct by a member of the All India Services.
The State Legislature, exercising the concurrent power, made Jammu and Kashmir Government Servants ' Prevention of Corrup tion (Commission) Act, 1962.
The validity thereof was ques tioned on the anvil of Article 254 of the Constitution.
Dealing with the subject, another Constitution Bench, speak ing through Sikri, C.J. held that the Commission Act empow ers to conduct on enquiry into the charges of corruption and misconduct against all Government Servants including the members of All India Services.
In addition to the recommen dation for imposition of punishment engrafted in sub section (2) of Section 17 of the Commission Act, it also disquali fies for any public office to a specified period and also recommendation for prosecution for an offence in a Court of law.
These details were not dealt with under the Central Act and the Rules.
From this conspectus, this Court further held thus: "It seems to us that in so far as the Commission Act deals with the infliction of disciplinary punishments it is repug nant to Discipline and Appeal Rules.
Parliament has occupied the field and given clear indication that this was the only manner in which any disciplinary action should be taken against the members of the All India Services 665 Accordingly it was held that the State Act must be read down so as to leave the members of the All India Services outside its purview.
Thereby, by implication it was held that by operation of Article 254 of the Constitution the Commission Act is repugnant to the All India Services Act and Rules.
In Kerala State Electricity Board vs Indian Aluminium Co., [1976] 1 SCR 552 another Constitution Bench of this Court held that: "Having discussed the question of the legislative field it might be necessary to discuss the question as to what hap pens if it should be held that the matter under considera tion in these cases falls within the concurrent list, that is, Entry 38 in List III as contended in the alternative by some of the respondents.
As already mentioned the question will arise only if it should be held that the Kerala State Act falls under Entry 38 as contended by Mr. B. Sen.
If the impugned legislation falls under List III then the question of repugnancy of that legislation with the existing law or the law made by Parliament as the case may be, will have to be considered.
" In Basu 's Commentary on the Constitution of India (Silver Jubilee Edition), Volume K, at page 144, it is stated that "the repugnancy to be found is the repugnancy in the actual provisions of two laws and not the subject matter of the two laws.
The proper test is whether effect can be given to the provisions of both the laws or whether both the laws can stand together." (Emphasis added).
It is trite law that the form of the provision does not conclude the matter.
It must be the "same matter" under consideration.
Operational Incompatibility: 9.
Repugnancy could also be angulated from the perspec tive of operational incompatibility as well.
The celebrated decision in Clyde Engineering Co. vs Cowburn, popularly known as 44 hour case, is a leading authority on this topic.
The facts therein are that a Commonwealth Arbitration award fixed rates of pay and overtime on the basis of 48 hour working week while Forthfour Hours Week Act 1925 (NSW) section 6 purported to deal with the same matter on the basis of 44 hours working week.
The respondent employee claimed the State Act rate of pay but was denied on the basis of 48 hours working week.
When questioned, it was argued that there was no 666 inconsistency between the award and the State Act because the employer, it was said, could obey both laws by observing the 44 hours working week but on the basis that the pay scale determined by the award applied to the 44 hours work ing week.
The High Court of Australia relying on section 109 of Australian Constitution rejected the argument and found that an inconsistency existed, as the State law operated to vary the adjustment of industrial relations established by the Commonwealth award.
Knox, C.J. held that two enactments may be inconsistent although obedience to each of them may be possible without disobeying the other.
Statute may do more than impose duties; they may for instance confer rights; and one statute is inconsistent with another when it takes away a right conferred by the other even though the right may be one which might be waived or abandoned without disobeying the statute which conferred it.
Issacc, J. in his separate but concurrent judgment held: "The vital question would be: was the second Act in its true construction intended to cover the whole ground, and there fore, to supersede the first? If it was intended, then the inconsistency would consist in giving operative effect at all to the first Act; because the second was intended en tirely to exclude it.
The suggested test however useful a working guide it may be in some cases prove a test; cannot be recognised as the standard measuring rod of inconsisten cy.
If, however, a competent legislature expressly or im pliedly evinces its intention to cover the whole field, that is a conclusive test of inconsistency where another legisla ture assumes to enter to any extent upon the same field .
If such a position as I have postulated be in fact estab lished the inconsistency is demonstrated not by comparison of detailed provisions but by the existence of the two sets of provisions; where that wholesale inconsistency does not occur but the field in partly open, then it is necessary to enquire further and possibly to examine and contrast partic ular provisions.
If one enactment makes or acts upon as lawful that which the other makes unlawful or if one enact ment makes unlawful that which the other makes or acts upon as lawful, the two or to that extent inconsistent.
It is plain that it may be quite possible to obey both simply by not doing what is declared by either to be unlawful and yet there is palpably inconsistency.
The basic reason is that the 667 Constitution clearly intended that once the Commonwealth settled an interstate dispute, that settlement shall stand and that its terms should be framed by the one hand, the other being necessarily excluded.
Forty four hours shall constitute a week 's work.
No day 's work to exceed either hours without payment for overtime, etc.
" Higgins, J. has held that: "When is a law inconsistent with another law? Etimologically I presume that things are inconsistent when they cannot stand together at the same time and law is inconsistent with another when the command or power or provision in one law conflicts directly with the command, power or other provi sion of another.
Where two legislations operate over the same territory and came into collision, it is necessary that one should prevail, but the necessity is confined to actual collision as one legislature says 'do ' and the other says 'do not '.
(Emphasis supplied) In that case it was held that there is operational incompat ibility between the Commonwealth award and the State law.
The State law was held to be void.
In Hume vs Palmer, ; both New South Wales Act and Commonwealth Act authorised making of the Regulations dealing with collisions at sea.
In both cases regulations had been made.
They were in identical terms except that in relation to the jurisdiction to convict for breaches.
The New South Wales regulations prescribed summary prosecution and a maximum penalty of Pound 50 whereas the Commonwealth regulations prescribed summary prosecution on indictment and a maximum penalty Pound 100.
It was held that the same facts produced different legal results under the two Acts, the penalty under State law was held displaced.
In R.v.
Brisbane Licensing Court; , a section of the Commonwealth Electoral Act provided that on a polling day fixed for a federal election, a referandum or vote of the electors of a State or part thereof, should not be taken.
A local option poll had been taken on such a day under Queensland legislation.
It was held that a direct inconsistency existed, and that the local option poll was, therefore, declared to be invalid.
In Colvin vs Bradley Bros. Pvt. Ltd., [1943] 68 an order made pursuant to a section of New South Wales Factories and Shops Act prohibiting the employment of women on a milling machine.
An award had been made by the Commonwealth Arbitration Court under the Conciliation and Arbitration Act which permitted the employment of females on work, which included work on a milling machine, unless the work was declared to be unsuitable for women by a Board of Reference.
No such declaration had been made by the Board.
it was held that the order was inconsistent with the award by virtue of section 109 in that it directly prohibited something which the Commonwealth award permitted.
In In Re Ex Parte Maclean, ; at 483.
Dixon J. held: "When the Parliament of the Commonwealth and the Parliament of a State each legislate upon the same subject and pre scribe what the rule of conduct should be, they make laws which are inconsistent notwithstanding that the rule of conduct is identical, which each prescribes, and section 109 applies.
" It was further held that the Federal statute had evinced an intention to cover the subject matter and provide what the law upon it should be.
In Wenn vs Attorney General (Victoria), ; the Re establishment and Employment Act dealt with the obligations of employers ' to give preference to ex service men in employment (but included no provision as to the duty to give preference in promotion to ex servicemen already employed).
The State Act dealt not only with the same mat ter, but also included a provision requiring employers to give preference in promotion.
It was held that Commonwealth Legislation was an exhaustive code allowing no room for the operation of the State legislation relating to matter not covered by the Commonwealth Act.
The Victorian Law giving preference in promotion was, therefore, held to have been displaced.
In O 'Sullivan vs Noarlunga Meat Co. Ltd., ; the facts are that the South Australian Act prohibited laughter of stock for export without a State licence while the Commonwealth Act prohibited export of meat from stock which had not been slaughtered on premises registered under the regulations thereof.
In an evenly divided Court, the opinion of the Chief Justice had prevailed, it was held that the Commonwealth regulations were detailed enough to show that 669 they covered the whole field of 'slaughter for export ' and, therefore, the State licensing requirement did not apply.
On further appeal the Judicial Committee in O. Sullivan vs Noarlunga Meat Co. Ltd., at 28 added that "in applying this principle it is important to bear in mind that the relevant field or subject is that covered by the law said to be invalid." In Australian Federal Constitutional Law by Collin Howard, Second Edition (1972).
at page 27, it was stated that where both a Commonwealth Law and a State law are in terms applicable to a given set of facts, and they produce conflicting legal results on those facts, the Commonwealth law applies and not the State law.
In Blackley vs Devondale Cream (Vie.) Pvt. Ltd., ; , a State wages determination prescribed a minimum rate of pay for certain work which was also covered by a Commonwealth award.
The Commonwealth award prescribed a lower minimum rate.
It was held that there was a direct inconsistence because on the same facts the two laws produced different entitlements.
The award rate, therefore, prevailed over the State 's determina tion.
REPEAL BY IMPLICATION: Sub section
(1) of section 217 of the Act repeals thus: "The , and any law corresponding to that Act in force in any State immediately before the com mencement of this Act (hereafter in this section referred to as the repeal enactments) are hereby repealed." (The other sub sections are not relevant.
Hence omitted. ) (Emphasis supplied) Thereby s.217(1) does not expressly repeal sections 14(1) and 20(3) of the Acquisition Act.
In Zaveribhai vs State of Bombay, [1955] 1 SCR 799 relied on by Sri Nariman, the facts were that section 7 of the Essential Supplies (Temporary Powers) Act, 1949 provides penalty for contravention of orders issued under section 3 for a term of three years or with fine or with both.
The Bombay Legislature amended the Act, by Act 52 of 1950.
Section 2 of the Amendment Act provides that ' notwithstanding anything contained in Essential Supplies (Temporary Powers) Act, 1946, whoever contravenes an order made under Sec. 3 of the Essential Supplies (Temporary Powers) Act, shall be punishable with imprisonment for a term which may extend to seven years but shall not, 670 except for reasons to be recorded in writing, be less than six months and shall also be liable to fine".
Thus, the Bombay Act imposes minimum sentence while indicating maximum sentence and obtained the assent of the President.
Later, the Central Act was amended in 1948, 1949 and 1950.
In 1950 Act, Sec. 7 categorised three groups of offences covering the same field and imposd graded sentences depending on the character of the offence and the nature of the commodity contravened.
The Bombay Act was challenged on the ground that it was repugnant and was repealed by implication.
Venkatarama Iyer, J. speaking for the Constitution Bench held that repugnancy might result when both the legislations cover the same field.
It was further held: "The important thing to consider with reference to this provision is whether the legislation in 'in respect of the same matter. ' If the later legislation deals not with the matters which formed the subject of the earlier legislation but with other and distinct matters though of a cognate and allied character, then article 254(2) will have no application.
The principle embodied in section 107(2) and article 254(2) is that when there is legislation covering the same ground both by the Centre and by the Province, both of them being competent to enact the same, the law of the Centre should prevail over that of the State.
" It was further held that though there is no express repeal, even then the State law will be void under the proviso if it conflicts with later law with respect to the same matter that may be enacted by the Parliament.
The principle on which the rule of implied repeal rests, namely, that if the subject matter of later legislation is identical with that of the earlier, so that they cannot both stand together then the earlier is repealed by the later enactment, will be equally applicable to a question under article 254(2) where the further legislation by Parliament is in respect of the same matter as that of the State law.
Accordingly, it was held that Sec. 2 of the Bombay Act, No. 36 of 1947 cannot prevail as against Sec. 7 of the Essential Supplies (Temporary Powers) Act as amended by Act 52 of 1950.
The doctrine of repugnancy and implied repeal was again considered by this Court in M. Karunanidhi vs Union of India, ; where the Tamil Nadu Public Men (Criminal Misconduct) Act (2 of 1974) was assailed to be repugnant to the Indian Penal Code and the Prevention of Corruption Act 1947.
In considering that question, Fazal Ali, J. speaking for the Constitution Bench held: 671 ".
So far as the Concurrent List is concerned, both Par liament and the State Legislatures are entitled to legislate in regard to any of the Entries appearing therein, but that is subject to the condition laid down by article 254(1).
Where the provisions of the Central Act and a State Act in the Concurrent List are fully inconsistent and are absolute ly irreconciliable, the Central Act will prevail and the State Act will become void in view of the repugnancy.
Where, however, a law passed by the State comes into colli sion with a law passed by Parliament on an Entry in the Concurrent List, the State Act shall prevail to the extent of the repugnancy and the provisions of the Central Act would become void provided the State Act has been passed in accordance with CI.
(2) of article 254.
Where a law passed by the State Legislature the entries in the State List entrenches upon any of the entries in the Central List the consitutionality of the law may be upheld by invoking the doctrine on a subject covered by the Concur rent List is inconsistent with and repugnant to a previous law made by the Parliament, then such a law can be protected by obtaining the assent of the President under article 254(2) of the Construction.
The result of obtaining the assent of the President would be that so far as the State Act is concerned, it will prevail in the State and overrule the provisions of the Central Act in their applicability to the State only.
Such a state of affairs will exist only until Parliament may at any time make a law adding to, or amend ing, varying or repealing the law made by the State Legisla ture under the proviso to Article 254.
" Dealing with the question of repeal by implication, it was held that there is no repeal by implication unless the inconsistency appears on the face of the two statutes that where two statutes occupy a particular field but there is a room or possibility of both the statutes operating in the same field without coming into collision with each other, no repugnancy results and that where there is no inconsistency, a statute occupying the same field seeks to create distinct and separate offence, no question of repugnancy arises and both the statutes continue to operate in the same field.
On a comparison of the relevant provisions of the ,impugned Act and the Central Acts, it was not repealed by implication.
672 In T. Barai vs Henry Ah Hoe, ; relied on by.
Sri Nariman, the facts are that for an offence under Sec. 16(1)(a) read with Sec. 7 of the , prescribed maximum punishment of six years.
But the West Bengal Legislature amended the Central Act with effect from April 29, 1974 by the Prevention of Adulteration of Food, Drugs and Cosmatics (West Bengal) (Amendment) Act, 1973, providing punishment with imprison ment for life and triable by a Court of Sessions.
It had received the assent of the President.
Later on the Parlia ment amended the Section (Section 16(a) and also introduced Section 16 A in 1976 to the , imposing punishment of three years.
Both the enactments have been made in exercise of the concurrent power.
In considering the question whether the State Act became void, A.P. Sen J. speaking for three Judges ' Bench has held thus: "There is no doubt or difficulty as to the law applicable.
article 254 of the Constitution makes provision firstly, as to what would happen in the case of conflict between a Central and State Law with regard to the subjects enumerated in the Concurrent List.
and secondly, for resolving such conflict, article 254(1) enunciates the normal rule that in the event of a conflict between a Union and a State Law in the concurrent field, the former prevails over the latter.
Clause (1) lays down that if a State law relating to a concurrent subject is 'repugnant ' to a Union law relating to that subject, then, whether the Union law is prior or later in time, the Union law will prevail and the State law shall.
to the extent of such repugnancy, be void.
To the general rule laid down in Clause (1), Clause (2) engrafts an exception, viz., that if the President assents to a State law which has been reserved for his consideration, it will prevail notwithstanding its repugnancy to an earlier law of the Union, both laws dealing with a concurrent subject.
In such a case, the Central Act will give way to the State Act only to the extent of incon sistency between the two, and no more.
in short, the result of obtaining the assent of the President to a State Act which is inconsistent with a previous Union law relating to a concurrent subject would be that the State Act will pre vail in that State and override the provisions of the Cen tral Act in their applicability to that State only.
The predominance of the State law may, however, be taken away if Parliament legislate under the proviso to Clause (2).
The proviso to article 254(2) empowers the Union Parliament to 673 repeal or amend a repugnant State law even though it has become valid by virtue of the President 's assent.
Parliament may repeal or amend the repugnant State law, either direct ly, or by itself enacting a law repugnant to the State law with respect to the 'same matter '.
Even though the subse quent law made by Parliament does not expressly repeal a State law, even then, the State law will become void as soon as the subsequent law of Parliament creating repugnancy is made.
A State law would be repugnant to the Union law when there is direct conflict between the two laws.
Such repug nancy may also arise where both laws operate in the same field and the two cannot possibly stand together, e.g. where both prescribe punishment for the same offence but the punishment differs in degree or kind or in the procedure prescribed, In all such cases, the law made by Parliament shall prevail over the State law under article 254(1).
That being so, when Parliament stepped in and enacted the Central Amendment Act, it being a latter law made by Parliament 'with respect to the same matter ', the West Bengal Amendment Act stood impliedly repealed." In M/s Hoeshst Pharmaceuticals Ltd. vs State of Bihar, ; the Bihar Finance Act, 1981 was made in exercise of the power under Entry 54 of List II of Seventh Schedule to the Constitution amending and repealing the previous Act providing therein to levy tax on sale or pur chase of goods.
Section 5(1) imposes levy of surcharge on every dealer whose gross turnover during an year exceeds Rupees Five lakhs, in addition to the tax payable by him at such rate not exceeding 10 per cent of the total amount of tax.
Sub section
(3) of section (5) prohibits such dealer from col lecting the amount of surcharge from the purchasers.
The made under Entry 33 of the Concur rent List III empowering the Government to fix prices of the essential commodities including drugs, medicines, etc.
It was contended that by operation of sub section
(1) of section 5, the State Act is repugnant and is void.
In considering that question, A.P. Sen, J. speaking for three Judges ' Bench held that both the Union and the State Legislature have concur rent powers of legislation with respect to any of the mat ters enumerated in List 111, subject only to the proviso contained in el.
(2) of article 254, i.e. provided the State Act do not conflict with those of any Central Act on the subject .
The question of repugnancy arises only when both legislatures are competent to legislature in the same field, i.e. when both Union and the State laws relate 674 to a specified subject in List III and occupy the same field.
Yet another place it was held that it is only when both these requirements are fulfilled that the State law will, to the extent of repugnancy became void.
article 254(1) has no application to the cases of repugnancy due to over lapping found between List II on the one hand and Lists I and II on the other.
If such overlapping exists in any particular case, State law will be ultra vires because of the non obstenti clause in article 246(1) read with opening words "Subject to" article 246(3).
In such cases, the State law will fail not because of repugnance in the Union List but due to want of legislative competence.
Repugnancy arises where there is a direct conflict or collision between the Central Act and the State Legislation and to the extent of repugnancy by necessary implication or by express reference the State legislation stands repealed.
It is true, as tightly contended by Mr. Sanghi, that sections 14 and 20 are consequential or ancillary to section 4 of the Acquisition Act 21 of 1976 which had received the assent of the President.
Its constitutionality was upheld by seven Judges ' Bench of this Court, when the legislative competence was assailed on the anvil of Entry 42 of List I of the Seventh Schedule, but not on the touchstone of proviso to cl.
(2) of article 254 which gives overriding power to the Parliament to make any law or amend, vary, modify or repeal the law made by a State Legislature.
Ranganatha Reddy 's ratio, thereby, does not stand an impediment to go into the validity of sections 14 and 20 of the Acquisition Act.
The result of the above discussion leads to the following conclusions: (a) The doctrine of repugnancy or inconsistency under article 254 of the Constitution would arise only when the Act or provision/ provisions in an Act made by the Parliament and by a State Legislature on the same matter must relate to the Concurrent List III of Seventh Schedule to the Constitution; must occupy the same field and must be repugnant to each other; (b) In considering repugnance under article 254 the question of legislative competence of a State Legislature does not arise since the Parliament and the Legislature of a State have undoubted power and jurisdiction to make law on a subject, i.e. in respect of that matter.
In other words, same matter enumerated in the Concurrent List has occupied the field.
(c) If both the pieces of legislation deal with separate and dis 675 tinct matters though of cognate and allied character repug nancy does not arise.
(d) It matters little whether the Act/Provision or Provi sions in an Act falls under one or other entry or entries in the Concurrent List.
The substance of the "same matter occupying the same field by both the pieces of the legisla tion is material" and not the form.
The words "that matter" connotes identity of "the matter" and not their proximity.
The circumstances or motive to make the Act/Provision or Provisions in both the pieces of legislation are irrelevant.
(e) The repugnancy to be found is the repugnancy of Act/ provision/Provisions of the two laws and not the predoninant object of the subject matter of the two laws.
(f) Repugnancy or inconsistency may arise in diverse ways, which are only illustrative and not exhaustive: (i) There may be direct repugnancy between the two provi sions; (ii) Parliament may evince its intention to cover the whole same field by laying down an exhaustive code in respect thereof displacing the State Act, provision or provisions in that Act.
The Act of the Parliament may be either earlier or subsequent to the State law; (iii) Inconsistency may be demonstrated, not necessarily by a detailed comparison of the provisions of the two pieces of law but by their very existence in the statutes; (iv) Occupying the same field; operational incompatibility; irreconcilability or actual collision in their operation in the same territory by the Act/provision or provisions of the Act made by the Parliament and their counter parts in a State law are some of the true tests; (v) Intention of the Parliament to occupy the same field held by the State Legislature may not be expressly stated but may be implied which may be gethered by examination of the relevant provisions of the two pieces of the legislation occupying the same field; 676 (vi) If one Act/Provision/Provisions in an Act makes lawful that which the other declares unlawful the two to that extent are inconsistent or repugnant.
The possibility of.
obeying both the laws by waiving the beneficial part in either set of the provisions is no sure test; (vii) If the Parliament makes law conferring right/obliga tion/ privilege on a citizen/person and enjoins the authori ties to obey the law but if the State law denies the self same rights or privileges negates the obligation or freezes them and injuncts the authorities to invite or entertain an application and to grant the right/privilege conferred by the Union law subject to the condition imposed therein the two provisions run on a collision course and repugnancy between the two pieces of law arises thereby; (viii) Parliament may also repeal the State law either expressly or by necessary implication but Courts would not always favour repeal by implication.
Repeal by implication may be found when the State law is repugnant or inconsistent with the Union law in its scheme or operation etc.
anti conflicting results would ensue when both the laws are applied to a given same set of facts or cannot stand togeth er or one law says do and other law says do not do.
In other words, the Central law declares an act or omission lawful while the State law says them unlawful or prescribes irrec oncilable penalties/punishments of different kind, degree or variation in procedure etc.
The inconsistency must appear on the face of the impugned statutes/provision/provisions therein; (ix) If both the pieces of provisions occupying the same field do not deal with the same matter but distinct, though cognate or allied character, there is no repeal by implica tion; (x) The Court should endeavour to give effect to both the pieces of legislation as the Parliament and the legislature of a State are empowered by the Constitution to make laws on any subject or subjects enumerated in the Concurrent List III of Seventh Schedule to the Constitution.
Only when it finds the incompatibility or irresconcilability of both Acts/provision or provisions, or the two laws cannot stand together, the Court is entitled to declare the State law to be void or repealed by implication; and (xi) The assent of the President of India under article 254(2) given to a State law/provision, provisions therein accord only opera 677 tional validity though repugnant to the Central law but by subsequent law made by the Parliament or amendment/modifica tion, variation or repeal by an act of Parliament renders the State law void.
The previous assent given by the Presi dent does not blow life into a void law.
Scope and operation of Rule of Pith and Substance and pre doninant purpose vis a vis Concurrent List.
The further question is whether the doctrines of dominant purpose and pith and substance would be applied to the matter covered under the Concurrent List.
in my consid ered view, they do not apply.
The doctrine of pith and substance primarily concerns in determining the legislative competence.
The idea underlying the detailed distribution of legislative powers in three Lists was to ensure that Parlia ment and State Legislatures should keep themselves within the spheres allocated to them in List I and vice versa in List II respectively.
However, legislation is a very compli cated matter as it reflects life, which itself is a compli cated one.
Hence, it is sometimes inevitable that a law passed by the Parliament may trench upon the domain of the State Legislature and vice versa.
Would such incidental encroachment on the territory of the other invalidates the legislation? In examining this question and finding a solu tion, the Courts try to save the legislation from unconsti tutionality by applying the flexible rule of pith and sub stance.
It is not that the Courts encourage one legislature to encroach upon the legislative field of another legisla ture but merely recognise the reality that despite the strict demarcation of legislative fields to respective legislatures, it is not always possible to effectuate a legislative purpose without incidental encroachment on another 's field.
In such a situation the Courts try to find out the pith and substance of the legislation.
If the legis lation is found in its pith and substance, within the legis lative competence of the particular legislature, it is held to be valid, despite incidental encroachment on the legisla tive power of another legislature.
Thus, the rule of pith and substance is applied to determine whether the impugned legislation is within that competence under articles 246(1) and 246(3) of the Constitution, and to resolve the conflict of jurisdiction.
If the Act in its pith and substance falls in one List it must be deemed not to fall in another List, despite incidental encroachment and its validity should be determined accordingly.
The pith and substance rule, there by, solves the problem of overlapping of "any two entries of two different List vis a vis the Act" on the basis of an inquiry into the "true nature and character" of the legisla tion.
The Court examines the legislation as a whole and tries 678 to find whether the impugned law is substantially within the competence of the Legislature which enacted it, even if it incidentally trespasses into the legislative field of anoth er Legislature.
In a case where the question of validity of an act arises, it may be that the topic underlying the provisions of the Act may in one view of the matter falls within the power of the Centre, and on another view within the power of the States.
When this happens, it is necessary to examine the pith and substance of the impugned legisla tion; and to see whether in its pith and substance it fails within one, or the other of the Legislative Lists.
As stated earlier the constitutionality of the Impugned Act is not determined by the degrees of invasion into the domain as signed to the other legislature but its pith and substance and its true nature and character to find whether the matter fails within the domain of the enacting legislature.
The incidental or ancillary encroachment into forbidden field does not effect the competence of the legislature to make the impugned law.
From this scenerio let us peep into few important decisions touching the subject.
In Prafulla Kumar vs Bank of Commerce, Khulna, AIR 1947 PC 60 the question was whether the Bengal Moneylenders Act (10 of 1940) is ultra vires by reason of Schedule 7, List II, Items 28 and 38 of the Gov ernment of India Act, 1935, and thereby is void.
In consid ering that question, the Judicial Committee held as culled out in Head note (b) thus: "It is not possible to make a clean cut between the powers of the Federal and Provincial Legislatures.
They are bound to overlap and where they do the question to be considered is what is the pith and substance of the impugned enactment and in what list is its true nature and character to be found.
The extent of invasion by the Provinces into subjects in Federal List is an important matter not because the validity of a Provincial Act can be determined by discrimi nating between degrees of invasion but for determining the pith and substance of the impugned Act.
The question is not has it trespassed more or less but is the trespass, whatever it be, such as to show that the pith and substance of the impugned Act is not a Provincial matter but a Federal mat ter.
Once that is determined the Act falls on one or the other side of the line and can be seen as valid or invalid according to its true import.
No doubt where they come in conflict List I has priority 679 over Lists III and II and List III has priority over List II but in each case one has to consider what the substance of an Act is and whatever its ancillary effect, attribute it to the appropriate list according to its true character" This leading ratio formed foundation in countless cases decided by this Court.
In State of Bombay vs
F.N. Balsara, [ ; it was held that: "It is well settled that the validity of an Act is not affected if it incidentally trenches on matters outside the authorised field and, therefore, it is necessary to enquire in each case what is the pith and substance of the Act impugned.
If the Act, when so viewed, substantially falls within the powers expressly conferred upon the Legislature which enacted it then it cannot be held to be invalid merely because it incidentally encroaches on matters which have been assigned to another Legislature.
" In Atiabari Tea Co. Ltd. vs State of Assam, ; Gajendragadkar, J. (as he then was) speaking per majority, has explained the purpose of the rule of pith and substance thus: "The test of pith and substance is generally and more appro priately applied when a dispute arises as to the legislative competence of the legislature, and it has to be resolved by reference to the entries to which the impugned legislation is relateable, when there is a conflict between the two entries in the legislative list, and legislation by refer ence to one entry would be competent but not by reference to other, the doctrine of pith and substance is invoked for the purpose of determining the true nature and character of the legislation in question.
" In Meghraj & Ors.
vs Allaharakhiya & Ors., AIR 1942 FC 27 relied on by Sri Nariman, the contention raised was that when the matter in the Concurrent List had occupied the flied whether the question of pith and substance of the impugned Act would arise? The Federal Court held that when the Provincial Act is objected to as contravening not Sec.
100 but Sec.
107(1) of the Government of India Act 1935, which is in pari materia to article 254 of the Constitution, that the question of pith and substance of the impugned Act does not arise.
In Tika Ramji 's case, the same question had arisen for resolution.
It was held that 680 "The pith.and substance argument also cannot be imported here for the simple reason that when both the Centre as well as the State Legislatures were operating in the Concurrent field.
there was no question of any trespass upon the exclu sive jurisdiction vested in the Centre under Entry 52 of List I, the only question which survived being whether, putting both the pieces of legislation enacted by the Centre and the State legislature together, there was any repugnancy a contention which will be dealt with hereafter.
" I have no hesitation to hold that the doctrine of pith and substance on the predoninant purpose, or true nature and character of the law have no application when the matter in question is covered by an entry or entries in the Concurrent List and has occupied the same field both in the Union and the State Law.
It matters little as to in which entry or entries in the Concurrent List the subject matter falls or in exercise whereof the Act/provision or provisions therein was made.
The Parliament and Legislature of the State have exclusive power to legislate upon any subject or subjects in a Concurrent List.
The question of incidental or ancillary encroachment or to trench into forbidder field does not arise.
The determination of its 'true nature and character ' also is immaterial.
Power to legislate whether derived from the con cerned Articles or legislative lists in Seventh Schedule 16.
Parliament and the Legislature of any state derive their power from article 246(2) of the Constitution to make laws with respect to any of the matters enumerated in List III of the VIIth Schedule to the Constitution.
With a non obstanti clause engrafted therein namely notwithstanding anything in Clause ? the Parliament, and, subject to Clause 1, the Legislature of any State also have power to make laws with respect to any of the matters enumerated in List III.
List III of Seventh Schedule enumerates the legislative heads over which the appropriate Legislature can operate.
The function of the list is not to confer power on either the Parliament or a State Legislature.
Article 254 of the Constitition removes the inconsistency between the law made by the Parliament and by the Legislatures of States.
Thus the power to legislate on the Concurrent List is derived by the Parliament and the Legislature of any State from Article 246(2) read with Article 254 only.
Paramouncy to the law made by the Parliament is given by Article 254(1) and provi so to Article 254(2).
The Parliament derives its exclusive power under Article 246(1) to legislate upon any of the 681 subjects enumerated in List I of the Seventh Schedule in the Constitution.
Similarly the Legislature of a State derives its exclusive power from Article 246(3) to make laws on any matters in List II.
When the Parliament or the Legislature of a State while making legislation within its exclusive domain, namely, List I or List II respectively if it inci dentally trenches upon the forbidden flied, namely, the field demarcated or distributed to the State Legislature and vice versa by the Legislature into List I the doctrine of Pith and Substance was applied to find the "true purpose and character of the Legislation".
In considering the question of the doctrine of Pith and Substance in Subrahmanyam Chet tiar vs Muttuswami Goundan, A.I.R. 1941 F.C. 47 at p. 51 held that it must inevitably happen from time to time that legislation, though purporting to deal with a subject in one list, touches also on a subject in another list, and the different provisions of the enactment may be so closely intertwined that blind adherence to a strictly verbal inter pretation would result in a large number of statutes being declared invalid because the Legislature enacting them may appear to have legislated in a forbidden sphere.
Hence the rule which has been evolved by the Judicial Committee where by the impugned statute is examined to ascertain its "pith and substance", or its "true nature and character", for the purpose of determining whether it is legislation with re spect to matters in this list or in that.
In that case the question was whether the Madras Agriculturists Relief Act 4 of 1938, Section 8 thereto is invalid, since the matter is in Schedule VII, List I or List II of the Government of India Act, 1935.
The contention was that the negotiable instrument; promissory notes are covered by List I of the Seventh Schedule, therefore, the Act is invalid.
In consid ering that question and negativing the contention the above ratio was enunciated.
(emphasis supplied) In Governor General in Council vs The Reliegh Investment Co. Ltd., at p. 261 in considering the ques tion whether the Federal Legislature 's power is not limited to cases specified in clauses (a) to (e) of sub section (2) of Section 99 from Entry No. 23 of the List I of the Seventh Schedule; it was held by Spens, C.J. that it would not be right that the Legislature would derive the power to legis late on this topic merely from the reference to it in the List, because the purpose of the Lists was not to create or confer powers, but only to distribute between the Federal and the Provincial Legislatures, the powers which had been conferred by Section 99 and 100.
(emphasis added) 682 In Harakchand Ratanchand Banthia vs Union of India, ; at p. 489 the Constitution Bench speaking through Ramaswami, J. dealing with the Gold (Control) Act (45 of 1968) observed thus: "Before construing these entries it is useful to notice some of the well settled rules of interpretation laid down by the Federal Court and by this Court in the matter of construing the entries.
The power to legislate is given to the appro priate legislature by Article 246 of the Constitution.
The entries in the three Lists are only legislative heads or fields of legislation; they demarcate the area over which the appropriate legislatures can operate." (emphasis added) In Union of India vs
H.S. Dhillion; , at p. 52 Sikri, C.J. speaking per majority of Seven Judges ' Bench held that it must be remembered that the function of the lists is not to confer powers; they merely demarcate the legislative field.
The Constitution Bench followed the ratio in Releigh Investment case, etc.
(emphasis supplied) 16.
Thus I hold that the Parliament and the legislature of a State derive their power to legislate on a subject/subjects in Lists I and List II of Seventh Schedule to the Constitution from article 246(1) and (3) respectively.
Both derive their power from article 246(2) to legislate upon a matter in the Concurrent List III subject to article 254 of the Constitution.
The respective lists merely demarcate the legislative field or legislative heads.
The Parliament and the legislature of a State have concurrent power to legis late upon any subject/subjects in the Concurrent list III of Seventh Schedule to the Constitution.
article 254(1) and provi so to article 254(2) give paramouncy to the law made by the Parliament, whether existing or made afresh or amended, modified, added or repealing the law subsequent in point of time to the state law made under article 254(2).
The exercise of the power by a state legislature to make impugned law under one entry or other in the concurrent list is not decisive.
The concerned entry or entries is not the source of power to make impugned law.
Keeping the principles laid hereinbefore at the back of our mind, let us consider the impugned provision.
Section 14 read with section 20 of the Acquisition Act (21 of 1976) freezed the right of a citizen to apply for an to obtain permit or special permit to run a contract car 683 riage in terms of the permit and monopoly to run a contract carriage was conferred on the S.T.U., Karnataka.
But the Act evinces its intention to liberalise the grant of contract carriage permit by saying in section 80(2) that the Regional Transport Authority "shall not ordinarily refuse to grant the permit.
" It also confers the right on an applicant to apply for and authorises and Regional Transport Authority to grant liberally contract carriage permit except in the area covered by section 80(3) and refusal appears to be an exception, that too, obviously for reasons to be recorded.
It may be rejected if the permit applied for relate to an approved or notified route.
The Act accords the right, while the Acqui sition Act negates and freezes the self same right to obtain a permit and to run a contract carriage and prohibits the authorities to invite or entertain an application and to grant a permit to run contract carriage.
the Act and the relevant rules cover the entire field of making an applica tion in the prescribed manner and directs the Regional Transport Authority to grant permit with condition attached thereto to run contract carriages vide sections 66(1), 73, 74 and 80 of the Act.
Thus, the existence of two sets of provisions in the Act 59 of 1988 and Acquisition Act 21 of 1976 is sufficient to produce conflicting results in their operation in the same occupied field.
The two sets of provisions run on collision course, though an applicant may waive to make an application for a permit.
Thereby, there exists the operational incompatibility and irreconcilability of the two sets of provisions.
Sections 14(1) and 20(3) of the Acquisi tion Act are repugnant and inconsistent of sections 73, 74 and 80 of the Act.
By operation of proviso to article 254(2) of the Constitution, the embargo created by sections 14(1) and 20(3) of the Acquisition Act (21 of 1976) to make or invite an appli cation and injunction issued to Regional Transport Authority prohibiting to grant contract carriage permit to anyone except to S.T.U., Karnataka within the State of Karnataka became void.
For the applicability of the principle that special law prevails over the general law, the special law must be a valid law in operation.
Voidity of law obliterates it from the statute from its very inception.
In view of the finding that sections 14(1) and 20(3) are void the contention that the special law prevails over the general law is without sub stance.
In Justiniano Augusto De Peidada Barreto vs Antonia Vicento De Fonseca & Ors., ; section 5(1) of the declared that all laws in force immediately before December 20, 1961 in Goa, Daman and Diu or in part thereof shall continue to be in force therein until amended or repealed by a competent Legislature or other competent authority.
Pursuant to the powers conferred by article 240 of the Constitution, the Presi dent pro 684 mulgated Goa, Daman and Diu (Laws) Regulations from time to time.
These regulations were extended with specified modifi cation to Goa, Daman and Diu like Civil Procedure Code, 1908 and the , but the Limitation Act, 1908 was not extended by any regulation made by the President.
The Portuguese Civil Code inter alia provides limitation to lay suits which is different from the periods prescribed in .
It was contended that the Portuguese Civil Code is void by operation of article 254 of the Constitu tion.
While considering this question this Court at page 500 has stated thus: "We are not here concerned with the provisions of cl.
For the purpose of the present appeals, we will assume that the Portuguese Civil Code which was continued by Par liament to be in force in Goa, Daman and Diu was a law made by the State, though there may be several objections to so doing .
Without doubt the provisions of the Portuguese Civil Code, unless they are saved by section 29(2) of the Limita tion Act, are repugnant to the provisions of the Portuguese Civil Code are saved by section 29(2) then there can be no ques tion of any repugnancy.
So the question whether the provi sions of Portuguese Civil Code are void on the ground that they are repugnant to the provisions of the depends on the question whether the Portuguese Civil Code is saved by section 29(2) of the ." After exhaustive consideration of that question it was held by Chinnappa Reddy, J. speaking for a bench of two Judges that the provisions of the Portuguese Civil Code deal with the subject of limitation of suits etc. and in force in the Union Territory of Goa, Daman and Diu only is 'local law ' within the meaning of section 29(2) of the and they have to read into the , as if the schedule to the is amended mutatis mutandis Thus, it is clear that the question of repugnancy in cl.
(2)of 'article 245 did not arise in that case.
On the other hand, operation of Portuguese Civil Code was saved by section 29(2) of the as a local law.
The doctrine of predominant purpose of Acquisition Act (21 of 1976) as discussed by my learned brothers is to achieve the objective of preventing the flagrant and blatant misuse or abuse of the contract carriages as stage carriages by eliminating that class of private pliers from all Karna taka roads I am in complete agreement with it.
It is a laudable object to subserve public purpose.
But the opera tion of its incidental or ancillary provisions, i.e. articles 14(1) and 20(3) to the 685 primary or predominant purpose is nailed by the altered/situation, viz., making the law under the Act 59 of 1988.
It is already held that article 254 applies only to repugnancy arising between an existing or subsequent Union law and State law on any one or more subjects in the Concur rent List III of Seventh Schedule to the Constitution.
The inconsistency arising between laws on the other two Lists, i.e. Lists I and II, of Seventh Schedule to the Constitu tion, has been taken care of by the opening non obstenti clause of article 246(1) of the Constitution which gives Su premacy of List I over List II/Laws made by Parliament in its residuary jurisdiction will be governed by the same provision because article 248 is to be read with Entry 97 of List I. Same is the position under article 252 of the Constitu tion.
Once Parliament has made a law under that Article on a matter in State List, the Legislatures of those States on whose resolution the law was passed by Parliament or which subsequently adopt it ceases to have a power to make a law relating to that matter, and, therefore, there is no ques tion of retaining any legislative competence to make law on that matter.
Same should De the position under article 253 of the Constitution.
The position under temporary measures are, therefor dealt with by article 251 that in case of inconsisten cy between the Union and State law, the former shall prevail and the latter will be only 'inoperative ' but not 'null and void '.
Under articles 252 and 253, the loss of legislative power of the States is complete and, thereafter, the States can no longer make any law on a subject on which Parliament has made a law and, therefore, their existing laws and any laws that they may venture to make in future will be null and void and for that matter article 254(1) cannot be invoked.
But that is not the case with matter enumerated in the Concurrent List.
The State Legislature did not surrenderated power or jurisdiction.
The Parliament, with a view to lay down general principles makes law or amends the existing law.
The State Legislature still may feel that its local conditions may demand amendment or modification of the Central law.
Their reserve power is article 254(2).
If the Parliament expressly repeals the repugnant law made under article 254(2) different considerations may arise for which no final pronouncement is needed here.
It is already found that sections 14(1) and 20(3) of the Acquisition Act (21 of 1976) became void.
But after making the Act 59 of 1988, the power of the State Legislature under article 254(2) is not exhausted and is still available to be invoked from time to time Though, there is opposite school of juristic thought, in my considered view the interpretation I have but up will sub serve the animation of the rounding fathers of the Constitu tion; the Constitutional Scheme and purpose envisioned by article 254.
Therefore, after the Act has come into force, the State legislature has its reserve power under article 254(2) 686 to make law.
But unless it again enacts law and reserves it for consideration and obtains the assent of the President afresh, there is no prohibition for the petitioners to make applications for the grant of contract carriage permits under the Act and consideration and grant or refusal thereof according to law by the concerned Regional Transport Author ity.
It is, therefore, made clear that this order does not preclude the Karnataka State Legislature to make afresh the law similar to sections 14(1) and 20(3) of the Acquisition Act with appropriate phraseology and to obtain the assent of the President.
The authorities have misconstrued the effect of the Act.
Accordingly I hold that section 14(1) to the extent of prohibiting to make fresh application for grant of permits to run the contract carriages other than those acquired under Act 21 of 1976 (Acquisition Act) and the embargo and prohibition created under section 20(3) thereof on the respective Regional Transport Authority in the State of Karnataka to invite/receive the application to consider the grant of permits to such contract carriages according to law, are hereby, declared to be void.
The writ petitions are accordingly allowed, but, in the circumstances, without costs.
P.S.S. Petitions dismissed.
| About 250 acres of wooded evergreen land was given to the ancestors of Respondent by grant over a hundred years ago and a patta in respect thereof granting the aforesaid lands was given to them in 1912 and in that patta there was an endorsement reading "redeemed coffee sagawall malai" indicating that the trees on the land had been paid for.
In 1918, it appears that pursuant to an order passed by the Commissioner, the said entry had been altered to "unre deemed" showing that the trees had not been paid for.
The respondent applied for permission of appellant No. 1 to cut and remove some of the trees from the land granted to his ancestors.
The said application was rejected on the ground that the seigniorage payable on the value of the timber standing on the land granted had not been paid and hence, before the trees could be cut and the timber removed, seign iorage in respect of the trees had to be paid.
The respond ent thereupon filed a suit in the Court of Civil Judge, Madakeri for a declaration that the said land granted to him was redeemed in tenure and hence no payment of seigniorage could be demanded from him.
The respondent claimed that the alteration of the relevant entry from 'redeemed ' to 'unre deemed ' in the record of rights pertaining to the lands in question was made under orders of the Commissioner and not of the Chief Commissioner as required under the Regulation and hence the alteration was void having been directed to be made by an unauthorised person.
The trial Court decreed the suit and granted the declaration.
The appellants preferred an appeal against the said decision to the District Court but the appeal failed.
Appellant 's further appeal to the High Court of Karnataka was also dismissed.
Hence this appeal by special leave.
Dismissing the appeal, this Court, HELD: The suit in the instant case were not barred as they did not question the right of the Government to levy seigniorage nor the liabi 728 lity of the plaintiffs to pay but the plea was that seign iorage had already been levied and paid.
[731E] Identical orders changing the word 'redeemed ' to the word 'unredeemed ' in the relevant entries have been unifor mally made in a large number of cases which would suggest that these changes were made pursuant to a special revision of the record of rights in respect of a number of properties and was not an individual change in a particular entry in the record of rights of a particular plot of land.
[731G H] Under regulation 29 of the Coorg Regulation, this could have been done only pursuant to a direction or order of the Chief Commissioner.
but no such order or direction of a notification to that effect appears to be on the record.
The result is that the said change must be held to be unautho rised in law, void and of no legal effect.
[732A B] State of Mysore vs Kainthaje Thimmanna Enat and Ors., to.
|
Civil Appeal No. 21 38 Of 1980 From the Judgment and Order dated the 16th November, 1979 of Madras High Court in Civil Revision Petition No. 544 of 1978.
A.T.M. Sampath for the Appellant.
A.S. Nambiar for the Respondent.
The Judgment of the Court was delivered by BALKRISHNA ERADI, J.
With the obvious intent of falling in line with the rest of the country in the matter of achieving the social goal of equitable distribution of cultivable lands by the imposition of ceiling on agricultural land holdings and distribution of surplus lands among landless persons, the Legislature of the Union Territory of Pondicherry enacted 'The Pondicherry Land Reforms (Fixation of Ceiling on Land) Act, 1973 ' (hereinafter called 'the Act '), The questions arising for determination of some of the provisions of the 1) Act Before we proceed to refer to the relevant sections of the Act, we shall set out in brief the material facts, which have given rise to the controversy before us.
The appellant Vengdasalam Pillai is married to Smt.
Senbagevalli Ammal.
Five children three daughters and two sons were born to this couple.
On March 17, 1970, the appellant effected a partition of all his properties as between himself and his two sons both of whom were minors at that time.
This partition was evidenced by a registered document.
Under that document the appellant retained in his name an extent of 1.85.63.
hectares of land.
The first son, Shanmugasundaram (minor) was allotted 7.10.24.
hectares and the younger son Trinivasan was allotted an extent of 3.54.82.
hectares of land.
An area of 5.74.87 hectares stood registered in the name of the appellant 's wife Senbagevalli, the said land having been purchased by her in 1958 by utilising her Sridhanam money.
The Act was passed by the legislative assembly on October 5, 1974 and after it received the assent of the President on September 22, 1974, it was published in the Gazette of Pondicherry on October 14, 1974.
929 Since the appellant did not voluntarily file a return under A section 7(1) of the Act, a notice in Form 4 was issued to him by the Authorised Officer (Land Reforms), Karaikal under section 8(1) of the Act.
In compliance therewith the appellant filed a return on December 12,1975 stating that he and his wife were holding only 7,67.91 hectares of land.
Thereafter separate notices were issued by the Authorised Officer to the appellant and his wife to file further representations, if any, and to appear before him for enquiry on the dates specified therein.
In response to these notices, the appellant and his wife filed separate representations reiterating their original stand that the lands allotted to the minor sons under the partition as also the lands acquired by the appellant 's wife with the Sridhanam amounts could not be taken into account while computing the extent of the appellant 's holding.
The Authorised Officer rejected these contentions and held that the appellant was holding an extent of 18.26.28 ordinary hectares equivalent to 11.48.55 standard hectares of land and since the appellant 's family consisted of himself, his wife two minor sons and three unmarried daughters, he was eligible to retain only 8.40.00 standard hectares D Aggrieved by the aforesaid order passed by the Authorised Officer, the appellant preferred an appeal in the Court of the Land Tribunal, Karaikal.
That appeal was allowed by the Land Tribunal which took the view that since the sons of the appellant had become divided from him by THE deed of partition executed in 1970, long prior to the appointed day specified in the Act, and since the Lands standing in the name of the appellant 's wife belonged to her independently in her own separate right, there was no justification for clubbing together the lands of the appellant and those belonging to his wife and the two minor sons.
The Land Tribunal held that since the two minor sons of the appellant and the wife of the appellant were holding their lands as independent owners, the definition of "family" under section 2(1()) of the Act was not attracted in this case and that the Authorised Officer ought to have excluded the lands belonging to the sons and the wife of the appellant while computing the extent of the holding of the appellant and fixed his ceiling on the said basis.
It was further held that on such computation the total area of land held by the appellant was well within the ceiling limit and hence there was no liability on his part to surrender any surplus land.
The correctness of the said decision of the Land Tribunal was called in question before the High Court of Madras by the Govern 930 ment of the Union Territory of Pondicherry by filing a Civil Revision Petition under section 50 of the Act.
By the judgment now impugned before us, the High Court allowed that revision petition, set aside the decision of the Land Tribunal and restored the Order passed by the Authorised Officer.
The High Court held that on a combined reading of the definition of "family" contained in section 2(10) of the Act with the further provision contained in section 4(2), it was clear that notwithstanding any transaction of partition entered into prior to the appointed day, the minor sons of a person will, for the purposes of the Act, be treated as members of the family of such person together with his wife and unmarried daughters.
It was further held that in computing the extent of the holding of the "family" as defined in the Act, the separate properties of the minor sons as well as the separate property of the wife had all to be included by reason of the express provision contained in section 4(2) of the Act.
In this view, the High Court held that the Authorised Officer had acted fully in accordance with law in clubbing together the properties of the appellant, his wife and the two sons, who were minors on the appointed day.
Aggrieved by the said decision of the High Court, the appellant has filed this appeal in this Court by Special leave.
We may now proceed to examine the relevant provisions of the Act.
Section 2 is the definition section.
Clause (4) thereof states that the expression "appointed day ' means the 24th day of January, 1971.
The definition of ' 'family ' ' which is very important for the purposes of this case is contained in clause (10) and it is in the following terms: (10) "family", in relation to a person, means the person, the wife or husband, as the case may be, of such person and his or her minor sons and unmarried daughters. 'The only other definition to which we need refer is that contained in clause (24), which states that " 'notified date ' means the date specified in the notification issued by the Government under sub section (1) of section 7.
" It is common ground before us that the date so specified under section 7(1) is 3.1.1974.
It is under section 4 that the ceiling limits of land holdings have been specified and it is necessary to reproduce the section in it full.
It reads; 931 "4(1)(a) Subjects to the provisions of Chapter VI, the A ceiling area in the case of every person and in the case of every family consisting of not more than five members, shall be 6 standard hectares.
(b) The ceiling area in the case of every family consisting of more than five members shall, subject to the pro vision of Chapter VI, be 6 standard hectares together with an additional 1.2 standard hectares for every member of the family in excess of five: Provided that the total extent of land held by any family shall in no case exceed twice the ceiling area referred to in clause (a) (2) For the purpose of this section, all the lands held Individually by the members of a family or jointly by some or all of the members of such family shall be deemed to be held by the family.
(3)(a) In calculating the extent of land held by a member of a family or by an individual person, the share of the member of the family or of the individual person in the land held by an undivided Hindu family shall be taken into account.
(b) In calculating the extent of land held by a family or by an individual person, the share of the family or of the individual person in the land held by a firm, society or association of individuals of individuals (whether incorporated or not) or by a company (other than a non agricultural company) shall be taken into account.
Explanation For the purposes of this section (a) the share of a member of a family or of an individual person in the land held by an undivided Hindu family, and (b) the share of a family or of an individual person the land held by a firm, society or association of individuals (whether incorporated or not), or by a company (other than a non agricultural Company, shall be deemed to be the extent of land 932 (i) which, in case such share is held on the appointed day would have been allotted to such member, person or family had such land been partitioned, or divided in proportion to the share held by such member, person or family, as the case may be, no such day; or (ii) which, in case such share is acquired in any manner whatsoever after the appointed day would be allotted to such member, person or family if a partition, or division, in proportion to the share held by such member, person or family, were to take place on the date of the preparation of the draft statement under sub section (1) of section 9.
(4) In calculating the extent of land held by any person, any land which was transferred by sale, gift or other wise or partitioned by that person after the appointed day but before the commencement of this Act, shall be taken into account as if such land had not been transferred or Partitioned as the case may be.
(5)(a) The land held by the public trust referred to in the proviso to clause (30) of section 2 shall be deemed to be held by the founder of the trust or his heirs or the family of the founder of his heirs.
(b) In calculating the extent of land held by such founder or his heirs of such family, the extent of the land held by the public trust shall be taken into account.
(6) In calculating the extent of land held by any person, the extent of land which may revert to such person immediately after the death of any limited owner shall, during the lifetime of limited owner, be excluded.
" Section 6 lays down that on from the appointed day, no person shall.
except as otherwise provided in this Act, but subject to the provisions of Chapter VI, be entitled to hold land in excess of the exiling area.
The proviso to the said section is not material for the purposes of this case, 933 Sub section (1) of Section 7 requires every person, who, on the A appointed day, held land in excess of the ceiling area to furnish to the Authorised Officer within whose jurisdiction the holding of such person or the major part thereof is situated, a return containing the particulars specified in clauses (i) to (viii) thereof within thirty days from such date as may be specified in the Notification issued by the Government in that behalf.
Clause (ii) reads: "(ii) particulars of the members of the family and of the land held by each member of the family." (underlining ours) Explanation IV to sub section (1) of section 7 is in the following terms: "Where in a family both husband and wife hold land separately and the aggregate of such land exceeds the ceiling area.
the extent of land to be declared surplus by each of them shall bear the same proportion to the extent of land held by them.
(2) The notification referred to in sub section (1) shall contain such particulars and shall be published in such manner as may be prescribed.
" These are the only provisions of the Act which have a direct relevance for deciding the questions raised in this case.
However, since the Counsel appearing on behalf of the appellant sought to derive some assistance from the provisions contained in section 22(1) of the Act, we may extract the said Sub section also: Section 22(1): "Except where a person is permitted, in writing, by the authorised officer, a person, holding land in excess of the ceiling area applicable to him under section 4, shall not, after the commencement of this Act, transfer by sale, gift or otherwise or make any partition of any land held by him or any part thereof until the excess land, which is to be acquired by the Govt.
under section 17, has been determined and taken possession of by or on behalf of the Government.
" The main argument advanced before us on behalf of the appellant was that since the two minor sons of the appellant had become divided from their father as a result of the partition effected under the document of March 17, 1970, they could not be regarded as member 934 of the family of the appellant as on the 'appointed day ' namely, January 24, 1971.
On this basis it WAS urged that the lands, the ownership in respect of which had become vested individually in the two minor sons by virtue of the allotments in their favour at the partition could not legally be included in the holding of the appellant for the purpose of fixation of his ceiling under the Act.
Relying on the provisions contained in sub section (4) of section 4 Counsel for the appellant contended that the framers of the Act did .
not intend to nullify transactions by way of partition entered into before the 'appointed day ' and it is only post appointed day partitions and transfers that are to be ignored under that sub section.
Support was also sought to be derived from the provisions contained in subsection (1) of section 22, which prohibits partition and transfers by sale, gift etc.
Of any land held by a person having land in excess of ceiling area prescribed under section 4 until the excess land to be acquired by the Govt.
under section 17 of the Act has been determined and taken possession of by or on behalf of the Government.
Another point pressed on behalf of the appellant was that the properties separately owned by his wife in her own right by virtue of purchase effected by her by utilising her Sridhanam amounts ought not have been clubbed along with the lands belonging to the appellant in computing the appellant 's holding.
We see no force in any of the contentions aforementioned.
The fallacy underlying the arguments advanced on behalf of the appellant is that they proceed on the erroneous assumption that the "family" referred to in the Act must conform to the concept of the joint family as known to Hindu Law.
The provisions of the Act are applicable to all holders of land in the Union Territory of Pondicherry irrespective of religion, community etc.
The lands may be held by Hindus, Christians, Muslims or by persons belonging to other religious faiths.
All of them are equally governed by the provisions of the Act.
The concept of a joint family is totally foreign to the personal laws of some of these communities.
It is, therefore, manifestly wrong to approach the interpretation of the sections of the Act with the preconceived notion that in using the expression "family", the legislature had intended to connote an undivided family as known to the Hindu Law and that after a partition had taken place in a Hindu joint family there cannot be a 'family ' consisting of the father and his divided minor sons for the purpose of fixation of ceiling under the Act.
The fact that the definition of ' family" contained in section 2(10) does not treat the 935 major sons of a person as members of his family is a clearly pointer A that an undivided Hindu family was not in the contemplation of the Legislature when it enacted that said definition section.
Similarly, the provision contained i n sub section (3)(a) of section 4 that in calculating the extent of land held by a member of a family or by an individual person, the share of the member of the family or of the individual person in the land held by an undivided Hindu family shall be taken into account furnishes a conclusive indication that the "family" mentioned in the Act is wholly distinct and different from an 'undivided Hindu family. ' The circumstance that a partition had taken place disrupting the joint family consisting of the appellant and his minor sons is, therefore, of no relevance in determining the total extent of the holding of the appellant in accordance with the provisions of Election 2(10) read with section 4 of the Act.
That is because, the Act has created a special statutory unit consisting of the persons satisfying the description contained in clause (10) of section 2 as constituting a "family" for the purpose of fixation of ceiling.
The stress is only on the existence of the relationship mentioned in the section and unity of title or jointness of holding in relation to property are not essential elements for attracting the applicability of the definition.
Under the definition contained in section 2(10), a person, the wife or husband of such person and his or her minor sons and unmarried daughters together constitute a "family".
Section 4(2) expressly provides that for the purpose of fixation of ceiling on the lands held individually by the members of a family or jointly by some or all of the members of such family shall be deemed to be held by the "family".
The result is that the separate properties of the members constituting the statutory family are all to be treated as forming part of the holding of the 'family ' for the purpose of determination of the ceiling area.
Such being the position emerging from the provisions of section 2(10) and section 4(1)(2), the properties held by the minor sons of the appellant individually as well as the lands separately owned by Smt.
Senbagevalli, wife of the the appellant by virtue of the purchase effected by her with her Sridhanam amounts were all liable to be taken into account while computing the total extent of holding of the family of the appellant.
Counsel for the appellant sought to rely on the provision contained in Explanation IV to section 7 for contending that there was no justification for including the separate properties of Smt.
Senbagevalli in the holding of the appellant 's 'family '.
We see nothing in 936 the said provision which lends support to the contention of the appellant. 'The Explanation itself clearly proceeds on the footing that for purposes of computing the ceiling and determining the area of surplus land to be surrendered, the lands held separately by the husband and wife are to be pooled together.
All that the Explanation lays down is that when the aggregate of such lands exceeds the ceiling area, the extent of the land to be declared surplus by each of the spouses shall be fixed in proportion to the respective areas of land separately held by each of them.
In other words, the liability to surrender excess land is to be fixed in proportion to the extent of land held separately by the two spouses.
Counsel for the appellant also relied on the provision contained in sub section (4) of section 4 of the Act as furnishing an indication that transactions of partition that have taken place before the 'appointed day ' are not to be ignored and that only post appointed day partitions are to be treated as ineffective.
We find no force in this argument.
The purpose of section 4(4) is to peg down the process of determination of ceiling area to the state of things that obtained on the 'appointed day ' and it is in that context and for the said purpose that the sub section provides that in calculating the extent of land held by any person, any land which was transferred, by sale, gift or otherwise or partitioned by that person after the appointed day but before the commencement pf the Act, shall be taken into account, as if such land had not been transferred or partitioned.
The conclusion that emerges from the foregoing discussion is that the High Court was perfectly right in holding that the lands standing in the names of the wife and the two minor sons of the appellant as their separate properties were also liable to be included in the holding of the appellant for the purpose of fixation of ceiling under Section 4 of the Act.
The appeal accordingly fails and is dismissed but in the circumstances without costs.
A.P.J. Appeal dismissed.
| An order granting two stage carriage permits by the Regional Transport Authority was set aside in appeal on the ground that the RTA had not been properly constituted.
Thereafter, the Regional Transport Authority, on its proper constitution, did not issue a fresh Notification section 57 (2) of the inviting fresh applications but granted a stage carriage permit to the appellant on the basis of applications received in pursuance of the earlier Notification.
On appeal by the aggrieved applicants the Appellate Authority set aside the said order and instead granted the permit to respondent No. 4.
The appellant 's revision application before the State Government having been failed, he filed a writ petition in the High Court against the order of the State Government on the grounds, (i) that at the time when the earlier Notification was issued section 57(2), the delegation of power by the invalidly constituted Authority to its Secretary to issue such Notification would be invalid and therefore the further proceedings adopted for consideration of such applications and grant of permits pursuant to such consideration was invalid; and (ii) that on merits the Appellate Authority ought not to have interfered with the five marks that had been granted to the appellant by the Regional Transport Authority and reduced the same to three and further that the Appellate Authority ought not to have relied upon the only solitary adverse entry in the appellant 's record to reject his application while preferring that of respondent No. 4.
The High Court also dismissed the writ petition.
The appellant advanced the same contentions before the Supreme Court, Dismissing the appeal, ^ HELD: (1) The first contention is liable to be rejected on three grounds, namely, (i) It was not disputed that applications under section 57 (2) of the Act for the grant of stage carriage permits could be filed voluntarily and without any Notification being issued in that behalf.
If that be so, the question whether a fresh Notification inviting fresh applications by the properly constituted Regional 805 Transport Authority ought to have bean issued or not or whether the properly A constituted Regional 'transport Authority could proceed to act on the earlier Notification issued by the Secretary would be immaterial and of no consequence and the ultimate decision not to grant stage carriage permit to the appellant cannot be disturbed on this ground; (ii) The non issuance of a fresh Notification by the properly constituted Regional Transport Authority could, if at all, be made a ground of attack by those persons who were unable to make applications because of such non issuance and not by the appellant who had made an application in that behalf and who took his chance to obtain the permit on the basis of his application which was in fact considered by the Regional Transport Authority and thereafter by the Appellate Authority; and (iii) The initial order granting the permit to the appellant was passed by a properly constituted Regional Transport Authority and the appellate order was also passed by State Transport Appellate Tribunal which was the properly constituted Appellate Authority and both these authorities had passed their orders on a consideration of the entire material placed before each of them and after giving a full hearing to the appellant and as such no failure of justice had occassioned.
[807C F; H; 8U8A] (2) This Court will not be justified in interfering in the matter on merits, since the High Court has rightly taken the view, (i) that the second contention really pertained to the merits of the claim of the appellant to the stage carriage permit and it could not interfere with the finding of fact recorded against the appellant in that behalf in exercise of its extra ordinary jurisdiction under article 226 of the Constitution; and (ii) that the grounds on which the marks of the appellant were reduced and the reasons for ultimate rejection of the appellant 's application were justified.
[808C D]
|
Civil Appeal No. 2152 of 1969.
Appeal by Special Leave from the Judgment and Order dated 1 8 1967 of the Assam and Nagaland High Court in Civil Rule No. 256 of 1966.
Naunit Lal for the Appellant.
section K. Dutta, section K. Nandy and A. Sen for the Respondent.
J. Respondent J. Ahmed joined service in Assam State in 1945 and some time in 1959 came to be promoted to the Indian Administrative Service Cadre.
In that very year he was posted as Deputy Commissioner and District Magistrate, Nowgong District.
While he was holding the aforementioned post, some time in the beginning of June 1960 there were large scale disturbances in Nowgong city and District area described in official parlance as 'language disturbances '.
There was considerable damage to property.
One Shri A. N. Kidwai, the then Additional Chief Secretary to the Government of Assam, undertook an inquiry into the causes of disturbances at Nowgong with a view to ascertaining the responsibility of District officials.
After Shri Kidwai submitted his Report, the Government took the first step of suspending the respondent from service by an order dated 14th September 1960.
The Chief Secretary to the Government of Assam by his communication dated 13th September 1960 conveyed to the respondent various charges framed against him and called upon him to submit his explanation.
A statement of allegations was annexed to the communication.
Respondent submitted his explanation and thereafter the Government appointed respondent 507 No. 4, K. Balachandran as the Enquiry Officer.
After the inquiry was concluded, the Enquiry Officer submitted his report.
It may be noticed that respondent was born on 1st February 1907 and according to Rule 16 of the All India Services (Death cum Retirement Benefits) Rules, 1958 ( 'Retirement Rules ' for short), then in force, the age of retirement being 55 years, the respondent would have retired from service on 1st February 1962.
First, the Governor of Assam by his order dated 31st January 1962 purporting to exercise power under Rule 16(1) of the Retirement Rules, directed that the respondent then under suspension be retained in service for a period of three months beyond the date of his retirement which fell on Ist February 1962 or till the termination of departmental proceedings drawn up against him whichever is earlier.
By subsequent orders dated 21st June 1962, Ist September 1962, 23rd February 1963 and 28th August 1963 respondent was retained in service, till the inquiry pending against him concluded and final orders were passed in the proceedings.
It may be mentioned that the order dated 28th August 1963 was made by the Governor in exercise of the powers conferred by subrule (2) of rule 16 of the Retirement Rules.
The Enquiry Officer submitted his report holding charges 1, 2, 3, 5 and 6 proved and in respect of charge No. 4 the finding recorded was that though the charge was proved, the Enquiry Officer took note of certain extenuating circumstances mentioned in the report.
A Memorandum dated 22nd February 1963 was served by the Government of India on the respondent forwarding the report of the Enquiry Officer and the respondent was called upon to show cause why the provisional penalty determined by the Government of removal from service be not imposed upon him.
Ultimately, by order dated 11th October 1963 the President, after consultation with the Union Public Service Commission, imposed the penalty of removal from service on the respondent.
A memorial submitted by the respondent to the President under Rule 20 of the All India Services (Discipline & Appeal) Rules, 1955, ( 'Discipline and Appeal Rules ' for short), against the imposition of the penalty was rejected.
The respondent filed a petition under Article 226 of the Constitution in the High Court of Assam and Nagaland.
Two contentions were raised before the High Court: (1) Whether rule 16(2) of the Retirement Rules is attracted so as to retain the respondent in service beyond the period of his normal retirement for the purpose of completing disciplinary proceedings against the respondent; and (2) if rule 16(2) was not attracted, whether the retention of respondent beyond the normal period of his retirement was valid and if it was not valid, whether he 508 could be removed from service after he had actually and effectively retired from service ? While examining these two contentions, the High Court was of the opinion that disciplinary proceedings can be held and punishment can be imposed for misconduct and the charges held did not disclose any misconduct because negligence in performance of duty or inefficiency in discharge of duty would not constitute misconduct.
On the second point it was held that if the Enquiry was not for any misconduct, sub rule (2) of rule 16 would not be attracted and the Government had no power to retain the respondent in service for the purpose of holding or completing disciplinary proceeding which can only be for misconduct, and as there was no inquiry into what can be styled as misconduct, the retention in service of the respondent beyond the period of retirement was not legal and valid, and, therefore, the respondent could not bemoved from service from which he had retired.
In accordance with these findings, the writ petition filed by the respondent was allowed declaring that the respondent was deemed to have retired from service from Ist February 1962 and that the punitive or disciplinary action taken against him after that date is completely without jurisdiction and wholly unjustified, and the same was quashed.
The Union of India and the State of Assam have preferred this appeal by special leave.
Rule 3 of the Discipline and Appeal Rules provides that the penalties therein set out may, for good and sufficient reasons, be imposed on a member of service.
One such penalty prescribed therein is 'removal from service which shall not disqualify for future employment '.
Rule 4 prescribes the authority competent to institute disciplinary proceedings.
Where a member of a service has committed any act or omission which renders him liable to any penalty specified in rule 3, an inquiry shall be held according to procedure prescribed in rule 5.
Therefore penalty prescribed in rule 3 can be imposed upon a member of the service for any act or omission committed by him which, according to rule 3, must provide good and sufficient reason to impose one or the other of the penalties mentioned therein.
Rule 7 of the Discipline and Appeal Rules enables the Government to put under suspension a member of the Service during disciplinary proceeding if having regard to the nature of charges and circumstances the Government thinks it proper to do so.
Sub rule (2) of Rule 16 of the Retirement Rules as it stood at the relevant time reads as under: "16(2).
A member of the service under suspension on a charge of misconduct shall not be required or permitted to retire from the service but shall be retained in service until the 509 inquiry into the charges against him is concluded and a final order is passed".
A survey of these rules would show that disciplinary proceedings can be held against a member of the service for any act or omission which renders him liable to a penalty and such penalty can be imposed for good and sufficient reasons.
All India Services (Conduct) Rules, 1954, prescribe a code of conduct for members of service.
Discipline and Appeal Rules provide for disciplinary action and imposition of penalties.
Sub rule (2) of rule 16 of the Retirement Rules contemplates a situation where a member of service against whom disciplinary proceeding is pending is likely to retire and the proceedings may be thwarted and provides for his retention in service beyond the date of his retirement till the completion of the inquiry, provided the delinquent officer is under suspension on a charge of misconduct.
The respondent contended and the contention has found favour with the High Court that the charges framed against the respondent, even if they are held proved, would not constitute misconduct, and, therefore, it could not be said that he was under suspension on a charge of misconduct and accordingly sub rule (2) of rule 16 would not be attracted and he could not be retained in service beyond the date of his retirement.
It was said that retention in service being invalid, imposition of penalty after his retirement is illegal.
Therefore, what constitutes misconduct for a member of a service liable to be removed from service on proof of such misconduct in a disciplinary proceeding, looms large in this case.
To appreciate the contention it is better to have a look at the charges framed against the respondent.
They are as under: "(i) Completely failed to take any effective preventive measures against widespread disturbances breaking out in Nowgong District in spite of adequate warning being conveyed.
(ii) Showed complete lack of leadership when the disturbances actually did break out and failed to give proper direction to your subordinate Magistrates and co ordinate co operations with the police to restore Law and Order; (iii) Did not personally visit the scenes of disturbances within the town or in the Rural areas, in time to take personal control of the situation and to exercise necessary supervision; 510 (iv) Did not keep Government informed of the actual picture and extent of the disturbances; (v) Showed complete inaptitude, lack of foresight, lack of firmness and capacity to take quick and firm decision and were, thus largely responsible for complete break down of Law and Order in Nowgong town as well as the rural areas of Nowgong District.
Thus you proved yourself completely unfit to hold any responsible position".
The Inquiry Officer has treated the statement in the letter conveying the charges that the respondent proved himself completely unfit to hold a responsible position as a separate and independent charge which on the face of it is merely a surmise or a conclusion drawn from the five charges set out above.
This surmise or conclusion has to be ignored and cannot be treated as a specific charge.
The five charges listed above at a glance would convey the impression that the respondent was not a very efficient officer.
Some negligence is being attributed to him and some lack of qualities expected of an officer of the rank of Deputy Commissioner are listed as charges.
to wit, charge No. 2 refers to the quality of lack of leadership and charge No. 5 enumerates inaptitude, lack of foresight, lack of firmness and indecisiveness.
These are qualities undoubtedly expected of a superior officer and they may be very relevant while considering whether a person should be promoted to the higher post or not or having been promoted, whether he should be retained in the higher post or not or they may be relevant for deciding the competence of the person to hold the post, but they cannot be elevated to the level of acts of omission or commission as contemplated by Rule 4 of the Discipline and Appeal Rules so as to incur penalty under rule 3.
Competence for the post, capability to hold the same, efficiency requisite for a post, ability to discharge function attached to the post, are things different from some act or omission of the holder of the post which may be styled as misconduct so as to incur the penalty under the rules.
The words 'acts and omission ' contemplated by rule 4 of the Discipline and Appeal Rules have to be understood in the context of the All India Services (Conduct) Rules, 1954 ( 'Conduct Rules ' for short).
The Government has prescribed by Conduct Rules a code of conduct for the members of All India Services.
Rule 3 is of a general nature which provides that every member of the service shall at all times maintain absolute integrity and devotion to duty.
Lack of integrity, if proved, would undoubtedly en 511 tail penalty.
Failure to come up to the highest expectations of an officer holding a responsible post or lack of aptitude or qualities of leadership would not constitute failure to maintain devotion to duty.
The expression 'devotion to duty ' appears to have been used as something opposed to indifference to duty or easy going or light hearted approach to duty.
If rule 3 were the only rule in the Conduct Rules it would have been rather difficult to ascertain what constitutes misconduct in a given situation.
But rules 4 to 18 of the Conduct Rules prescribe code of conduct for members of service and it can safely stated that an act or omission contrary to or in breach of prescribed rules of conduct would constitute misconduct for disciplinary proceedings.
This code of conduct being not exhaustive it would not be prudent to say that only that act or omission would constitute misconduct for the purpose of Discipline and Appeal Rules which is contrary to the various provisions in the Conduct Rules.
The inhibitions in the Conduct Rules clearly provide that an act or omission contrary thereto as to run counter to the expected code of conduct would certainly constitute misconduct.
Some other act or ommission may as well constitute misconduct.
Allegations in the various charges do not specify any act or omission in derogation of or contrary to Conduct Rules save the general rule 3 prescribing devotion to duty.
It is, however, difficult to believe that lack of efficiency, failure to attain the highest standard of administrative ability while holding a high post would themselves constitute misconduct.
If it is so, every officer rated average would be guilty of misconduct.
Charges in this case as stated earlier clearly indicate lack of efficiency, lack of foresight and indecisiveness as serious lapses on the part of the respondent.
These deficiencies in personal character of personal ability would not constitute misconduct for the purpose of disciplinary proceedings.
It would be appropriate at this stage to ascertain what generally constitutes misconduct, especially in the context of disciplinary proceedings entailing penalty.
Code of conduct as set out in the Conduct Rules clearly indicates the conduct expected of a member of the service.
It would follow that that conduct which is blameworthy for the Government servant in the context of Conduct Rules would be misconduct.
If a servant conducts himself in a way inconsistent with due and faithful discharge of his duty in service, it is misconduct [see Pierce vs Foster(1)].
A disregard of an essential condition of the contract of service may constitute misconduct [see Laws vs London Chronicle .(Indicator Newspapers) (2)].
This 512 view was adopted in Shardaprasad Onkarprasad Tiwari vs Divisional Superintendent, Central Railway, Nagpur Division, Nagpur(1), and Satubha K. Vaghela vs Moosa Raza(2).
The High Court has noted the definition of misconduct in Stroud 's Judicial Dictionary which runs as under: "Misconduct means, misconduct arising from ill motive; acts of negligence, errors of judgment, or innocent mistake, do not constitute such misconduct".
In industrial jurisprudence amongst others, habitual or gross negligence constitute misconduct but in Management, Utkal Machinery Ltd. vs Workmen, Miss Shanti Patnaik(3), in the absence of standing orders governing the employee 's undertaking, unsatisfactory work was treated as misconduct in the context of discharge being assailed as punitive.
In section Govinda Menon vs Unio nof India(4), the mamnner in which a member of the service discharged his quasi judicial function disclosing abuse of power was treated as constituting misconduct for initiating disciplinary proceedings.
A single act of omission or error of judgment would ordinarily not constitute misconduct though if such error or omission results in serious or atrocious consequences the same may amount to misconduct as was held by this Court in P. H. Kalyani vs Air France, Calcutta(5), wherein it was found that the two mistakes committed by the employee while checking the load sheets and balance charts would involve possible accident to the aircraft and possible loss of human life and, therefore, the negligence in work in the context of serious consequences was treated as misconduct.
It is, however, difficult to believe that lack of efficiency or attainment of highest standards in discharge of duty attached to public office would ipso facto constitute misconduct.
There may be negligence in performance of duty and a lapse in performance of duty or error of judgment in evaluating the developing situation may be negligence in discharge of duty but would not constitute misconduct unless the consequences directly attributable to negligence would be such as to be irreparable or the resultant damage would be so heavy that the degree of culpability would be very high.
An error can be indicative of negligence and the degree of culpability may indicate the grossness of the negligence.
Carelessness can often be productive of more harm than deliberate wickedness or malevolence.
Leaving aside the classic example of the sentry who sleeps at his post 513 and allows the enemy to slip through, there are other more familiar instances of which a railway cabinman signals in a train on the same track where there is a stationary train causing headlong collision; a nurse giving intravenous injection which ought to be given intramuscular causing instantaneous death; a pilot overlooking an instrument showing snag in engine and the aircraft crashes causing heavy loss of life.
Misplaced sympathy can be a great evil [see Navinchandra Shakerchand shah vs Manager, Ahmedabad Co op.
Department Stores Ltd.(1)].
But in any case, failure to attain the highest standard of efficiency in performance of duty permitting an inference of negligence would not constitute misconduct nor for the purpose of Rule 3 of the Conduct Rules as would indicate lack of devotion to duty.
The High Court was of the opinion that misconduct in the context of disciplinary proceeding means misbehaviour involving some form of guilty mind or mens rea.
We find it difficult to subscribe to this view because gross or habitual negligence in performance of duty may no involve mens rea but may still constitute misconduct for disciplinary proceedings.
Having cleared the ground of what would constitute misconduct for the purpose of disciplinary proceeding, a look at the charges framed against the respondent would affirmatively show that the charge inter alia alleged failure to take any effective preventive measures meaning thereby error in judgment in evaluating developing situation.
Similarly, failure to visit the scenes of disturbance is another failure to perform the duty in a certain manner.
Charges Nos. 2 and 5 clearly indicate the shortcomings in the personal capacity or degree of efficiency of the respondent.
It is alleged that respondent showed complete lack of leadership when disturbances broke out and he disclosed complete inaptitude, lack of foresight, lack of firmness and capacity to take firm decision.
These are personal qualities which a man holding a post of Deputy Commissioner would be expected to possess.
They may be relevant considerations on the question of retaining him in the post or for promotion, but such lack of personal quality cannot constitute misconduct for the purpose of disciplinary proceedings.
In fact, charges 2, 5 and 6 are clear surmises on account of the failure of the respondent to take effective preventive measures to arrest or to nip in the bud the ensuing disturbances.
We do not take any notice of charge No. 4 because even the Enquiry officer has noted that there are number of extenuating circumstances which may exonerate the respondent in respect of that charge.
What was styled as charge No. 6 is the conclu 514 sion, viz., because of what transpired in the inquiry, the Enquiry Officer was of the view that the respondent was unfit to hold any responsible position.
Somehow or other, the Enquiry Officer completely failed to take note of what was alleged in charges 2, 5 and 6 which was neither misconduct nor even negligence but conclusions about the absence or lack of personal qualities in the respondent.
It would thus transpire that the allegations made against the respondent may indicate that he is not fit to hold the post of Deputy Commissioner and that if it was possible he may be reverted or he may be compulsorily retired, not by way of punishment.
But when the respondent is sought to be removed as a disciplinary measure and by way of penalty, there should have been clear case of misconduct, viz., such acts and omissions which would render him liable for any of the punishments set out in rule 3 of the Discipline & Appeal Rules, 1955.
No such case has been made out.
Mr. Naunit Lal for the appellant contended that the word 'misconduct ' is nowhere used either in the Conduct Rules or in the Discipline and Appeal Rules and the Court should not import any concept of misconduct in this inquiry.
The word 'misconduct ' has relevance here because the respondent in due course would have retired from service on 1st February 1962 on attaining the age of 55 years.
The inquiry could not be completed before the relevant date and it became necessary for the Government to retain the respondent in service beyond the normal period of retirement on superannuation for continuing the inquiry.
Rule 16(1) of the Retirement Rules 1955 as it stood at the relevant time provided for retirement on superannuation on attaining the age of 55 years.
There is a proviso to rule 16(1) which enables the State Government to postpone the period of retirement and retain the Government servant in service for an aggregate period not exceeding six months and if the retention in service beyond that period is required, the same will have to be with the sanction of the Central Government.
Respondent would have retired from service on attaining the age of 55 years on 1st February 1962.
He was served with a charge sheet dated 13th September 1960.
The inquiry could not be completed before the date of retirement of the respondent.
The Government of Assam by order dated 31st January 1962 retained the respondent in service for a period of three months beyond the date of his retirement which fell on 1st February 1962 or till the termination of the departmental proceedings drawn up against him whichever is earlier.
In view of the language of rule 16(1), the Assam Government had no power to extend the period of service of a member of the service beyond a period of six months in the aggregate.
Therefore, retention for a period of three months would be legal and valid with the result that the 515 date of retirement of the respondent would be postponed to 1st May 1962.
Admittedly no order was made by the Assam Government before 1st May 1962.
The order postponing the date of retirement and retention of the respondent in service beyond 1st May 1962 was made on 21st June 1962.
No order was made by the Assam Government for postponing the period of retirement of the respondent and his retention in service before 1st May 1962.
The State Government had power under rule 16(1) (a) of the Retirement Rules to retain the respondent in service for a period of six months in aggregate and therefore, even though specific period was mentioned in the order, simultaneously providing for retention in service till the date of termination of the proceedings, the extension would be valid for a period of six months in the aggregate if the inquiry was continuing till the expiration of six months but not exceeding six months.
In that event the respondent would retire from service by 1st August 1962.
Putting the construction on rule 16 (1) (a) and the order of extension, most favourable to the State Government, it may be stated at once that retention in service upto 1st August 1962 would be valid but unfortunately the inquiry was not over by 1st August 1962.
No order was made before 1st August 1962 for retention of the respondent in service beyond 1st August 1962.
The order next in succession in of 1st September 1962.
This order is again made by the State of Assam.
The State Government had no power to retain a member of the service for a period exceeding six months in the aggregate after the date of his normal retirement.
The maximum period for which retention could be ordered by the State Government being thus six months, the respondent would have retired from service on 1st August 1962.
Even if an order had been made by the State Government to retain the respondent in service it would be without jurisdiction and the order in fact was made on 1st September 1962.
Now, undoubtedly under rule 16(1) (b) the Central Government has power to retain a member of the service in service after the date of retirement for any period beyond six months.
But in this connection it may be pointed out that no such order appears to have been made by the Central Government.
All the subsequent orders were made by the Government of Assam.
Such orders made by the Government of Assam would not have the effect of retaining the respondent in service beyond a period of six months from the date of his normal retirement.
That being the maximum period, the State Government had no power to retain the respondent in service.
If the State Government could not retain him in service beyond 1st August, 1962, it could not continue the inquiry thereafter.
This position seems to be clearly established by the decision of this Court in State of Assam 516 vs Padma Ram Borah(1).
In that case the State Government had made an order to retain the Government servant in service up to the end of March 31, 1961.
Subsequent order extending the period was made on 9th May 1961.
This Court held that according to the earlier order of the State Government itself the service of the Government servant had come to an end on March 31, 1961 and the State Government could not by unilateral action create a fresh contract of service to take effect from April 1, 1961.
If the State Government wished to continue the service of the respondent for a further period, the State Government should have issued a notification before March 31, 1961.
It is thus clear that the retention of the respondent in service by order of the State Government not made before the retirement taking place on 1st August 1962 and the State Government not having the power to retain the respondent, a member of the Indian Administrative Service, beyond a period of six months, the respondent could not be said to have continued in service so that an inquiry could be continued against him.
Mr. Naunit Lal, however, contended that sub rule(2) of rule 16 clearly provides that a member of the service under suspension on a charge of misconduct shall not be required or permitted to retire from the service until the enquiry into the charges against him is concluded and a final order is passed.
It is in the context of sub rule (2) of rule 16 that the question of the nature of the proceedings held against the respondent assumed importance.
If the inquiry was on a charge of misconduct, the respondent could be retained in service until the inquiry into the charges against him was concluded and a final order was made.
But before sub rule (2) of rule 16 would be attracted it must be shown that the member of the service was under suspension on a charge of misconduct and an inquiry was being conducted against him.
As pointed out earlier, no misconduct as one would understand that word in the context of disciplinary proceeding was alleged against the respondent.
There was an inquiry but before sub rule (2) of rule 16 is attracted, it had to be an inquiry on a charge of misconduct.
What is alleged is not misconduct as the word is understood in service jurisprudence in the context of disciplinary proceedings.
Therefore, it could not be said that an inquiry on a charge of misconduct was being held against the respondent and sub rule (2) of rule 16 would thus be attracted and he would be deemed to have been retained in service till the inquiry was concluded.
It thus appears crystal clear that there was no case stricto sensu for a disciplinary proceeding against the respondent.
In fact the inquiry was held to establish that the respondent was not fit to hold a respon 517 sible post.
The respondent was actually retiring from service and there was no question of his any more holding a responsible position.
Yet not only the inquiry was initiated but he was retained in service beyond the date of his normal retirement till the final order was made on 11th October, 1963 when he was removed from the Indian Administrative Service.
It appears that there were large scale disturbances in the State.
There followed the usual search for a scapegoat and the respondent came handy.
Some charges were framed none of which could costitute misconduct in law.
Some charges were mere surmises.
Substance of the allegations was that he was not a very efficient officer and lacked the quality of leadership and was deficient in the faculty of decision making.
These deficiencies in capacity would not constitute misconduct.
If the respondent were a young man and was to continue in the post for a long period, such an inquiry may be made whether he should be retained in the responsible post.
He may or may not be retained but to retain him in service beyond the period of his normal retirement with a view to punishing him was wholly unjustified.
The High Court was, therefore, right in coming to the conclusion that the respondent was no longer in service on the date on which an order removing him from service was made and, therefore, the order was illegal and void.
Accordingly, this appeal fails and is dismissed with costs.
P.B.R. Appeal dismissed.
| The Madhya Pradesh Local Authorities School Teachers (Absorption in Government Service) Act provided for absorbing teachers serving in Middle Schools and Primary Schools managed by local authorities in Government service.
The relevant rule for absorption enacted under the Act in rule 3 and rule 3(b) read as follows: "3(b)For absorption on the post of Head Master/Principal of a High/ Higher Secondary School, the person concerned should possess the post graduate degree and should have worked on the post for a minimum period of 7 years in the same institution and should have 10 years ' teaching experience in any recognised institution of Madhya Pradesh".
On the question of interpretation of the words "should have worked on the post for a minimum period of seven years" the High Court was of the view that the period during which a Head Master/Principal worked as incharge Principal ought to be taken into account for computing the period of 7 years.
Dismissing the special leave petitions by the State the Court, ^ HELD : 1.
While computing the period of 7 years for the purpose of rule 3(b) what is determinative is performing duties and discharging functions of the post of Head Master/Principal irrespective of the capacity in which the post was held.
[635 C] 2.
The absorption of a person as Principal under rule 3(b) does not depend on rank but on the nature of functions and duties that is incumbent discharges for a particular number of years (i.e.) the duties of a Principal for a period of seven years.
The language, in the instant case, indicates emphasis on work being done while on the post irrespective of capacity.
[635 B C] Ramrattan vs State of M.P. and Ors., I.L.R. 1964 M.P. 242; State of Madhya Pradesh vs Gokul Prasad,[1971] M.P.L.J. 609; Girja Shanker vs S.D.O. Harda and Ors., A.I.R. 1973 M.P. 104; distinguished.
On a pure grammatical construction of the expression "should have worked on the post for a minimum period of seven years in the same institution".
it is clear that the person claiming to be absorbed must have worked on the post of Head Master/Principal of a High/Higher Secondary School for a minimum period of 7 years, the emphasis being on the experience gamed by working on the said post.
A person in charge of the post also works and 631 discharges the duties and functions of the post of which he has taken charge.
Even an officiating incumbent of the post does discharge the functions and duties of the post.
If the rule expressly did not make any differentiation between the persons working as a confirmed holder of substantive post and an incharge or officiating holder of the post, there is nothing in the expression itself which by necessary implication excludes service in any other capacity except as a confirmed Head Master/Principal in a substantive post.
[633 D E, G H] Confirmation in a post being one of the glorious uncertainties of service as observed by this Court in section B. Patwardhan 's case, it is rational to believe that the framers of the rule did not want to attach any importance to the capacity in which the post is held but the emphasis was on working on the post meaning thereby discharging the duties and performing the functions assigned to the post.
[634 C D] section B. Patwardhan and Ors.
vs State of Maharashtra and Ors.
, ; ; applied.
|
vil Appeal No. 1154 1155 (N) of 1974.
From the Judgment and Order dated 30.6.1972 of the Court of Judicial Commissioner of Goa, Daman and Diu in Civil Revision Application Nos. 13 and 14 of 1972.
Anil Dev Singh and Miss A. Subhashini for the Appellant.
S.K. Mehta and Dhruv Mehta for the Respondent.
The Judgment of the Court was delivered by SINGH, J.
This appeal is directed against the judgment and order of the Judicial Commissioner, Goa dated 30.6.1972 setting aside the order of the Civil Judge, Senior Division, Panaji and declaring that the suit instituted by the appel lant had abated.
The appellant Bank instituted a suit before the Civil Judge for recovery of an amount of Rs. 63,315 against Vi naique Naique, advanced to him as loan by it.
Vinaique Naique, the defendant contested the suit, issues were framed and evidence was being recorded.
On 26.2.
1970 statement of PW I was recorded and the case was adjourned to another date but on that date also the case was adjourned to 23.7.1970.
The suit was again adjourned on 23.7.
1970 on the ground that the defendant Vinaique Naique was indisposed and 813 was hospitalised.
Thereafter, the suit was taken up for hearing on 4.11.
On that date the defendant 's pleader informed the Court orally that the defendant had died at Margaon but did not give any further details.
The Custodian of the appellant Bank Panaji deputed his clerk to Margaon to collect necessary information and to obtain death certifi cate from the Civil Registration Office if the defendant was found to be dead.
The clerk visited Margaon on 5th and 6th November, 1970 and on enquiry he came to know that the defendant had died on 4.8.1970, he obtained death certifi cate from the Civil Registration Office on 6.11.1970 and handed over the same to the Custodian of the Bank on 7th November, 1970.
Since 8th November, 1970 was Sunday, the Custodian could not file the same in the court.
The appel lant made application under Order XXII Rule 4 of CPC on 9th November, 1970 for bringing on record Smt.
Nalini Bai Naique as the legal representative of the deceased original defend ant.
He made another application for condoning delay in making the application duly supported by affidavit.
The appellant made another application requesting the court to treat his earlier application made for condonation of delay as an application under Order 22 Rule 9 for setting aside the abatement of the suit.
Nalini Bai Naique late defendant 's widow contested the applications on the ground that the news regarding the death of Vinaique Naique had been published in the local newspapers and the plaintiff had knowledge of his death and further the suit had abated on the expiry period of 30/60 days of the death of original defendant as no application for setting aside abatement had been filed within time.
Meanwhile the appellant made another application for adding the names of six heirs four sons, one major son and three minor sons and two minor daughters of the deceased defendant Vinaique Naique on the ground that earlier the appellant had no knowledge about the sons and daughters of the deceased defendant.
On behalf of Mrs. Nalini Bai it was vehemently asserted before the trial court that the application for substitution was not maintainable as it was filed beyond time, and in the alternative she was not the legal heir of the deceased defendant but she was only his 'Meeira ' and as other legal heirs of the deceased defendant were not brought on record within time the appli cation for bringing the sons and daughters on record was liable to be rejected.
The trial Judge on an elaborate consideration of the rival contentions held that even though the news relating to the death of original defendant Vi naique Naique had been reported in local newspapers but in view of the affidavit of Custodian and other material on record the appellant Bank came to know of the death of the defendant only on 4. ] 1. 1970 from the deceased defendant 's lawyer in the court and within four days thereof application for 814 bringing the legal representative of the deceased defendant was made, therefore, the application made under Order XXII Rule 4 was not barred by time.
The learned Judge further held that since Smt.
Nalini Bai Naique one of the legal representative of the deceased defendant was brought on record within time, the sons and daughters could also be impleaded as defendants along with her.
On these findings the learned Judge by his order dated 16.11.
1971 set aside the abatement of the suit and directed for substituting the name of the widow Smt.
Nalini Bai Naique along with the name of four sons and two daughters as defendants to the suit in place of deceased defendant Vinaique Naique.
Mrs. Nalini Bai filed a revision application under Section 115 of Code of Civil Procedure before the Judicial Commissioner of Goa at Panaji against the aforesaid order of the trial Judge.
The Judicial Commissioner by his order dated 30.6.1972 set aside the order of the trial Judge and declared the suit to have abated.
Aggrieved the plaintiff Bank has preferred this appeal after obtaining special leave.
The learned Judicial Commissioner interfered with the order of the trial Judge on the sole ground that Mrs. Nalini Bai whose name was proposed to be brought on record was not legal representative of the deceased Vinaique Naique as under the Portugees Law she being the widow had acquired Meeira rights and her status was not that of "Cabeca De Casal" (Head of the family and administrator) of the other heirs of deceased Vinaique Naique.
Since all the heirs of the deceased defendant had not been brought on record along with Mrs. Nalini Bai within time the suit abated as Mrs. Nalini Bai alone could not represent the estate of the deceased defendant.
The learned Judicial Commissioner did not interfere with other findings recorded by the trial Judge, instead he set aside the order of the trial Judge on the sole ground as aforesaid, and declared the suit to have abated.
After hearing learned counsel for the parties, we are of opinion that the learned Judicial Commissioner committed serious error of law in setting aside the order of the trial Judge.
"Legal representative" as defined in Civil Procedure Code which was admittedly applicable to the proceedings in the suit, means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased and where a party sues or is sued in a representative character the person on whom the estate devolves on the death of the party so suing or sued.
The definition is inclusive in character and its scope is wide, it is not confined to legal heirs only instead it stipulates a person who may or may not be heir, competent to inherit the property of the deceased but he should represent the 815 estate of the deceased person.
It includes heirs as well as persons who represent the estate even without title either as executors or administrators in possession of the estate of the deceased.
All such persons would be covered by the expression "legal representative".
If there are many heirs, those in possession bona fide, without there being any fraud or collusion, are also entitled to represent the estate of the deceased.
In the instant case it is not disputed that under the Portugees Law of Inheritance which was applicable to Goa at the relevant time Mrs. Nalini Bai had acquired "Meeira rights" according to which she had acquired half share in the estate left by the deceased Vinaique Naique and the remaining half share was inherited by sons and daughters of the deceased who were subsequently brought on record.
On the admitted facts Mrs. Nalini Bai therefore represented the estate of the deceased Vinaique Naique.
Once the name of Mrs. Nalini Bai was brought on record within time and the application for setting aside abatement was allowed by the trial Judge, the suit could proceed on merits and the mere fact that the remaining legal representatives were brought on record at a subsequent stage could not render the suit defective.
The Custodian of the appellant Bank had no knowl edge that there were other legal representatives of deceased defendant along with Mrs. Nalini Bai.
He had filed affidavit that on making diligent and bona fide inquiry, he had come to know that Nalini Bai was the sole legal representative but later on he acquired knowledge that the deceased had left four sons and two daughters as legal representatives, along with Mrs. Nalini Bai, therefore, he made another application for bringing them on record.
The trial Judge accepted the testimony of the Custodian, and placing reli ance on the decision of Andhra Pradesh High Court in Mannem Venkataramaih vs M. Munnemma & Ors., AIR 1963 A.P. 406 he allowed the substitution application.
The trial court com mitted no error in law, instead he applied correct princi ples of law.
In Daya Ram & Ors.
vs Shyam Sundari, ; this Court recognised the principle of representation of the estate by some heirs, where the defendant died during the pendency of the suit to enforce claim against him and all the heirs are not brought on record within time.
This Court held that if after bona fide inquiry, some, but not all the heirs, of a deceased defendant, are brought on record the heirs so brought on record represent the entire estate of the deceased and the decision of the Court in the absence of fraud or collusion binds even those who are not brought on record as well as those who are impleaded as legal represen tatives of the deceased defendant.
In N.K. Mohd. Sulaiman vs N.C. Mohd. Ismail; , this Court 816 rejected the contention that in a suit to enforce a mortgage instituted after the death of a Muslim, if all the heirs of the deceased were not impleaded in the suit and a decree was obtained, and in execution the property was sold, the auc tion purchaser could have title only to the extent of the interest of the heirs who were impleaded, and he could have no title to the interest of those heirs who had not been impleaded to the suit.
The Court held, that those who were impleaded as party to the suit in place of the deceased defendant represented the entire estate as they had share in the property and since they had been brought on record the decree was binding on the entire estate In the instant case Mrs. Nalini Bai had admittedly hall share in the property left by the deceased defendant and as she was brought on record within time, she represented the estate of the deceased defendant and the suit could proceed on merit.
In this view the impleadment of other legal repre sentatives at a subsequent stage could not affect validity of the proceedings.
In the result we allow the appeal and set aside the judgment and order of the Judicial Commission er dated 30.6.1972, and restore the order of the trial Judge.
Since trial of the suit has been delayed, we direct the trial court to make every effort to decide the suit expeditiously.
The appellant is entitled to its costs throughout.
P.S.S. Appeal allowed.
| After the poll the appellant was declared elected to the Madras Legislative Assembly.
Respondent No. 1 filed an election petition praying that it be declared that the election of the appellant was void.
In the petition it was alleged that two of the candidates at the election accepted money paid to them by the appellant and his election agent to induce them to abandon the contest and they actually abandoned the contest.
These two candidates were not made parties to the petition.
The appellant applied to the Election Tribunal to dismiss the petition under section 90(3) Of the Representation of the People Act, 1951, for non compliance with the provisions of section 82 of the Act on the ground that allegations of a corrupt practice were made against the two candidates and Respondent No. 1 had failed to make them parties to the petition as required by section 82: Held, that the acceptance of gratification is not a corrupt practice within the meaning of section 123(1) Of the Act and consequently it could not be said that allegations of corrupt practice had been made against the two candidates.
There was thus no non compliance with the provisions of section 82 and the election petition was not liable to be dismissed under section 90(3).
|
Criminal Appeal No. 21 of 1965.
Appeal by special leave from the judgment and order dated May 19, 1964 of the Punjab High Court, Circuit Bench at Delhi in Criminal Appeal No. 7 D of 1963.
A.S.R. Chari, C.L. Sareen and R.L. Kohli, for the appellant.
B.R.L. lyenger, S.P. Nayar for R.N. Sachthey, for the respondent.
The Judgment of the Court was delivered by Sikri, J.
This appeal by special leave was limited to the question whether the case comes under section 302 of the Indian Penal Code.
The case of the prosecution which has been accepted by 247 the learned Sessions JUdge and the High Court was,.
in brie as follows: On January 31, 1962, at about 2.30 p.m., a fight took place ' between Dalip Kumar, P.W. 12, and Harjinder Singh, appellant, near the water tap in front of a tin factory in Zamirwali lane, Delhi.
Harjinder was apparently worsted in the fight and he then left the place holding out a threat that he would teach a lesson to Dalip Kumar.
The appellant.
returned with his brother Amarjit Singh to the house of Dalip Kumar and shouted to Dalip Kumar to come out.
Tejibai opened the door of the house and asked the appellant and Amarjit Singh to go away, but either these two or the appellant pulled Dalip Kumar out of the house into the lane and gave him beating near a lamp post in the comer of Zamirwali lane.
that time the deceased Kewal Kumar, who was the brother of Dalip Kumar, came and tried to intervene and rescue his brother.
It is at this stage that the evidence conflicting as to what exactly happened, According to one version, Amarjit Singh accused caught hold of Kewal Kumar and the appellant took out the knife and stabbed the deceased.
According to the other version, given by Mohd. Ali, P.W. 5, this is what happened: "Dalip Kumar 's brother holding Jinda accused asked him not to fight.
Jinda at that time took out the knife from his pocket and opened it with both his hands and then gave a blow with it under the belly and the upper portion of the left thigh.
Amarjit Singh accused did not do.
anything.
" In cross examination he stated: "Jinda accused was holding Dalip Kumar from the collar of his shirt by his left hand.
At that time Kewal Kumar was on right hand side of Jinda accused.
When Jinda took out the knife and opened it with both his hands, Dalip Kumar and his brother Kewal were grappling with Jinda accused Jinda accused gave only one knife blow to Kewal Kumar.
Kewal Kumar was m bent condition when he was stabbed only once." After inflicting this injury the appellant ran away.
Dr. G. section ,Mittal, P.W. 8, noted the following injuries on the person of the deceased: 1.
A stab wound 1"x1/4"x? On left thigh upper and below the inguinal ligament.
Abrasion l" x linear on back of left fore arm middle.
He described the other features of the injuries as follows: 248 "The direction of the stab wound was Oblique and was going medially.
Sartorius muscle was cut underneath along with femoral artery and vein.
Cut over major part of their diameter.
There was effusion of blood in the muscles and around the track over left thigh upper end. " He deposed that death was due to shock and hemorrhage from injury to femoral vessels by stab wound of the thigh.
He further stated: "It is correct that femoral artery and vein are important main vessels of.
the body.
The cutting of these vessels would result in great loss of blood.
The cutting injuries of these vessels could result in immediate death or after short duration.
" It was urged before the Sessions Judge 0n behalf of the appellant that, in the circumstances of the case; the offence, if at all committed, Would fall under section 326, I.P.C. The learned Sessions Judge, relying on Virsa Singh vs State of Punjab (1), he/d: "In this case, the prosecution has proved that the bodily injury, the nature of which has been described above was present.
This injury was caused with the pen knife deliberately.
It was not accidental or unintentional.
Injury of any other kind.
was not intended.
This injury in the opinion of this doctor was sufficient in the ordinary course of nature to cause death.
This being so the case ; would apply and the offence which the accused Jinda has committed falls u/s 302 Indian Penal Code." The High Court, on appeal, over ruled a similar contention in the following words: "Lastly, the counsel has attempted to take the case out of the purview of the offence of murder.
It has been contended that it was.
just a small knife with which a blow was given and that it was not on the vital part of the body and, therefore, the appellant should not be held guilty of murder.
In my opinion, the contention is wholly unsustainable.
The deceased, a boy of about 16 years of age had merely come to help his brother, when the appellant, who had deliberately come armed with knife from his house, stabbed the deceased with that knife on vulnerable part.
1 do not see how the (1) ; 249 offence can be considered not to fall within the purview of murder.
" Later, the High Court observed: "It is futile to contend that he did not intend to kill the deceased.
The injury and the weapon are quite eloquent in this respect.
" The learned counsel for the appellant, Mr. Chari, contends on the facts established in this case no offence under section 302 s been committed and the appellant should have been connected under section 326 or at the most under section 304, part two.
The learned counsel for the respondent strongly relies.
on the decision this Court in Virsa Singh vs Slate of Punjab(1) and he says at all the ingredients laid down in that case by this Court are ascent in this case and, therefore, the High Court was correct in firming the conviction of the appellant under section 302, I.P.C. It seems to us.
that all the ingredients which were laid down this Court in that case have not been established in this case.
Bose, J., speaking for the.
Court observed: "To put it shortly, the prosecution must prove the following facts before it can bring a case under section 300, "3rdly"; First, it must establish, quite objectively, that a bodily injury is present; Secondly, the nature of the injury must be proved.
These are purely objective investigations.
Thirdly, it must be proved that there was an intention to inflict that particular bodily injury, that is to say, that it was not accidental or unintentional, or that some other kind of injury was intended.
Once these three elements are proved to be present, the enquiry proceeds further and,.
Fourthly, it must be proved that the injury of the type just described made up of the three elements set out above is sufficient to cause death in the ordinary course of nature.
This part of the enquiry is purely objective and inferential and has nothing to do with the intention of the offender.
" The learned Judge further explained the third ingredient at p. 1503 in the following words: "The question is not whether the prisoner intended to inflict a serious injury or a trivial one but whether he (1) ; 250 intended to inflict 'the injury ' that is proved tO be present.
If he can show that he did not, or if the totality of ' the circumstances justify such an inference, then, of 'course, the intent that the section requires is not proved.
But if there is nothing beyond the injury and the fact that the appellant inflicted it, the only possible inference is that he intended to inflict it.
Whether he knew of its seriousness, or intended serious consequences, is neither here nor ,there.
The question, so far as the intention is concerned, is not whether he intended to kill, or to inflict an injury of a particular degree of seriousness, but whether he intended to inflict the injury in question; and once the existence of the injury is proved the intention to cause it will be presumed unless the evidence or the circumstances warrant an opposite conclusion.
In Rajwant singh vs
State of Kerala(1), Hidayatullah, J. referring to Virsa Singh vs state of Punjab(2), observed: "As was laid down in Virsa Singh vs State of Punjab. for the application of this clause it must be first established that an injury is caused, next it must be established objectively what the nature of that injury in the ordinary course of nature is.
If the.
injury is found to be sufficient to cause death one test is satisfied.
Then it must be proved that there was an intention to inflict that very injury and not so.me other injury and that it was not accidental or unintentional.
If this is also held against the offender the offence of murder is satisfied.
" It seems to us that the.
High Court has not considered whether the third ingredient laid down by Bose, J. in Virsa Singh vs State Punjab(2) has been proved in this case or not.
In our opinion the circumstances justify the inference that the accused did not intend to cause an injury on this particular portion of the thigh.
The evidence indicates that while the appellant was trying to assault Dalip Kumar and the deceased intervened, the appellant timing 'himself one against two took out the knife and stabbed 1he deceased, It also indicates that the deceased at that stage was in a crouching position presumably to intervene and separate the two.
It cannot, therefore, be said With any definiteness that the appellant aimed the blow tat this particular part of the thigh knowing that it would cut the artery.
It may be observed that the appellant had not used the knife While he was engaged in the fight with Dalip Kumar.
It was only when he felt that the deceased also came up against him that he whipped out the knife.
(1) A.I.R. 1965 S.C.1874, 1878 (2) ; 251 in these circumstances it cannot be said that it has been proved that it was.
the intention of the appellant to inflict this particular injury on tiffs particular place.
It is, therefore, not possible to apply cl. 3 of section 300 to the act of the accused.
Nevertheless, the deceased was in a crouching position when the appellant struck him with the knife.
Though the knife was " 5 to. 6" in length including the handle it was nonetheless a dangerous weapon.
When the appellant struck the deceased with the knife, he must have known that the deceased then being in a bent position the blow would land in the abdomen or near it a vulnerable part of the human body and that such a blow was likely to result in his death.
In these circumstances it would be quite legitimate to hold that he struck the deceased with the knife with the intention to cause an injury likely to cause death.
We are, therefore, of the opinion that the offence falls under section 304 Part 1.
The appeal is allowed and the conviction is altered from one under section 302 to section 304 Part 1 and the appellant is sentenced to seven years rigorous imprisonment.
G.C. Appeal allowed.
| By a notification under section 4 of the Land Acquisition Act issued on March 10, 1965 the respondent State Government notified that certain lands were needed for a public purpose, namely, the construction of the State capital, that the Government was satisfied that they were 'arable lands ' and further directed, under section 17(4) of the Act, that as the acquisition of the lands was urgently necessary, the provisions of section 5A would not apply.
Thereafter, a notification was issued under section 6 containing a direction under section 17(1) of the Act enabling the Collector to take possession of all the arable lands on the expiry of 15 days from the publication of the notice under section 9(1) of the Act.
Both Notifications were signed by an Under Secretary of the respondent Government.
The petitioners challenged the notifications in writ petitions under article 226.
In the original affidavits, the petitioners merely asserted that the Government had not made up its mind regarding the acquired lands as to urgency and that the lands were not arable.
The parties filed a number of affidavits at various stages of the bearing, the Government in order to establish that everything was regularly done, while the petitioners alleged infractions.
In one of the affidavits on behalf of the Government it was stated that file Minister in charge gave oral instructions to the Secretary that he or his under secretaries may take action under section 17(1) and (4) of the Act according to law, that the Secretary was satisfied regarding urgency and gave instructions to the Under Secretary to take the necessary action.
The High Court after considering the affidavits, dismissed the petitions.
In appeal to this Court it was contended that: (i) only a Secretary could sign the notifications and that the Under Secretary who signed the notification under section 6 was not duly authorised to do so; (ii) that there was no formation of opinion by the Government as regards urgency or that the lands were arable; (iii) that this function could not be delegated to the Secretary and even if it could be delegated, a general oral instruction given by the Minister was not according to the procedure prescribed by the Rules of Business; (iv) that since the lands in question were under cultivation, they were not waste or arable lands; and (v) that sub sections
(1) and (4) of section 17 of the Act were violative of articles 14 and 19(1)(f) of the Constitution.
HELD: Dismissing the petitions.
(1) The word 'Secretary ' is not defined in the Land Acquisition Act or the General Clauses Act so as to exclude Additional, Joint, Deputy, Under or Assistant Secretaries.
On the other hand r.13 of the Rules of Business framed under article 166 of the Constitution specifically places a 268 Secretary, Joint Secretary, Deputy Secretary, Under Secretary and Assistant Secretary on equality for authentication of orders and instruments of Government.
The Under Secretary was, therefore, competent to sign the notifications.
[273F; 274E] Even if he did not possess the power as a Secretary he would have been competent as an officer 'duly authorised ', within the meaning of section 6 of the Act, by virtue of r. 13 of the Rules of Business.
[274F] (ii) Under article 166 of the Constitution the validity of the notification could not be called in question on the ground that it was not an order made by the Governor, because, as required by the Article the executive action of the Government was expressed to be taken in the name of the Governor and the order was authenticated in the manner required by r. 13 of the Rules of Business.
In addition, there is also the presumption of regularity of official acts.
Therefore, the bare assertion that Government had not formed an opinion could not raise an issue.
The Government was not called upon to answer the affidavit of the petitioners and the Government need not have undertaken the burden of showing the regularity of their action.[275 E G; 278 D, F] (iii) Rules 7, 10, 13 and 15 of the Rules of Business specifically allow conferral of powers on Secretaries and the determination of the Secretary becomes the determination of the Government.
There is nothing in the Rules or instructions which prescribes that the authority must be in writing or by Standing Orders.
Under Paragraph 3 of the instructions issued by the Governor under r. 15 of the Rules of Business, Standing Orders are necessary for the disposal of cases in the department, and a case is defined as 'the papers under consideration and all previous papers and notes put in connection therewith to enable the question raised to be disposed of '.
Paragraph 4, on the other hand refers to "matters or classes of matters".
Therefore, paragraph 3 only refers to the disposal of cases and not to matters arising In a case, regarding which under paragraph 4, the Minister may arrange with the Secretary whether they are to be brought to his personal notice or not.
The matters in the present case were the application of section 17(1) and (4), to the acquisition of waste and Arabic lands and the Minister could leave this matter to his Secretary as he did.
For this purpose, Standing Orders were not necessary and oral instructions would be sufficient.
The Secretaries concerned were given the jurisdiction to take action on behalf of Government and they satisfied themselves about the need for acquisition under section 6, the urgency of the matter and the existence of waste and arable lands for the application of sub sections
(1) and (4) of section 17.Therefore, on a review of the affidavits, the provisions of the Act and the Business Rules and Instructions, the directions under sub sections
(1) and (4) of section 17 were not invalid.
[280 D G; 281 C D; 282 E G] Shayamaghana Ray vs State, A.I.R. 1952 Orissa 200, referred to.
Emperor vs
Shlbnath Banerji, L.R. 72 I.A. 241, distinguished.
(iv) Arable land under the Act is not only land capable of cultivation but also land actually under cultivation.
The words 'compensation for the standing crops and trees (if any) on such land ' in section 17(3), show that the land may have crops or he fallow and the crops can only be on arable land.
because.
if crops could grow or were actually grown the land Would hardly he waste land [286 A B, E] Baldeo Singh & Ors.
vs State of U.P. A.I.R. 1965 All Smt.
Lakshmi Devi Ors.
vs State of Bihar ' & Ors.
A.I.R. 1965 Pat, 400 269 and Guntur Ramalakshmamma vs Govt.
of Andhra Pradesh, A.I.R. , approved.
Sadruddin Suleman vs
J.H.Patwardhan, A.I.R.1965 Born.224.
over ruled.
(v) The High Court had rightly held that sub as.
(1) and (4) and 17 were not unconstitutional.
[286 F G]
|
ivil Appeal No. 2991 of 1986.
From the Judgment and Order dated 13.1.
1986 of the Madras High Court in Civil Revision Petition No. 3599 of 1983.
Ms. Shyamala Pappu, Ms. Dhaneshwari and R. Vasudevan for the Appellant.
section Srinivasan for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This is an appeal by special leave from the judgment and order of the High Court on 13th January, 1986 ordering eviction under Section 10(3)(c) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, hereinafter called the Act.
This is an appeal by the tenant.
A room in the front portion of the building had been leased out to the tenant for non residential purposes.
The landlord resides in the other portion.
The landlord needed additional accommodation for residential purposes due to marriages in the family.
Was the portion let out as such separate and distinct unit for the purpose of Section 10(3)(c) of the Act? It was not and as such the landlord was entitled to seek eviction of the tenant under section 10(3)(c) of the Act.
It has been so held clearly by this Court in Shri Balaganesan Metals vs
M.N. Shanmugham Chetty and Ors., [1987] 2 1148 SCC 707 wherein the section has been analysed and explained.
Ms. Shyamala Pappu, learned counsel for the appellant sub mits that the decision needs reconsideration as the residen tial and the nonresidential part of the building covered as separate units and the requirements of the two separate parts have not been properly assessed therein.
We are unable to accept this criticism.
A building may consist of separate parts if the context so warrants.
In the instant case as in Shri Balaganesan Metal 's case the context and the user did not warrant treatment of the portion let out for non resi dential user either as a separate or distinct unit.
It was only a small part of the residential building and not a separate part.
It was secondly submitted that the expression "as the case may be", in the section has not been properly appreci ated.
We are unable to agree.
The difference between resi dential part and the nonresidential has been borne in mind by my learned brother in the judgment aforesaid.
Justice Morris in Bluston & Bramley Ltd. vs Leigh (Euler and Another, Third Parties), [1950] 2 A.E.R. page 29 at page 35 explained that the phrase "as the case may be" meant in the events that have happened.
Our attention was also drawn to the expression "as the case may be" as appearing in the Words and Phrases Permanent Edition 4 Page No. 596.
The meaning of the expression "as the case may be" is what the expression says, i.e., as the situation may be, in other words in case there are separate and distinct units then concept of need will apply accordingly.
Where, however, there is no such separate and distinct unit, it has no significance.
There is no magic in that expression.
The expression "as the case may be" has been properly construed in the judgment mentioned hereinbefore.
It was lastly contended that comparative hardship in the instant appeal has not been properly considered.
It appears that there is nothing in this point.
The appellant is an affluent businessman and it is not difficult for him to get alternative accommodation.
On the other hand, the respond ents have no other residential house than the one in ques tion will find it extremely difficult to get residential accommodation in the same locality and as such they will be put to immense hardship if they are not allowed to occupy the additional portion in their house which has been leased out to the tenant.
The Court has observed that there is no question of balance of convenience.
In that view of the matter this appeal must fail and is, therefore, dismissed.
There will, however, be no order as to costs.
P.S.S. Appeal dismissed.
| The appellant/plaintiffs filed a suit for a declaration that the eight agreements/contracts executed between the appellants and the defendant/respondent No. 1, were not 'hire purchase agreements ' but were agreements relating to the transaction of loan.
The suit was dismissed.
The appellate Court confirmed the decision of the Trial Court.
There was a second appeal to the High Court, whereafter the appellants moved this Court by special leave against the judgment and order of the High Court.
Allowing the Appeal, the Court, HELD: The suit had been dismissed on the ground that it was not maintainable in view of the provisions of section 32 of the .
Section 32 of the Act stipulates that notwithstanding any law for the time being in force, no suit shall lie on any ground whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or award, nor shall any arbitration agreement or award be enforced, set aside, amended, modified or in any way affected otherwise than as provided in the Act.
[49B C] Specific case of the appellants was that it was a transaction of loan and there was in fact no agreement of arbitration.
It appeared from the plaint as well as the issues framed that the very existence of the agreement described as hire purchase agreement was put in issue.
The execution of the documents was not denied but it was alleged that these were manipulated documents and that there were in fact no agreements which contained the arbitration agreement.
[50A C] Section 32 of the Act does not contemplate the case of suits challenging the validity of a contract because it contains an arbitration 48 clause.
The section has a very limited application, namely, where the existence of the validity of an arbitration agreement and not the contract containing the arbitration agreement is challenged.
[50D E] Every person has a right to bring a suit which is of a Civil nature and the Court has jurisdiction to try all suits of Civil nature under section 9 of the Code of Civil Procedure.
That right has not been taken away by section 32 of the Act.
One of the issues, framed namely.
issue No. 4 was "whether the defendant No. 1 obtained disputed hire purchase agreements from the plaintiffs in pursuance of its money lending business?" The existence of the disputed hire purchase agreements was put in issue.
It is true that the execution of an alleged document was not in issue, but the existence of that document as an arbitration agreement was in issue.
Section 32 of the Act does not purport to deal with suits for declaration that there was never any contract or that the contract is void.
This principle is well settled.
In State of Bombay vs Adamjee Hajee Dawood and Co., A.I.R. 1951 Calcutta 147, the Calcutta High Court held that section 32 of the Act does not contemplate the case of a suit challenging the validity of a contract merely because it contains an arbitration clause.
This is the correct position in law, and in the facts and circumstances of the case, the trial Court, the appellate Court and the High Court in this case were in error.
Their judgments and orders were set aside.
[50E H; 51A C] State of Bombay vs Adamjee Hajee Dawood & Co., A.I.R , referred to.
|
Civil Appeal No. 1297 of 1970.
Appeal by special leave from the Award dated the 10th October 1969 of the Additional Industrial Tribunal, Delhi in I.D. No.174 of 1968.
M. K. Ramamurthi, K. R. Nagaraja, section K. Mehta, A. K. Jain and C. K. Srivastava, for the Appellant.
A. K. Sen, M. C. Bhandare.
Dr. Anand Prakash, P. P. Rao, P. H. Parekh and Mrs. Sunanda Bhandare, for Respondent No. 1.
The Judgment of P. N. Bhagwati and P. K. Goswami, JJ. was delivered by Bhagwati, J. A. Alagiriswami, J. gave a dissenting opinion.
BHAGWATI J.
Here, in this case, once again arises the question as to what is an 'industry ' within the meaning of the .
This question has continually baffled and perplexed the Courts in our country.
There have been various judicial ventures in this rather volatile area of the law.
The Act gives a definition of 'industry ' in section 2(j) but this definition is not very vocal and it has defined analysis, so that judicial effort has been ultimately reduced merely to evolving tests by reference to characteristics regarded as essential for constituting an activity as an 'industry '.
The decided cases show that these tests have not been uniform; they have been guided more by an empirical rather than a strictly analytical approach.
Sometimes these tests have been liberally conceived, sometimes narrowly.
The latest exposition is to be found in the judgment of a Bench of six Judges of this Court 141 in Safdarjung Hospital vs K. section Sethi.(1) But while applying the tests indicated in this decision, it is necessary to remember that the is a legislation intended to bring about peace and harmony between management and labour in an 'industry ' so that production does not suffer and at the same time, labour is not exploited and discontented and, therefore, the tests must be so applied as to give the widest possible connotation to the term 'industry '.
Whenever a question arises whether a particular concern is an 'industry ', the approach must be broad and liberal and not rigid or doctrinaire.
We cannot forget that it is a social welfare legislation we are interpreting and we must place such an interpretation as would advance the subject and purpose of the legislation and give full meaning and effect to it in the achievement of its avowed social objective.
With these prefatory observations, we proceed to state the facts giving rise to the appeal.
The Indian Standards Institution (hereinafter referred to as 'the Institution ') is a Society registered under the .
The workmen of the Institution represented by the Indian Standards Institution Employees ' Union (hereinafter referred to as 'the Union ') made certain demands which were not accepted by the management and a dispute accordingly arose between the management and the workmen.
The dispute was taken in conciliation but the Conciliation officer was unable to bring about settlement and he made, what is commonly known as "failure report" to the Lt. Governor of Delhi.
The Lt. Governor thereupon by an order dated 28 9 1968, referred the dispute for adjudication to the Industrial Tribunal under sections 10(1) (d) and 12(5) of the Act.
The order of the Lt. Governor set out the demands which were to form the subject matter of adjudication by the Industrial Tribunal.
The Union representing the workmen filed a statement of claim in support of these demands.
The management opposed the demands on merits but in addition to the defence on merits, they raised a preliminary objection which, if well founded, would strike at the very root of the jurisdiction of the Industrial Tribunal to entertain the reference.
The preliminary objection was that the institution was not a industry within the meaning of section 2(j) of the Act and, therefore, the dispute between the management of the Institution and its workmen was not an 'industrial dispute ' as defined in sec.
2(k) and the Lt. Governor had no jurisdiction to refer it for adjudication under the provisions of the Act.
Issue No. 1 arising out of this preliminary objection was in the following terms: "Is Indian Standards Institute an industry or not", and this issue was directed to be tried as a preliminary issue.
The Industrial Tribunal proceeded to examine the legal position for the purpose of determining when a particular activity can be regarded as an industry within the meaning of section 2(j) of the Act.
It observed that there were five tests laid down by the decisions of this Court in Madras Gymkhana Club Employees Union vs The Management of the Madras Gymkhana Club(2) and Cricket Club of India Ltd. vs The (1) ; (2) [1968] 1. section C. R. 742.
142 Bombay Labour Union & Anr.(1) which were required to be satisfied before an activity could be held to be an "industry" and they were as follows: "1.
When the operation undertaken rests upon cooperation between employers and employees with a view to production and distribution of material goods or material services; 2.
It must bear the definite character of trade or business or manufacture or calling or must be capable of being described as an Undertaking analogous to business or trade resulting in material goods or material services; 3.
The activity to be considered as an 'industry ' must not be casual but must be distinctly systematic; 4.
The work for which labour of workmen is required, must be productive and workmen must be following an employment calling, or industrial avocation; and 5.
When private individuals are the employers, the industry is run with capital and with a view to profits.
(These two circumstances may not exist when Government or Local Authority enters upon business, trade, manufacture or an undertaking analogous to trade).
" On an application of these tests, the Industrial Tribunal found that the Institution satisfied the first four tests and this indeed was not disputed, but so far as the fifth test was concerned, it was not satisfied since capital was undoubtedly employed in the institution but the institution was not run with a view to profit.
The profit motive was ruled out by the objectives of the Institution and as the profit motive was lacking, the Institution could not be held to be an 'industry '.
The Industrial Tribunal accordingly, by an order dated 10th October, 1969, held that the reference of the dispute between the management of the Institution and its workmen was outside the power of the Lt. Governor and the Industrial Tribunal had no jurisdiction to entertain the reference or to adjudicate upon it.
The workmen were obviously aggrieved by this older made by the Industrial Tribunal since it closed the doors of industrial adjudication and left the workmen without any remedy to redress their grievances and hence they preferred the present appeal against the order of the Industrial Tribunal with special leave obtained from this Court.
The , as its long title and preamble show, has been enacted to make provision for investigation and settlement of industrial disputes.
It is only an 'industrial dispute ' which can be referred for adjudication under sections 10(1) (d) and 12(5) of the Act.
That is a 'industrial dispute ' is to be found in s 2(k) which defines an industrial dispute to mean "any dispute or difference between employers and employers, or between employers and workmen or between workmen and workmen, which is connected with the employment or non employment or the terms of employment or with the conditions (1) ; 143 Of labour, of any person.
" This definition, of course, does not in so many terms, refer to 'industry '.
But, on the grammar of the expression itself an industrial dispute must necessarily be a dispute in an industry and moreover the expressions 'employer ' and 'workman ' used in the definition of 'industrial dispute ' carry the requirement of 'industry ' in that definition by virtue of their own definitions in sections 2(g) and 2(s).
It is therefore, necessary to examine what is the concept of an 'industry ' within the meaning of the Act.
Now, the word 'industry ' is defined in section 2(j) and that section reads: " 'industry ' means any business, trade, undertaking, manufacture or calling of employers, and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen;" This definition is in two parts.
The first part says that it means any business, trade, undertaking, manufacture or calling of employers and then it goes on to say in the second part that it includes ally calling, service, employment handicraft, or industrial occupation or avocation of workmen.
This Court had occasion to consider this definition in r the case of State of Bombay vs The Hospital Mazdoor Sabha(1) where this Court sought to expand the concept, of 'industry ' by a process of judicial interpretation to meet the changing requirements of modern currents of socio economic thought.
It was pointed out by this Court that "section 2(j) does not define 'industry ' in the usual manner by prescribing what it means: the first clause of the definition gives the statutory meaning of 'industry ' and the second clause deliberately refers to several other items of industry and brings them in the definition in an inclusive way.
" But this interpretation of the definition was disapproved by a larger bench of this Court in Management of Safdarjung Hospital vs K. section Sethi (supra).
We shall immediately proceed to examine that decision, as that is the decision which presently holds the field and must ultimately govern the determination of the present case.
But before we do so, we must refer to another decision of this Court which came a little before Safdarjung Hospital case (supra).
That is the decision in Secretary, Madras Gymkhana Club Employee.
Union vs Management of the Gymkhana (supra).
While dealing with the definition of 'industry ' in this case, it was pointed out by this Court that "denotation of the term 'industry ' is to be found in the first part relating to employers and the full connotation of the term is intended to include the second part relating to workmen" and it was concluded: "If the activity can be described as an industry with reference to the occupation of the employers, the ambit of the industry, under the force of the second part, takes in the different kinds of activity of the employees mentioned in the second part.
But the second part standing alone cannot define 'industry '.
By the inclusive part of the definition the labour force employed in an industry is made an integral part of the industry for purpose of industrial disputes although industry is (1) ; 144 ordinarily something which employers create or undertake.
" We may point out that the concept underlying the observation that "industry is ordinarily something which employers create or undertake" is gradually yielding place to the modern concept which regards industry as a joint venture undertaken by employers and workmen an enterprise which belongs equally to both.
But we need not dwell on this any longer, as it is not of immediate concern to us in this case.
It is sufficient to point out that the interpretation of the definition of 'industry ' given in Madras Gymkhana case (supra) struck a slightly different note from what it was understood to mean in the State of Bombay vs Hospital Mazdoor Sabha case (supra).
But again in Safdarjung Hospital case (supra) this Court found it necessary to qualify what it had said in the Madras Gymkhana case (supra) in regard to the meaning of 'industry ' and after referring to the definition of industry in section 4 of the Common wealth Conciliation and Arbitration Act, 1909 1970 this Court observed: "Although the two definitions are worded differently the purport of both is the same.
It is not necessary to view our definition in two parts.
The definition read as a whole denotes a collective enterprise in which employers and employees are associated.
It does not exist either by employers alone or by employees alone.
It exists only when there is a relationship between employers and employees, the former engaged in business, trade, undertaking, manufacture or calling of employers and the latter engaged in any calling service, employment, handicraft or industrial occupation or avocation.
There must, therefore, be an enterprise in which the employers follow their avocations as detailed in the definition and employ workmen.
The definition no doubt seeks to define 'industry ' with reference to employers ' occupation but include the employees, for without the two there can be no industry.
An industry is only to be found when there are employers and employees, the former relying upon the services of the latter to fulfil their own occupations.
This Court then proceeded to add that "every case of employment is not necessarily productive of an industry.
Domestic employment.
administrative services of public officials, service in aid of occupations of professional men, also disclose relationship of employers and employees but they cannot be regarded as in the course of industry".
A workman can be regarded as one employed in an industry only "if he is following one of the vocations mentioned in conjunction with his employers engaged in the vocations mentioned in relation to the employers".
Thus, a basic requirement of 'industry ' is that the employers must be "carrying on any business, trade, undertaking, manufacture or calling of employers.
If they are not, there is no industry as such.
" Now, what these expressions mean has been discussed in a large number of cases decided by this Court.
These cases have all been reviewed in the Madras Gymkhana case.
We are, however, not directly concerned with any of these expressions except 'undertaking ', for the case of the workmen is not that the management of the Institution is 145 carrying on any business, trade, manufacture or calling but It rests on a very limited ground, namely, that the management of the Institution is carrying on an undertaking.
It, therefore, becomes necessary to inquire what is the meaning and scope of the term 'undertaking ' as used in the definition in section 2(j).
Now, according to its dictionary meaning as given by Webster, "undertaking" means "anything undertaken; any business, work or B. project which one engages in or attempts.
an enterprise".
It is a term of very wide denotation.
But all decisions of this Court are agreed that an under taking to be within the definition in section 2(j) must be read subject to a limitation, namely, that it must be analogous to trade or business.
That was the view expressed in the Hospital Mazdoor Sabha case (supra) vide page 879 of the Report and the same view was reiterated in the Safdarjung Hospital case (supra) vide page 187 of the Report.
But the question is: when can an undertaking be said to be analogous to trade or business: what are the attributes or characteristics which it must possess in common with trade or business in order to be regarded as analogous to trade or business ? That is a question which is not very easy to decide, but there are decisions of this Court which afford guidance in dealing with this question.
This Court pointed out in the Hospital Mazdoor Sabha case (supra) that in order that an undertaking should be analogous to trade or business, it is not necessary that it should possess the two essential features associated with the conventional notion of trade or business namely, profit motive and investment of capital.
Gajendragadkar, J., (as he then was), speaking on behalf of the Court observed: "It is not disputed that under section 2(j) an activity can and must be regarded as an industry even though in carrying it out profit motive may be absent.
It is also common ground that the absence of investment of any capital would not make a material difference to the applicability of section 2(j).
Thus, two of the important attributes conventionally associated with trade or business are not necessarily predicated in interpreting section 2(j)".
This view was neither overruled nor departed from in the Safdarjung Hospital case (supra).
On the contrary, the decision 1 in Safdarjung Hospital case reaffirmed this view and gave it the seal of approval of a bench of six judges of this Court.
This Court speaking through Hidayatullah, C.J., pointed out in that case.
"It is not necessary that there must be a profit motive, but the enterprise must be analogous to trade or business in a commercial sense It is an erroneous assumption that an economic activity must be related to capital and profit making alone.
An economic activity can exist with out the presence of both".
The learned Chief Justice, after referring to the observations of Isaacs and Rich, JJ.
in Federated Municipal and Shire Council Employees of Australia vs Melbourne Corporation(1) stated that these observations "indicate that in those activities in which Government takes to industrial ventures, the notion of profit making and the absence of capital in the true sense of the word are irrelevant".
It is, therefore, clear that, according to the decisions of this Court and on this point the decision in Safdarjung Hospital case (supra) does (1) ; 146 not make any departure from that in the Hospital Mazdoor Sabha case (supra) profit motive and capital investment are not essential requisites for an undertaking within the meaning of the definition in section 2(j).
There can be such an undertaking without the presence of both or either of those attributes or features.
What then are the attributes or features which make an under taking analogous to trade or business so as to attract the applicability of s.2(j).
It is difficult to enumerate these possible attributes or features definitely or exhaustively.
Indeed, it would not be prudent to do so.
So infinitely varied and many sided is human activity and with the incredible growth and progress in all branches of knowledge and ever widening areas of experience at all levels, it is becoming so diversified and expanding in so many directions hitherto unthought of, that no rigid and doctrinaire approach can be adopted in considering this question.
Such an approach would fail to measure up to the needs of the growing welfare state which is constantly engaged in undertaking new and varied activities as part of its social welfare policy.
The concept of industry, which is intended to be a convenient and effective tool in the hands of industrial adjudication for bringing about industrial peace and harmony, would lose its capacity for adjustment and change.
It would be petrified and robbed of its dynamic content.
The Court should, therefore, as far as possible avoid formulating or adopting generalisations and hesitate to cast the concept of industry in a narrow rigid mould which would not permit of expansion as and when necessity arises.
Only some working principles may be evolved which would furnish guidance in determining what are the attributes or characteristics which would ordinarily indicate that an undertaking is analogous to trade or business.
What can fairly be regarded as a sufficiently elastic or flexible working principle for this purpose has been discussed in a number of decisions of this Court, of which we may refer only to three, namely, the Hospital Mazdoor Sabha case (supra), The Madras Gymkhana case (supra) and the Safdarjung Hospital case (supra).
Though the language used in these decisions to state the working principle is not uniform and there are minor variations in the formulation according as one aspect is more emphasised than the other, the working principle laid down is basically the same.
Gajendragadkar, J., (as he then was) speaking on behalf of the Court in the Hospital Mazdoor Sabha case (supra) stated the working principle in these terms: " .
as a working principle it may be stated that an activity systematically or habitually undertaken for the production or distribution of goods or for the rendering of material services to the community at large or a part of such community with the help of employees is an undertaking.
Such an activity generally involves the co operation of the employer and the employees; and its object is the satisfaction of material human needs.
It must be organised or arranged in a manner in which trade or business is generally organised or arranged.
It must not be casual nor must it be for oneself nor for pleasure.
Thus the manner in which the activity in 147 question is organised or arranged, the condition of the co operation between employer and the employee necessary for its success and its object to render material service to the community can be regarded as some of the features which are distinctive of activities to which section 2(j) applies.
" It was the same working principle which was pithly expressed by this Court through Hidayatullah, J., (as he then was) in the Madras Gymkhana case (supra) where it was stated: " before the work engaged in can be described as an industry, it must bear the definite character of 'trade ' or 'business ' or 'manufacture ' or 'calling ' or must be capable of being described as an undertaking resulting in material goods or material services".
This last proposition taken from the judgment in the Madras Gymkhana case (supra) was in so many terms accepted as valid in the Safdarjung Hospital case (supra): vide page 189 of the Report.
This Court speaking through Hidayatullah, C.J., pointed out in the Safdarjung Hospital case (supra) at pages 186 and 187 of the Report: "But in the collocation of the terms and their definitions these terms have a definite economic content of a particular type and on the authorities of this Court have been uniformly accepted as excluding professions and are only concerned with the production distribution and consumption of wealth and the production and availability of material services.
industry has thus been accepted to mean only trade and business, manufacture, or undertaking analogous to trade or business for the production of material goods or wealth and material services.
" What is meant by 'material ' services in this context was explained by the learned Chief Justice in these words. "Material services are not services which depend wholly or largely upon the contribution of professional knowledge, skill or dexterity for the production of a result.
Such services being given individually and by individuals are services no doubt but not material services.
Even an establishment where manly such operate cannot be said to convert their professional services into material services Material services involve an activity carried on through cooperation between employers and employees to provide the community with the use of something such as electric power, water, transportation mail delivery, telephones and the like.
In providing these services there may be employment of trained men and even professional men, but the emphasis is not on what these men do but upon the productivity of a service organised as an industry and commercially valuable.
Thus the services of professional men involving benefit to individuals according to their needs, such as doctors, teachers, lawyers, solicitors etc. are easily distinguishable from an activity such as transport service.
The latter is of a commercial character in which something is brought into existence quite apart from 148 the benefit to particular individuals.
It is the production of this something which is described as the production of material services.
" The learned Chief Justice then proceeded to explain why professions must be held to be outside the ambit of industry.
This is what he said: "A profession ordinarily is an occupation requiring intellectual skill, often coupled with manual skill.
Thus a teacher uses purely intellectual skill while a painter uses both.
In any event, they are not engaged in an occupation ill.
which employers and employees co operate in the production or sale of commodities or arrangement for their production or sale or distribution and their services cannot be described as material services.
" It was for this reason, observed the learned Chief Justice, that the establishment of a solicitor was held not to be an industry "because there the services rendered by the employees were in aid of professional men and not productive of material goods or wealth or material services(1) The learned Chief Justice pointed out that in the University of Delhi & Anr.
v Ramnath(2) the University was also held to be outside the ambit of industry for the same reason.
The learned Chief Justice then summarised the working principle the broad test or criterion for determining what is an undertaking analogous to trade or business in these terms: "It, therefore, follows that before an industrial dispute can be raised between employers and their employees or between employers and employers or between employees and employees in relation to the employment or non employment or the terms of employment or with the conditions of labour of any person, there must be first established relationship of employers and employees associating together, the former following a trade, business, manufacture, undertaking or calling of employers in the production of material goods and material services and the latter following any calling, service, employment, handicraft, or industrial occupation or avocation of workmen in aid of the employers ' enterprise.
It is not necessary that there must be a profit motive but the enterprise must be analogous to trade or business in a commercial sense.", and after referring to the observations of Isaacs and Rich, JJ in Federated Municipal and Shire Council Employees of Australia v Melbourne Corporation (supra) pointed out that these observations showed that "industrial disputes occur in operations in which employers and employees associate to provide what people want and desire, in other words, where there is production of material goods or material services." (emphasis added).
(1) National Union of Commercial Employers vs M. R. Meher, [1962] Supp.
3 section C. R 157.
(2) ; 149 It would thus be seen that the broad test for determining when an undertaking can be said to be analogous to trade or business laid down in the Safdarjung Hospital case (supra) was the same as in the Hospital Mazdoor Sabha case (supra).
The Safdarjung Hospital case did not make any real departure the enunciation of this test It is only in the application of this test to the case of hospitals that the Safdarjung Hospital case took a different view and observed that the judgment in the Hospital Mazdoor Sabha case (supra) had taken "an extreme view of the matter which was not justified".
There was also one other ground on which the decision in the Safdarjung Hospital case disapproved of the view taken in the Hospital Mazdoor Sabha case and that ground was that the decision in the Hospital Mazdoor Sabha case proceeded on an erroneous basis that an activity, in order to be an undertaking analogous to trade or business, need not be an economic activity and applied a wrong test, namely, 'can such activity be carried on by private individuals or group of individuals? ' It would, therefore, seem that, in view of the decision in Safdarjung Hospital case, this last test applied in the Hospital Mazdoor Sabha case must be rejected as irrelevant and it must be held that an activity, in order to be recognised as an undertaking analogous to trade or business, must be an economic activity in the sense that it is productive of material goods or material services.
To summarize, an activity can be regarded as an 'industry ' within the meaning of section 2(j) only if there is relationship of employer and employees and the former is engaged in 'business, trade, undertaking, manufacture or calling of employers ' and the latter, 'in any calling service, employment, handicraft or industrial occupation or avocation ' Though 'undertaking ' is a word of large import and it means anything undertaken or any project or enterprise, in the context in which it occurs, it must be read as meaning in undertaking analogous to trade or business.
In order that an activity may be regarded as an undertaking analogous to trade or business, it must be "organised or arranged in a manner in which trade or business is generally organised or arranged".
It must not be casual nor must it be for oneself nor for pleasure.
And it must rest on co operation between employer and employees who associate together with a view to production, sale or distribution of material goods or material services.
It is entirely irrelevant whether or not there is profit motive or investment of capital in such activity.
Even without these two features an activity can be an undertaking analogous to trade or business.
It is also immaterial "that its objects are charitable or that it does not make profits or even where profits are made, they are not distributed amongst the members",(1) or that its activity is subsidised by the Government.
Again it is not necessary that "the employer must always be a private individual.
The Act, in terms, contemplates cases of industrial disputes where the Government or a local authority or a public utility service may be employer . "(2) It also makes no difference that the material services rendered by the undertaking are in public interest (1) Management of FICCI vs Workmen, [1972] 2 section C. R. 353 at 376.
(2) Madras Gymkhana case, p. 756 of the Report.
150 The concept of public interest in a modern welfare State, where new social values are fast emerging and old dying out, is indeed so wide and so broad and comprehensive is its spectrum and range that many activities which admittedly fall within the category of 'industry ' are clearly designed to subserve public interest.
In fact, whenever any industry is carried on by the Government, it would be in public interest, for the Government can act only in public interest Whether an activity is carried on in public interest or not can, therefore, never be a criterion for determining its character as an industry.
Having thus examined the legal concept, of industry as expounded in the decisions of this Court, we may now proceed to consider whether the activity of the Institution can be characterised as an industry in the light of the broad test discussed by us.
The Institution owes its genesis to the Government of India Resolution No. 1 STD(4)/45 dated 3rd September 1916.
Prior to this Resolution, British and American standards were generally adopted for our country.
But due to diversity of raw materials available in our country and the processes employed for manufacture, it was increasingly felt that the British and other standards were not always suitable for adoption in our country and it was necessary to establish a central standards organisation for fixing Indian standards.
The Government of India, therefore, passed this Resolution for setting up an organisation to be called the Indian Standards Institution with its headquarters at New Delhi.
Pursuant to this Resolution, the Institution was registered and establish under the .
Clause (3) of the Memorandum of Association sets out objects of the Institution and, so far as material, they are as follows: "(a) To prepare and promote the general adoption of standards on national and international basis relating to structures, commodities, materials, practices, operations, matters and things, and, from time to time, to revise, alter and amend the same.
(b) To promote standardization, quality control and simplification in industry and commerce.
(c ) . . (d)To co ordinate the efforts of producers and users for the improvement of materials, products, appliances, processes and methods.
(e) To provide for the registration of standardization marks applicable to products, commodities, etc., for which it issues standards to be branded on or applied to those products, commodities, etc., which conform to standards set.
(f) To provide or arrange facilities for the examination and testing of commodities, processes and practices,, and for any investigations or research that may be necessary.
(g). . (h). . (i). . 151 (j) To communicate, information to members on all A matters connected with standardization and to print, publish, issue and circulate such periodicals, books, circulars, leaflets and other publications as may seem conducive to any of the objects of the Institution".
The income and property of the Institution, however derived, are directed by cls.
(6) and (7) of the Memorandum of Association to be applied towards the promotion of the objects as set forth in the Memorandum of Association and no portion of the income or property is divisible or distributable amongst the members, either during the active life of the Institution or on its winding up or dissolution.
The Rules and Regulations of the Institution make various provisions in regard to the mechanics of the functioning of the Institution.
Rule 2 lays down that there shall be two categories of members, namely, subscribing members and committee members and their rights and privileges are enumerated in Rule 5.
Rule 7 vests the.
management of the affairs of the Institution in a general Council and its composition is laid down in Rule 8 and its functions, in Rule 11.
Rule 15 provides for the constitution of the Executive Committee and it lays down that the Executive Committee shall have the powers to manage the day to day affairs of the Institution, including administration of ISI (Certification Marks)) Act, 1952 in conformity with policies laid down by the General Council.
The Institution can have different branches as may be decided upon by the General Council under Rule 18.
Rule 19 says that a division shall constitute the main section of the technical activities of the Institution and Rule 20 declares that the work of a division shall be controlled by a Division Council.
What shall be the constitution of a Division Council is laid down in Rule 22 and that Rule provides that a Division Council shall be constituted from the representatives of the respective interests of users, manufacturers and other persons or bodies concerned in or associated with the industries included in the Division.
Rule 26 deals with Sectional Committees and it says that the Sectional Committee shall be appointed by a Division Council or if necessary, by Executive Committee for the preparation of a particular standard or group of standards and the Sectional Committee shall be composed of representatives of such interests as, in the opinion of the Division Council or Executive Committee, are concerned with the standards referred to the Committee.
It emphasises that on the Sectional Committee all interests shall be adequately represented including scientists and technicians, but consumer interest shall, as far as possible, predominate.
G Now, at this stage it would be convenient to explain what are standards and why they are necessary to be established.
Standards are technical documents describing constructional, operational and technological requirements of a material, a product or a process for a given purpose.
They furnish such details as materials to be used dimensions and sizes to be adopted, performance to be expected, and quality to be achieved; they also give methods of tests for comparing and judging quality of goods produced by the manufacturer.
Standards may be of any one or more of the following five categories: (a) 11 1276SCI/75 152 Dimensional Standards which secure interchangeability and eliminate unnecessary variety of types for the same or similar purposes; (b) Performance and quality Standards which ensure that the final article will be fit for the job it is designed to do; (c) Standard Methods of Tests which enable materials or products intended for the same purpose to be compared uniformly; (d) Standard Technical Terms and Symbols which provide a common, easily understood technical language for the industry, and (e) Standard Codes of Practice which set out the most efficient methods of installation, use and maintenance of equipment and recommend methods of technical operations.
These are necessary ill order to meet the challenges posed by the fast developing industry economy of the country and mass production of economic goods and services.
The manufacturer should be able to produce goods of specified quality so that he can win the confidence and good will of the consumer and build up internal and external markets for high products.
He should also be able to increase his productivity, produce goods at minimum cost and achieve overall economy by best utilisation of human and material resources at its disposal.
Standards which are based on the consolidated results of science, technology and experience, furnish guidance to the manufacturer in this behalf and confer economic benefits for the development of industry and smooth flow of commerce.
The procedure for preparing standards is laid down in Rule 29 of the Rules and Regulations of the Institution.
The underlying principles for the preparation of standards are that they shall be in accordance with the needs of the industry and fulfil a generally recognised want, that the interests of both producers and consumers shall be considered and that periodic review shall be undertaken.
The work of standardisation on any specific subject can be undertaken only when the Division Council concerned is satisfied, as a result of its own deliberations or of an investigation and consultation with the producer and consumer interests, that the necessity for standardisation has been established.
When the subject has been so investigated and the need established the Division Council concerned would refer the work to an appropriate Sectional Committee and the Sectional Committee would then explore and study the subject and prepare a draft of the proposed standard.
The draft standard would then be issued in draft form for a period to be determined by the Sectional Committee but not less than three months and widely circulated amongst those likely to be interested for the purpose of securing critical review and suggestions for improvement which, is found desirable, would be incorporated in the draft.
This procedure for circulation can, in an appropriate case, be curtailed or dispensed with by the Division Council.
The consideration of the comments received as a result of the circulation of the draft standard would be undertaken by the Sectional Committee and the final draft prepared after verification in the appropriate laboratories where necessary.
The standard so finalised by the Sectional Committee would then be referred to the Division Council concerned for adoption and on such adoption by the Division Council, it would be published as an Indian Standard.
The Institution thus prepares and publishes Indian Standards on different subjects and some of these Indian Standards are also revised 153 so as to keep abreast with the latest developments in manufacturing and testing techniques and to improve the quality of goods.
The Annual Report of the Institution for 1967 68 shows that the number of Indian standards in force on 31st March, 1968 was 4564 and during that year 159 existing Indian standards were revised.
The activity of the Institution in regard to preparation and publication of Indian standards has continued to increase over the years and, according to the Annual Report of the Institution for 1973 74, the number of Indian standards in force on 31st March, 1974 was 7760 and during that year, as many as 243 existing Indian standards were subjected to revision.
Indian standards thus published, whether new or revised, are sold by the sales service of the Institution at its headquarters and at the various branch offices and as the Annual Report for 1973 74 shows, the proceeds from the sales of Indian standards have steadily increased from year to year and reached the figure of Rs. 16,24,170/ during the year 1973 74.
The Institution also acts as a sole selling agent for sale of overseas standards on commission basis and from this activity, the Institution derives a large income, which during the year 1973 74 amounted to as much as Rs. 3,20,700/ .
The Institution also carries on another activity which is the direct outcome of preparation and publication of Indian standards and that activity is the result of implementation of the Indian Standards Institution (Certification Marks) Act, 1952 (hereinafter referred to as the Certification Marks Act) .
Section 2, cl.
(1) defines 'standard mark ' to mean the Indian Standards Institution Certification Mark F. specified by the Indian Standards Institution to represent a particular Indian standard.
Sub section (1) of section 5 imposes a prohibition that no person shall use, in relation to any article.
Or process, or in the title of any patent, or in any trade mark or design, the Standard Mark or any colourable imitation thereof, except under a licence granted under the Act and another prohibition is imposed by sub section
(2) of section 5 that no person shall, notwithstanding that he has been granted a licence, use in relation to any article or process the Standard Mark or any colourable imitation thereof, unless such article or process conforms to the Indian Standard.
Since the Standard Mark is intended to represent a particular Indian Standard, obviously no one can be allowed to use the Standard Mark or any colourable imitation thereof, except under a licence granted by the Institution, for it is only through the machinery of a licence that the Institution would be able to exercise a check on the person concerned and ensure that the article manufactured or process employed by him conforms to the Indian Standards and that the Standard Mark is not abused by him and it does not become an instrument of deception.
It is for this purpose that section 8 confers power on the Institution to appoint inspectors for inspecting whether any article or process in relation to which the Standard Mark has been used conforms to the Indian Standard or whether the Standard Mark has been improperly used in relation to any article or process, with or without licence.
154 The Central Government has, in exercise of the power conferred under section 20 of the Certification Marks Act, made the Indian standards Institution (Certification Marks) Rules, 1955.
Rule 4 requires that the design of the Standard Mark in relation to each Indian Standard together with the verbal description of the design of the Standard Mark and the title of the Indian Standard shall be published by the Institution.
Rule S provides for the making of an application for grant of a licence .
Rule 7 stipulates for the holding of a preliminary inquiry by the Institution before granting a licence and Rule 8 lays down when a licence may be granted or renewed.
Under Rule 6, the fees and expenses leviable in respect of grant or renewal of licence and in respect of all matters in relation to such licence are left to be prescribed in the Regulations.
Regulation 7 of the Indian Standards Institution provides that every application for the grant of a licence shall be accompanied by 9a fee of Rs. 100/ and every application for a renewal of such licence shall be accompanied by a fee of Rs. 50/ and in addition to this application fee, there shall be paid by every licensee an annual licence fee of Rs. 200/ and a marking fee proportionate to the quantum of the annual production of the article or process in respect of which the licence has been granted.
Regulation 9 requires every licensee to institute and maintain to the satisfaction of the Institution a system of control to keep up the quality of his production or process by means of a scheme of inspection and testing attached to the licence and Rule 10 confers power on an Inspector to enter upon the premises of a licensee with a view to ascertaining that the Standard Mark is used in accordance with the terms and conditions imposed by the Institution and that the scheme of routine inspection and testing specified by the Institution is being correctly followed.
It will, therefore, be seen that the Standard Mark is the most authentic representation to the consumer that the article or process in respect of which it is used conforms to the relevant Indian Standard and Indian Standard thus becomes meaningful and advantageous by reason of the use of the Standard Mark.
But no one can use the Standard Mark without a licence from the Institution and even if there is a licence, the Standard Mark cannot be used in relation to an article or process unless such article or process conforms to the relevant Indian Standard.
The issue of licences for use of Standard Marks under the Certification Marks scheme is, therefore, a very important activity of the Institution complementary as well as supplementary to preparation and publication of Indian Standards.
The Certification Marks scheme has been making considerable progress from year to year and while, according to the Annual Report of the Institution for 1967 68, the total number of licences issued since the inception of the scheme upto 31st March, 1968 was 1665 and the annual value of goods covered under the scheme was approximately Rs. 3800 million.
the total number of licences granted upto 31st March, 1974 increased to 3784 and the annual value of goods covered under the scheme rose to approximately Rs. 5000 million during the year 1973 74 as per the figures contained in the Annual Report for that year, the total income from certification marking does not appear to have been shown separately in the Annual Report of the Institution for the year 155 1967 68, but according to the Annual Report for 1973 74, it was Rs. 5.2 million during that year.
The Annual Reports of the institution clearly reveal that from year to year the total number of licences granted by the Institution is steadily increasing and so is the total income from certification marking.
The Institution has also several laboratories for the purpose of carrying out testing operations.
It has a well equipped library at the Headquarters and there are also laboratories at the branch offices where testing of different articles is carried out.
The testing work carried out in these laboratories has shown a consistent rise over the years and while during the year 1967 68 the number of samples received for testing was 3853 and the value of testing work done was Rs. 3,96,468, the number of samples received during 1973 74 was 12726 and the value of testing working done during that year was Rs. 8,76,847.58.
The samples tested at the laboratories are not only those submitted by the manufacturers, distributors and consumers, but also those taken by the Inspectors for the purpose of ascertaining whether any article or process in relation to which the Standard Mark is used conforms to the Indian Standard or whether the Standard Mark has been improperly used in relation to any article or process.
The laboratories are also used in connection with the preparation of Indian Standards as contemplated in cl.
(f) of Rule 29 of the Rules and Regulations of the Institution.
Then, the Institution maintains libraries at the Headquarters and at the branch offices which render useful services to the subscribing members, the Committee members, the Staff members and others.
The library at the Headquarters, which is open to visitors, has complete sets of overseas standards and specifications and related indices.
It has also classified subject catalogues for consultation and retrieval of information on standardization.
It also prepares and circulates for the benefit of its users a monthly list of current published information on standardization.
It has also brought out fortyone bibilographies at the request of technical staff and Committee members and also published an important bibliography, namely, 'World List of Standards on Paper Products '.
Quite often, technical enquiries are received from the industry and the necessary information is supplied by the libraries of the Institution.
The libraries also disseminate technical information on national and overseas standards, specifications and other allied subjects.
The Institution is also bringing out regularly ISI bulletin, Standards Monthly Additions and miscellaneous publications such as Annual Report, Handbook of ISI publications, brochures, leaflets and a large number of advertisements.
These publications are distributed amongst the members and are also sold to non members and they are intended to publicise the activities of the Institution, promote widespread implementation of Indian Standards, propagate the Certification Marks scheme, create awareness about the importance of standardization and quality control and further the standardization movement in the country.
The Institution is also making concerted efforts for furthering standardization movement among different sectors of economy 156 through out the country through different media of publicity and for that purpose it contributes articles, reviews and write ups on different aspects of standardization and other activities in newspaper journals, souvenire, reference publications etc.
and holds inter alia radio broadcasts, press conferences, exhibitions, seminars, conferences and conventions.
It is clear from the resume of the activities of the Institution given above.
that the undertaking of the Institution answers the broad test laid down in the Safdarjung Hospital case (supra) and explained by us in the earlier part of the judgment and must be held to be an industry within the meaning of section 2(j).
The activities of the Institution arc carried on in a systematic manner and are organised or arranged in a manner in which trade or business is ordinarily organised or arranged.
The Institution derives large income from its activities, which was about Rs. 4.5 million in 1967 68 and rose to about Rs. 10.2 million in 1973 74, a bulk of the income being accounted for by sale proceeds of Indian Standards and Certification Marking Fees.
The object of the activities of the Institution is to render material services to a part of the community, namely, manufacturers, distributors and consumers.
Standards set the recognised level of good quality, corner stone for building domestic and export markets and developing good will and prestige for the manufacturer: they provide the framework for mass production, increase in productivity simplification in production process and enhancement in labour efficiency the make for dimensional interchangeability by setting national and also international patterns of interrelated sizes: they incorporate results of the latest developments in research and technology: they increase consumer confidence and goodwill bringing wide markets and quick turn over with savings for the buyer and they bring more profits and lower costs by optimum utilization of scarce resources.
The brochure on "Standards for Textiles" points out that amongst various advantages which accrue from the application of standards in the day to day manufacturing programmes are increased efficiency, less waste of manpower and material, higher productivity through longer runs in the factory, simplified buying, costing and cataloguing and stabilizing and promoting exports by sending goods of uniform quality abroad.
The Certification Marking Scheme involving issue of licences for use of Standard Marks, maintenance of laboratories and libraries, bringing out various publications, such as ISI bulletin, Standards Monthly Additions and other brochures and leaflets and publicity through different kinds of media, which constitute the other activities of the Institution apart from preparation and publication of Standards, are intended to promote implementation of Standards, create consciousness about the importance of standardisation and quality control amongst different sectors of the economy and further inplant standardization activity, with a view to helping the manufacturer, to step up production and lower manufacturing cost, increasing labour efficiency by simplifying production processes and ensure dependable and quality goods, increase consumer confidence and goodwill and achieve greater turnover and increased profits by maximum utilization of human and material resources, the distributor, to add to his turnover and to his reputation by marketing uniform quality of goods of high standard 157 assured by compliance with the Standards and the consumer, to benefit from lower prices, higher quality and more safety in short, get value for the money spent by him.
The Institution renders what are termed `extension services ' to industries which opt for them and these extension services are made available in three district phases, namely, Pilot Study, Systematic Development and Evaluation.
If this is not rendering of material services to a section of the community, we fail to see what other activity can be so regarded.
There is also cooperation between the management of the Institution and the employees who are associated together for rendering these material services.
It is true that the Standards are prepared by Sectional Committees which are composed of representatives of all concerned, including scientists and technicians, with consumer interest playing a dominant role and they are not exclusively the result of the work carried out by the employees, but the participation of the employees is not altogether absent.
Not only do the employees who are technicians participate in the work relating to various aspects of preparation of Standards but the draft standards are also verified in the laboratories of the Institution which are operated by the employees.
Moreover, the distribution and sale of Standards prepared and published by the Institution is being made through the employees.
The certificate Marketing scheme, maintenance of laboratories and libraries, publication of ISI bulletin, Standard Monthly Additions and other magazines, journals and leaflets and publicity of the activities of the Institution are all carried on with the help of the employees.
There are a large number of employees of the Institution belonging to Grades II, III and IV, apart from officers in Grade I. Some of the employees in Grade II are technical people closely associated with the technical activities of the Institution.
There can, therefore, be no doubt that the activities of the Institution fall within the category of undertaking analogous to trade or business and must be regarded as an `industry ' within the meaning of section 2(j).
This view which we are taking receives support from an earlier decision or this Court in the Ahmedabad Textile Industry Research Association vs The State of Bombay & Ors.(1) There the question was whether the activity of the appellant Association, which was a textile research institute established for the purpose of carrying on research and other scientific work in connection with the textile trade or industry and other trade and industries allied there with or necessary thereto, was an 'industry ' for the purpose of the Act.
This Court analysed the activity of the appellant Association and pointed out that it is an "activity systematically undertaken; its object is to render material services to a part of the community (namely, member mills) the material services being the discovery of processes of manufacture etc.
with a view to secure greater efficiency, rationalisation and reduction of costs of the member mills.
it is being carried on with help of employees (namley, technical personnel) who have no rights in the results of the research carried on by them as employees of the association; it is organised or arranged in a manner in which a trade or business is generally organised: it postulates cooperation between (1) 158 employers (namely, the association) and the employees (namely, the technical personnel and others) which is necessary for its success, for the employers provide monies for carrying on the activities of the association and its object clearly is to render material services to a part of the community by discovery of process of manufacture etc.
with a view to secure greater efficiency, rationalisation and reduction of costs.
" It was observed by this Court that the undertaking as a whole is "in the nature of business or trade organised with the object of discovering ways and means by which the member mills may obtain larger profits in connection with their industries," and on this view, the Court held that "the appellant association is carrying on an activity which clearly comes within the meaning of the word `industry ' in section 2(j)".
This case bears a very close analogy to the present case and indeed, some of the observations made by this Court ill that case particularly those underlined by us aptly describe the nature of the activities of the Institution and the reasoning on which the decision in this case is based is equally applicable in the decision of the present case.
There is also one other decision of this Court which amply supports the view we are taking and that is the decision in the Management of the FICCI vs Workmen (supra).
The question which arose in that case was whether the Federation of Indian Chambers of Commerce and Industry, for short referred to as FICCI was an industry within the meaning of section 2(j).
This Court reviewed most of the earlier decisions on the subject and after summarising the broad test for determining what is an industry, proceeded to analyse the activities of FICCI and pointed out that "the Federation carries on systematic activities to assist its members and other businessmen and industrialists and even non members, as for instance, in giving them the right to subscribe to their bulletin; in taking up their cases and solving their difficulties and in obtaining concessions and facilities for them from the Government.
These activities are business activities and material services, which are not necessarily confined to the illustrations given by Hidayatullah, C.J., in the Gymkhana case by way of illustration only, rendered to businessmen, traders and industrialists who are members of the constituents of the Federation.
There can in our view be no doubt that the Federation is an industry within the meaning of section 2(j) of the Act.
" This decision is also very apposite and helpful and leaves no doubt that the activities of the Institution in the present case are an 'industry ' so as to attract the beneficent provisions of the Act.
We, therefore, allow the appeal, set aside the order passed by the Industrial Tribunal and direct the Industrial Tribunal to proceed with the Reference before it on merits on the basis that the activities of the Institution constitute an 'industry ' within the meaning of section 2(j) of the Act.
The respondents will pay to the appellants costs of the appeal as also costs of the hearing before the Industrial Tribunal.
ALAGIRISWAMI, J.
I am sorry I find myself unable to agree with my learned brother Bhagwati J.
The facts of the case have been 159 elaborately set out in his judgment and it is unnecessary to repeat them.
It would be necessary, however, to refer to one or two other facts which have not been mentioned in their proper place.
After the very clear decision by this Court in its judgment in Gymkhana Club Union vs Management(l) and its endorsement in its judgment in Safdarjung Hospital vs K. section Sethi(2) the decision in State of Bombay vs
The Hospital Mazdoor Sabha(3) has become irrelevant.
The Gymkhana Club case has laid down that any trade, business, undertaking, manufacture or calling of employers is an industry and once the existence of an industry viewed from the angle of what the employer is doing is established, all who render service and fall within the definition of 'workman ' come within the fold, of industry, irrespective of what they do.
It was also pointed out that the word 'undertaking ', though elastic, must take its colour from other expressions used in the definition of `industry ', and must be defined as any business or any work or project resulting in material goods or material services and which one engages in or attempts as an enterprise analogous to business or trade.
It also pointed out that the test adopted in Hospital Mazdoor case (supra) namely, could the activities be carried on by a private individual or group of individuals for the purpose of holding that running a Government hospital was an industry must be held to have taken an extreme view of what is an industry and that this test is not enlightening.
With regard to local bodies it was pointed out that they are political sub divisions and agencies for the exercise of governmental functions, but if they indulge in municipal trading or business or have to assume the calling of employers they are employers whether they carry on or not business commercially for purposes of gain or profit.
It was finally held that before the work engaged in can be described as an industry, it must bear the definite character of `trade ' or `business ' or `manufacture ' or `calling ' or must be capable of being described as an undertaking resulting in material goods or material services and the word 'undertaking ' was defined as "any business or any work or project which one engages in or attempts as an enterprise analogous to business or trade. ' These ideas were crystallised in the judgment in Safdarjang Hospital case and for facility of reference I may quote the first conclusion in the headnote.
"The definition of industry in section 2(j) of the is in two parts.
But it must be read as a whole.
So read it denotes a collective enterprise to which employers and employees are associated.
It does not exist either by employers alone or by employees alone.
It exists only when there is a relationship between employers and employees, the former engaged in business, trade, under taking, manufacture or calling of employers and the latter engaged in any calling, service, employment, handicraft or industrial occupation or avocation.
But every case of em (1) [1968]1 section C. R. 742.
(2) [1971] I section C. R. 177.
(3) ; 160 ployment is not necessarily productive of an industry.
A workman is to be regarded as one employed in an industry only if he is following one of the vocations mentioned in relation to the employers, namely, any business, trade, under taking, manufacture or calling of employers.
In the collocation of the terms and their definitions these terms have a definite economic content of a particular type and on the authorities of this Court have been uniformly accepted as excluding professions and are only concerned with the production, distribution and consumption of wealth and the production and availability of material services.
Industry has thus been accepted to mean only trade and business, manufacture, or undertaking analogous to trade or business for the production of material goods or wealth and material services.
Material services involve an activity carried on through co operation between employers and employees to provide the community with the use of something such as electric power, water, transportation, mail delivery, telephones and the like.
In providing these services there may be employment of trained men and even professional men, but the emphasis is knot on what they do but upon the productivity of a service organised as an industry and commercially valuable, in which, something is brought into existence quite apart from the benefit to particular individuals; and it is the production of this something which is described as the production of material services.
Thus, the services of professional men involving benefit to individuals according to their needs, such as doctors, teachers, lawyers, solicitors, etc. are easily distinguishable from an activity such as transport service.
They are not engaged in an occupation in which employers and employees cooperate in the production or sale of commodities or arrangement for the production or sale or distribution and their services cannot be described as material services and are outside the ambit of industry.
It, therefore, follows that before an industrial dispute can be raised between employers and employers or between employers and employees or between employees and employees in relation to the employment or non employment or the terms of employment or with the conditions of labour of any person, there must first be established a relationship of employers and employees associating together, the former following a trade, business, manufacture, undertaking or calling of employers in the production of material goods and material services and the latter following any calling, service, employment, handicraft or industrial occupation or avocation of workmen in aid of the employers ' enterprise.
It is not necessary that there must be profit motive, but the enterprise must be analogous to trade or business in a commercial sense.
" It criticised the decision in Hospital Mazdoor case in words which have been summarised in headnote 2 as follows: .
161 "The decision in State of Bombay vs Hospital Mazdoor Sabha holding that a Government hospital was an industry took an extreme view of the matter and cannot be justified, because: (a) it was erroneously held that the second part of the definition of 'industry ' was an extension of the first part, whereas, they are only the two aspects of the occupation of employers and employees in an industry; (b) it was assumed that economic activity is always related to capital or profit making and since an enterprise could be an industry without capital or profit making it was held that even economic activity was not necessary; and (c) it was held that since a hospital could be run a business proposition and for profit by private individuals or groups of individuals a hospital run by Government without profit must also bear the same character.
This test was wrongly evolved from the observations in Federated Municipal and Shire Council Employees of Australia vs Melbourne Corporation, ; , which only indicate that in those activities in which Government take to industrial ventures the motive of profit making and absence of capital are irrelevant.
The observations, on the contrary show that industrial disputes occur only in operations in which employers and employees associate to provide what people want and desire, that is, in the production of material goods or services, and not the 'satisfaction of material human needs '." and also pointed out that if a hospital, nursing home or dispensary is run as a business in a commercial way there may be found elements of an industry there.
Applying these tests it was held that the Safdarjung Hospital was not embarked on an economic activity which could be said to be analogous to trade or business, that there was no evidence that it was more than a place where persons could get treated, that it was a part of the functions of Government and the Hospital was run as a Department of Government and that it could not, therefore, be said to be an industry.
The Tuberculosis Hospital was held to be not an industry because it was wholly charitable and a research institute, the dominant purpose of the Hospital being research and training and as research and training could not be given without beds in a hospital, the hospital was run.
The Kurji Holy Family Hospital was held not to be an industry on the ground that it objects were entirely charitable, that it carried on work of training, research and treatment and that its income was mostly from donations and distribution of surplus as profit was prohibited.
The idea behind these decisions could be crystallised thus: Even where a trade, business, undertaking, manufacture or calling of employers results in production of material goods or rendering of material services, such an undertaking engaged in trade, business, manufacture or calling of employers will not be an industry if it is run on charitable principles or is run by Government or local body as part of its duty.
In other words whenever an undertaking is engaged in activity which is not done with a view to exploit it in a trading or 162 commercial sense but for public interest and without any profit motive or in the form of social service or in the form of activity intended to benefit the general public it will not be an industry.
The Indian Standards Institution was set up by a Resolution of the Government of India and registered under the .
My learned brother Bhagwati J. has set out the Memorandum of Association, the rules and regulations of the Institution and explained what the standards established by the Institution are as also its role in the implementation of Indian Standards Institution (Certification Marks) Act, 1952.
It is unnecessary to set out all of them at length.
A bare scrutiny of the objects of the Institution would show that they are concerned with broad public interest of the country as a whole and no part of the objects of the Institution has anything to do with serving any private interest.
The standards are prepared by committees in which all interests are adequately represented, including scientists and technicians but consumer interest has, as far as possible, to predominate.
As pointed out by my learned brother, the Standard Mark is the most authentic representation to the consumer that the article or process in respect of which it is used conforms to the relevant Indian Standard and Indian Standard thus becomes meaningful and advantageous by reason of the use of the Standard Mark.
The existence of laboratories and libraries are incidental and in furtherance of the specifications of standards and the application of the Standard Marks.
The Institution has no capital, it does not distribute profits and even when it is wound up the assets would not go to any private individual.
It is not run with a profit motive.
It is thus not an enterprise analogous to business or trade.
In fact one can go further and say that its activity is only a manifestation of governmental activity.
Instead of itself performing these duties the Government have set up the Institution in effect for the purpose of discharging duties which the Government itself has to do in the service of the general public.
What the Institution does it thus to render material services.
It is in recognition of the role which the Institution plays as an instrument of Government that it had made a contribution of 40 lakhs and odd out of the income of 73 lakhs of the Institution in the year 1973 74.
Thus the material service which the Institution renders is really a subsidised service and it is rendered in public interest.
It is an Institution interested and engaged in service to the public.
Its activities do not go to swell coffers of anybody.
Applying therefore the tests which have been evolved and applied in the Gymkhana Club case and the Safdarjung Hospital case it is obvious that the Institution is not engaged in an industry.
The judgments of this Court in Management of FICCI vs Workmen and Ahmedabad Textile Industry Research Association vs The State of Bombay & Ors. are not relevant because in the case of the Federation it was intended to benefit the members of the commercial community and not the public in general.
The Ahmedabad Textile Industry Research Association activities were in the nature of business or trade organised with the object of discovering ways and means by 163 which the member mills may obtain larger profits in connection with their industries.
The activities of the Indian Standards Institution are not intended to benefit any class of businessmen or to enable them to increase their income.
It is a public service institution and therefore must be held not an industry.
I would, therefore, dismiss the appeal ORDER In view of the decision of the majority, the appeal is allowed and the Industrial Tribunal should proceed with the Reference before it on the merits.
The respondents will pay to the appellants costs of the appeal as also costs of the hearing before the Industrial Tribunal.
| The appellant assessee is a firm, having three Partners and one minor admitted to the benefits of the partnership.
One of the partners has 31% share and the remaining two partners and the minor have 23% share each in the profit of the firm but the partnership deed is silent about their shares in the losses.
Clauses 9 of the partnership deed provides that the partners are bound to act according to the provisions of the Indian Partnership Act.
The firm applied for registration under section 26A of the Income Tax Act, 1922 which was refused by the Income Tax officer.
The High Court in a reference under section 66(1) held that unless the instrument r of partnership specified the shares of the partners not only in the profits but also in the losses, the firm would not be entitled to registration under section 26A.
The High Court negatived the contention of the assessee that clause 9 of the instrument indicated how losses were to be apportioned between the partners.
On appeal by special leave it was contended by the appellant: (1) section 26A does not require that the instrument of partnership must specify the respective shares of the partners in the losses and it is sufficient if the proportion in which the losses are to be shared is otherwise ascertainable.
(2) Assuming that section 26A does require mentioning the proportion of losses in the instrument of partnership, clause 9 of the instrument read with s 13(b) of the Partnership Act satisfies that requirement.
Dismissing the appeal, ^ HELD: (1) A firm whether registered or unregistered is an assessee under the Act and can do business as such.
However, registration under section 6A confers on the partners a benefit to which they would not have been entitled but for section 26A and such a right being a creature of a statute can be claimed only in accordance with the statute which confers it and the person who seeks relief under section 26A must bring himself strictly within its terms before he can claim the benefit of it.
[133D E] Rao Bahadur Revulu Subba Rao and others vs Commissioner of Income Tax, Madras, , relied on.
(2) In the case of a registered firm the share of each partner in the profit or loss is added to or set off against, as the case may be, to the other income of the partner.
Thus, the loss, if any, affects the assessment proceedings and.
therefore, Income Tax officer has to know what are the respective shares of the partners in the loss before allowing the firm to be registered.
[134 C D] (3) There is a conflict of opinion amongst the High Courts whether it is essential for registration under section 26A that the shares of the partners must be specified in the partnership deed.
It is not necessary to decide for the purpose of this appeal which of the conflicting views is correct because in the present case the appeal is bound to fail on any view.
It is not disputed and cannot be disputed that the Income Tax Officer before allowing the application for 132 registration must be in a position to ascertain the shares of the partners in the losses.
even if section 26A did not require this to be specified in the instrument of partnership.
[135E F] (4) The contention that clause 9 brings in by implication section 13 (b) of the Partnership Act and thus specifies the shares of the partners in the losses is untenable.
section 13(b) makes the partners liable to contribute equally to the losses only when they are entitled to share equally in the profits.
ID this case the shares of the partners are not equal.
The case of K. Pitchiah Chettiar.
vs G. Subramaniam Chettiar I.L.R. and In re Albion Life Assurance Society, 16 Ch.
83, 87, applied.
[135 G H] The law stated in these cases in the context of section 253(2) of the contract Act applies equally to section 13(b) of the Partnership Act which is in identical terms.
In the absence of any indication to the Contrary, where the partners have agreed to share the profits in certain proportions, the presumption is that the losses are also to be shared in like proportions.
The other rule that where the shares in the profits are unequal the losses must be shared in the same proportions as profits in the absence of an agreement as to how the losses are to be apportioned, also does not apply to this case since there is a minor admitted to the benefits of the partnership.
Even if the adult partner bear the losses in proportion to their respective shares in the profits, the amount of loss in the minor 's share would still remain undistributed.
Whether the partners between themselves will bear this loss equally or to the extent of their own individual shares, is not even suggested in the instrument of Partnership.
TD There is, therefore, no means of ascertaining in this ease how the losses are to be apportioned.
[136 H, 137A C]
|
: Criminal Appeal No.106 of 1980.
From the Judgment and Order dated 8.1.1980 of the Delhi High Court in Crl.
A. No. 137 of 1978.
Ms. Neeraja Mehra and I.K. Wadera for the Appellants.
Anil Dev Singh, R.N. Poddar and G.D. Gupta for the Respondent .
The Judgment of the Court was delivered by FAZAL ALI, J.
The appellant in this case was convicted under section 302 IPC and sentenced to imprisonment for life by the High Court.
m e case depends purely on circumstantial evidence and the trial court after considering the evidence was of the opinion that the prosecution case was not proved beyond reasonable doubt and accordingly acquitted the appellant of the charges framed against him.
The State filed an appeal before the High Court which reversed the decision of the trial court and came to the conclusion that the appellant had killed his wife by strangulation.
Hence, this appeal before this Court under section 379 of the Code of Criminal Procedure.
At the very outset we might mention that circumstantial evidence must be complete and conclusive before an accused can be convicted thereon.
This, however, does not mean that there is any particular or special method of proof of circumstantial evidence.
We must, however, guard against the danger of not considering circumstantial evidence in its proper perspective, e.g., where there is a chain of circumstances linked up with one another, lt 511 is not possible for the court to truncate and break the chain of circumstances.
In other words where a series of circumstances are dependent on one another they should be read as one integrated whole and not considered separately, otherwise the very concept of proof of circumstantial evidence would be defeated.
The learned Sessions Judge seems to have fallen into this very error.
In the instant case, instead of taking all the circumstances together, which are undoubtedly circumstantial and closely linked up with one another, the learned Sessions Judge has completely misdirected himself by separately dealing with each circumstance thereby making a wrong approach while appreciating the circumstantial evidence produced in the case.
Let us now recount the circumstances relied upon by the appellant by giving first a brief summary of the same.
The marriage of the accused and the deceased took place on December 6, 1975, i.e., hardly a year before the date of the occurrence.
After about six months of the marriage, the relations between the two spouses started becoming strained.
The evidence clearly shows that the accused neglected the deceased, abused her, teased her, waxed her and even beat her.
All these things were reported to the relatives of both sides as a result of which a panchayat had to be called to bring the two parties together which also was of no avail.
There is further evidence to show that on the night of the occurrence, i.e., between the night of 16th and 17th November 1976, the accused was last seen by some of the witnesses whose evidence we shall refer hereafter.
Secondly, it is also proved that the accused left his house in the morning of 17th November 1976 and went to Muzaffar Nagar and stayed at his sister 's house there and came back to Delhi in the evening of 17th November 1976 but instead of staying in his own house he stayed in Venus Hotel in Paharganj in Delhi under a false and assumed name of Vinod Kumar which, according to the evidence, was written by him while making the entries in the Hotel register.
Furthermore, it appears that there are some letters written by the deceased which show the callous and cruel nature of the accused and his treatment towards her.
He appears to have been completely indifferent towards her and the deceased prayed to her parents for taking her with them immediately.
It is true that despite the conduct of the appellant, the parents in law of the deceased were very kind to her and tried their best to save the situation but the appellant was made of such a stern stuff and stubborn nature that he would not listen to anyone.
512 Moreover, the evidence further shows that certain broken bangles and one pair of cufflinks were recovered from the room where the deceased was strangulated.
The medical evidence also supports that the deceased had died of manual strangulation.
There are some other circumstances which show the role played by the accused and if we take the circumstances together the irresistible inference is that the prosecution has completely proved its case.
We might observe there that the circumstances which have been narrated above are so interlinked in the chain of circumstantial evidence that lt is difficult to truncate them and the learned Sessions Judge ought not to have rejected the circumstances one by one and then acquit the accused.
It is here that the learned Sessions Judge has committed a serious error of law.
If we read the evidence as an integral whole, the inescapable conclusion is that excepting the appellant nobody else could have committed the murder.
With this preface, we now proceed to deal with the chain of circumstances relied upon by the High Court in reversing the judgment of the trial court and convicting the accused.
To begin with, as we have said, within one year of her marriage the deceased died during the night of 16th and 17th November 1976.
A number of prosecution witnesses (PWs 5,6,7,8 and 9) whose evidence has been fully considered by the High Court deposed that the appellant had been ill treating the deceased and their relations were extremely strained.
This is buttressed by the further circumstance that a panchayat had been called to resolve the differences between the two spouses.
In this connection, the prosecution witnesses have spoken thus: The accused had always been maltreating Madhu and used to say that he will not like to keep Madhu with him.
After about 6 months of the marriage a Panchayat was held in Bakhtamal Dharamshala, Delhi for bringing about conciliation.
Before the panchayat the father of the accused had assured that he will ask the accused to behave better.
But there was no change in the attitude of the accused towards the deceased and the accused was bent upon leaving the girl." (PW 5, Ramesh Chand) About 5 or six months prior to the murder of Madhu, her father had complained to me that the accused used 513 to beat her and wanted to leave her.
After 2 or 3 days A of that, a panchayat was held in Bagtamal Dharamshala, Kucha Pati Ram. .
Before the Panchayat, father of the accused had assured that he will make him under stand and see that the accused behaved properly in future with Madhu.
(PW 6, Ram Kishan Dalaya) Accused used to beat Madhu and we were receiving many complaints in this respect.
Myself, Ramesh Chand, Ganga Prasad and Madan Lal had been coming to Delhi and requesting the accused not to do so.
However, the behaviour of the accused towards Madhu did not change.
(PW 7, Chhanu Lal) She was married to Ram Avtar(accused) present in the court.
Madan Lal had started saying after about 20 or 25 days after the marriage that the deceased was being beaten and ill treated by the accused. .
A panchayat was organised.
Radhey Lal was also called and he attended the panchayat.
( PW 8, Ram Pal Singh) There were strained relations between them for a long time.
(PW 9, Gulab Chand) Right from the beginning, accused had been ill treating my daughter.
She had been writing letters to me from which I had come to know that she was not happy and so I came to Delhi.
I beseeched the accused and with folded hands requested him to behave better with my daughter in the presence of his father.
Both of them had assured that nothing will happen in future.
(PW 12, Madan Lal) I had gone to attend its conference at Lucknow from G 5th to 7th Oct. 1976.
There, Chhanu Lal, elder brother of Madan Lal had complained to me that Ram Avtar accused was ill treating Madhu and that I should look into this matter.
Then I told him that in that case Chhanu Lal would not have complained to me.
Then he assured me that he will ask the accused to behave properly and there will be no complaint in future.
(PW 13, Sohan Lal Verma) 514 The above extracts from the evidence of various prosecution witnesses show that the relatives of the two sides tried their best to bring harmony in the relations of the accused and the deceased and the father of the accused had been promised that his son will behave in future in a proper manner.
One outstanding feature of this case is that while the deceased was fully satisfied with the treatment received by her from her parents in law, yet so adamant was the accused that he would hardly listen or pay any heed to the advice of his parents.
Another circumstance which almost conclusively proves the case of the prosecution is the evidence of PW 1, Shri Krishan Avtar, according to which, the accused was seen by him on the fateful night between 9 or 9.30 p.m. in his house and in this connection he says thus: When I returned at about 9 or 9.30 p.m.
I saw the accused in his house.
He was alone in the house at that time.
The room of the accused is situated on the ground floor while mine is situated on the first floor.
When I saw him he was coming down stairs from the first floor and entered his room on the ground floor. . . .
Then I entered the room of the accused where he and his wife used to sleep together and saw the dead body of Madhu.
" PW 1 further testifies to the articles found from the scene of occurrence "exhibit
P8 is the pair of cufflink.
exhibit
P 14 are the broken pieces of bangles collected from the floor of the room.
F PW 2, Nathi Lal, another independent witness, says that at about 12.30 in the night while he was coming from Lal Darwaza to his house, he saw the accused passing that side and the accused told him that he had told the chowkidar that he (appellant) was going away and the door of his house was open.
Another witness (PW 3) though declared hostile, yet so far as the relations between the spouses are concerned, categorically states that the relations between the spouses were extremely strained.
Another circumstance which is of great importance and which seems to have been ignored by the learned Sessions Judge is that after returning from Muzaffar Nagar in the evening of 17th November 1976, the accused instead of staying in his house, stayed in 515 Venus Hotel in Paharganj, New Delhi under a false and assumed name of Vinod Kumar and made the entries in the Hotel register in his own hand.
m is shows the guilty conscience of the accused.
This is proved by exhibit
PW 14/A where it has been stated thus: The aforesaid register contains one entry against serial No.518 dated 18.11.76 recorded at 1.00 a.m. relating to Vinod Kumar, Indian 23/3, Sarafa Bazar, Muzaffar Nagar, for business Muzaffar Nagar, stated to have been made and initialled by accused Ram Avtar S/o Radhey Lal, r/o 2721, Chhatta Girdhar Lal, Gali Arya Samaj, Bazar Sita Ram, Delhi.
Another intrinsic evidence which proves the case against the accused consists of two letters (Ext.
PW 12A and 12B) written by the deceased to her parents wherein she had requested her father to take her away as her husband was ill treating her.
In these letters she had written thus: You (father) take me away from here. . (He) is not on speaking terms with me.
PW 12A) There is always a quarrel in the house about me.
Papa and Mummy have been trying to make him understand.
(He) does not eat and drink anything from my hand and even does not speak to me.
Whenever, I come across him, he scolds me.
Today, he gave me beating and was about to turn me out of the house but Mummy and Pappa pacified him. .
He further said 'I do not want to see the face of this mean girl.
Furthermore that whatever Khurjawallas have done in my interest is good (Taunt).
He says that when I become a widow then at least they (parents) will come to take me away. .
He says that even if God comes, he will not agree and will not keep me with him at any cost. .
You treat this letter as a telegram and please reach here immediately.
I keep weeping here day and night and Mummy also continuous weeping.
He would not keep me with him at any cost and I also do not want to live here any more. .
I am weeping while writing this letter.
Dear Pappa, please come as early as possible.
(exhibit PW 12 B) In addition to Ext.
PW 12 A and 12 B, one more letter was found from the house where the murder took place but which she could not post.
516 In his statement PW 18, Kanshi Ram, S.I., stated that from the personal search of the accused, Rs. 5.50 one ticket from Meerut to Delhi were recovered and the accused was also made to put off his shirt and banian, and that he (PW 18) took into police custody the banian of the accused which had blood stains on the front side.
The last piece of evidence which is also important and which has been completely glossed over by the trial court is the recovery of broken bangles and a pair of cufflinks which show that during the course of strangulation the deceased must have put in stiff resistance.
In view of the circumstances discussed above, it cannot be said that the case against the accused has not been proved.
It is not possible for us to consider the various chains of circumstances, mentioned above, in isolation by divorcing them from the other circumstances which are closely interlinked with them.
This is where the trial court has gone wrong and has made a fundamentally wrong approach.
Having regard to the circumstances mentioned above, we are clearly of the opinion that the judgment of the trial court is not only legally erroneous but also absolutely perverse.
In view of the circumstances and the admissions of the witnesses extracted, the case against the accused is proved beyond reasonable doubt and this is not a case where two views are reasonably Possible.
Before concluding we might observe that where circumstantial evidence consists of a chain of continuous circumstances linked up with one another, the court has to take the cumulative effect of the entire evidence led by the prosecution before acquitting or convicting an accused.
For the reasons given above, we find ourselves in complete agreement with the view taken by the High Court and we see no reason to interfere with the same.
The appeal is accordingly dismissed.
In case the appellant is on bail, he shall now surrender and be taken into custody and sent to prison to serve out the remaining part of the sentence.
N.V.K. Appeal dismissed.
| In the general election to the State Assembly held in 1982 the appellants and the respondents were the candidates.
The respondent was declared elected to the Assembly.
In their election petition, the appellants alleged that the respondent was guilty of corrupt practice and booth capturing in that he went to two polling booths along with 50 to 60 persons, armed with guns, sticks and swords, threatened and pressurized the voters and as a result of the serious threats held out by the respondent and his men the voters ran away without exercising their franchise; that the respondent and his companions entered the polling booths and terrorized the Polling Officer and polling agents, assaulted the polling agents at gun point, snatched away the ballot papers and marking them in the respondent 's favour, cast the votes in the ballot boxes and thumb marked the counter foil of ballot papers.
They sought a declaration that the respondents election was void under section 100 of the Representation of the People Act 1951.
A large number of witnesses were examined by both sides.
The Deputy Commissioner who was the Returning Officer of the constituency recorded on a tape recorder the statements of same persons including the polling agents, the Polling Officer and the respondent and of himself.
The High Court held that the evidence of the witnesses and the petitioners on these points was not corroborated, no effort was made by the petitioners to connect the respondent with the ownership of vehicles purported to have been used by him, that the witnesses were drawing more upon their imagination to make out stories about the detention of the persons and forcible polling at that polling station by the respondent and that the 400 petitioners failed to prove the charge beyond reasonable doubt.
A The court also held that the role assigned to the respondent by the petitioners has not been proved.
Dismissing the appeal ^ HELD: [Per Fazal Ali J, Sabyasachi Mukharji J concurring and Varadarajan J dissenting] The appellants have failed to prove their case that the respondent was guilty of indulging in corrupt practices.
[446 F] Clear and specific allegations with facts and figures regarding the corrupt practices indulged in by the respondent have not been alleged in the first part of the election petition.
The petitioners should have given definitive and specific allegations regarding the nature of fraud or the corrupt practices committed by the respondent as briefly as possible in the main part of the petition.
[407 E F] The appellants have not established that the respondent was present at the time of the incidents at the two booths.
Once this is not proved, the appellants have failed.
It is settled law that corrupt practices must be committed by the candidate or his polling agent or by others with the implicit or explicit consent of the candidate or his polling agent.
Where the supporters of the candidate indulged in corrupt practices on their own, without the authority from the candidate the election cannot be voided, and this factor is conspicuously absent in this case.
It is also settled law that the charge of corrupt practice has to be proved by convincing evidence and not merely by preponderance of probabilities.
As the charge of corrupt practice is in the nature of a criminal charge, it is for the party who sets up the plea of undue influence to prove it, to the hilt and the manner of proof should be the same as in a criminal case.
[445 F H] As regards the evidence recorded on a tape Recorder or other mechanical process the preponderance of authorities is in favour of the admissibility of the statements subject to certain safeguards viz., (1) the voice of the speaker must be identified by the maker of the record or by others who recognise his voice.
Where the voice is denied by the maker it will require very strict proof to determine whether or not it was really the voice of the speaker.
[414 E] (2) The voice of the speaker should be audible and not distorted by other sounds or disturbances.
[414 E] 401 (3) The accuracy of the tape recorded statement has to be proved by the maker of the record by satisfactory evidence.[414 F] (4) Every possibility of tampering with or erasure of a part of the tape recorded statement must be ruled out; [414 G] (5) The statement must be relevant according to the rules of evidence and [414 H] (6) The recorded cassette must be carefully sealed and kept in safe custody.
[415 A] R. vs Maqsud Ali and B. vs Robson , referred to.
In the instant case, the voices recorded at a number of places are not very clear and there is noise while the statements were being recorded by the Deputy Commissioner.
A good part of the statement recorded on the cassette has been denied not only by the respondent but also the respondent 's witnesses.
No other witness has come forward to depose identification of the voice of the respondent or of witnesses.
[444 E] There are erasures here and there in the tape and besides the voices recorded being not very clear, lt is hazardous to base a decision on such evidence.
The Deputy Commissioner recorded the statements in violation of the instructions or the Government and erred in not placing the recorded cassette in proper custody.
He kept it with himself without authority and therefore the possibility of tampering with the statements cannot be ruled out.
The transcript was prepared in his office by his stenographer and when the transcript was being prepared the Deputy Commissioner himself was absent from his office.
The possibility of its being tampered with by his stenographer or somebody else cannot be ruled out.
Respondents witnesses have denied the identity of their voices.
The recording was done in a haphazard and unsystematic manner.
A conspectus of the evidence of the witnesses shows that the evidence adduced by the respondent in the court is much superior in quality than that adduced by the appellants.
The High Court was right in holding that the petitioners had failed to prove the allegations of corrupt practice or booth capturing beyond reasonable doubt.
[441 E, 442 H 443 E] Sabyasachi Mukharji,J. concurring: While accepting the tape recorded statements the court should proceed cautiously.
The 402 evidence should be examined on the analogy of mutilated documents.
If the tape recording is not coherent or distinct or clear it should not be relied upon.
[502 B,D E] R. V. Maqsud Ali and R. vs Robson , referred to.
In the instant case, the tape recording was misleading and could not be relied on because in most places it was unintelligible and of poor quality.
Therefore, its potential prejudicial effect outweighs the evidentiary value of the recording.
[504 C] Shri N. Sri Rama Reddy etc.
vs Shri V.V. Giri [1971]1 S.C.R. 399 and R.M. Malkani vs State of Maharashtra ; M.Chenna Reddy vs V. Ramachandra Rao & Anr.
[1972] E.L.R. Vol. 40, 390; Ram Sharan Yadav vs Thakur Muneshwar Nath Singh & Ors.
; ; C.A.No. 3419/81 decided on 29.11.84, referred to.
It is settled law that the charge of corrupt practice is in the nature of a criminal charge which if proved entails a heavy penalty in the form of disqualification and that a more cautious approach must be made in order to prove the charge of undue influence levelled by the defeated candidate.
In the instant case, it cannot be said that the appellants had proved their case to the extent required to succeed.
[506 D] Where the question is whether the oral testimony should be believed or not the views of the trial judge should not be lightly brushed aside, because the trial judge has the advantage of judging the manner and demeanour of the witness which advantage the Appellate Court does not enjoy.
In view of the nature of the evidence on record there is no reason to disagree with the appraisal of the evidence by the trial judge.
[506 G] Moti Lal vs Chandra Pratap Tiwari & Ors.
A.I.R. 1975 S.C. 1178 and Raghuvir Singh vs Raghuvir Singh Kushwaha A.I.R. 1970 S.C. 442, referred to.
Varadarajan J. dissenting : It is clear from decided cases that tape recorded evidence is admissible provided the originality and the authenticity of the tape are free from doubt.
In the instant case, there is no valid reason to doubt them.
It is not reasonable to reject the tape merely because some portions thereof 403 could not be made out on account of noise and interference not only outside but also inside the Polling Station.
On the contrary under the circumstances of this case great relevance has to be placed on the tape and its contents not only for corroborating the evidence of the District Commissioner and the Presiding Officer to the extent they go but also as resgestae evidence of the first part of the incident.
The Trial Judge was not justified in rejecting the tape record and transcription.
The appellants have proved satisfactorily and beyond reasonable doubt the first part of the incident in one of the Polling Stations, that the respondent went armed with a rifle with 25 or 30 companions and entered the Polling Station with 4 or 5 armed companions and threatened the Presiding Officer and others who were present there with the use of force and got some ballot papers marked in favour of the respondent polled forcibly by his companions in the ballot box and that they left the Polling Station on seeing the villagers and the police coming towards the Polling Station.
The discrepancy in evidence regarding the time of the incident is not material.
[478 A C, 483 E 484 A] Secondly, the Deputy Commissioner recorded the conversation which he had with the presiding Officer but some portion thereof was erased by his own voice by inadvertence.
After recording, his stenographer prepared the transcript in his office most of it under his supervision and though he was temporarily absent to attend to some other work he compared it with the original tape and found it to be correct.
The tape, the tape recorder and the transcript remained with him throughout and were not deposited by him in the record room and there was not possibility of tampering.
[496 F 497 A] The respondent had managed to keep away from the court material evidence by way of the original report of the Presiding Officer.
He had cited a person as his witness to depose about his case but did not examine him for that purpose and had called him only for the purpose of production of some record, without any oath being administered to him.
He had denied to the appellants the opportunity to cross examine that witness.
The respondent had come forward with a new case of alleged booth capturing and forcible polling of bogus votes after the appellants had completed the examination of their witnesses to whom not such suggestion was made in the cross examination.
From the evidence on record two views are not possible.
The appellants have proved beyond reasonable doubt that the respondent had committed the corrupt practices alleged against him.
No lenient view can be taken in this case merely because the election petition is directed against the returned candidate.
[499 G 500 B] 404
|
ivil Appeal No. 931 of 1986.
From the Judgment and Order dated 3.10.1985 of the Madhya Pradesh High Court in Civil Misc.
W.P. No. 15 10 of 1981.
P.N. Lekhi, M.K. Garg, Aman Lekhi and Lokesh Kumar for the appellants.
R.B. Datar, Sakesh Kumar, Uma Nath Singh, Satish K. Agnihotri and Ashok Singh for the respondents.
The Judgment of the Court was delivered by 133 SAWANT, J.
The two appellants in this case had joined the service in the Public Works Department of the respond ent Madhya Pradesh State, as Overseers.
They were thereafter appointed as Junior Engineers by direct recruitment the first appellant on August 29, 1969 and the second appellant on September 12, 1969.
Although the High Court in its im pugned judgment has stated that they were promoted as Junior Engineers from the posts of Overseers, it appears that that statement is not correct since their orders of appointment to the post of Junior Engineer which are Annexures P 1 and P 2 to the writ petition filed in the High Court show that their appointments as Junior Engineers were not by way of promotion.
This, however, makes no difference to the issues involved in the present appeal.
We have stated it to keep the record straight.
The grievance of the appellants is with regard to their seniority in the next promotional post, viz., that of Assistant Engineer.
The Recruitment Rules which govern the said promo tional post are known as Madhya Pradesh P.W.D. (Gazetted) Recruitment Rules, 1969 (hereinafter referred to as the 'Rules ').
According to these Rules, Junior Engineers, Over seers, Head Draftsmen and Draftsmen are eligible to be considered for promotion to the post of Assistant Engineer on their securing the requisite experience.
Each of these categories further has a fixed quota of its own.
The Depart mental Promotion Committee, D.P.C. to be short, whose con stitution is also prescribed in these Rules, is required to consider the names of all the eligible candidates on merits, and judge their suitability in all respects on merit cum seniority basis.
The D.P.C. is also required to arrange the names of all the selected candidates ordinarily in the order of their seniority unless a junior is exceptionally merito rious in which case, of course, he is given a higher number in the selection list.
This list is then sent through the State Government to the Public Service Commission for its consideration and approval.
The list as approved by the Commission then becomes the select list, and promotions are made from this list in the same order as is arranged in the list.
However, in case of an administrative exigency, the State Government is given power to appoint anyone not in cluded in the said list if the vacancy is not likely to last for more than three months.
Under the Rules, to be eligible to be considered for promotion to the post of Assistant Engineer, a Junior Engineer has to have an experience of two years as Junior Engineer.
It appears that the State Government wanted a certain 134 number of Assistant Engineers, but enough number of Junior Engineers with requisite qualifying service were not avail able at the relevant time.
Admittedly the appellants were two of such unqualified Junior Engineers since they had not completed their two years ' qualified service as Junior Engineers at the relevant time.
Hence, taking resort to the Rule of Administrative Exigency contained in the proviso to Rule 19(1) of the said Rules, the Government promoted some Junior Engineers including both the appellants as Assistant Engineers on July 22, 1971 on purely ad hoc basis.
In the order appointing then, it was stated as follows: "Since adequate number of Junior Engineers with requisite qualify ing service are not available for appointment as Assistant Engineers, and but for these promotions large number of Assistant Engineers ' posts would remain vacant adversely affecting the construction work . . . . .
These appointments will not be deemed to determine seniority as Assistant Engineer for any purpose whatsoever.
It is not disputed that on July 22, 1971 when the appellants were so appointed as Assistant Engineers on ad hoc basis, appellant No. 1 was short of 'two years ' qualify ing service period by one month and appellant No. 2, by two months.
They became qualified on August 22, 1971 and on September 11, 1971 respectively.
It appears that while the appellants continued to act as Assistant Engineers on ad hoc basis, on August 7, 1972.
respondents 40 to 63 were appointed as Assistant Engineers by direct recruitment.
Thereafter, on November 22, 1972 respondents 2 to 39 and the appellants were selected as Assistant Engineers by the D.P.C.
On the same date, the State Government issued an order of appointment of the appellants and respondents 2 to 39 in which appellant No. 1 was shown at Serial No. 14 and appellant No. 2 at Serial No. 28.
The State Government thereafter prepared a seniority list of Assistant Engineers which reflected the seniority of appellants as having been appointed on and from November 22, 1972 and as per the ranking given in the said order of November 22, 1972.
The appellants challenged the seniority list before the High Court by a writ petition.
Although it appears the appellants had also joined to the petition, those Junior Engineers who were promoted as Assistant Engi neers along with the appellants by the same order and whose seniority in the list had reflected their placement in the order of appointment, the challenge to the seniority of those Junior Engineers was given up at the time of the arguments before the High Court, and it was confined to the seniority of respondents 2 to 39 who were Overseers and were selected by the D.P.C. 135 from their own quota as Assistant Engineers along with the appellants, and to the seniority of respondents 40 to 63 who were appointed by direct recruitment on August 7, 1972.
The first challenge common to the seniority of all the respondents 2 to 63 was based on the contention that the appellants ' ad hoc service as Assistant Engineers from July 22, 1971, when they were promoted on ad hoc basis, to Novem ber, 22, 1972, on which date they were selected as regular appointees, was not taken into account.
The second challenge was confined to the seniority given to respondents 2 to 39 by giving them a weightage of their experience as Overseers.
The High Court negatived both the challenges and dismissed the writ petition.
Hence the present appeal.
The same contentions which were advanced before the High Court was advanced before us.
We will, therefore, first examine the grievance that the ad hoc service of the appel lants was not counted for the purpose of the appellants ' seniority.
A heavy reliance is placed on behalf of the appellants on the decision of this Court reported in Balesh war Dass & Ors.
vs State of U.P. & Ors. etc.
, [1981] 1 S.C.R. 449 in support of the contention that ad hoc officia tion is entitled to be counted for the purpose of seniority.
The ratio of the said decision however is not applicable to the present case.
In that case there was no dispute that the temporary appointees to the posts, who were claiming benefit of their temporary appointment or officiation were qualified to be appointed to the posts when they were initially ap pointed.
, All the procedural formalities of their appoint ments were also followed, namely, they had completed their probationary period, the Public Service Commission had given its approval and they had also been medically examined and found it.
No rule was breached in making their appointment.
The vacancies to which they were appointed were also sub stantive vacancies.
Their appointments, however, had contin ued for a number of years although there was no obstacle whatsoever in making them regular or permanent.
All that had remained to be done was the issuance of a format order of regularisation of the appointment which for unexplained reasons, the Govt.
had failed to do for a number of years.
The Court therefore observed that "a post of short duration, say of a few months, is different from another which is terminologically temporary but is kept on for 10 or more years under the head "temporary" for budgetary or other technical reasons.
Those who are appointed and hold tempo rary posts of the latter category are also members of the service provided they have been appointed substantively to that temporary post".
A 136 little later, the Court made further observations in this connection, as follows: "Government will ascertain from this angle whether the capacity in which posts have been held was substantive or temporary.
If it is not, the further point to notice is as to whether the appointments are regular and not in viola tion of any rule, whether the Public Service Commission 's approval has been obtained and whether probation, medical fitness etc., are complete.
Once these formalities are complete, the incumbents can be taken as holding posts in substantive capacities and the entire officiating service can be considered for seniority.
For other purposes they may remain temporary . . .
The normal rule consistent with equity is that officiating service, even before confirmation in service has relevancy to seniority if eventually no infirmities in the way of confirmation exist.
We see nothing in the scheme of the Rules contrary to that principle.
Therefore, the point from which service has to be counted is the commencement of the officiating service of the Assistant Engineers who might not have secured permanent appointments in the beginning and in that sense may still be temporary, but who, for all other purposes, have been regularised and are fit to be absorbed into permanent posts as and when they are vacant. ' ' (Emphasis supplied) It will thus be seen that in that case the appointments to the substantive vacancies were made according to rules after complying with the procedure for regular appointment.
There was no requirement of the Recruitment Rules which was left to be complied with.
In our case unless the D.P.C. makes the selection, none can be appointed as Assistant Engineer regularly.
Similar were the facts in the case of G.P. Doral & Ors.
vs Chief Secretary, Government of U. P. & Ors., ; in that case the petitioners were temporarily appointed as Khandsari Inspectors having been selected in the departmental competitive test and interview.
Their appointments were however "subject to final selection by Public Service Commission at a later date".
Some of the respondents 137 were also appointed to the same posts subsequently in the same manner.
The names of these recruits were later forward ed to the Public Service Commission which accorded its approval to their appointments.
The Department drew up a provisional seniority list on the basis of the recommenda tions of the said Commission by taking the date of approval/selection by the Commission in respect of each candidate as the basis for determining the length of contin uous officiation.
The Department supported its action on the ground that it had prepared the list by reckoning seniority from the date of their "substantive appointments" in accord ance with an earlier Government Order of 1940 which pre scribed certain guidelines or model rules for framing rules governing conditions of service.
The model set out in the order suggested two independent principles for determining seniority, namely, (i) the date of substantive appointment and (ii) the date of the order of first appointment, if such appointment is followed by confirmation.
In the seniority list, the petitioners were placed below the respondents though they were initially appointed prior to the respond ents.
This Court quashed the seniority list holding that the question as to from what date the service is to be reckoned will depend upon the facts and circumstances of each case.
It was observed there that: "Where officiating appointment is followed by confirmation, unless a contrary rule is shown, the service rendered as officiating appointment cannot be ignored for reckoning length of continuous officiation for determining the place in the seniority list.
If the first appointment is made by not following the prescribed procedure but later on the appointee is approved making his appointment regular, then in the absence of the contrary rule, the approval which means confirmation by the authority which had the authority, power and jurisdiction to make appointment or recommend for appointment, will relate back to the date on which first appointment is made . . .
If a stopgap ap pointment is made and the appointee appears before the Public Service Commission when the latter proceeds to select the candidates and is selected, there is no justification for ignoring his past service.
At any rate, there is no justification for two persons selected in the same manner being differently treated." (emphasis ours) The Court also found there that the earlier order of 1940 had not prescribed any binding rule of seniority and assum ing that it did, the 138 seniority list did not conform to the model.
The model set out in the Government Order prescribed two different start ing points for reckoning seniority and it was difficult to assume that the department adopted one and rejected the other without making a specific rule in that behalf.
It will thus be clear that the Court was dealing with an altogether different situation in both the aforesaid cases.
There was no dispute in those cases that except for the terminology and nomenclature there was no distinction be tween a temporary and permanent appointment and all that remained to be done in those cases was the formalisation of the appointments.
That is not the situation in the present case.
The appellants were ineligible to be appointed as Assistant Engineers initially.
Their appointments were made specifically under the power given to the Government to make ad hoc appointments for administrative exigency.
The ap pointment orders made it clear that the appointments were in the said special circumstances and that they will not be deemed to determine seniority for any purpose whatsoever.
There is further no dispute that no appointments could be made as Assistant Engineers except by way of either direct recruitment through the Public Service Commission or promo tion through the selection made by the D.P.C. as per the quota assigned to different categories.
The first D.P.C. which met for selection, after the appellants became quali fied for being promoted, was held on October 12, 1972.
It is in this meeting that the appellants were selected along with the other qualified promotees, namely, respondents 2 to 39.
The D.P.C. further had the power also to arrange the senior ity of the promotees according to merits.
For all purposes, therefore, the appointment of the appellants on July 22, 1971 was ad hoc and not according to rules.
Their selection/appointment on November 22, 1972 by the D.P.C was further not a mere formality or a process undertaken only for formalisation of their earlier appointment.
In the circumstances, their appointment on November 22, 1972 could not relate back to July 22, 1971 and hence they were not entitled to claim their officiation between July 22, 1971 and November 22, 1972 for being counted for the purposes of their seniority for placing them either above respondents 40 to 63, who were directly recruited on August 7, 1972 or above respondents 2 to 39, who were promoted by the D.P.C. along with them, on November 22, 1972, and who happened to be senior to them even as Junior Engineers.
The other leg of the aforesaid contention was that the appellants were appointed under Rule 7(4) of the said Rules and not under 139 the proviso to Rule 19 of the Rules inasmuch as under the latter provision, their appointments could not have been made.
The argument was that the latter provision permitted appointments for an administrative exigency only in vacan cies which did not last for more than three months.
Since the appellants continued in the post for more than a year before they were selected on November 22, 1972, it should be held that their appointment was under Rule 7(4) of the Rules.
As has been pointed out by the High Court, the re course to Rule 7(4) is unwarranted because that provision deals with the method of recruitment and permits the State Government to adopt any method other than those provided there.
One of the methods permitted by that provision admit tedly is promotion, and since the appellants were admittedly promoted, though they were not qualified on that date, their case would not be covered by the third method of recruitment which is other than the one prescribed there.
Therefore, the argument that they should be considered to have been re cruited to the post of Assistant Engineer by a method other than that expressly provided by the said Rule 7(4) is only to be stated to be rejected.
Once it is held that they were promoted on ad hoc basis, what comes in the play is the proviso to Rule 19(1) which permitted the Government to make such ad hoc appointments for purely administrative exigen cies.
It was then contended that since the proviso to Rule 19(1) permitted appointments in vacancies which were to last for more than three months, it should be held that after the appellants became eligible during the first three months of their appointment, their further continuation was on regular basis.
This argument has also no substance in it, for as pointed out earlier, for being selected for appointment as Assistant Engineers, the appellants had to face the D.P.C. and the Government had no power to make regular appointments to the said post unless the D.P.C. had selected the candi dates for the posts.
Secondly, the proviso to Rule 19(1) has to be read liberally.
The said provision has to be inter preted to mean that the appointments under the said provi sion can be made for three months at a time.
Thus there was nothing to prevent the State Government from renewing the appointment of the appellants every three months.
The second contention is directed against the senior ity of respondents 2 to 39 and proceeds on the ground that the weightage given to them is illegal.
This contention must also fail for the following reasons.
Admittedly the Rules of Recruitment prescribe appointments to the post of Assistant Engineer from two sources, namely, (i) by direct recruitment and (ii) by promotion in the proportion of 50 50. 140 The promotional posts are further required to be filled in from three different cadres in the following proportion: '(i) 25% from Junior Engineers (ii) 20% from Overseers (iii) 5% from Head Draftsmen/Draftsmen.
Under the Madhya Pradesh P.W.D. (non gazetted) Recruitment Rules of 1972 (hereinafter referred to as 1972 Rules), the Overseers who acquire an Engineering degree or qualify for A.M.I.E. become eligible for promotion to the post of Junior Engineers as soon as the vacancy arises.
The inter se sen iority between the Overseers and the Junior Engineers in the cadre of Junior Engineers is to be fixed in accordance with Rule 14(3) of the said Rules by giving weightage of two months for every year of their service to the Overseers.
When the D.P.C. met on October 12, 1972 and considered the cases both of the appellants and the respondents, the Com mittee had submitted the names of the selected candidates cadre wise, i.e. separately of Junior Engineers, Overseers, Head Draftsmen/Draftsmen.
The General Administration Depart ment thereafter considered the matter.
Under the Rules, the Overseers were required to obtain an Engineering degree or qualify for A.M.I.E. and were also required to serve for 12 years as Overseers to become eligible for being considered for appointment as Assistant Engineers.
As against this, the Junior Engineers who were degree holders were required to serve only for two years to become eligible for being con sidered to the said post.
Taking these aspects into consid eration their inter se seniority, namely, the interse sen iority of the appellants and the Overseers promotee respon deets was fixed by the Government according to the following formula which was in vogue for a number of years: (a) In the cadre of Junior Engineers, Overseers so promoted were given weightage as per Rules of 1972, and promotional dates for seniority in the cadre were fixed accordingly.
(b) In the cadre of Assistant Engineers, the date of reckon ing of seniority was the one on which Junior Engineer or Overseer or Head Draftsman/Draftsman completed the respec tive span of service for eligibility.
Hence, when seniority was fixed as per the impugned seniori ty list of 141 the cadre of Assistant Engineers, when admittedly the Rules of 1972 were in vogue, it was fixed according to the afore said formula.
There is no dispute that according to the said formula, which can hardly be faulted, respondents 2 to 39 who were senior as Junior Engineers, were entitled to sen iority over the appellants.
It may further be pointed out that the Rules of 1972 were not challenged either before the High Court or before us.
All that was challenged before the High Court was that these Rules were restricted in their application only to the promotions made to the post of Junior Engineers and were not applicable to the promotions made to the post of Assistant Engineers.
On the face of it, such a challenge is meaningless because Rule 14 of the said Rules is clearly meant for the promotions to the post of Assistant Engineers.
Otherwise the seniority given to the Overseers etc.
in the seniority list of Junior Engineers on the basis of the their service as Overseers, is meaningless.
For all these reasons, we find no substance in this conten tion either.
We, therefore, confirm the decision of the High Court and dismiss the appeal.
There will, however, be no order as to costs.
R. N.J. Appeal dismissed.
| The two appellants had joined as overseers in the P.W.D. of the respondent Madhya Pradesh State.
Thereafter they were appointed as Junior Engineers.
The grievance of the appel lants is with regard to their seniority in the next promo tional post viz, that of Assistant Engineer.
Recruitment Rules which govern the promotional post lay down that the Departmental promotion Committee is required to consider the names of all eligible candidates on merits and judge their suitability in all respects on merit cum seniority basis.
The D.P.C. is also required to arrange the names of all the selected candidates in the order of their merit.
In the case of exceptionally meritorious junior he is given a higher number in the selection list.
This list is sent to Public Service Commission for its approval.
After approval the list becomes the select list and the promotions are made from this list serial wise.
Under the Rules to be eligible to be considered for promotion to the post of Assistant Engineer a Junior Engineer has to have an experi ence of two years as Junior Engineer.
As the State Govt.
wanted a certain number of Assistant Engineers but enough number with requisite qualifying serv ice were not available so taking resort to the Rule of Administrative Exigency contained in the proviso to Rule 19(1) of the Rules the Govt.
promoted some Junior Engineers including both the appellants is Assistant Engineers on July 22, 1971 on purely ad hoc basis.
On August 7, 1972 respond ents 40 to 63 were appointed as Assistant Engineers by direct recruitment and on November 22, 1972 respondents 2 to 39 and the appellants were selected as Assistant Engineers by the D.P.C.
On the same date the State Govt.
issued an order of appointment of the appellants and respondents 2 to 39 in which appellant No. 1 was shown at 132 serial No. 14 and appellant No. 2 at serial No. 28.
The State Govt.
thereafter prepared a seniority list of Assist ant Engineers as per the order of November 22, 1972.
The appellants challenged the seniority list before the High Court by a Writ Petition.
The High Court dismissed the Writ Petition.
Hence the present appeal.
Dismissing the appeal, this Court, HELD: Under the Rules to be eligible to be considered for promotion to the post of Assistant Engineer, a Junior Engineer has to have an experience of two years as Junior Engineer.
[133G] In the instant case, unless the D.P.C. makes the selec tion, none can be appointed as Assistant Engineer regularly.
The appellants were ineligible to be appointed as Assistant Engineers initially.
Their appointments were made specifi cally under the power given to the Government to make ad hoc appointments for administrative exigency.
The appointment orders made it clear that the appointments were in the said Special Circumstances and that they will not be deemed to determine seniority for any purpose whatsoever.
[138C D] Once it is held that the appellants were appointed on ad hoc basis, what comes into play is the proviso to Rule 19(1) which permitted the Government to make such ad hoc appoint ments for purely administrative exigencies.
[139D] Baleshwar Dass & Ors.
vs State of U.P. & Ors etc.
, [1981] 1 S.C.R. 449 and G.P. Doval & Ors.
vs Chief Secre tary, Government of U.P. & Ors., ; , re ferred to.
|
133 of 1959.
Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights.
A. V. Viswanatha Sastri and G. Gopalakrishnan, for the petitioner.
D. Narasa Raju, Advocate General, of Andhra Pradesh, D. Venkatappayya Sastri and ' T. M. Sen, for respondents Nos.
T. V. R. Tatachari, for respondent '1 No. 4. 1960.
December 6.
The Judgment of the Court was delivered by section K. DAS, J.
This is a writ petition under article 32 of the Constitution.
Gazula Dasarstha Rama Rao is the petitioner.
The respondents are (1) the State of Andhra Pradesh, (2) the Board of Revenue, Andhra Pradesh, (3) the Collector of Guntur in Andhra Pradesh and (4) Vishnu Molakala Chahdramowlesshwara 933 Rao.
The petitioner prays that this Court must declare section 6 of the Madras Hereditary Village Offices Act,, 1895 (Madras Act III of 1895), hereinafter called the Act, as void in so far as it infringes the fundamental right of the petitioner under articles 14 and 16 of the Constitution, and further asks for an appropriate writ or direction quashing certain orders passed by respondents 1 to 3 in favour of respondent No. 4 in the matter of the latter 's appointment as Village Munsif of a newly constituted village called Peravalipalem.
When this petition first came up for hearing we directed a notice to go to other States of the Union inasmuch as the question raised as to the constitutional validity of the law relating to a hereditary village office was of a general nature and might arise in relation to the existing laws in force in other States.
Except the State of Andhra Pradesh which has entered appearance through its Advocate General, none of the other States have entered appearance.
The Advocate General of Andhra Pradesh has appeared for respondents 1 to 3, and respondent 4 has been separately represented before us.
These respondents have contested the application and have pleaded that section 6 of the Act does not violate any fundamental right, nor are the impugned orders of respondents 1 to 3 invalid in law.
The short facts are these: Village Peravali in Tenali taluq of the district of Guntur in the State of Andhra Pradesh was originally comprised of a village of the same name and a fairly large hamlet called Peravalipalem.
The two were divided by a big drainage channel.
It is stated that for purposes of village administration the villagers felt some difficulties in the two being treated as one unit So the villagers, particularly those of the hamlet, but in an application to the Revenue authorities for constituting the hamlet into a separate village.
This application was re commended by the Tehsildar and was accepted by the Board of Revenue and the State Government.
By an order dated August 25, 1956, Peravali village was bifurcated and two villages were constituted.
The 118 934 order was published in the District Gazette on October 115,1956, and was in these terms: "The Board sanctions the bifurcation of Peravali village of Tenali taluq, Guntur district, into two villages, viz., (1) Peravali and (2) Peravalipalem along the boundary line shown in the map submitted by the Collector of Guntur with his letter Re. A. 4.
28150/55 dated 30th June, 1956.
These orders will come into effect from the date of publication in the District Gazette.
The Board sanctions the following establishments on the existing scale of pay for the two villages: Peravali: 1 Village Munsif.
1 Karnam.
1 Talayari.
3 Vettians.
Peravalipalem: 1 Village Munsif.
1 Karnam.
1 Talayari.
1 Vettian.
" It is convenient to read at this stage sub section
(1) of section 6 of the Act under which the bifurcation was made: "section 6(1).
In any local area in which this Act is in force the Board of Revenue may subject to rules made in this behalf under section 20, group or amalgamate any two or more villages or portions thereof so as to form a single new village or divide any village into two or more villages and, thereupon, all hereditary village offices (of the classes defined in section 3, clause (1), of this Act) in the villages or portions of villages or village grouped, amalgamated or divided as aforesaid, shall cease to exist I and new offices, which shall also be hereditary shall the created for the new village or villages.
In choosing persons to fill such new offices, the Collector shall select the persons whom he may consider the best qualified from among the families of the last holders of the offices which have been abolished.
" 935 On the division of the village into two villages, all the hereditary village offices of the original village ceased to exist under the aforesaid sub section, and new offices were created for the two villages.
We are concerned in this case with the appointment to the office of Village Munsif in the newly constituted village of Peravalipalem.
In accordance with the provisions of sub section
(1) of section 6 and certain Standing Orders of the Board of Revenue, the Revenue Divisional Officer, Tenali, invited applications for the post of Village Munsif of Peravalipalem.
Eight applications were made including one by the petitioner and another by respondent 4.
Respondent 4, be it noted, is a son of the Village Munsif of the old village Peravali.
By an order dated October, 18, 1956, the Revenue Divisional Officer, appointed the petitioner as Village Munsif of Peravalipalem.
From the order of the Revenue Divisional Officer, respondent 4 and some of the other unsuccessful applicants preferred appeals to respondent 3, the Collector of Guntur.
By an order dated April 1, 1957, respondent 3 allowed the appeal of respondent 4 and appointed him as Village Munsif of Peravalipalem.
In his order respondent 3 said: "Shri V. Chandramowleswara Rao is qualified for the post.
He is the son of the present Village Munsif of Peravali and is, therefore, heir to that post. section 6(1) of the Hereditary Village Offices Act states that in choosing a person to fill a new office of this kind the Collector shall select the person whom he may consider best qualified from among the family of the last holder of the office which has been abolished.
The Village Munsif 's post of the undivided village of Peravali was abolished when the village was divided and the new post of Village Munsif of Peravalipalem has to be filled up from among the family of the previous Village Munsif.
The same instructions are contained in Board 's Standing Order 148(2).
" The petitioner then carried an appeal from the order of respondent 3 to the Board of Revenue.
By an order dated April 24, 1958, the Board dismissed the appeal and stated: "According to section 6, in choosing the person to fill 936 in a new office like this, the Collector shall select the person whom he considers best qualified from among the families of the last holders of the office, which have been abolished.
Here the office of the Village Munsif was abolished and two new offices have been created.
As the last holder of the office was appointed to the new village, Peravali, after bifurcation,, the Collector has appointed the son of the last office holder as Village Munsif of Peravalipalem as he is the nearest heir.
The appellant before the Board cannot claim any preference over the son of the last office holder. 'The Board, therefore, holds that the Collector 's order is in accordance with the law on the subject.
No interference, is, therefore, called for." The petitioner then moved respondent, 1, but without success.
Thereafter, he filed the present writ petition.
The petitioner relies mainly on clauses (1) and (2) of article 16 of the Constitution.
We may read those clauses here: "article 16(1).
There shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State: (2) No citizen shall, on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them, be ineligible for, or discriminated against in respect of, any employment or office under the State.
" On behalf of the petitioner it has been contended that (1) the office of Village Munsif of Peravalipalem is an office under the State, and (2) respondents 1 to 3 in passing their orders in favour of respondent 4 expressly stated that they proceeded on the basis of the hereditary principle laid down in section 6(1) of the Act and discriminated against him as a citizen.
on the ground of descent only.
This discrimination, it is argued violates the guarantee of equal opportunity enshrined in article 16, cls.
(1) and (2) and section 6(1) of the Act to the extent that it permits such discrimination is void under article 13(1) of the Constitution.
The first question before us is if the office of Village 937 Munsif under the Act is an office under the State within the meaning of cls.
(1) and (2) of article 16 of the Constitution.
For determining that question it is necessary to examine the scheme and various provisions of the Act.
The long title shows that it was an Act made to repeal Madras Regulation VI of 1831 and for other purposes.
The purposes mentioned in the preamble are "to provide more precisely for the succession to certain hereditary village offices in the State; for the hearing and disposal of claims to such offices or the emoluments annexed thereto; for the appointment of persons to hold such offices and the control of 'the holders thereof, and for certain other purposes.
" Section 3 of the Act refers to classes of village offices to which the Act applies and Village Munsif is one of such offices.
Under section 4 "emoluments" of the office means and includes (i) lands; (ii) assignment of revenue payable in respect of lands; (iii) fees in money or agricultural produce; and (iv) money salaries and all other kinds of remuneration granted or continued in respect of, or annexed to, any office by the State.
Section 5 lays down that the emoluments of village offices, whether such offices be or be not hereditary, shall not be liable to be transferred or encumbered in any manner whatsoever and it shall not be lawful for any Court to attach or sell such emoluments or any portion thereof Sub section
(1) of section 6 relates to the grouping or division of villages; this sub section we have already read.
Sub section
(2) of section 6 gives a right to the Board of Revenue, subject to the approval of Government, to reduce the number of village offices, and on such reduction the Collector is empowered to dispense with the services of the officers no longer required.
Sub section
(3) of6 which was subsequently added in 1930 says thatminor shall not be ineligible for selection by reasonof his minority only.
Section 7 states the circumstances in which the Collector may, of his own motion or on complaint and after enquiry suspend, remove or dismiss, etc.
, some of the village officers mentioned in section 3.
A similar power of punishment is also given to the Tehsildar.
Under these provisions the Collector may suspend, remove 938 or dismiss the Village Munsif.
Section 10 lays down certain rules which are to be observed in making appointments to some of the village offices and these rules lay down, among other things, the general qualifications requisite for appointment to the offices in question.
For example, for the appointment to the office of Village Munsif no person.
is eligible unless he has attained the age of.
majority, is physically and mentally capable of discharging the duties of the office, has qualified according to the educational test prescribed for the office by the Board of Revenue, has not been convicted by a Criminal Court of any offence which, in the opinion of the Collector, disqualifies him for holding the office and has not been dismissed from any post under the Government on any ground which the Collector considers sufficient to disqualify him for holding the office.
One of the qualifications prescribed by section 10 as it originally stood required that the applicant must be of the male sex.
This requirement was deleted by the Adaptation (Amendment) Order of 1950, presumably to bring the section into conformity with articles 15 and 16 of the Constitution which prohibit discrimination on the ground of sex.
Sub section
(2) of section 10 says that the succession shall devolve on a single heir according to the general custom and rule of primogeniture governing succession to impartable zamindar is in Southern India. ' Sub section
(3) of section 10 says that where the next heir is not qualified, the Collector shall appoint the person next in order of succession, who is so qualified, and, in the absence of any such person in the line of succession, may appoint any person duly qualified.
Sub sections
(4), (5) and (6) of section 10 deal with matters with which we ore not directly concerned.
Section 11 lays down the rules to be observed in making appointments to certain offices in proprietary estates and one of the rules is that succession shall devolve in accordance with the law or custom applicable to the office in question.
Section 13 in effect says that any person may sue before the Collector for any of the village offices specified in section 3 or for the recovery of the emoluments of, any such office on the ground that he is entitled to hold such office and 939 enjoy such emoluments.
There are some provisos to the section which lay down limitations on the right of suit.
With those limitations we are not concerned in the present case.
Section 14 lays down the period of limitation for bringing a suit.
Sections 15, 16 and 17 relate to the transfer and trial of such suits and the decrees or orders to be passed therein.
Section 20 empowers the Board of Revenue to make rules and section 21 bars the jurisdiction of Civil Courts.
Section 23 provides for appeals.
The above gives in brief the scheme and provisions of the Act.
These provisions show, in our opinion, that the office of Village Munsif under the Act is an office under the State.
The appointment is made by the Collector, the emoluments are granted or continued by the State, the Collector has disciplinary powers over the Village Munsif including the power to remove, suspend or dismiss him, the qualifications for appointment can be laid down by the Board of Revenue all these show that the office is not a private office under a private employer but is an office under the State.
The nature of the duties to be performed by the Village Munsif under different provisions of the law empowering him in that behalf also shows that he holds a public office.
He not only aids in collecting the revenue but exercises power of a magistrate and of a Civil Judge in petty cases.
He has also certain police duties as to repressing and informing about crime, etc.
The learned Advocate General appearing for respondents 1 to 3 has contended that the expression " office under the State" in article 16 has no reference to an office like that of the Village Munsif, which in its origin was a customary village office later recognised and regulated by law.
His contention is that the expression has reference to a post in a Civil 'Service and an ex cadre post under a contract of service,, as are referred to in articles 309 and 310 in Part XIV of the Constitution relating to the Services under the Union and the States.
He has referred in support of his contention to Ilbert 's Supplement to the Government of India Act, 1915, p. 261, where a similar 940 provision with regard to the Indian Civil Service has been referred to as laying down that "no native of British India. . is by reason only of his religion, place of birth, descent, or colour, or any of them disabled from holding any place, office or employment under His Majesty in India" and has pointed out that the aforesaid provision reproduced section 87 of the Act of 1833 and historically the office to which the provision related was an office or employment in a Service directly under the East India Company or the Crown.
He also referred to section 298 of the Government of India Act, 1935, which said inter alia that "no subject of His Majesty domiciled in India shall on grounds only of religion, place of birth, descent, colour or any of them be ineligible for office under the Crown in India.
" The argument ' of the learned Advocate General is that article 16 embodies the same principle as inspired the earlier provisions referred to above, and like the earlier provisions it should be confined to an office or post in an organised public Service or an excadre post under a contract of service directly under the Union or the State.
He has further suggested that the deletion of the requirement as to sex in section 10 of the Act was by reason of article 15 and not article 16 of the Constitution.
The argument is plausible, but on a careful consideration we are unable to accept it as correct.
Even if we assume for the purpose of argument that articles 309 and 310 and other Articles in Chapter 1, Part XIV, of the Constitution relate only to an organised public Service like the Indian Administrative Service, etc., and ex cadre posts under a direct contract of service which have not yet been incorporated into a Service, we do not think that the scope and effect of cls.
(1) and (2) of article 16 can be out down by reference to the provisions in the Services Chapter of the Constitution.
Article 14 enshrines the fundamental right of equality before the law or the equal protection of the laws within the territory of India.
It is available to all, irrespective of whether the person claiming it is a citizen or not.
Article 15 prohibits discrimination on some special grounds religion, race, caste, sex, place 941 of birth or any of them.
It is available to citizens only, but is not restricted to any employment or office under the State.
Article 16, cl.
(1), guarantees equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State; and el.
(2) prohibits discrimination on certain grounds in respect of any such employment or appointment.
It would thus appear that article 14 guarantees the general right of equality; articles 15 and 16 are instances of the same right in favour of citizens in some special circumstances.
Article 15 is more general than article 16, the latter being confined to matters relating to employment or appointment to any office under the State.
It is also worthy of note that article 15 does not mention 'descent ' as one of the prohibited grounds of discrimination, whereas article 16 does.
We do not see any reason why the full ambit of the fundamental right guaranteed by article 16 in the matter of employment or appointment to any office under the State should be cut down by a reference to the provisions in Part XIV of the Constitution which relate to Services or to provisions in the earlier Constitution Acts relating to the same subject.
These Service provisions do not enshrine any fundamental right of citizens; they relate to recruitment, conditions and tenure of service of persons, citizens or otherwise, appointed to a Civil Service or to posts in connection with the affairs of the Union or any State.
The word 'State ', be it noted, has a different connotation in Part III relating to Fundamental Rights: it includes the Government and Parliament of India, the Government and Legislature of each of the States and all local or other authorities within the territory of India, etc.
Therefore, the scope and ambit of the Service provisions are to a large extent distinct and different from the scope and ambit of the fundamental right guaranteeing to all citizens an equality of opportunity in matters of public employment.
The preamble to, the Constitution states that one of its objects is to secure to all citizens equality of status and opportunity; article 16 gives equality of opportunity in matters 119 942 of public employment.
We think that it would be wrong in principle to cut down the amplitude of a fundamental right by reference to provisions which have an altogether different scope and purpose.
Article 13 of the Constitution lays down inter alia that all laws in force in the territory of India immediately before the commencement of the Constitution, in so far as they are inconsistent with fundamental rights, shall to the extent of the inconsistency be void.
In that Article 'law ' includes custom or usage having the force of law.
Therefore, even if there was a custom which has been recognised by law with regard to a hereditary village office, that custom must yield to a fundamental right.
Our attention has also been drawn to cl.
(4) of article 16 which enables the State to.
make provision for the reservation of appointments or posts in favour of any backward class of citizens which, in the opinion of the State, is not adequately represented in the services under the State.
The argument is that this clause refers to appointments or posts and further talks of inadequate representation in the services, and the learned Advocate General has sought to restrict the scope of cls.
(1) and (2) of article 16 by reason of the provisions in el.
We are not concerned in this case with the true scope and effect of cl.
(4) and we express no opinion with regard to it.
All that we say is that the expression 'office under the State ' in cls.
(1) and (2) of article 16 must be given its natural meaning.
We are unable, therefore, to accept the argument of the learned Advocate General that the expression " office under the State ' in article 16 has a restricted connotation and does not include a, village office like that of the Village Munsif.
In M. Ramappa vs Sangappa and Others (1) the question arose whether certain village offices governed by the Mysore Villages Offices Act, 1908, were offices of profit under the Government of any State within the meaning of article 191 of the Constitution.
This Court held that the offices were offices of profit under the Government and said.
"An office has to be held under someone for it is impossible to conceive of an office held under no one.
(1) 943 The appointment being by the Government, the office to which it is made must be held under it, for there is no one else under whom it can be held.
The learned Advocate said that the office was held under the village community.
But such, a thing is an impossibility for village communities have since a very long time, ceased to have any corporate existence.
" Learned Counsel for respondent 4 has presented a somewhat different argument on this question.
He has submitted that the office of Village Munsif is not merely an office simpliciter; but it is an office cum property.
His argument is that article 16 does not apply to a hereditary village office because a person entitled to it under the Act has a pre existing right to the office and its emoluments, which he can enforce by a suit.
We now proceed to consider this argument.
Learned Counsel for respondent 4 has relied on the decision of this Court in Angurbala Mullick vs Debabrata Mullick (1) where it was held that in the conception of shebaiti under Hindu law, both the elements of office and property, of duties and personal interest, are mixed up and blended together; and one of the elements cannot be detached from the other.
He has argued that on the same analogy the office of a village Munsif must be held to be an office cum property.
We do not think that the analogy holds.
As this Court pointed out in Kalipada Chakraborti and Another vs Palani Bala Devi and Others (2) shebaitship is property of a peculiar and anomalous character and it is difficult to say that it comes under the category of immovable property as it is known to law.
As to the office of a Village Munsif under the Act, the provisions of the Act itself and a long line of decisions make it quite clear that what go with the office are its emoluments, whether in the shape of land, assignment of revenue, agricultural produce, money, salary or any other kind of remuneration.
These emoluments are granted or continued in respect of, or annexed to, the office by the State.
This is made clear by section 4 of the Act.
Apart from the office there is no right to the emoluments.
In other words, when a person is appoint (1) (2) 944 ed to be a "Village Munsif" it is an appointment to a an office by the State to be remunerated either by the use of land or by money, salary, etc.
; it is not the case of a grant of land burdened with service, a distinction which was explained by the Privy Council in Lakhamgouda Basavprabhu Sardesai vs Baswantrao and Others (1).
In Venkata vs Rama (2) where the question for decision was the effect of the enfranchisement of lands forming the emoluments of the hereditary village office of Karnam, it was pointed out: "Emoluments for the discharge of the duties of the office were provided either in the shape of land exempt from revenue or subject to a lighter assessment, or of fees in grain or cash, or of both land and fees.
. . . . . . . . . When the emoluments consisted of land, the land did not became the family property of the person appointed to the office, whether in virtue of an hereditary claim to the office or otherwise.
It was an appanage of the office inalienable by the office holder and designed to be the emolument of the officer into whose hands soever the office might pass.
If the Revenue authorities thought fit to disregard the claim of a person who asserted an hereditary right to the office and conferred it on a stranger, the person appointed to the office at once become entitled to the lands which constituted its emolument.
" The same view was re affirmed in, Musti Venkata Jagannada Sharma vs Musti Veerabhadrayya (3) where the history of the office of Karnam was examined and it was observed that the "Karnam of the village occupies his office not by hereditary or family right, but as personal appointee, though in certain cases that appointment is primarily exercised in favour of a suitable person who is a member of a particular family." This latter decision was considered by a Full Bench of the Madras High Court in Manubolu Ranga Reddi vs Maram Reddi Dasaradharami.
Reddi (4) (1) A.I.R. 1931 P.C. 157.
(3) A.I.R. 1922 P.C. 96.
(2) I.L.R. 8 'Mad.
(4) I.L.R. 945 and it was pointed out that their Lordships of the Privy Council, though they indicated the nature of the right which the Karnam had, did not consider the ' question whether on the creation of an office under section 6(1), the members of the family of the last holder of the abolished office had the right to compel the Collector to carry out the duty cast upon him by the section.
It was held that section 6(1) creates a right in the family which can be enforced by suit.
Learned Counsel for respondent 4 has relied on this decision.
It is worthy of note, however, that the decision was given on the footing that section 6(1) was valid and mandatory in character.
No question arose or could at that time arise of the contravention of a fundamental right guaranteed by the Constitution, by_ the hereditary principle embodied in section 6(1) of the Act.
The decision proceeded on the footing that the Act recognised a 'right vested in a family ' to the office in question and contained provisions to enforce that right.
It did not proceed upon the footing that the family had a right to the property in the shape of emoluments, independent or irrespective of the office.
In other words, the decision cannot be relied upon in support of the contention that a hereditary village office is like a shebaiti, that is, office cum property.
That was not the ratio of the decision.
The ratio simply was this that the Act bad recognised the right vested in a family to the office in question.
That decision cannot assist respondent 4 in support of his contention that article 16, cls.
(1) and (2), do not apply to the office, even though the office is an office under the State.
In Ramachandurani purshotham vs Ramachandurani Venkatappa and Another (1) the question was whether the office of Karnam was 'property ' within the meaning of article 19(1)(f) of the Constitution.
It was held that it was not property within the meaning of that Article.
The same view was expressed in Pasala Rama Rao vs Board of Revenue (2) where if was observed that the right to succeed to a hereditary office was not property and the relation back of an adopted son 's rights was only with regard to property.
(1) A.I.R. 1952 Mad.
(2) A.I.R. 1954 Mad.
946 This view was not accepted in Chandra Chowdary vs The Board of Revenue (1) where it was observed that the fact that the adoption was posthumous did not make any difference and the adoption being to the last office holder, the adopted son must be deemed to have been in existence at the time of the death of the male holder and had the right to succeed to the office.
It was further observed that the office of a Village Munsif was 'property ' so as to attract the operation of the rule that the adoption related back to the date of the death of the last male holder.
We are not concerned in this case with the doctrine of relation back in the matter of a posthumous adoption.
The simple question before us is whether the office, though it is an office under the State, is of such a nature that cls.
(1) and (2) of article 16 of the Constitution are not attracted to it.
We are of the view that there is nothing in the nature of the office which takes it out of the ambit of cls.
(1) and (2) of article 16 of the Constitution.
An office has its emoluments, and it would be wrong to hold that though the office is an office under the State, it is not within the ambit of article 16 because at a time prior to the Constitution, the law recognised a custom by which there was a preferential right to the office in the members of a particular family.
The real question is is that custom which is recognised and regulated by the Act consistent with the fundamental right guaranteed by article 16? We do not agree with learned Counsel for respondent 4 that the family had: any pre existing right to property in the shape of the emoluments of the office, independent or irrespective of the office.
If there was no such pre existing right to property apart from the office, then the answer must clearly be that article 16 applies and section 6(1) of the Act in so far as it makes a discrimination on the ground of descent only, is violative of the fundamental right of the petitioner.
There can be no doubt that section 6(1) of the Act does embody a principle of discrimination on the ground of descent only.
It says that in choosing the persons to fill the new offices, the Collector shall select the persons whom he may consider the best qualified from (1) A.I.R. 1959 Andhra Pradesh 343.
947 among the families of the last holders of the offices which have been abolished.
This, in our opinion, is discrimination on the ground of descent only and is in contravention of article 16(2) of the Constitution.
Learned Counsel for respondent 4 has also submitted that the petitioner cannot be permitted to assert the invalidity of section 6(1) of the Act when he himself made an application for appointment as Village Munsif under the Act.
He has drawn our attention to the decision in Bapatla Venkata Subba Rao v, Sikharam Ramakrishna Rao(1).
That was a case where the appellant was appointed as a hereditary Karnam under the Act and but for the Act, he would not have had any claim to be appointed to the office of Karnam.
It was held that he could not be permitted to contend for the first time in appeal that the very Act but for which he would not have had any right to the office, was unconstitutional.
Apart from the question whether a fundamental right can be waived, a question which does not fall for consideration in this case, it is clear to us that the facts here are entirely different.
The petitioner had the right to make an application for the new village office and he was accepted by the Revenue Divisional Officer.
Respondents 1 to 3, however, passed orders adverse to him and in favour of respondent 4, :acting on the principle of discrimination on the ground of descent only as embodied in section 6(1) of the Act.
It is, we think, open to the petitioner to say that section 6(1) of the Act in so far as it violates his fundamental right guaranteed under article 16 of the Constitution is void and his application for appointment must, therefore, be decided on merits.
Finally, we must notice one other argument advanced by the learned Advocate General on behalf of respondents 1 to 3.
The argument is based on the distinction between articles 15 and 16.
We have said earlier that article 15 is, in one respect, more general than article 16 because its operation is not restricted to public employment; it operates in the entire field of State discrimination.
But in another sense, with (1) A.I.R. 1958 Andhra Pradesh 322.
948 regard to the grounds of discrimination, it is perhaps less wide than article 16, because it does not include , descent ' amongst the grounds of discrimination.
The argument before us is that the provision impugned in this case must be tested in the light of article 15 and not article 16.
It is submitted by the learned Advocate General that the larger variety of grounds mentioned in article 16 should lead us to the conclusion that article 16 does not apply to offices where the law recognises a right based on descent.
We consider that such an argument assumes as correct the very point which is disputed.
If we assume that article 16 does not apply, then the question itself is decided.
But why should we make that assumptions If the office in question is an office under the State, then article 16 in terms applies; therefore, the question is whether the office of Village Munsif is an office under the State.
We have held that it is.
It is perhaps necessary to point out here that cl.
(5) of article 16 shows that the Article does not bear the restricted meaning which the learned Advocate General has canvassed for; because an incumbent of an office in connexion with the affairs of any religious or denominational institution need not necessarily be a member of the Civil Service.
For the reasons given above, we allow the petition.
The orders of respondents 1 to 3 in respect of the appointment to the post of Village Munsif of Peravalipalem in favour of respondent 4 are set aside and we direct that the application of the petitioner for the said office be now considered on merits by the Revenue authorities concerned on the footing that section 6(1) of the Act in so far as it infringes the fundamental right of the citizens of India.
under article 16 of the Constitution is void.
The petitioner will be entitled to his costs of the hearing in this Court.
Petition allowed.
| Under the law as it stood prior to the enactment of section 65 A of the Transfer of Property Act, by Act XX of 1929, the question whether the mortgagor in possession had powar to lease the mortgaged property has got to be determined with reference to the 109 authority of the mortgagor as the bailiff or agent of the mortgagee to deal with the property in the usual course of management.
It has to be determined general principles and not the distinction between an English mortgage and a simple mortgage or the considerations germane to s.66 of the Transfer of Property Act, and the true position is that the mortgagor in possession may make a lease conformable to usage in the ordinary course of management; for instance, he may create a tenancy from year to year in the case of agricultural lands or from month to month in the case of houses.
But it is not competent to him to grant a lease unusual terms or to alter the character of the land or to authorise its use in a manner, or for a purpose, different from the mode in which he himself had used it before he granted the mortgage.
And it is for the lessee, if he wants to resist the claim of the mortgagee, to establish that the lease in his favour was granted the usual terms in the ordinary course of management.
Where a mortgagor granted a permanent lease of the mortgaged property in the year 1925 and the High Court upheld the lease as against a person who had purchased the properties in a sale held in execution of a decree obtained by the mortgagee the mortgage, the ground that the lease did not impair the security of the mortgagee: Held, that the lease was not binding the mortgagee or the auction purchaser as it was not a lease granted in the usual course of management, even though it did not impair the security.
Madan Mohan Singh vs Raj Kishore Kumari , approved.
Balmukund vs Motilal (1915) 20 C.W.N. 350, dissented from.
Banee Prasad vs Beet Bhunjun Singh , explained.
|
ivil Appeal No. 1213 of 1979.
583 From the Judgment and Order dated 24.4.
1978 of the Gujarat High Court in L.P.A. No. 97 of 1978.
Appellant in person.
H.S. Parihar for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
The appellant, D.M. Bharati, challenges the validity of an order dated 30.9.
1976 passed by the Deputy Municipal Commissioner of the Municipal Corporation of the City of Ahmedabad.
By the said order, the Deputy Municipal Commissioner, consequent on the staff of the Municipal Corporation working in the Town Planning Estab lishment having to be absorbed in the Municipal Corporation, "reverted" the appellant from the post of junior draftsman in the Establishment and appointed him to act in the post of a tracer in the Town Development Department of the Corpora tion.
The High Court rejected his writ petition and hence the present appeal.
It is necessary to state the relevant facts.
The appel lant had been appointed as a tracer in the Estate Department of the Municipal Corporation on 26.6.
1955 and worked there till 18th February, 1957.
It appears that the Government appointed a Town Planning Officer under the provisions of section 31 of the Bombay Town Planning Act.
The Town Planning Officer had to be supplied with an establishment.
The establishment of the Town Planning Officer was admitted ly temporary.
An arrangement was entered into between the two authorities that the arbitrator in the planning office could select such persons from the Corporation for his establishment as he thought fit.
The Town Planning Officer demanded the services of the appellant and he was appointed as a tracer in the Town Planning Establishment on 22.2. 1957.
It is not clear whether the appellant went therein by way of transfer or by way of deputation as the original order dated 22.2.
1957 is not available with us.
However, the High Court and the appellant have proceeded on the footing that the appellant was deputed from the Municipal Corporation to the Town Planning Establishment.
Sometime later, the post of a junior draftsman fell vacant in the Town Planning Establishment.
The appellant tells us that he was asked to take charge of that post on 4.12.
It appears that Mr. Yevla (Respondent No. 6 in the W.P.) was posted to fill in that vacancy but, 584 on 21.4.
1960, his appointment was cancelled and the appel lant was appointed as junior draftsman in the Town Planning Establishment w.e.f.
The appellant tells us that he had also been subsequently recommended for appointment to the post of Surveyor cum Draftsman, which was a higher post and which had fallen vacant on 28.2.
But before this proposal could materialise the appellant was suspended on 5th December, 1962 by the Corporation and was removed from service on 13.5.64.
The Industrial Court granted approval to the removal of the appellant from service but made certain observations suggesting that he may be re appointed to the said post.
The appellant filed a writ petition against the order of the industrial court.
The High Court eventually, set aside the order of the industrial court on 1.2.
1969 and remanded the matter for fresh disposal to the industrial court.
The Municipal Corporation preferred S.L.P. 48/71 in this Court which was dismissed on 27.1.71.
The industrial court re heard the matter pursuant to the order of the High Court and declined approval to the order of removal of the appellant from service with the result that the order of removal dated 13.5.64 stood vacated and an order was passed on 3.3.71 by the Municipal Commissioner that the appellant was reappointed as a junior draftsman in the Town Planning Establishment.
In the meantime, on 16.8.
1965, consequent on the recom mendations of the industrial court, the appellant was ap pointed as junior draftsman in the Estates Department of the Municipal Corporation where he had been previously working.
This purported to be a fresh appointment and so the appel lant made a representation that he should be appointed in this post according to his seniority.
No orders were passed on this representation except a direction that the appellant should join service within a week of receipt of the memo and then represent his case for seniority, if he so desired.
Thereupon the appellant accepted the order re appointing him as junior draftsman in the Estates Department and took charge of his office.
The order of the High Court has found that the appellant was relieved from service on 1.10.1967 because of retrenchment.
When the above proceedings in the case of the appellant were taking place respondents 6 to 11 were directly selected as junior draftsmen by the Staff Selection Committee and promoted to the said post.
The appellant did not appear before the Staff Selection Committee perhaps because of the various proceedings above referred to, as a result of which he was under suspension from 5.12. 1962 to 13.5.
1964, when he was removed and then again till 16.8.65, when he was re 585 appointed as a draftsman.
Once the proceedings against the appellant came to a close, the Municipal Commissioner passed order on 3.3. 1971, cancelling the order dated 13.5.
1964 removing the appellant from service.
He was re appointed as a junior draftsman in the Town Planning establishment.
Subsequently, however, the Town Planning Establishment was abolished, and the appellant was served with the order dated 30.9.
1976, by which he was reverted to the services of the Municipal Corporation.
On such reverter, however, as we have seen, he was posted as a tracer and not as a junior drafts man.
The appellant filed an appeal against the said order before the Standing Committee but his appeal was rejected on 15.3.
1977 on the ground that in the Corporation direct recruits were already working as junior draftsmen, and that there was no post of junior draftsman vacant in the Corpora tion, to which the appellant could be appointed.
The appel lant thereupon filed a writ petition and, as already stated, he was unsuccessful therein and hence this present appeal.
The appellant 's contention before the High Court was two fold.
The first contention was that since he had been ap pointed as junior draftsman in the Town Planning establish ment by the order dated 21.4.
1960, he could not be repatri ated as a tracer in the Municipal Corporation, that is, to a lower post.
It was also contended that the order dated 30.9.
1976 has been passed by the Deputy Municipal Commissioner, who is a person lower in rank than the person who appointed him, namely, the Municipal Commissioner and that, therefore, the order dated 30.9.76 was passed by an officer without jurisdiction.
These two arguments have been reiterated before us also.
So far as the second contention is concerned it may at once be pointed out that if the order dated 30.9.76 is an order of reversion by way punishment, the appellant 's contention may be correct in view of the provi sions contained in sections 53 and 56 of the Bombay Provin cial Municipal Corporation Act.
However, if the order dated 30.9.76 has merely given effect to the abolition of the Town Planning establishment and restored the appellant to the post he can properly hold in the Municipal Corporation then no element of reversion would be involved and the Deputy Commissioner would be quite competent to pass the order in question.
The only question therefore that survives for consideration is regarding the validity of an order dated 30.9.76 in so far as it purported to appoint the appellant as a tracer in the Municipal Corporation instead of as a junior draftsman.
We may mention here that a point was also made that the appellant should not have been appointed as an "acting" tracer but it has been explained by the Corporation that it was a verbal inaccuracy and that the appointment 586 of the appellant in the Municipal Corporation is not an acting but a substantive one.
This point, therefore, does not survive.
We shall proceed on the assumption that the appellant went to the Town Planning establishment (which was a tempo rary one) by way of deputation from the Municipal Corpora tion.
There is some controversy as to whether the appellant was properly promoted as junior draftsman in the Town Plan ning establishment.
There is a suggestion that both the demand by the Town Planning establishment for the services of the appellant as well as his promotion therein were not acceptable to the Corporation and that they were the conse quence of undue favour shown to the appellant by the Arbi trator who was the appointing authority.
We do not think it is necessary to go into this controversy here because it is quite clear that the appellant 's promotion as junior drafts man and proposed promotion as Surveyor cum Draftsman in the Town Planning Establishment cannot confer any rights on him in his parent department.
When he left the Municipal Corpo ration and joined the Town Planning establishment he was a tracer and he can go back to the Estate Department or any other Department of the Municipal Corporation only to his original post i.e., as tracer, subject to the modification that, if in the meantime he had qualified for promotion to a higher post, that benefit cannot be denied to him.
In the present case, unfortunately, what happened was that when junior draftsmen were recruited by the Municipal Corporation in 1959 60 and in 1963 64, persons were selected and ap pointed to the said posts through the machinery of a Staff Selection Committee.
The appellant submits that he had been wrongly overlooked and that the respondents had been wrongly promoted as junior draftsmen.
He points out that, under the regulations, junior draftsmen had to be appointed by promo tion on the basis of seniority cure fitness and that the question of Staff Selection Committee did not at all arise.
According to him, the procedure for selecting by Staff Selection Committee would not come into force when the recruitment was restricted to persons in the municipal service.
In the present case, however, all the persons, who were appointed as junior draftsmen during the appellant 's absence were from the municipal service.
The appointment should, therefore, have been made directly by promotion without the intervening machinery of the Staff Selection Committee and the appellant being the seniormost tracer should have been appointed as junior draftsman in preference to respondents 6 to 11.
There are considerable difficulties in accepting this case of the appellant.
In the first place, what he is really attempting is to challenge 587 the appointments of respondents 6 to 11, which had been made in 1963 64, by a writ petition filed in 1978, more than a decade after the above selections and appointments had been made It is true that, at that time the appellant, was under a cloud because he had been suspended and subsequently removed from service.
But all the same, if he had desired to challenge those appointments, he should have taken immediate steps.
Anyhow, these obstacles had disappeared when the tribunal, on remand by High Court, had disapproved the appellant 's removal from service by the order dated 13.5.
At least in 1971.
when the order was passed restoring him to the position of junior draftsman in the Town Planning establishment, he could and should have taken steps to obtain his "pro forma" promotion in the parent department.
The appellant says he was making some representations but this was not enough.
The fact is that he took no effective steps to challenge the appointment of respondents 6 to 11 from 1963 64 right upto 15.2.1978, when he filed the writ petition or atleast upto 1.10.1976, when he made a represen tation against the order of reversion.
Quite apart from the above consideration, there is no material before us to show that the appointments of respond ents 6 to 11 were made irregularly and that the constitution of a Staff Selection Committee for selecting junior drafts men did not conform to the regulations and the provisions of the Bombay Provincial Municipal Corporations Act.
The Corpo ration has stated that they have been directly recruited.
The High Court has pointed out that the relevant regulation gave a discretion to the Commissioner to make the appoint ments by promotion or by direct recruitment.
section 54(2) of the Municipal Act, on which the petitioner relies, no doubt dispenses with the Staff Selection Committee when it is proposed to fill the appointment from among persons already in municipal service.
But the nature of the recruitment that took place is not known.
That apart, the constitution of a Staff Selection Committee to decide upon the selections cannot be said to be illegal even though not mandatory in the situation.
The High Court has found as a fact at more than one place in the judgment that the respondents 6 to 11 had been directly selected as junior draftsmen after proper scrutiny by the Staff Selection Committee.
Even the appel lant stated before us that there was a circular among the municipal employees in regard to these appointments and selections.
The appellant should have made an application for selection at that time or, if he thought it more appro priate, should have challenged the constitution of Staff Selection Committee and the direct recruitment and not forward his claim for promotion as junior draftsman by virtue of his 588 seniority.
That he failed to do at the crucial time.
It may be that this was because he had certain difficulties facing him by way of suspension and subsequent expulsion from service.
But even in 1971, after his original order of suspension and removal had been set aside, he took no imme diate steps to claim his rights in the parent department.
He was apparently satisfied with his restoration as junior draftsmen in the Town Planning establishment.
We are in agreement with the High Court that, having regard to the circumstances of the appointment of respondents 6 to 11, he was not entitled to any promotion in preference to them and that he cannot claim appointment as junior draftsman when there was no such post in 1976 to which he could be appoint ed.
It is not his case that any posts of junior draftsmen became vacant after his reversion to the parent department to which he could have been promoted.
The appellant contends that the fact that his eligibili ty for appointment as a junior draftsman in the parent department had been accepted by the order dated 16.8.1965 referred to earlier.
It is also pointed out that subsequent ly a question arose of the seniority as between the appel lant and one Kavadia.
This was gone into and the Municipal Corporation accepted the position that the appellant pos sessed qualifications required for the post of junior draftsman and that he was senior to Mr. Kavadia.
This was sometime in 1966.
We, however, find that this aspect of the matter does not help the appellant because the order dated 16.8.
1965 was passed in pursuance of the recommendation of the industrial court, while approving the appellant 's remov al, that he may be reconsidered for appointment.
In view of this order of the industrial court, the appellant had to be given a posting and since he had been discharged from serv ice when he was a junior draftsman, orders were passed appointing him as junior draftsman.
This again was made as an order of fresh appointment and the appellant 's represen tation that he should be given seniority was not accepted, rightly, for the reason mentioned above.
There is also the further fact that the appellant was relieved from this post with effect from October 1, 1967.
There has been, apparent ly, no challenge to this order.
Moreover, these orders lost their basis once the petitioner was restored to his post in the Town Planning Establishment.
In these circumstances the order dated 16.8.65 or the determination of seniority be tween appellant and Kavadia in 1966 do not help the appel lant 's case.
Learned counsel for the Municipal Corporation submitted to us that the appellant had not joined his post as a tracer in compliance 589 with the order dated 30.9.76 and that by now he has also reached the age of superannuation.
We are not here concerned in this appeal with the consequences of "non acceptance" of the order dated 30.9.76 by the appellant.
We are only con cerned with the question whether the appellant was rightly appointed as tracer on his reverter to the Municipal Corpo ration and that question we have answered in the affirma tive.
We do not express any opinion on the questions raised by the learned counsel for the respondent.
In the circumstances, we are of the opinion that there are no grounds to interfere with the order of the High Court.
We, therefore, dismiss this appeal but, in the cir cumstances, we make no order as to costs.
G.N. Appeal dis missed.
| With a view to nationalise the road transport services under Ch.
IV A of the (IV Of 1939), inserted into it by the amending Act 100 of 1956, the General Manager of Andhra State Transport Undertaking published a scheme under section 68C of the Act in the Official Gazette and invited objections thereto.
By an order of the Chief Minister the objections were received and heard by the Secretary to the Home Department, who was in charge of Transport, but were decided by the Chief Minister.
The State Government approved of the scheme and published it in the Official Gazette.
The petitioners, who were plying their buses on various routes in the Krishna District as permit holders under the Act, apprehending that their routes would be taken over by the newly established State Corporation in implementation of the scheme, applied to this Court for the protection of their fundamental rights to carry on their business.
It was contended, inter alia, on their behalf, (i) that Ch.
IVA of the Act was a piece of colourable legislation whose real object was to take over their business, under cover of cancellation of permits, in contravention of article 31 of the Constitution, (2) that the scheme itself was ultra vires the Act, for the reason, amongst others, that the State Government whose duty it was to act judicially in approving the scheme, had transgressed certain fundamental principles of natural justice.
Held (Per curiam), that the question of colourable legislation was, in substance, really one of legislative competence of the legislature that enacted it.
The legislature could only make laws within its legislative competence.
Its legislative field might be circumscribed by specific legislative entries or limited by fundamental rights created by the Constitution.
The legislature could not over step the field of its competency, directly or indirectly.
It would be for the Court to scrutinize if the legislature in purporting to make a law within its sphere, in effect and substance, 320 reached beyond it, it had infact the power to the law, its motive in making it would be irrelevant.
K. C. Gajapaji Narayan Deo vs The ' State of Orissa, [1954] S.C.R. i, followed.
The State of Bihar vs Maharajadhiraja sir Kameshwar singh of darbhangha considered So judged; it could not said that CH.
IVA of the Act was a colourable piece of legislation.
The power vested in the Regional ' Transport Authority by section 68F of the Act involved no transfer of business of the ,existing permit holders to the State Transport Undertaking nor could the latter be said thereunder to take over any assets of the former.
Section 68G of the Act in providing for compensation for un expired period of the permit did not imply that CH.
IVA of the Act involved any transfer of property or possession so as to entitle the permit holder to any compensation under article 31(2) Of the Constitution.
Chapter 1VA of the Act did not, therefore infringe the fundamental right of the petitioners under ' article 31 Of the Constitution.
Per Das, C. J., Bhagwati, and Subba Rao, jj.
While the purpose of section 68C of the Act was no doubt to provide a scheme of road transport service on the lines prescribed by it, the scheme proposed might affect the rights of individual permit holders by excluding them, partially or completely, from the business in any particular route or routes, and the procedure prescribed by section 68D and Rules 8 and 10 framed under the Act, required that the Government should hear both the objectors and the State Transport Undertaking before approving or modifying the scheme.
There was no doubt, therefore, that the State was deciding a lis and it was to do so judicially.
Province of Bombay vs Kusaldas section Advani, ; , Nagendra Nath Bora vs Commissioner, Hills Division, and Express Newspapers Ltd. vs The Union of India, , relied on.
Franklin vs Minister of Town and Country Planning, [19481 A. C. 87, held inapplicable.
It was a fundamental principle of natural justice that the authority empowered to decide a matter must have no bias in it and another, no less fundamental, was that where the Act provided for a personal hearing the authority that heard the matter must also decide it.
The procedure followed in the instant case whereby the Home Secretary, in charge of Transport, himself a party to the dispute, heard the objections and the Chief Minister decided them, violated those principles, and the order of the State Government approving the scheme, therefore,must be quashed.
Per Sinha and Wanchoo, jj.
The sole object of Ch.
IVA, of the Act was to nationalise the road, transport services and the inquiry envisaged by it was of a limited character.
That inquiry 321 was meant to find out whether the scheme propounded was in public interest as required by section 68C of the Act, and not to adjudicate rival claim of permit holder on the one hand and the State Transport Undertaking on the other ; for, on approval of the scheme, exclusion of private transport as proposed by the scheme was bound to follow as a matter of course.
There could, therefore, be no lis, and the Government in approving or modifying the scheme under Ch.
IVA and the Rules framed thereunder must be held to act in its normal administrative capacity.
No objections could be taken, in the instant case, to the procedure adopted by the Government in empowering the Secretary to hear objections while the Chief Minister decided them, and the Secretary could in no sense be a party to any dispute.
Province of Bombay vs Kusaldas section Advani, ; , Nagendra Nath Bora vs Commissioner, Hills Division, ; and Express Newspapers Ltd. vs The Union of India, , referred to.
Franklin vs Minister of Town and Country Planning, [19481 A.C. 87, applied.
Robinson vs Minister of Town and Country Planning, [1947] I All E. R. 851, referred to.
|
Civil Appeal No. 2377 of 1970.
On appeal by certificate from the Judgment and Order dated 9/10.7.69 of the Gujarat High Court in Special Civil Application No. 624 of 1964.
D.K. Sen, V.C. Mahajan and R.N. Poddar for the appellants.
K.K. Venugopal, D.N Misra, T M Ansari and P.K. Rana for the respondent.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
This appeal by certificate under Article 133(1) (a) of the Constitution is filed against the judgment and order dated July 9/10,1969 in Special Civil Application No. 624 of 1964 on the file of the High Court of Gujarat filed under Article 226 of the Constitution by M/s. The Atul Products Ltd., the respondent in this appeal.
The respondent is the owner of a factory at Atul in the State of Gujarat in which it has been carrying on the business of manufacturing dyes, chemicals and pharmaceuticals from a number of years.
By the Finance Act of 1961`synthetic organic dyestuffs (including pigment dyestuffs) and synthetic organic derivatives used in any dyeing process ' were added as Item 14D in the First Schedule to the Central Excise and Salt Act, 1944 (hereinafter referred to as `the Act ' with effect from March 1, 1961 and consequently the respondent became liable to pay excise duty imposed by the Act on two of its products known as cibagenes and cibanogenes which were being 837 manufactured by it by virtue of section 3 of the Act which provided that excise duty prescribed by the Act was leviable on all excisable goods specified in the First Schedule to the Act.
Item 14D in the First Schedule during the relevant period read thus: "14D, Synthetic organic dyestuffs (including pigment dye stuffs) and synthetic organic derivatives used in any dyeing Thirty per cent process.
ad valorem.
But on November 23, 1961, the Central Government issued a notification under Rule 8(1) of the Central Excise Rules, 1944 (hereinafter referred to as 'the Rules ') exempting the dyes specified in the Schedule annexed thereto from the whole of the excise duty leviable thereon if and only if such dyes had been manufactured from any other dye on which excise duty or countervailing customs duty had already been paid.
The notification read thus: D "Government of India Ministry of Finance (Department of Revenue) New Delhi, dated the 23rd November 1961 the 2nd Agrahayana, 1813 S.E. NOTIFICATION Central Excise GSR.
In exercise of the powers conferred by sub rule (1) of Rule 8 of the Central Excise Rules, 1944, as in force in India, and as applied to the State of Pondicherry, the Central Government hereby exempts the dyes specified in the schedule annexed hereto, falling under Item No. 14D of the First Schedule to the Central Excises and Salt Act, 1644 (1 of 1944) from the whole of the excise duty leviable thereon if and only if, such dyes are manufactured from any other dye on which excise duty or countervailing customs duty has already been paid.
838 Schedule 1.
Solubilised Vats, 2.
Rapid fast colours, 3.
Rapidogenes, 4.
Fast Colour Salts.
(180/61) sd/ (B.N. Banerji)" It may be stated here that cibagenes and cibanogenes which were being manufactured by the respondent belong to the class of dyes referred to in the Schedule annexed to the above said notification.
After the above notification was issued, the respondent wrote a letter dated December 22, 1961 to the Superintendent of Excise, Bulsar Division, Bulsar which read as follows: "Dear Sir, You are aware that under the Notification No. 180/61 of the 23rd November, 1961 issued by the Government of India, Min. Of Finance (Dept. of Revenue), Rapidogenes/Rapid fasts colour bases are exempted from the excise duty provided dyes are manufactured from other dyes on which excise duty or countervailing customs duty has already been paid.
During the course of discussions we had on the 20th December, 1961 with the Collector of Central Excise and yourself, we pointed that we purchase Fast Colour Bases, required in the production of Rapidogenes/Rapid fasts either from the manufacturer in Bombay or from the open market.
The material which the local manufacturer has offered us was produced before, the imposition of excise duty on dyes.
He is, therefore, willing to sell us the material without the recovery of excise duty.
We now propose to pay the excise duty on the fast colour bases which we will purchase from the local manufacturer so that we do not have to pay 839 excise duty on the final products produced viz. Rapidogenes/ Rapid fasts.
Similarly we propose to purchase some quantity of imported fast colour bases from the open market.
We will present the materials thus purchased to you for the recovery of excise duty @15%.
We have now to request you to advise your Inspector at ATUL to accept the excise duty on the fast colour Bases, which we will purchase either from the local manufacturer or from the open market.
Thanking you in meanwhile, we remain.
Yours faithfully, for the ATUL PRODUCTS LTD.
(section K Soman)" The Superintendent of Central Excise, Bulsar Division, Bulsar sent a reply dated January 4/6, 1962 to the above letter stating that there was no objection to the payment of excise duty on fast colour bases purchased by the respondent and that if evidence of payment of excise duty on fast colour bases was produced the dyes manufactured by using those fast colour bases would not be liable to duty under the notification referred to above.
He also instructed the Deputy Superintendent of Central Excise to receive duty on such fast colour bases which went into the production of cibagenes or cibanogenes (processed dyes) by the respondent.
The respondent accordingly paid the duty and was exempted from payment of duty on cibagenes and cibanogenes manufactured by it.
The departmental audit party later on noticed that the concession shown to the respondent was not in order since it was only when duty had been paid on the basic dyes at the time of their manufacture when they were chargeable to duty and they had been purchased by the respondent would get exemption from the duty payable on the products manufactured by it by employing such basic dyes.
The audit party was of the view that the respondent which had purchased the basic dyes at the time when duty was leviable on them could not claim exemption from payment of excise duty on the final products manufactured by it by using such basic dyes, by voluntarily paying duty on the basic dyes after March 1, 1961 in accordance with law in force then.
The audit party was further of the view that there was short levy of excise duty on account of the above mistake since 840 the respondent had paid excise duty on the basic dyes at 30% ad valorem whereas it was liable to pay duty at 30 % ad valorem on the products manufactured by it which were costlier than the basic dyes.
The Assistant Collector of Central Excise at Surat there fore issued five notices under Rule 10 A of the Rules to the respondent all on May 20, 1964 calling upon it to show cause as to way the deficit amount of excise duty should not be recovered in respect of the excisable goods manufactured by it at different periods before that date.
We reproduce below one of such notices, the contents of which were more or less the same except with regard to the amount claimed and the number of the relevant demand notice: "INTEGRATED DIVISIONAL OFFICE: CUSTOMS & CENTRAL EXCISE, SURAT No. VI (RR) 21 13/62/II/(iv) Surat, the 20th May 1964 NOTICE Whereas it has been reported that M/s Atul Products Limited, Atul have manufactured Synthetic Organic Dyes namely Cibagenes and Cibanogenes from basic dyes Lying in stock as on 28 2 61 / 1 3 61 with them purchased from the market and having voluntarily paid duty on all such basic dyes in stock/purchased from the market as referred to above manufactured and cleared from 23 11 61 onwards the processed dyes (final product) without payment of duty at the time of clearance from their factory, 2.
The Deputy Superintendent, Central Excise, Atul has raised demand No 10175 dated 6 1 64 for the amount of Rs. 2,930,22 for the recovery of duty as a result of the assessment of the final processed dyes; because the processed dyes were not eligible for exemption from duty only on the ground that the duty was voluntarily paid on the basic dyes which were in stock/purchased from the market as on 28 2 61 when such payment of duty on the stock of basic dyes as on 28 2 61 was not warranted.
M/s. Atul Products Ltd. Atul have represented this dispute vide their letter No. SL/437/9581 dated 25 3 64 against Demand No. 10175 dated 6 1 64.
841 4.M /s.
Atul Products Ltd. Atul should show cause to the undersigned as to way the demand referred to above issued by the Deputy Superintendent,Central Excise,Atul should not be confirmed.
Atul Products Ltd. Atul are further directed to produce at the time of showing cause all the evidence upon which they intend to rely in support of their defence.
6 M/s. Atul Products Ltd. Atul should also indicate in the written explanation whether they wish to be heard in person before the assessment dispute is finalised.
If no cause is shown against the action proposed to be taken within ten days of the receipt of this notice or they do not appear before the undersigned when the case is posted for hearing the case will be decided ex parte.
sd/ H. H. Dave 20 5 64 Assistant Collector.
" The particulars of the demand notices and the amounts claimed in the said five notices were as follows: Demand Notice No. Date Amount Period of Rs. clearance 1. 10163 24.10.63 18,349,21 1.1.62 to 31 5 63 2.
10166 11.11.63 8,142,06 3.8.63 to 13.11.63 3.
10174 6.1.64 1,80,593.47 30 12 61 to 30 5 62 4.
10175 6.1.64 2,930.22 Supplementary to 10163 and 10166 5.
10179 25.2.64 8,349.00 24.12.64 2,18,363.96 The respondent sent a common reply to the above notices on June 19, 1964.
The respondent contended that it had cleared the 842 products manufactured by it namely cibagenes and cibanogenes in accordance with the Rules.
It pleaded that there was no justification to conclude that it had paid excise duty on fast colour bases used by it in manufacturing the said goods voluntarily as the Superintendent, Central Excise, Bulsar had confirmed that according to Government of India 's notification dated November 23, 1961 it was required to pay excise duty on the fast colour bases before they were used in the production of the said processed dyes and also had written that the Dy.
Superintendent of Central Excise, Atul was being instructed to recover duty on the said fast colour bases.
The respondent also pleaded that Rule 10 A of the Rules was not applicable to the case and hence no demand could be made.
After considering the representations made by the respondent to the above notices, the Assistant Collector overruled the objections of the respondent by his orders dated July 20,1964 and directed it to pay the amounts which had been demanded in the notices by issuing appropriate notices f demand.
Aggrieved by the said orders passed by the Assistant Collector of Central Excise and the notices of demand the respondent filed a writ petition under Article 226 of the Constitution before the High Court of Gujarat questioning their correctness and praying for an order directing the excise authorities not to recover the amounts claimed in the notices from the respondent.
The High Court held that the respondent was entitled to the exemption under the notification in respect of the goods manufactured by it as excise duty had been paid on the dyes used in the manufacture of the said goods.
The High Court, therefore, allowed the writ petition quashing the orders of the Assistant Collector and the notices of demand impugned in the writ petition and directing the y excise authorities not to recover the sums mentioned therein by its judgment dated July 9/10, 1969.
This appeal is filed by the Union of India against the Judgment of the High Court.
The two principal questions which arise for consideration before us in this appeal are: (i) whether the respondent was entitled to the benefit of the exemption notification dated November 23, 1961 when the dyes said to have been used by the respondent in the manufacture of other dyes were not liable for payment of excise duty when they were manufactured, that is, before the introduction of Item 14D into the First Schedule to the Act even though duty may have been paid on them after the introduction of item 14D and (ii) whether the demands made in this case fall within the scope of Rule 10 A of the Rules or under Rule 10 thereof.
843 It is not disputed that the dyes in respect of which duty had A been paid in this case had been manufactured at a time when no duty was leviable on them.
This case actually began with the letter written by the respondent on December 22, 1961 within one month after the exemption notification dated November 23, 1961 was issued.
In the said letter the respondent no doubt stated 'the material which the local manufacturer has offered us was produced before the imposition of excise duty on dyes '.
But it was followed by the sentence 'We now propose to pay the excise duty on the Fast Colour bases . . '.
In that letter there was a request made to the superintendent of Central Excise to accept excise duty on the fast colour bases which the respondent would purchase either from the local manufacturer or from the open market.
The letter did not contain any particulars about the quantity of such dyes which the respondent wished to purchase or its value .
The Superintendent of Central excise in his reply stated that there was no objection to the to the payment of excise duty on fast colour bases purchased by the respondent and that if evidence of payment of exercise duty on fast colour bases was produced, the dyes manufactured by using those fast colour bases would not be liable to duty under notification.
The above reply was intended to convey in effect what the notification stated.
It was perhaps assumed that payment of excise duty would arise only when it was payable Under law.
The language of the notification left no room for doubt at all.
It stated that if and only if such dyes were manufactured from any other dye on which excise duty or countervailing customs duty had already been paid, they would be exempted from duty Payment of excise duty on dyes was possible only if they had been manufactured after the introduction of Item 14D into the First Schedule to the Act.
Admittedly in this case the dyes which were used by the respondent had been manufactured prior to that date.
In reaching its decision the High Court, however, relied on the decision of this Court in Innamuri Gopalan & Ors.
v State of Andhra Pradesh & Anr.(1) In that case the Court had to construe a notification issued by the Government of Andhra Pradesh granting exemption to textile goods from the levy of sales tax under the Andhra Pradesh General Sales Tax Act, 1957 (A P. 6 of 1957).
But it, however, contained a proviso that in the case of any class of such goods in respect of which additional duties are leviable by the Central Government under clause 3 of the Additional Duties (1) 844 of Excise (Levy and Distribution) Bill, 1957 read with Section 4 of the (Central Act XVI of 1931) the exemption would be subject to the dealer proving to the satisfaction of the assessing authority that additional duties of excise had been so levied and collected on such goods by the Central Government.
In the above said case certain dealers who had sold textile goods which were not subject to additional duties of excise claimed that they were entitled to the exemption even though they had not paid such additional excise duty.
The State Government pleaded that the dealers would be entitled to claim exemption if and only if such additional excise duty had been levied and collected and since the goods in question were not liable to such additional excise duty, they were not entitled to claim the exemption.
This Court rejected the contention of the State Government and held that on a plain reading of the notification relied on in that case all varieties of textile goods had been generally exempted from payment of sales tax but where any additional excise duty had been levied in respect of any kind of textile goods then the dealer had to show proof of levy and payment of such duty.
Accordingly the case of the dealers was upheld.
In the case before us, the notification relied on by the respondent is couched in a different language.
It specifically states that if and only if the dyes are manufactured from any other on which excise duty or countervailing customs duty has already been paid, the exemption can be availed of by the manufacturer of such dyes.
The above decision of this Court is, therefore, clearly distinguishable from the present case.
With great respect to the High Court it should be stated that the distinction pointed out above was not noticed by it.
The decision in Hansraj Gordhandas vs H. H. Dave, Assistant Collector of Central Excise & Customs, Surat & two Ors (1) does not also have any bearing on this case.
There the Court was concerned with the meaning of the notification in question which had granted exemption from payment of excise duty on cotton fabrics manufactured on powerlooms owned by cooperative societies registered prior to March 31 1961.
The appellant had produced with his own hired labour cotton fabrics on the powerlooms owned by a cooperative society under a contract.
Still the Court found that the appellant was entitled to the benefit of exemption since he had manufactured the goods on the powerlooms owned by a cooperative (1) 845 society as per the notification.
The crucial question in all such A cases is whether the case falls within the scope of the law granting exemption or not and there can be no dispute about that principle.
The difficulty arises only when the said principle is to be applied to the facts of a given case.
As mentioned earlier, in this case of the respondent did not fall under the notification granting exemption since the basic dyes used by it in producing other processed dyes were not subject to levy of excise duty when they were manufactured and cleared.
We do not agree that in this case the principle of promissory estoppel can be pleaded as a bar against the contention of the Department.
The respondent had not done anything prejudicial to its interest relying upon any representation made on behalf of the Department.
It is not the case of the respondent that it would not have manufactured the dyes but for the advice given by the Department.
On the other hand it is obvious that the respondent had before it the exemption notification which alone could be the basis for its actions.
The Department was not also expected to tender legal advice to the respondent on a matter of this nature.
After giving our earnest consideration to the case before us we are of the view that under the notification exemption could be claimed only where the dyes used in the manufacture of other dyes were liable to, payment of excise duty when they were manufactured and such duty had been paid.
A voluntary payment of excise duty on dyes which were not liable for such payment would not earn any exemption under the notification.
The finding re p73 corded by the High Court on the above question is, therefore, liable to be set aside.
The next question relates to the appropriate provision of law under which action could have been taken in this case by the Central Excise authorities.
This question was not decided by the High Court in view of its finding on the liability of the respondent to pay excise duty on the products manufactured by it.
Since we have not agreed with the decision of the High Court on this point, it has become necessary for us to decide this question in this appeal.
While the Department asserts that it was open to it to proceed under Rule 10 A of the Rules, the respondent contends that even if there was any short levy, the proper Rule applicable to its case was Role 10 and not Rule 10 A. Rule 10 and Rule 10 A of the Rules during the relevant period ran as follows: 846 10 Recovery of duties or charges short levied, or erroneously refunded When duties or charges have been short levied through inadvertence, error, collusion or misconstruction on the part of an officer, or through mis statement as to the quantity, description or value of such goods on the part of the owner, or when any such duty or Charge, after having been levied, has been owing to any such cause, erroneously refunded, the person chargeable with the duty or charge, so short levied, or to whom such refund has been erroneously made, shall pay the deficiency or pay the amount paid to him in excess, as the case may be, on written demand by the proper officer, being made within three months from the date on which the duty or charge was paid or adjusted in the owners account current, if any or from the date of making the refund.
10 A. Residuary powers for recovery of sums due to Government Where these Rules do not make any specific provision for the collection of any duty, or of any deficiency in duty if the duty has for any reason been short levied, or of any other sum of any kind payable to the Central Government under the Act or these Rules, such duty, deficiency in duty or sum shall, on a written demand made by the proper officer, be paid to such person and at such time and place, as the proper officer may specify.
" The points of difference between the above two Rules were that (i) whereas Rule 10 applied to cases of short levy through inadvertence, error, collusion or mis construction on the part of an officer, or through mis statement as to the quantity, description or value of the excisable goods on the part of the owner, Rule 10 A which was a residuary clause applied to those cases which were not covered by Rule 10 and that (ii) whereas under Rule 10, the deficit amount could not be collected after the expiry of three months from the date on which the duty or charge was paid or adjusted in the owners account current or from the date of making the refund, Rule 10 A did not contain any such period of limitation.
The scope of these two Rules has been considered by this Court in two decisions i.e. N. B. Sanjana.
Assistant Collector 847 Of Central Excise, Bombay & Ors.
vs Elphinstone Spinning & Weaving Mills Co. Ltd.(1) and Assistant Collector of Central Excise, CALCUTTA Division vs National Tobacco Co.
Of India Ltd.(2) In addition to the above two points of distinction between Rule 10 and 10 A of the Rules, this Court further held in Sanjana 's case (supra) following the decision in Gursahai Saigal vs Commissioner of Income tax, Punjab(3) that in calculating the period of limitation, the expression 'paid ' in Rule 10 should not be literally construed as 'actually paid ' but as 'ought to have been paid ' in order to prevent a person, who had not paid any excise duty at all which he should have paid from escaping, from the net of Rule 10 of the Rules.
In National Tobacco Co ' section case (supra) this Court observed at pages 836 837 thus: Rules 10 and 10A, placed side by side, do raise difficulties of interpretation.
Rule 10 seems to be widely worded as to cover any" inadvertence, error, collusion or mis construction on the part of an Officer", as well as any" mis statement as to the quantity, description or value of such goods on the part of the owner" as causes of short levy.
Rule 10 A would appear to cover any "deficiency in duty if the duty has for any reason been short levied" except that it would be outside the purview of Rule 10 A if its collection is expressly provided for by any Rule.
Both the rules, as they stood at the relevant time dealt with collection and not with assessment.
They have to be harmonised.
In N. B. Sanjana 's case (supra) this Court harmonised them by indicating that Rule 10 A which was residuary in character, would be inapplicable if a case fell within a specified category of case mentioned in Rule 10.
It was pointed out in Sanjana s case (supra) that the reason for the addition of the new Rule 10 A was a decision of the Nagpur High Court in Chhotabhai Jethabhai Patel vs Union of India (A. I R so that a fresh demand may be made on a basis altered by law.
The Excise authorities had then made a fresh demand, under (1) ; (2) [1973] I S.C.R. 822.
(3) ; 848 the provisions of Rule 10 A, after the addition of that Rule, the validity of which challenged but upheld by Full Bench of the High Court of Nagpur.
This Court in Chhotabhai Jethabhai Patel & Co. vs Union of India [1962] Supp.
2 section C R. 1. also rejected the assessee 's claim that Rule 10 A was inapplicable after pointing out that the new rule had been specifically designed "for the enforcement of the demand like the one arising in the circumstances of the case.
" We think that Rule 10 should be confined to cases where he demand is being made for a short levy caused wholly by one of the reasons given in that Rule so that an assessment has to be reopened." This Court further observed at page 840: "Although Rule 52 makes an assessment obligatory before goods are removed by a manufacturer, yet, neither that rule nor any other rule, as already indicated above, has specified the detailed procedure for an assessment.
There is no express prohibition anywhere against an assessment at any other time in the circumstances of a case like the one before us whore no "assessment.
" as it is understood in law; took place at all.
On the other hand, Rule 10A indicates that there are residuary powers of making a demand in special circumstances not foreseen by the framers of the Act or the rules.
If the assessee disputes the correctness of the demand an assessment becomes necessary to protect the interests of the assessee.
A case like the one before us falls more properly within the residuary class of unforeseen cases.
We think that, from the provisions of section 4 of the Act read with Rule 10A, an implied power to carry out or complete an assessment, not specifically provided for by the rules, can be inferred.
" In the instant case there has been no assessment of the manufactured goods at all as contemplated by Rule 52 of the Rules and the delivery of the goods has taken place contrary to Rule 52 A of the Rules.
Rule 52 and Rule 52 A as they stood at the relevant period are set out below: "52.
Clearance on payment duty 849 When the manufacturer desires to remove goods on A payment of duty, either from the place or a premises specified under rule 9 or from a store room or other place of storage approved by the Collector under rule 47, he shall make application in triplicate unless otherwise by rule or order required to the proper officer in the proper form and shall deliver it to the officer at last twelve hours or such other period as may be elsewhere prescribed or as the Collector may in any particular case require or allow before it is intended to remove the goods.
The officer, shall, thereupon, assess the amount of duty due on the goods and on production of evidence that this sum has been paid into the Treasury or paid in the account of the Collector in the Reserve Bank of India or the State Bank of India, or has been despatched to the Treasury by money order shall allow the goods to be cleared.
52 A (1) Goods to be delivered on a Gate pass No excisable goods shall be delivered from a factory except under a gatepass in the proper form or in such other form as the Collector may in any particular case or class of cases prescribe signed by the owner of the factory and countersigned by the proper officer. ." The facts of this case indicate that the Department was virtually inveigled into a trap by the respondent suggesting that it was too eager to pay excise duty on certain goods which to the knowledge of the respondent were not liable for excise duty with the object of getting the benefit of the right to clear its products which were liable for higher excise duty because of their increased value without paying any duty at all.
Rule 10 of the Rules deals with four kinds of mistakes on the part of an officer which bring a case within its sweep.
Of them 'inadvertence ' 'error ' and ' mis construction ' are mistakes which can be committed unilaterally by the officer himself.
`Collusion ' involves a pact between two or more persons to defraud the Government This case does not involve any such unilateral mistake on the part of an officer or collusion as explained above.
Nor is this a case where through mis statement as to the quantity, description or value of such goods on the part of the owner short levy has occasioned.
Further the error in this case has not taken place at the time of the assessment or at the time 850 when assessment ought to have been made under Rule 52.
The discussion and correspondence between the assessee and the officers concerned had taken place on December 20, 1961 and January 416, 1962 was in the nature of an advice and not an assessment as contemplated under Rule 52.
Hence this case is not covered by Rule 10 of the Rules at all.
Rule 10 A of the Rules which is a residuary provision is, therefore, necessarily attracted.
Hence the plea of limitation raised on the basis of Rule 10 of the Rules does not survive.
In the result we set aside the judgment of the High Court and dismiss the writ petition filed by the respondent.
The Department may now proceed to recover the sums demanded under the impugned notices issued to the respondent.
For the foregoing reasons, the appeal is accordingly allowed with costs.
N. V. K. Appeal allowed.
| The appellant failed to prepare a budget of the Waqf Estate of which he was the mutawalli, for the year 1952 53 and send a copy of it to the Majlis before January 15, 1952, as he was bound to do under section 58(1) of the Bihar Waqfs Act, 1947, and was convicted by the 'Magistrate under section 65(1) of the Act and sentenced to pay a fine of Rs. 100, in default to undergo fifteen days simple imprisonment.
It was contended for him that the conviction and sentence were not valid because (1) section 58 of the Act contravened article 19(1) (g) of the Constitution of India, as it gave unrestricted power to the Majlis to alter or modify the budget prepared by the mutawalli without a right of appeal against the action of the Majlis and so imposed an unreasonable restriction on the mutawalli in carrying on his occupation as such, and (2) section 65 Of the Act did not provide for any imprisonment in default of payment of fine.
Held, that having regard to the fact that a mutawalli occupies the position of a manager or custodian and the supervision over him by the Majlis with respect to due administration of the waqf property is necessary and that the powers of the Majlis to alter or modify the budget prepared by the mutawalli are controlled by sub section
(6) Of section 58 of the Act, the restrictions imposed by section 58 Of the Act on the exercise of his powers 1033 by a mutawalli are reasonable.
Accordingly, the provisions Of section 58 'of the Act do not offend article 19 (i) (g) of the Constitution.
Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindya Thirtha Swamiar of Sri Shirur Mutt, ; , relied on.
The order of the Magistrate providing for imprisonment in default of payment of fine is not invalid in view Of section 33 of the Code of Criminal Procedure read with sections 4o and 67 of the Indian Penal Code.
|
ls Nos. 140 to 143 and 156 and 157 of 1953.
Appeals by special leave granted by the Supreme Court by its Order dated the 23rd April, 1953, from the decision dated the 19th December, 1952, of the Labour Appellate Tribunal of India, Third Bench, Madras, in Appeals Nos.
245/52, 246/52, 247/52 and 248/52.
466 C.K. Daphtary, Solicitor General for India, (I. B. Dadachanji, with him) for the appellants in all the appeals.
S.Mohan Kumaramangalam for the respondents in Civil Appeals Nos.
140 to 143.
H. J. Umrigar for the respondents in Civil Appeals Nos.
156 and 157.
October 8.
The Judgment of the Court was delivered by MAHAJAN J.
The Government of Mysore by a notification dated 15th June, 1951, under powers conferred by section 7 of the Industrial *Disputes Act, 1947, constituted an Industrial Tribunal for a period of one year consisting of a chairman and two members for the adjudication of industrial disputes in accordance with the provisions of the Act.
It appointed the following persons as chairman and members thereof: Chairman : Rajadharmaprasakta T. Singaravelu Mudaliar.
Members : Janab Mohamed Sheriff.
Sri section Rangaramiah.
Two disputes between the management and the workers of the Minerva Mills Ltd., Bangalore, and two other disputes between the management and workers of the Mysore Spinning and Manufacturing Co. Ltd., Bangalore, were referred to the said Industrial Tribunal under section 10 (1) )c) of the Act for adjudication.
Several other disputes were also referred for adjudication to the same tribunal.
Till the 15th June, 1952, when the period of one year expired, the tribunal had only disposed of 5 out of the 22 disputes referred to it.
In the four disputes with which we are concerned ,the tribunal had only framed issues and had not proceeded to record any evidence.
On 27th June, 1952, the Government by another notification constituted another tribunal for adjudication of these disputes and acting under section 10(1) (c) of the Act referred all the disputes left undisposed of by the first tribunal to the newly constituted 467 tribunal.
This notification was not very happily worded and has been the subject matter of a good deal of comment in the courts below and also before us.
It runs thus : "Whereas under Notification No. L.S. 1075 L.W. 68 51 2, dated 15th June, 1951 an Industrial Tribunal for the adjudication of industrial disputes in accordance with the provisions of the , was constituted for a period of one year, And whereas the said period of one year has expired creating a vacancy in the office of both the chairman and the two members, namely, Chairman: Sri B. R. Ramalingiah.
Members : Janab Mohamad Sheriff.
Sri section Rangaramiah.
Now therefore in exercise of the power conferred under sections 7 and 8 of the , H.H. the Maharaja of Mysore is hereby pleased to constitute an Industrial Tribunal for adjudication of industrial disputes in the Mysore State in accordance with the provisions of the Act and further to appoint the following persons as chairman and members thereof Chairman Sri B. R. Ramalingiah.
Members Janab Mohamad Sheriff.
Sri K. Shamaraja Iyengar.
Under section 10 (1) (c) of the , H. H. the Maharaja is pleased to direct that the tribunal now constituted under this notification shall hear and dispose of all the references made to the previous tribunal constituted under the notification of 15th June, 1951, and which have remained undisposed of on 15th June, 1952.
" When the second tribunal proceeded to hear the four disputes which are the subject matter of these appeals, the employers raised a number of preliminary objections regarding the jurisdiction of the tribunal to hear and dispose of the disputes, the principal contentions being, (1) that the time limit of one year fixed 468 for die life of the first tribunal was unauthorized illegal and therefore the first tribunal continued to exist in spite of the expiry of that period; (2) that the Government could not withdraw the disputes referred to the first tribunal,from it, so long as the members of the first tribunal were available for discharging their duties and.
that section 8 had no application to the facts of this case ; and (3) that the trial of these disputes by the newly constituted tribunal, even if,it had jurisdiction to entertain them, could not be started from the stage at which they were left by the first tribunal and should begin de novo.
The employees contested these propositions and contended that it was competent for the Government to constitute one or more Industrial Tribunals under section 7 and it was open to it to prescribe that these tribunals should function for a limited period; that the notification dated the 27th June, 1952, was valid both under sections 7 and 8 of the Act and the second tribunal was properly constituted and had jurisdiction over the disputes referred to it under section 10 (1) (c) of the Act and that there was no need for a de novo trial in law.
The second tribunal rejected the preliminary objections raised by the employers and came to the conclusion that the Government was competent to constitute the first tribunal for a limited period, that the second tribunal was properly constituted and that the references made were proper and could be proceeded with from the stage at which the first tribunal had left them.
Against this order the employers preferred appeals ' to the Labour Appellate Tribunal, Nos. 245 to 248 of 1952.
They also filed writ applications under article, 226 of the Constitution of India before the Court, C.P. Nos. 79 and 80 of 1952 53, for the issue of writs of prohibition prohibiting the second tribunal from proceeding with the adjudication of the four disputes, the subject matter of the appeals.
The points that arose for decision in the appeals as well as in the writ applications were substantially the same.
In these circumstances the High Court postponed hearing the 469 writ applications till the appeals had been heard by the Labour Appellate Tribunal.
The Labour Appellate Tribunal by its order dated 19th December, 1952, dismissed all the 'appeals and subsequently the High Court of Mysore by its order dated 25th March, 1953, also dismissed the writ applications.
It, however, granted the employers a certificate of leave to appeal to this court.
The employers filed applications for special leave to appeal against the order of the Labour Appellate Tribunal passed in the appeals before it, and this court granted special leave to appeal by an order dated 23rd April, 1953.
The result is that we have four appeals now before us against the order of the Labour Appellate Tribunal, C.A. Nos. 140 to 143 of 1953 and two appeals before us from the order of the High Court refusing the application of the employers under article 226 of Constitu tion, C.A. Nos. 156 and 157 of 1953.
As all these appeals raise a common question of law they can conveniently be disposed of by one judgment.
Mr. Daphtary, who appeared for the employers, contended that the four disputes between the ,employers and employees that were referred to the Industrial Tribunal constituted by the notification of 15th June, 1951, were still in law pending before that tribunal and it was that tribunal and that tribunal alone that could adjudicate on them and give its award on them and that the second tribunal constituted by the notification of 27th June, 1952, had no jurisdiction to entertain the references or to give any awards concerning them.
It was contended that under the there is no power in the Government for appointing a tribunal for a limited duration, and that its power is only to constitute a tribunal and to refer certain disputes to it.
It is said that in the provisions of the Act it is implicit that a tribunal once appointed can cease to function only after the references made to, it have been exhausted, i.e., after it has given its award.
It 6 83 S.C. India/59. 470 was further urged that there is no power in the Government once it has made a reference under section 10 of the Act to withdraw it from the tribunal and to hand it over to another tribunal.
It was suggested that the members of the first tribunal should be directed to hear those references and to give their award.
In our opinion, none of these contentions can be sustained on the provisions of the Act Section 7 of the Act provides as follows : "The appropriate Government may constitute one or more Industrial Tribunals for the adjudication of industrial disputes in accordance with the provisions of this Act.
(2)A tribunal shall consist of such number of independent members as the appropriate Government may think fit to appoint, and where the tribunal consists of two or more members, one of them shall be appointed as the chairman thereof . . ".
Section 8 provides that if for any reason a vacancy occurs in the office of the chairman or any other member of a court or tribunal, the appropriate Government shall, in the case of a chairman, and may, in the case of any other member, appoint another independent person, in accordance with the ' provisions of section 6 or section 7, as the case may be, to fill the vacancy, and the proceedings may be continued before the court or the tribunal so reconstituted.
Section 7 does not restrict or limit the powers of the Government in any manner and does not provide that a tribunal cannot be constituted for a limited period or for deciding a limited number of disputes.
From the very nature and purpose for which Industrial Tribunals are constituted it is quite clear that such tribunals are not to be constituted permanently.
It is only when some industrial disputes arise that such tribunals are constituted and normally such tribunals function so long as the disputes referred to them are not disposed of.
But from this circumstance it cannot be inferred that it is not open to the Government to fix a time limit for the life of these tribunals in order 471 to see that they function expeditiously and do not prolong their own existence by acting in a dilatory manner.
Mr. Daphtary, however, contended that though the language of section 7 was wide enough to include within its phraseology a power in the Government to constitute tribunals for any period of time it thought fit, this wide construction of its language had been limited by the other provisions of the Act.
He made reference to the provisions of section 4 which deals with conciliation officers.
Sub section (2) of section 4 provides that a conciliation officer may be appointed for a specified area or for specified industries in a specified area or for one or more specified industries and either permanently or for a limited period.
It is obvious that the nature of duties of conciliation officers being of a different character, provision has been made that they may be either appointed permanently or for a limited period.
From these provisions it is difficult to infer the same or a different intention regarding Industrial Tribunals.
They may well be appointed ad hoc for a particular dispute.
It was for this reason that no restriction was placed on the powers of Government regarding the constitution of tribunals, and Government was given very wide discretion and it could appoint them for any limited time or for a particular case or cases as it thought fit and as the situation in a particular area or a particular case demanded.
Reference was then made to the provisions of sections 15 to 20 of the Act for the proposition that once a reference is made to a tribunal, the adjudication must be ,concluded by that tribunal and that tribunal alone must give the award, and that the life of the tribunal cannot be cut short between the date of the reference of the dispute for adjudication and the date of the award.
Section 15 provides that where an industrial dispute has been referred to a Tribunal for adjudication, it shall hold its proceedings expeditiously and shall, as soon as practicable, on the conclusion thereof, submit its award to the appropriate Government.
We are unable to see that any inference 472 can be raised from the provisions of the section supporting the contention of Mr. Daphtary.
This is a provision directing the tribunal to function expeditiously and give its award as soon as possible.
Section 20(3) is in these terms "Proceedings before a tribunal shall be deemed to have commenced on the date of the reference of dispute for adjudication and such proceedings shall be deemed to have concluded on the date on which the award becomes enforceable under section 17 A." This section lays down the date or the terminus a quo for the termination and commencement of the proceedings.
It is difficult to see that it in any way cuts the power of the Government to appoint a tribunal for a limited duration.
Reference was also made to the provisions of section 33 which relate to the conditions of service during the pendency of the proceedings in adjudication.
It is provided therein that there shall be no change in the conditions of service of the workmen pending adjudication.
In our opinion, the Labour Appellate Tribunal and the High Court were right in holding that from these provisions it could not be held that it was implicit in section 7 that the Government could not withdraw a dispute referred to a tribunal or make the appointment of a tribunal for a limited period of time.
In our opinion, under the provisions of section 7, the appropriate Government has ample power of constituting a tribunal for a limited time, intending thereby that its life would automatically come to an end on the expiry of that time.
The contention therefore of Mr. Daphtary that the notification appointing the first tribunal for a period I of one year was illegal and that the first tribunal continues to exist is without force.
His further contention that the Government could not withdraw the dispute referred to the first tribunal so long as the members of the first tribunal were available and could not hand it over to the 'second tribunal cannot also be sustained.
| A firm called the Modern Cultivators brought a suit against the State of Punjab to recover damages for loss of crops suffered by flooding of its lands as a result of a break in a canal belonging to the State.
The plaintiff 's case was that there was a breach in the western bank of the canal owing to the negligence of the defendants and canal water escaped to the fields causing them to be flooded.
The case of Government was that breach did take place but it was promptly repaired and the fields were flooded not by the canal water but by heavy rains in the month of September.
The trial Judge passed a decree for Rs. 20,000 against Government, but it was reduced by the High Court to Rs. 14,130.
The High Court held that the inundation of the fields was by water from the canal and not from the nallahas.
Both the plaintiff and the defendant filed cross appeals by special leave of this Court.
Held (per Sarkar, J.): (i) That the rule of res ipsa loquitur was applicable to the facts of this case because there would not have been a breachin the banks of the canal if those in management took proper care andthe breach itself would be prima facie proof of negligence.
Scott vs London Dock Co., applied.
Barkway vs South Wales Transport Co. Ltd., [1950] 1 All.
E.R. 392, distinguished.
(ii)An inference that the defendant was negligent in the management of the canal arises because it is clear from the record that documents called for had not been produced deliberately.
Murugesam Pillai vs Manickavasaka Pandara, L.R. 44 I.A. 98, referred to.
(iii)Article 2 of the Limitation Act does not apply to the facts of the casefor there is nothing in the Canal Act imposing any duty on the defendant to take care of the banks.
Held (per Hidayatullah, J.): (i) The principle of res ispa loquitur cannot always, be safely applied where the facts before the court are not the whole facts.
It should not be applied as legal rule but only 51 S.C. 18. 274 as an aid to an inference when it is reasonable to think that there are lb no further facts to consider.
It is not a principle which dispenses with proof of negligence.
Rather it shifts onus from one party to another.
It is a rule of evidence and not of liability.
A too ready reliance on the maxim reinforces a fault liability and makes it into an absolute liability.
If absolute liability is to give way to fault liabilty, some fault must be established by evidence or must be capable of being reasonably inferred from the circumstances.
It is not sufficient to say res ipsa loquitur because the danger is that facts may not always tell the whole story and if there is something withheld how can the thing be said to speak for itself? The High Court erred in applying the principle of res ipsa loqutur to the facts of this case.
In the present case there was sufficient evidence, in the absence of reasonable explanation (which there was not), to establish negligence.
Donoghue vs Stevenson, 1932 1 A.C. 562, explained.
Sedleigh Denfield vs V. O 'Callaghan and Other section 1940 1 A.C. 890 and Scott vs London and St. Katherine Docks Co., ; , referred to.
Barkway vs South Wales Transport Co. Ltd. [1950] 1 All.
E.R. , relied on.
(ii)The rule in Raylands vs Fletcher is hardly applicable here.
Canal Systems are essential to the life of the Nation and land that is used as canals, is subjected to an ordinary use and not to unnatural use on which the rule in Raylands vs Fletcher rests.
There is difficulty in distinguishing non natural and natural user.
Rylands vs Fletcher, L.R. 3 H.L. 300, inapplicable.
Richards vs Lothian, ; , relied on.
(iii)Article 2 of the Limitation Act cannot apply to cases where the act or omission complained of is not alleged to be in pursuance of statutory authority.
Act or omission which can claim statutory protection or is alleged to be in pursuance of a statutory command may attract article 2 of the Limitation Act but the Act or omission must be one which can be said to be in pursuance of an enactment.
In the present case the breach in the bank was not that kind of act or omission.
It could not claim to be in pursuance of the Canal Act.
Nor could the opening or closing of the channel for operations, though in pursuance of the Canal Act, be the relevant act or omission because they were more than a year before the cause of action and to apply a limitation of 90 days to that cause of action is not only impossible but also absurd.
Article 2, therefore does not apply.
Article 3 of the Limitation Act applies to the present case.
Punjab Cotton Press Co. Ltd. vs Secretary of State, I.L.R. P.C., inapplicable 275 Mohamad Sadaat Ali Khan vs Administrator Corporation of City of Lahore, I.L.R. F.B. and Secretary of State vs Lodna Colliery Co. Ltd., I.L.R. 15 Pat.
510, referred to.
Commissioners for the Port of Calcutta vs Corporation of Calcutta, 64 I.A. 363, distinguished.
Held (per Mudholkar. J.): (i) The rule in Rylands vs Fletcher applies only if the defendant brings or accumulates on his own land something that is likely to escape and do mischief, irrespective of the question whether that was done by the defendant wilfully or negligently.
This rule has been adopted in this country in several cases and so can be regarded as a part of the common law of the land.
In the country of its origin, this rule has been subjected to certain exceptions.
One of the exceptions is this: that where the owner or occupier of land accumulates a deleterious substance thereon by virtue of an obligation imposed upon him by a statute or in exercise of statutory authority he will not be rendered liable for damages resulting therefrom to other persons unless it is established that he was guilty of negligence in allowing the deleterious substance to escape.
The present case falls within this exception.
The State of Punjab would not be liable for damages by the operation of the rule in Rylands vs Fletcher but is liable by reason of its negligence.
The breach was caused by the negligence on the part of the officers of the State in inspecting the banks of the canal and in particular that portion of it where the breach had been caused.
Rylands vs Fletcher, ; explained.
Gooroo Churn V. Ram Dutt, , Dhanusao V. Sitabai, , and Dunne vs North Western Gas Board, referred to.
(ii)The rule of evidence res ipsa loquitur cannot be applied to the facts of this case because all the facts for the decision of the case were not placed before the court.
Immediately after the breach occurred some reports were made by the officers of the State but they were not placed before the Court despite its order requiring their production.
In other words the State had deliberately suppressed evidence in its possession which could have established negligence.
In this view the rule of res ipsa loquitur is not the applicable.
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Subsets and Splits