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etition (Criminal) No. 1075 of 1982.
(Under article 32 of the Constitution of India) V.J. Francis for the Petitioner.
S.N. Jha for the Respondent.
The Judgment of the Court was delivered by DESAI, J.
On October 4, 1982, we quashed and set aside the impugned detention order dated April 20, 1982, in respect of detenu Devi Lal Mahto, reserving the giving of the reasons for our order to a later date.
Here are the reasons.
This is a petition under Article 32 for a writ of hebeas corpus filed by detenu Devi Lal Mahto challenging the order of preventive detention dated April 20, 1982, made by the District Magistrate, Dhanbad.
Detenu Devi Lal Mahto was arrested on March 2, 1982, and was produced before the Chief Magistrate, Dhanbad, who remanded him to jail custody till March 17, 1982.
On March 1982, detenu moved an application for bail which was fixed for hearing on March 24, 1982.
On March 25, 1982 the bail application was rejected.
On April 20, 1982, the District Magistrate, Dhanbad, made the impugned order of detention in exercise of the power conferred by sub section
(2) read with sub section (3) of section 3 of the ( 'Act ' for short).
The District Magistrate stated in his order that with a view to preventing the detenu from acting in a manner prejudicial to the maintenance of public order he be detained.
Grounds of detention 632 were served upon the detenu on April 23, 1982.
Another application for bail moved by detenu was rejected on April 23, 1982 On May 13, 1982 the detenu submitted his representation to the State Government which came to be rejected by the State Government on June 3, 1982.
The order of detention was confirmed by the State Government on June 10, 1982.
Mr. V.J. Francis, learned counsel who appeared for the petitioner canvassed three contentions before us.
They are: (i) the detenu being already deprived of his personal liberty having been confined in jail from March 2, 1982, and his bail application having already been rejected on March 25, 1982, he was not even if so inclined, in a position to repeat his activity and therefore, the preventive detention order could not be made against him with a view to preventing him from indulging into activity prejudicial to the maintenance of public order; (ii) the detaining authority was not even aware that the detenu was already in jail when he made the impugned detention order and, therefore, the order suffers from the vice of non application of mind which would vitiate the order; and (iii) there was inordinate delay which has remained unexplained in considering the representation of the detenu and, therefore, the detention order is vitiated.
Undoubtedly, for a period of one month and 18 days the detenu was in jail, his bail application having been rejected nearly 25 days before the date of the impugned detention order.
It is difficult to appreciate how the District Magistrate was subjectively satisfied that a detention order in respect of the detenu was necessary with a view to preventing him from acting in a manner prejudicial to the maintenance of public order.
This aspect we have most meticulously examined in four decisions of this Court, and therefore, we need not examine the same again.
As early as in Rameshwar Shaw vs District Magistrate, Burdwan & Anr.,(1) and as late as Vijay Kumar vs State of J & K and Ors.(2), the two recent most decisions in Biru Mahato vs District Magistrate, Dhanbad(3), and M. Satyanarayana, etc.
vs State of Andhra Pradesh & Ors.
,(4) it has been held that one can envisage a hypothetical case in which a preventive detention order 633 may have to be made against a person already deprived of his personal liberty by being confined or detained in jail but in such a situation the detaining authority must show awareness of this fact that the person against whom the detention order is proposed to be made is already in jail and is incapable of acting in a manner prejudicial to the maintenance of public order and yet for the reasons which may appeal to the District Magistrate on which his subjective satisfaction is grounded a preventive detention order is required to be made.
It is further held that this awareness must appear either in the order or in the affidavit justifying the impugned detention order when challenged.
Neither in the order nor in the affidavit we find even a whimper of this aspect being present to the mind of the detaining authority while making the detention order.
Therefore, it clearly discloses non application of mind and following the aforementioned decisions it must be held that the order of preventive detention having been mechanically made and suffering from the vice of non application of mind is vitiated.
The last contention is that there was an inordinate delay in considering the representation of the detenu and, therefore, the detention order is vitiated.
The detenu made a representation on May 13, 1982.
It also transpires that the case of the detenu was referred to the Advisory Board on May 15, 1982.
The affidavit in reply recites that the representation was rejected by the State Government on June 3, 1982.
How the representation was dealt at various levels from May 13, to June 3, has not been dealt with in the affidavit on behalf of the respondents.
It may be mentioned here that the counter affidavit on behalf of the respondents has been filed by one G.P.A. Kujur who has described himself as Deputy Collector of Dhanbad.
Obviously he was not the detaining authority.
The detaining authority though impleaded as a respondent has not filed the affidavit.
Mr. Jha, learned counsel who appeared for the respondents after referring to the file with him urged that the representation was received on May 14, 1982 and it was on May 24, 1982, that its examination commenced.
There was no further detail available as to how it was dealt with.
When a detention order is made by the District Magistrate in exercise of the power conferred by sub section
(2) read with sub section
(3) of section 3 of the Act, sub section
(4) makes it obligatory upon the State Government to examine the order and approve the same within a period of 12 days from the date of making of the order.
There is a proviso appended to the section which is not relevant.
There is nothing to show that the order was approved.
634 There is nothing to show why for a period of 10 days the representation was not examined by the competent authority.
There is nothing to show how the file moved after May 24, 1982, till the representation was rejected on June 3, 1982.
In our opinion in the facts and circumstances of this case a time of 21 days taken by the State Government in examining the representation of the detenu made under section 8 of the Act shows inordinate delay in dealing with the representation and that would vitiate the order.
For these reasons we had quashed and set aside the impugned detention order.
H.L.C. Petition allowed.
| The appellant was at the relevant dates posted as Subordinate Judge at Masulipatam and Amalapuram.
Charges were made against him of bribery and serious irregularities in the discharge of official duties, and they were enquired into by one of the judges of the Madras High Court who sent his reports on August 2o, ,953, and November Io, 953.
On the basis of the reports the High Court decided on January 25, 1954, that the appellant should be dismissed from service on the charge of bribery and removed from service on the charge of irregularities, and on January 28, 1954, placed him on suspension until further orders.
The appellant moved the High Court under article 226 of the Con stitution of India for quashing the order of suspension on the ground (1) that under r. 4(I)(a) of the Andhra Civil Services (Disciplinary Proceedings Tribunal) Rules, 1953, an enquiry into the 415 conduct of a Government servant drawing a monthly salary of Rs. 15o and above could be made only by a Tribunal to be appointed by the Government, and that as the rule came into, effect from October 1, 1953, the order of the Madras High Court dated January 28, 1954, was without jurisdiction, and (2) that the order was repugnant to article 31I of the Constitution of India.
The High Court dismissed the application and on appeal against the judgment.
Held:(1) that in view of the amendment of r. 4 Of the Andhra Civil Services (Disciplinary Proceedings Tribunal) Rules, 1953, on April II, 955, excluding, with retrospective effect, the jurisdiction of the Tribunal in respect of enquiries into the conduct of the judicial officers, the order of the Madras High Court dated January 28, 1954, was not open to attack.
(2)that an order of suspension pending final orders is neither one of dismissal nor of removal of service within article 311 of the Constitution.
(3)that under r. 13 of the Madras Civil Services (Classification, Control and Appeal) Rules, the High Court had the power to impose suspension pending enquiry into grave charges under r. 17(e) against the Members of the State judicial Service.
|
ivil Appeal No. 955 of 1981.
From the Judgment and Order dated 11.5.79 of the Allaha bad High Court in W.P. No. 3048 of 1973.
P.N. Lekhi and M.K. Garg for the Appellant.
K.M. Sinha, Deepak Jaiswal and Pramod Swarup for the Respondents.
The Judgment of the Court was delivered by VERMA, J.
This appeal by special leave under Article 136 of the Constitution of India is against the judgment of a learned Single Judge of the Allahabad High Court in Writ Petition No. 3048 of 1973 decided on May 11, 1979.
The subject matter of the dispute is a holding compris ing of Khata No. 141 in village Khera, Laxmipur, Pargana Kashipur in District Naimtal of which one Chain Sukh was initially the occupancy tenant.
The said Chain Sukh died issueless prior to the date of vesting, that is, 1.7.1952 under the U.P. Zamindari Abolition and Land Reforms Act, 1950 (hereinafter referred to as "the Zamindari Abolition Act") survived by his widow, Smt.
Sukhia.
The interest of Chain Sukh as the occupancy tenant of the holding devolved upon his widow, Smt.
Sukhia, in accordance with section 35 of the United Provinces Tenancy Act, 1939 (hereinafter referred to as "the Tenancy Act") in the absence of any male lineal descendant of Chain Sukh.
The appellant, Smt.
Mainia, is the sister of deceased Chain Sukh.
Even according to the appellant, Smt.
Mainia, Chain Sukh 's widow, Smt.
Sukhia, remarried Gopal Singh in "Karwa" form according to the caste custom about two years after the death of Chain Sukh and a son, Chander Pal, respondent No. 4, was born to Sukhia during her wedlock with Gopal Singh.
Sukhia continued to remain in possession of this holding till her death in 1965.
A dispute arose between appellant, Smt.
Mainia and respondent No. 4, Chander Pal, during the consolidation proceedings under the U.P. Consolidation of Land Holdings Act in respect of this holding, each of them claiming sole interest therein to the exclusion of the other.
Ultimately, the Consolidation Officer, Afzalgarh, by his order dated 29.1.1972 (Annexure III) passed under section 9 A of the Act 689 dismissed Chander Pal 's claim to the holding.
The Consolida tion Officer held that Smt.
Sukhia on her remarriage with Gopal Singh lost her interest in the holding and by virtue of section 171 of the Zamindari Abolition Act, appellant, Smt.
Mainia, being the sister of Chain Sukh inherited the interest in the holding.
It was held that Chander Pal, not being the son of Smt.
Sukhia from Chain Sukh but the son born to Smt.
Sukhia after her remarriage with Gopal Singh, could not inherit as a heir of Chain Sukh.
The Settlement Officer, Consolidation, Nainital dismissed Chander .Pal 's appeal under Section 11 against the order of the Consolida tion Officer by order dated 14.2.1972 (Annexure IV).
Howev er, the Settlement Officer held that even though Smt.
Sukhia lived in the house of Gopal Singh for several years there is no positive evidence of her remarriage with Gopal Singh and therefore a legal marriage of Smt.
Sukhia with Gopal Singh is not proved.
It was held that Smt.
Sukhia cultivated the land throughout as the widow of Chain Sukh and therefore Chain Sukh 's sister Smt.
Mainia inherited it after the death of Smt.
Sukhia.
A revision by Chander Pal to the Deputy Director Consolidation, Moradabad, Camp Kashipur, under Section 48 was also dismissed by order dated 15.11.1972 (Annexure V).
It was observed that Smt.
Mainia in her reply dated 10.12.1970 had stated that Smt.
Sukhia did "Karwa" with Gopal Singh but Smt.
Sukhia had been shown in the family register as widow of Chain Sukh which shows that Smt.
Sukhia was treated as a widow of Chain Sukh till the time of her death.
It was held that Smt.
Sukhia 's "Karwa" with Gopal Singh not being proved to be a legal marriage, the succes sion would be governed on the basis that she.
was Chain Sukh 's widow at the time of her death.
A writ petition under Article 226 of the Constitution was then filed by Chander Pal in the High Court which has been allowed by the impugned judgment dated May 11, 1979.
The High Court has quashed the orders passed by the Consoli dation Authorities and directed the Deputy Director (Consol idation) to decide the revision of Chander Pal afresh on the basis of the decision given in the writ petition.
The High Court has held that the consolidation authorities erred in deciding the matter on the basis that Smt.
Sukhia 's marriage with Gopal Singh was not proved to be legal and, therefore, Smt.
Sukhia 's possession of the holding till the time of her death was merely as widow of Chain Sukh.
It was pointed out that in view of appellant Smt.
Mainia 's clear admission that Smt.
Sukhia was remarried to Gopal Singh in "Karwa" form, according to caste custom, after Chain Sukh 's death and that they had been living together as husband and wife for sever al years no further proof of legality of the remarriage was necessary.
Reliance was placed 690 by the High Court on a decision of the Supreme Court in Badri Prasad vs Deputy Director Consolidation, ; for reaching its conclusion and it was held that this strong presumption of validity of Smt.
Sukhia 's remar riage with Gopal Singh was not rebutted by the entry in the family register which continued to show Smt.
Sukhia as the widow of Chain Sukh.
Consequently, it was held by the High Court that the finding of the consolidation authorities that Smt.
Sukhia 's interest in the holding continued to be as widow of Chain Sukh was a manifest error of law.
The High Court then proceeded to examine the legal consequences of Smt.
Sukhia remarriage with Gopal Singh prior to the date of vesting i.e., 1.7.1952 under the Zamindari Abolition Act and her continuous possession over the holding after her remar riage.
It was held by the High Court that the effect of the provisions of the Tenancy Act was that her interest in the holding after her remarriage was in her own right and not as widow of Chain Sukh; and therefore, by virtue of section 180(2) of the Tenancy Act she acquired an independent right which did not devolve upon her death to Chain Sukh 's sister, appellant Smt.
Mainia, but to her son Chander Pal born to her after her remarriage with Gopal Singh.
It is on this basis that the High Court has directed the Deputy Director, Consolidation, to decide respondent No. 4, Chander Pal 's revision afresh.
Hence this appeal by special leave.
Shri P.N. Lekhi, learned counsel for the appellant, Smt.
Mainia, has assailed the decision of the High Court substan tially on the ground that Smt.
Sukhia 's interest in the holding continued till her death only as widow of Chain Sukh since her initial interest in the holding was by revolution as widow of Chain Sukh under section 35 of the Tenancy Act.
Learned Counsel for the appellant also contended before us that Smt.
Sukhia 's remarriage with Gopal Singh was not proved and, therefore, the consequences of remarriage, if any, did not arise.
He argued that Smt.
Sukhia 's name was recorded throughout only as the widow of Chain Sukh which negatived the case of her remarriage with Gopal Singh after the death of Chain Sukh.
He argued that since the possession of Smt.
Sukhia till her death in 1965 was as widow of Chain Sukh, there was no occasion for attracting the provisions contained in section 180(2) of the Tenancy Act.
It was urged that on the death of Smt.
Sukhia in 1965 the succession was governed by section 172 read with section 171 of the Zamind ari Abolition Act on account of which by virtue of clause (m) of section 171 appellant Smt.
Mainia being the married sister of Chain Sukh inherited the interest in the holding instead of respondent No. 4, Chander Pal by virtue of sec tion 174 of that Act.
691 In reply, Shri K.M. Sinha, learned counsel for re spondent No. 4 contended that remarriage of Smt.
Sukhia with Gopal Singh after the death of Chain Sukh prior to the date of vesting i.e., 1.7. 1952 under the Zamindari Abolition Act being the admitted case of appellant Smt.
Mainia herself, the appellant cannot now be permitted to take a contrary stand.
It was urged that the conclusion of the High Court is correct and that consequence is obvious from the provisions of the Tenancy Act.
On this basis, it was urged that the possession of Smt.
Sukhia in the holding at the time of her death not being as a widow of Chain Sukh but in her own right the succession is governed not by section 172 but by section 174 of the Zamindari Abolition Act under which respondent No. 4, Chander Pal, inherited Smt.
Sukhia 's interest in the holding as her son.
In our opinion, the contention of learned counsel for the appellant cannot be accepted and on the case set up by Smt.
Mainia herself no fault can be found with the reasoning or conclusion of the High Court.
It is obvious even from the orders of the consolida tion authorities that Smt.
Sukhia 's remarriage in "Karwa" form according to the caste custom with Gopal Singh a couple of years after the death of Chain Sukh was pleaded by Smt.
Mainia herself in her reply dated 10.12.1970 as mentioned in the order dated 15.11.1972 (Annexure V) by the Deputy Direc tor (Consolidation) while deciding Chander Pal 's revision.
The controversy between the parties before the consolidation authorities was at best only about the validity of the remarriage and not its factum.
Moreover, the order of the Consolidation Officer dated 29.1.
1972 (Annexure III) also indicates that before the Consolidation Officer appellant, Smt.
Mainia, did not dispute even the validity of Smt.
Sukhia 's remarriage with Gopal Singh and the case of the appellant before the Consolidation Officer was put on the basis of Smt.
Sukhia being remarried to Gopal Singh and Chander Pal being the son born to Smt.
Sukhia after her remarriage so that Chander Pal could not claim to be a legal heir of Smt.
Sukhia 's first husband Chain Sukh.
The High Court was, therefore, right in taking the view that the matter must be decided on the basis of Smt.
Sukhia being remarried to Gopal Singh a couple of years after the death of her first husband Chain Sukh and the question of factum or validity of Smt.
Sukhia 's remarriage with Gopal Singh did not really arise.
This being so, the mere fact of Smt.
Sukhia 's name being shown in the family register as widow of Chain Sukh till the time of her death in 1965 did not have the effect of continuing Smt.
Sukhia 's status as widow of Chain Sukh even after she 692 had become the wife of Gopal Singh as a result of her remar riage.
The effect of the statutory provisions on the continued possession of Smt.
Sukhia in this altered status has, there fore, to be examined.
The relevant provisions of the Tenancy Act may now be noticed.
Admittedly, succession to the interest of Chain Sukh on his death was governed by section 35 of the Tenancy Act according to which the interest of Chain Sukh in the holding devolved upon Smt.
Sukhia as his widow in the ab sence of any male lineal descendant in the male line of descendant.
Section 36 of the Tenancy Act is as under: "36(1) When a female tenant, other than a tenant mentioned in section 34, who either before or after the commencement of this Act has inherited an interest in a holding as a widow, as a mother, as.a step mother, as a father 's mother, or, as a daughter dies or abandons such holding, or surrenders such holding, or a part of such holding or, in the case of a tenant inheriting as a widow or as a daughter, marries such holding or such part of such holding shall, notwithstanding anything in section 45, devolve in accordance with the order of succession laid down in section 35 on the heir of the last male tenant, other than a tenant who inherited as a father 's father under the provisions of that section . . (emphasis supplied)" The applicability of section 36 in the present case was disputed by the learned counsel for the appellant.
We are unable to agree.
Section 36 clearly provides for succession to a female tenant holding an interest inherited as a widow in the case of her marriage thereafter, or, in other words, remarriage.
The learned counsel for the appellant contends that this is not so.
In our opinion, the argument overlooks the clear words "in the case of a tenant inheriting as a widow . marries" which show that the situation where a female tenant who inherited as a widow marries, or, in other words, remarries is specifically covered by section 36.
The contrary construction placed on section 36 by the learned counsel for the appellant would render these words redun dant.
The word 'marries ' instead of the word 'remarries ' has been used for the obvious reason that it refers both to a widow as well as a daughter.
We have, therefore, no doubt that section 36 was attracted in the 693 present case when Smt.
Sukhia remarried Gopal Singh after the death of Chain Sukh.
Section 36 also overrides section 45 since it clearly says, "notwithstanding anything in section 45" which provides generally for extinguishment of the interest of a tenant in the manner specified therein.
The argument of the learned counsel for the appellant that clause (a) of section 45 deals with the situation of death of a tenant and, therefore, attracted, in the present case, on the death of Smt.
Sukhia in 1965 is untenable in view of the express provision made in section 36.
The result is that according to section 36 on the remar riage of Sukhia with Gopal Singh the interest devolved in accordance with the order of succession laid down in section 35 on the heir of the last male descendant, that is, Chain Sukh but appellant Smt.
Mainia, married sister of Chain Sukh, not being one of the heirs of Chain Sukh according to section 35 of the Tenancy Act, the interest did not devolve on Smt.
Mainia.
The continued possession of Smt.
Sukhia thereafter attracted section 180 of the Tenancy Act, the relevant portion of which is as under: 180(1) A person taking or retaining possession of a plot of land without the consent of the person entitled to admit him to occupy such plot and otherwise than in accord ance with the provisions of the law for the time being in force, shall be liable to eject ment under the section on the suit of the person so entitled, and also to pay damages which may extend to four times the annual rental value calculated in accordance with the sanctioned rates applicable to hereditary tenants: XXX XXX XXX (2) If no suit is brought under this section, or if a decree obtained under this section is not executed, the person in possession shall become a hereditary tenant of such plot, or if such person is a co sharer, he shall become a khudkashtholder, on the expiry of the period of limitation prescribed for such suit or for the execution of such decree, as the case may be: XXX XXX XXX.
" 694 Admittedly, no suit as contemplated by sub section (2) of section 180 of the Tenancy Act was brought at any time against Smt.
Sukhia and the prescribed period of limitation for such a suit expired prior to her death in 1965.
Sub section (2) of section 180 was, therefore, clearly attracted and Smt.
Sukhia had become a hereditary tenant by virtue of section 180(2) of the Tenancy Act with the further conse quences flowing therefrom.
The case of the appellant is based on the applicability of section 172 of the Zamindari Abolition Act which governs succession 'in the case of a woman holding an interest inherited as a widow etc on the ground that Smt.
Sukhia 's interest upto the time of her death was only as the widow of Chain Sukh.
It is by virtue of section 172 that the claim is made by the appellant.
Mainia as the married sister of Chain Sukh under clause (m) of section 171.
We have already indicated that the founda tion of Smt.
Mainia 's claim is non existent.
If such a situation, the appellant 's claim was rightly negatived by the High Court.
The learned counsel for the appellant referred to the decision of this Court in Ram Jivan vs Smt.
Phoola (dead) by Lrs. & Ors.
, In view of the above conclu sion, obviously that decision has no application.
The learned counsel also referred to two Single Bench decisions of the Allahabad High Court, namely, Jaganath and others vs Deputy Director of Consolidation Gorakhpur and others, [1976] AWC 654 and Chhiddoo Singh vs Deputy Director of Consolidation & others, [1976] AWC 809.
The first decision did not involve this point.
The learned single Judge in the other decision under provisions of the Agra Tenancy Act took the view that when a widow initially enters into possession as a limited owner, the character of her subsequent posses sion after remarriage cannot change in the absence of evi dence of a change in her animus.
It was held that in such a case it is for the widow to show that later she had asserted her absolute right and was possessing adversely as an abso lute owner in order to prescribe for absolute ownership.
It is sufficient for us to say that the legal consequence flowing from sections 36 and 180 of the U.P. Tenancy Act is enough to indicate that the character of widow 's possession after her remarriage altered by operation of law and any further animus is not required to bring about the effect of the statutory provisions which ensue on expiry of the limi tation prescribed for a suit to evict her.
That decision does not indicate consideration of the effect of a provision like section 180(2) of the Tenancy Act, assuming there was such a provision in the Agra Tenancy Act and also that section 24 of the Agra Tenancy Act was similar to section 36 of the U.P. Tenancy Act.
These decisions are clearly distin guishable.
However, if the other decision 695 under the Agra Tenancy Act is read as taking a contrary view, we are unable to subscribe to that view.
In the result, the appeal fails and is dismissed.
Howev er, in the circumstances of the case, we make no order as to costs.
R.S.S. Appeal dis missed.
| Under the customary law of the Punjab property inherited by a Hindu male from his maternal grandfather is not ancestral property qua his sons.
Narotam Chand vs Mst.
Durga Devi, I. L. R. (1950) Punj. 1, approved.
Lehna vs Musammat Thakyi, (1895) 30 P. R. I24 and Musammat Attar Kaur vs Nikkoo, Lah. 356, not approved.
The rule of stare decisis is not an inflexible rule and is inapplicable where the decision is clearly erroneous and when its reversal does not shake any titles or contracts or alter the general course of dealing.
|
Appeal No. 39 of 1955.
Appeal from the judgment and decree dated August 28, 1953, of the Calcutta High Court in Appeal from Original Decree No. 97 of 1950 arising out of the judgment and decree dated April 27, 1950, of the Court of Second Sub Judge of Zillah Hooghly in Rent Suit No. 3 of 1949.
B. Bagchi and P. K. Chosh, for the appellant.
N. C. Chatterjee and D. N. Mukherjee, for the respondents.
March 24.
The following Judgment of the Court Was delivered by SINHA J.
The main controversy in this appeal on a certificate granted by the High Court of Calcutta, against the concurrent decisions of the courts below, centers round the true interpretation and effect of sections 15 and 16 of the Bengal Tenancy Act Act VIII of 1885 (hereinafter referred to as the Act).
The courts below have substantially decreed the plaintiff 's suit for arrears of rent in respect of a se patni tenure.
Hence, the appeal by the defendant.
The plaintiffs ancestor, Nirmal Chandra Benerjee, was a durpatnidar under the patnidar in respect of the tenure in question.
He died leaving him surviving, his three sons Satya Ranjan, Satya Jiban and Satya Kiron who became the durpatindars in respect of the tenure by succession, and there is no dispute that they were so mutated in the superior landlord 's office.
There was a partition suit between them in the court of the 228 subordinate judge at Alipur, being Title Suit No. 128 of 1946.
During the pendency of that suit, Promode Kumar Banerjee was appointed Receiver of the properties under partition.
Satya Jiban died during the pendency of the partition suit.
The exact date of his death does not appear in the record.
His heirs are: his widow Tusharika Debi and his two sons, Uptal Kumar Banerjee who is of unsound mind, and Ujjal Kumar Banerjee, a minor.
The Receiver aforesaid, instituted the suit out of which this appeal arises, for arrears of rent, against the first defendant, now appellant, in respect of the years 1352 to 1355 B. section He put the total claim inclusive of interest, at Rs. 40,000 and odd, which was subsequently reduced to Rs. 27,000 and odd.
It is not necessary to go into the details of the claim, because the amount decreed is no more in controversy.
To the suit for rent, being Rent Suit No. 3 of 1949, in the court of of Second Subordinate Judge, Hooghly, the heirs aforesaid of Satya Jiban were impleaded as proforma defendants Nos. 2, 2(a) and 2(b), and so were Satya Kiran and Satya Ranjan as defendants 3 and 4, respectively.
During the pendency of the rent suit, the partition suit was compromised, with the result that the durpatni tenure in question was allotted to Satya Jiban 's branch of the family.
Hence, the plaint was amended by an order of the court, dated July 25, 1949, by substituting the aforesaid heirs of Satya, Jiban as the plaintiffs in the place of the Receiver aforesaid, who was the original plaintiff and who was discharged from the record.
The suit was contested on a number of grounds, but it is now necessary only to refer to the plea in bar of the suit, namely, that the plaintiffs substituted as aforesaid, and by transposition from the category of proforma defendants to that of plaintiffs, were not entitled to sue for rent on the ground that they had not got themselves mutated in the place of their predecessors in title in the landlord 's records and that, therefore, this suit was barred under section 16 of the Act.
It is no more necessary to set out the facts bearing on the devolution of title to the property in question, 229 because that was not a controversy raised in the High Court, and the arguments in this Court were, therefore, confined to the technical plea aforesaid.
After hearing the parties, the learned trial judge decreed the suit for Rs. 25,000 and odd.
The first defendant preferred an appeal to the Calcutta High Court, and a Divisional Bench of that Court, after hearing the parties, directed a limited remand to the trial court, for taking additional evidence in proof of certain documents filed by the plaintiffs but not properly proved at the original trial.
The trial court was also directed to submit its findings on the question of the right of the plaintiffs to maintain the suit in view of the provisions of sections 15 and 16 of the Act.
After remand, the documents on proof were again, marked as exhibits I and 2, and the finding was returned by the trial court in due course.
After the receipt of the finding, the High Court heard the appeal once again and dismissed it with costs.
The appellant moved the High Court and obtained the necessary certificate.
Hence this appeal.
In this Court, it was argued on behalf of the appellant that the provisions of section 15 are mandatory; that those provisions not having been complied with, the bar imposed by section 16, operates against the plaintiffs, with the result that they are not entitled to recover the arrears of rent by suit.
Sections 15 and 16 are in these terms: " 15.
When a succession to a permanent tenure takes place, the person succeeding shall give notice of the succession to the landlord or his common agent, if any, in the prescribed form within six months from the date of succession, in addition to or substitution of any other mode of service, in the manner referred to in sub section (3) of section 12: Provided that where, at the instance of the person succeeding, mutation is made in the rent roll of the landlord within six months of the succession, the person succeeding shall not be required to give notice under this section." " 16.
A person becoming entitled to a permanent tenure by succession shall not be entitled to recover by suit or other proceeding any rent payable to him as 230 the holder of the tenure, until the duties imposed upon him by section 15 have been performed.
" It is common ground that the notice contemplated by section 15, was not given, but it was contended on behalf of the plaintiff respondents that the proviso to that section had been complied with inasmuch as evidence had been adduced by the plaintiffs and accepted by the courts below, that the superior landlords accepted rents from the plaintiffs and granted them rent receipts in respect of the tenure in question, after ordering mutation of their names in the rent ,roll.
In order to bring the case within the proviso to section 15, quoted above, the plaintiffs served a requisition on the landlords (I) Maharajadhiraj of Burdwan, and (2) Sri Ramlal Bandopadhyaya, to produce all papers in respect of mutation of names regarding the tenure in question.
Those documents were not produced, but the plaintiffs examined P. W. 2 an employee of the Burdwan Raj and P. W. 3 their own employee to prove the necessary mutation.
P. W. 2 deposed that the plaintiffs paid Rs. 101 as fee for mutation of their names in the office of the Maharajadhiraj of Burdwan and that they were mutated in respect of the 8 annas ' interest.
P. W. 3, similarly, proves mutation in the office of Ramlal Babu, in respect of the other 8 annas ' share.
In pursuance of the mutation, rent was paid and accepted by the landlords.
The necessary order of mutation and the rent receipt exhibits 2 and respectively were produced and placed on record after being duly proved Nothing has been brought out in the cross examination of these two witnesses to detract from the value of their evidence.
Naturally.
therefore.
the courts below had no difficulty in accepting their evidence corroborated by those pieces of documentary evidence.
But it was contended on behalf of the appellant that section 15 requires proof of mutation in the rent roll of the landlord, and the rent roll or its certified copy, should have been adduced in evidence, and in the absence of the primary evidence of mutation contained in the rent roll the plaintiffs have failed to prove the requisite mutation.
In our opinion, there is no substance in this contention.
The landlords rent roll 231 was not in the custody or control of the plaintiffs.
They served requisition on their landlords to produce those documents.
As those documents were not produced by the parties who would ordinarily be in possession of their rent rolls, the plaintiffs had no option but to adduce secondary evidence of the mutation, namely, the order sanctioning mutation and the payment of rent to the superior landlord, in pursuance of the sanction of mutation.
Like any other disputed fact, the factum of mutation in the landlords rent roll can be proved by the production of the original rent roll or by its certified copy, if available, and failing those, by other secondary proof of mutation.
In the circumstances, we are inclined to hold that in this case, the courts below were justified in coming to the conclusion that there was the necessary mutation of the plaintiffs in the landlords ' rent roll.
It was next contended that there is no proof that the mutation, even if made, had been made " within six months of the succession ".
It is true that the date of the death of Satya Jiban, plaintiffs predecessor in title, is not known, if that is the point of time with reference to which the six months ' period has to be calculated.
If the starting point of time is the date of the allotment of the tenure in question to the plaintiffs ' share as a result of the partition, we know that June 20, 1949, is the date of the compromise, as appears from the list of dates supplied by the counsel for the appellant.
The rent receipt, exhibit 1, is dated January 4, 1950, and the order of mutation passed by the Burdwan Raj, is dated January 20, 1950.
Apparently, therefore, the mutation must have been effected within six months from the date of the compromise, as a result of which the entire tenure was allotted to the plaintiffs ' share.
If was not argued be fore us that this was not a case of succession, as contemplated by section 15, namely, the death of the last holder on the happening of which event, the succession to the tenure opened in favour of the plaintiffs.
Satya Jiban had only one third share in the entire tenure by inheritance from his father.
The other two thirds shares had been inherited by his two brothers aforesaid.
Hence, strictly speaking, succession to only 232 the one third share of Satya Jiban, could open on his death.
But as this aspect of the case was not canvassed before us, we need not express any opinion on it.
As already indicated, the date of the death of Satya Jiban not having been brought on record and if the six months ' period has to be counted from that date, it has got to be assumed in favour of the appellant that the mutation even if effected as found by the courts below, was not done within the prescribed time.
It may also be mentioned that it was not argued before us that the rent suit having originally been filed by the Receiver pendente lite, who represented the entire 16 annas interest in the tenure, the suit had been properly instituted, and no question under sections 15 and 16 of the Act, would, therefore, arise if any devolution of interest took place during the pendency of the suit.
For the purpose of determining the present controversy, we proceed on the assumption that the mutation had not been made within six months as prescribed by section 15, and that this defect affected the entire interest in the tenure in spite of the fact that the two thirds interest which originally belonged to Satya Jiban 's brothers, came to the plaintiffs as a result of the compromise in the partition suit.
Section 16 as it stands after the amendment by the Bengal Act IV of 1928, does not impose an absolute bar on the recovery by suit of the arrears of rent.
The bar is there only " until the duties imposed upon him (that is, the plaintiffs) by section 15, have been performed.
" Now, section 16 does not speak of any time limit.
It only speaks of the bar to the recovery of the arrears until the performance by the landlord of the duty of giving notice of the succession or getting mutation made on the succession.
It was argued on behalf of the appellant that the performance of the duty aforesaid is inextricably bound up with the period of six months, and that the performance of the duty beyond that period, is no performance at all in the eye of law.
We are not impressed by this argument, and there are several very good reasons for holding to the contrary.
The provisions of section 15 are meant not only for the benefit of the landlord or of the inferior tenant, but of the intermediate landlords also, that is to say, the 233 provision for notice, or in the alternative, for mutation .of names in the landlord 's rent roll, is meant to protect the interest of the superior landlord in that it ensures payment of his dues by the intermediate landlord before the latter can realise the same from his tenant, in this case, the se pataidar.
Those provisions also ensure that the rightful persons entitled to the durpatni interest, get themselves mutated in the superior landlord 's office, so that the inferior tenants may know who their new landlords are as a result of succession to their old landlords.
The legislature,, by fixing the limit of six months, intended to indicate that the notice of the mutation should be effected within six months, that is to say, within a reasonable time from the date of the devolution of interest, even as there are similar provisions in respect of the mutation of proprietors in the Collectorate for the purpose of regular realization of public demands.
But the legislature did not intend to make it mandatory in the sense that failing to observe the time limit, the landlord completely deprives himself of his right to receive rent from his tenant, even though otherwise due.
That is the reason why, in section 16, there is no indication of time limit.
On the other hand, there is an indication to the contrary in so far as the last clause quoted above, provides that the bar against the recovery by suit of any rent payable to the holder of the tenure, operates only until he performs the duties imposed upon him by section 15.
Section 16, being in the nature of a penal provision, has to be strictly limited to the words contained in the penal clause, and the penalty should not be extended by implication.
If the legislature had intended that the penalty should operate for all times if the duty were not performed within the time specified in section l5, the legislature would have used the words " within the prescribed time "; or some such words.
Instead of laying down such a time limit, the legislature has, by the amendment aforesaid by Act IV of 1928, made it clear that the bar operates only so long as the duty has not been performed.
No authority has been cited before us in support of the extreme proposition that 30 234 the failure on the part of the landlord to serve the requisite notice or to get the necessary mutation effected within six months, has . he effect of wiping out the landlord 's right to receive rent.
There may be rulings to the contrary, but this Court has to resolve the controversy on the language of the relevant sections of the statute, quoted above.
That language does not clearly indicate that the result contended for on behalf of the appellant, must necessarily ensue on his making a default to take those necessary steps within the time specified.
The language of the statute is not so peremptory in express terms or by necessary implication.
On the other hand, as already indicated the language easily lends itself to the construction that the prescribed time is not in the nature of a statutory bar to the exercise of the landlord 's right to recover rent.
in this connection, it has to be remembered that patni tenure and all other subordinate tenures under the patnidar, are permanent tenures.
Hence, the relationship of landlord and tenant, continues from generation to generation without there being any necessity of fresh attornment on the death of a durpatnidar or other grades of tenants in the process of sub infeudation.
The relationship is all the time there, only the landlord 's record has to be kept up to date by making the necessary substitution in the rent roll or by giving notice of the change in the succession to the landlord 's interest.
The legislature had to indicate a time by way of laying down the ordinary procedure for taking the steps indicated in section 15.
Six months ' period was deemed by the legislature to be a sufficiently long period to enable those steps being taken in the ordinary course of business.
But it is not difficult to imagine cases where such steps may not be feasible within the prescribed time.
For example, where the landlord dies leaving him surviving only an infant heir without a proper guardian to protect the infant 's interest, it may take a considerably longer period than six months to have a proper guardian appointed, if necessary, through court.
It may well be that the succession itself is disputed, and the controversy may take some years to get determined finally.
It cannot be reasonably 235 suggested that because the requisite notice or the mutation has not been given or effected within the prescribed period of six months, the landlord 's right to recovery` of rent, disappears.
That could not have been the intention of the legislature.
Again, it may easily be supposed that an honest tenant goes to his new landlord and pays him rent hand to hand, even though there has been no such step taken within the time as contemplated by section 15.
It cannot be said that such a payment of rent out of court, will not be recog nized by a court, if and when a controversy about such a payment were to arise.
In this way instances maybe multiplied where the provisions of section 15 of the Act, have not been strictly complied with, but still the receipt and payment of rent as between the patnidar and his tenant, have continued for a sufficiently long period, to prove what was required to be done under that section.
In our opinion, the inference is clear that the provision as regards the time limit, is not mandatory but only directory, and that transgression of that directory provision has the effect of only delaying the landlord 's remedy of recovery of arrears of rent by suit so long as the landlord has not done what he is required by law to do.
But that provision has not the effect of absolutely depriving the landlord of his remedy by suit for all times; he may recover through court, of course, subject to the law of limitation.
In our opinion, therefore, acceptance of the appellant 's arguments would be nothing more than " piling unreason upon technicality", which no, court of justice can countenance.
In view of these considerations, it must be held that there is no merit in this appeal which is, accordingly dismissed with costs.
Appeal dismissed.
| The terms and conditions of service including the rates of wages and other allied matters were decided and settled through mutual negotiations between the trade union represented by respondent No. 3, its General Secretary and respondent No. 4, President of the Employers Association.
Respondent Nos. 1 and 2 were workers and were members of the trade union.
Under an agreement entered into in October, 1973 an amount equivalent to 10 paise out of every rupee earned by the workers was deducted by the management towards the gratuity fund and transferred to the trade union for and on behalf of the workers.
Under another agreement a sum equivalent to 10 paise per rupee in the wages of the workers was paid by the management to the trade union towards accident benefit fund of which the workers were the beneficiaries.
The amounts so collected were entrusted to the petitioner, who was also the treasurer and custodian of these funds of the trade union.
The petitioner deposited the amounts received by him in his personal name in his bank account, and no account of these amounts was rendered by him to the members of the trade union.
He did not call any general body meeting and the members of the trade union could not ventilate their grievance regarding mismanagement of the funds.
In view of the aforesaid difficulty, 85 workers including Respon PG NO 258 PG NO 259 dent Nos. 1 and 2 and three others resigned from this trade union on January 13, 1976, and formed a separate trade union of their own and A registered the same under the .
Respondent Nos. 1 & 2 and three other persons instituted five suits in the Munsiff Court against the petitioner and respondent No. 3 for a decree directing the petitioner and respondent No. 3 to render an account of the amounts collected on their behalf from December, 1969 towards the accident benefit fund and from October, 1973 'towards the gratuity fund.
The petitioner who was the President and the Treasurer of the trade union resisted the suits and contended that since the plaintiffs had resigned and ceased to be members of the trade union they had no right to claim the refund of the sums due to them from out of the funds of the trade union and that the suits were not maintainable in the Civil Courts in view of the provisions of the and the .
All these suits were tried together and the Munsiff passed a preliminary decree against the petitioner and respondent No. 3 directing them to render an account of the amounts received by them, and further directed that each of the plaintiffs was entitled to get his proportionate share of the amount due to him from out of the total amount received by the petitioner and respondent No. 3.
The petitioner filed an appeal and the Additional Sub Judge found that the petitioner and respondent No. 3 had received from the management amounts on behalf of the workmen, but held that the plaintiffs were not entitled to any decree at the hands of the Civil Court since the suits were not maintainable in view of the provisions of the , l972 and the .
Second Appeals were filed in the High Court by respondent Nos. 1 & 2 and the High Court by a common judgment set aside the judgment and decree passed by the First Appellate Court and restored the judgment and decree passed by the Trial Court.
In the appeal by Special Leave to this Court it was contended that the provisions of the and the have debarred the filing of the suit, that respondent Nos. 1 & 2 could not claim the amount after resigning from the PG NO 260 membership of the trade union as the said amounts formed part of the general fund of the trade union, and that only on the dissolution of the trade union its funds could be distributed as per the rules of the trade union, and where the rules did not provide for the same, then the fund was liable to be distributed as per Rule 11(1) of the Central Trade Union Regulations, l938.
On the question: whether a member of the trade union is entitled to ask for an account and to claim refund of sums received by the trade union from the management for and on his behalf on his ceasing to be a member.
Dismissing the Special Leave Petition, HELD: 1.
The civil suits filed by the workers Respondent Nos. 1 & 2 were not barred under the provisions of the and the .
[264C] 2.
The amounts were received by the trade union from the employer concerned towards the gratuity and accident benefit to which the workers were entitled.
There was no scheme drawn up by the trade union regarding the payment of the gratuity amount and the accident benefit fund received on behalf of the workmen to the workmen concerned.
There was no agreement between the trade union and its members that the amount received towards gratuity and accident benefit should form part of funds of the trade union.
Any amount received for and on behalf of the members is liable to be refunded to the workmen concerned.
[264D] In the instant Case, the amount which had been received on behalf of Respondent Nos. 1 & 2 by the petitioner and Respondent No. 3 had, therefore, to be refunded to them on their resignation from the membership of the trade union.
[264E] 3.
There is no warrant for the view that only on the dissolution of the trade union its funds could be distributed as per the rules of the trade union and that where the rules did not provide for the same, the fund was liable to be distributed as per Rule 11(1) of the Central Trade Union Regulations 1938.
[264B] Balmer Lawrie Workers Union.
Bombay and Anr.
vs Balmer Lawrie and Co. Ltd. and Ors., [l985] 2 S.C.R. 492 distinguished.
PG NO 261
|
tition No. 350/ of 1977 etc.
Under Article 32 of the Constitution of India.
S.K. Jain and S.S. Khanduja for the Petitioners.
R.N. Poddar and Ms. A. Subhashini for the Respondents.
The following Judgments were delivered 877 CHANDRACHUD, C.J.: A large group of persons holding vacant lands in different urban agglomerations in the country had filed writ petitions in this Court, challenging the validity of some of the key provisions of the Urban Land (Ceiling and Regulation) Act, 33 of 1976.
Those writ petitions were disposed of on November 13, 1980 by a Constitution Bench consisting of Krishna Iyer J., Talzapurkar J., A.P.Sen J., and the two of us.
Each of our three learned Brethren delivered a full judgment.
We delivered a short judgment and stated that fuller reasons will follow later.
We had discussed with one another the several points arising in the writ petitions.
But, we were running against time, not an unusual predicament, since Krishna Iyer J. was due to retire on November 15, 1980, Tulzarpurkar J. differed from all of us, holding that the impugned Act is not protected under Article 31 C or under Article 31 B since, it did not further the Directive principles contained in clauses (b) and (c) of Article 39 of the Constitution.
The learned Judge held further that since Chapter III of the Act, comprising the substratum of the very scheme of the Act was invalid the entire Act had to be struck down as unconstitutional.
A.P. Sen J. agreed with us on all the points except that according to him, subsections (1), (2) and (3) of section 23 and the opening words of section 23(4) of the Act are unconstitutional, not being protected by Articles 31 B and 31 C of the Constitution.
Krishna Iyer J. concurred with us in holding that the entire Act is valid save and except section 27(1), insofar as that section imposes restrictions on the transfer of any urban or urbanisable land with a building or a portion of such building, which is within the ceiling area.
We took the view that the impugned Act was intended to and did in fact implement or achieve the purpose of clauses (b) and (c) of Article 39 and that, the vice from which a few provisions of the Act could be shown to suffer, would not justify a contrary conclusion.
We are free to confess that if the full text of the judgment of Krishna Iyer J. were available to us sufficiently in advance we would not have delivered a separate order stating that fuller reasons will follow later.
The judgment had to be pronounced on November 13, 1980 since, Krishna Iyer J. was due to retire two days later.
As we have stated earlier, all of us had together discussed the various points arising in these cases and we knew the conclusions to which we had respectively come.
But, it is not possible to express agreement with the line of reasoning of a judgment, without examining 878 the judgment carefully.
That opportunity became available to us latter.
We have gone through Krishna Iyer J. 's judgment closely and find that there is nothing that we can usefully add to it.
The only further order which we propose to pass now is say that we agree fully with the reasons given by Krishna Iyer J. in his judgment reported in 1981(1) S.C.C. 166.
CHANDRACHUD, C.J.
We have perused the judgment prepared by Brother Tulzapurkar with care but, with respect, we are unable to agree with him that the Urban Land (Ceiling and Regulation) Act 33 of 1976, does not further the Directive Principles of State Policy in clauses (b) and (c) of Article 39 of the Constitution.
The vice from which a provision here or a provision there of the impugned Act may be shown to suffer will not justify the conclusion that the Act is not intended to or does not, by its scheme, in fact implement or achieve the purposes of clauses (b) and (c) of Article 39.
The definition of 'family ' in section 2(f), which in relation to a person means the individual, the wife or husband, as the case may be, of such individual, and their unmarried minor children, will not necessarily lead to concentration of wealth in the hands of a few person or families.
Such is not the intendment, nor the drive, nor the direct and inevitable consequence of the aforesaid definition of 'family '.
Section 23 of the Act is in our opinion valid and does not suffer from any constitutional infirmity.
The definition of the word 'industry ' in clause (b) of the Explanation to that section is undoubtedly unduly wide since it includes "any business, profession, trade, undertaking or manufacture".
If sub section (1) of section 23 were to stand alone, no doubt could have arisen that the Urban Land Ceiling Act is a facade of a social welfare legislation and that its true, though concealed, purpose is to benefit favoured private individuals or associations of individuals.
But the preponderating provision governing the disposal of excess vacant land acquired under the Act is the one contained in sub section (4) of section 23 whereby, all vacant lands deemed to have been acquired by the State Government under the Act "shall be disposed of. to subserve the common good".
The provisions of sub section (4) are "subject to the provisions of sub sections (1), (2) and (3) "but the provisions of sub section (1) 879 are enabling and not compulsive and those of sub sections (2) and (3) are incidental to the provisions of sub section (1).
The disposal of excess vacant lands must therefore be made strictly in accordance with the mandate of sub section (4) of section 23, subject to this, that in a given case such land may be allotted to any person; for any purpose relating to, or in connection with, any 'industry ' or for the other purposes mentioned in sub section (1), provided that by such allotment, common good will be subserved.
The governing test of disposal of excess land being 'social good ', any disposal in any particular case or cases which does not subserve that purpose will be liable to be struck down as being contrary to the scheme and intendment of he Act.
The Preamble to the Act ought to resolve interpretational doubts arising out of the defective drafting of section 23, It shows that the Act was passed with the object of preventing concentration of urban land in the hands of a few persons and with a view to bringing about an equitable distribution of land in urban agglomerations to subserve the common good. 'Common good ' being the writing on the wall, any disposal which does not serve that purpose will be outside the scope of the Act and therefore lacking in competence in diverse senses.
Private property cannot under our Constitution be acquired or allotted for private purposes though an enabling power like that contained in sub section (1) of section 23 may be exercised in cases where the common good dictates the distribution of excess vacant land to an industry, as defined in clause (b) of the Explanation to section 23.
Section 11(6) which provides that the amount payable under sub section (1) or sub section (5) of section 11 shall, in no case, exceed two lakhs of rupees is valid.
The amount thus payable is not illusory and the provision is not confiscatory.
Rupees two lakhs is not like a farthing even if the excess land may be a fortune.
Finally, we are of the opinion that subsection (1) of section 27 of the Act is invalid in as far as it imposes a restriction on transfer of any urban or urbanisable land with a building or a portion only of such building, which is within the ceiling area.
Such property will therefore be transferable without the constraints mentioned in sub section (1) of section 27 of the Act.
The Writ Petitions are accordingly dismissed except for the restricted striking down of section 27(1) of the Act.
There will be no order as to costs 880 Fuller reasons will follow latter.
KRISHAN IYER, J.
I agree with the learned Chief Justice both regarding the constitutionality of the legislation and regarding the partial invalidation of section 27 (1).
Nevertheless, I consider it necessary to strike a few emphatic notes of concordance having special regard to the discordance of my learned brother Tulzapurkar, J. I have carefully perused the judgment of Tulzapurkar, J, but must express my deferential disagreement because on a few fundamentals there is sharp divergence between us.
I proceed to turn the focus only on three issues, namely, the alleged artificiality of "family ' as defined in section 2 (f) of the Urban Land (Ceiling and Regulation) Act, 1976 (for short, the Act), the invalidity of section 23 of the Act as discriminatory and, therefore, unconstitutional and the invalidity of section 11 (6) of the Act on the score that the compensation offered is illusory and, therefore, violative of article 31 (2) of the Constitution.
The legislation, as its title indicates, is obviously a measure for inhibiting concentration of urban lands in the hands of a few persons and fore quitetable distribution of such land to subserve the common good.
Article 39 (b) and (c) of the Constitution are directly attracted and there is no doubt that the fullest exploitation of the material resources of the community undoubtedly requires distribution of urban land geared to the common good.
It is also a notorious fact that concentration of urban land in private hands is an effective forbiddance of the maximum use of such land for industrial purposes at a critical juncture when the nation is fighting for survival through industrialisation.
It needs no argument to conclude that the objective of the legislation as set out in the long title and in the statutory scheme is implementation of Part IV of the Constitution.
The Directive principles of State policy being paramount in character and fundamental in the country 's governance, distributive justice envisaged in article 39 (b) and (c) has key role in the developmental process of the socialist Republic that India has adopted.
The conclusion is inevitable that is a broad measure of State policy, ceiling on and regulation of urban land ownership is an imperative of economic independence and is, therefore, on the national agenda of planned development.
Indeed, there was no controversy on this question before us.
One of the points which has been argued and has found approval with my learned brother 881 Tulzapurkar, J., turns on the gross inadequacy of compensation fixed under section 11 (6) of the Act.
There is a specific case before us that urban land worth a few crores will fall a prey to acquisition under this Act, but thanks to section 11 (6), "the amount" payable in return to the owner shall not exceed Rs. 2 lakhs.
This, it is contended, is an illusory compensation in reckless disregard of the market value of the property acquired.
I am unable to agree with this submission.
The taking over of large conglomerations of vacant land is a national necessity if article 39 is a constitutional reality.
"Law can never be higher than the economic order and the cultural development of society brought to pass by that economic order." (Marx).
Therefore, if article 38 of the Constitution which speaks of a social order informed by economic justice, is to materialise, law must respond effectively and rise to the needs of the transformation invisioned by the founding fathers.
But it is contended that any legislation which violates article 31 (2) or article 19 (1) (f) (both of them have since been deleted by the 44th Amendment to the Constitution although on the relevant date they were part of part III) must fail notwithstanding the fact that articles 31B and 31 C shield the legislation in question.
It is said that the Act is vulnerable for the reason that right to property armoured by the above two Articles is inviolable unless the taking is for a public purpose in contrast to a private industry and the payment in return, even if not an equivalent, is be fair enough so as not to be castigated as illusory.
The various amendments to article 31 culminating in the present provision which provides for the payment of an "amount" disclose a determined approach by parliament in exercise of its constituent power to ensure that full compensation or even fair compensation cannot be claimed as a fundamental right by the private owner and that short of paying a 'farthing for a fortune ' the question of compensation is out of bounds for the court to investigate.
The question is whether in the light of Kesavananda Bharati (especially the observations of Chandrachud, J), a sum of Rs. 2 lakhs in section 11 (6) is a farthing for a fortune.
I repudiate the proposition that payment of a sum of Rs. 2 lakhs, whatever the total value of the property in the market may be is so fictitious and flimsy as to be a farthing.
There are no absolutes in law as in life and the compulsions of social realities must unquestionably enter the judicial verdict.
882 What is the dimension of Indian penury? What is the basis of our constitutional order? What is the goal of the Republic? What is the meaning of the egalitarian ethos of our society? What do we mean by "We, the people of India"? Unless these profound roots of our social constitutional order are probed, we can never reach an effective answer to legal formal issues.
The roots and fruits of our National Charter depend on a clear grasp of the constitutional fundamentals.
In this context, it is important to remember what, right at the beginning even as the proceedings of the constituent Assembly were culminating, Nehru had warned: If we cannot solve this problem soon, all our paper constitutions will become useless and purposeless.
If India goes down, all will go down; if India thrives, all will thrive; and if India lives, all will live.
He had repeated with emphasis: The first task of this Assembly is to free India through a new constitution, to feed the starving people and to clothe the naked masses, and to give every Indian the fullest opportunity to develop himself according to his capacity.
Indeed, the tryst with destiny that India made when it became free found expression in a historic speech by the then Prime Minister, Jawahar Lal Nehru: The service of India means the service of the millions who suffer.
It means the ending of poverty and ignorance and disease and inequality of opportunity.
The ambition of the greatest man of our generation has been to wipe every tear from every eye.
That may be beyond us, but as long as there are tears and suffering, so long our work will not be over.
We must notice the Indian human condition.
"Indian poverty, to many who have an acquaintance with poverty in similar societies is unique", writes Segal in his book The Crisis of India: "It is unique in its depths, which seems incapable of supporting life at all; unique in its blatancy, for it is everywhere, in city and village, and concealed among chimneys or trees, not isolated like an epidemic in an 883 inaccessible slum, but everywhere, on the movement of one 's feet, always some where in the circle of one 's sight; unique in its sheer magnitude for in India the poor are not to be numbered in hundreds of thousands, but in hundreds of millions; unique in the quality of its submission, which registers a kind of glazed pride." In this context we may also read what Rajen Babu stated as a framer of the Constitution: To all we give the assurance that it will be our endeavour to end poverty and squalor and its companions hunger and disease, to a abolish distinctions and exploitation and to ensure decent conditions of living.
We may have to remember that a galaxy of Constitution makers like Sardar Patel and B. Pant and Rajagopalachari, not to speak of Jawahar Lal Nehru, where doubtful about the court being given the power to pronounce upon the question of compensation when the State acquired property.
Indeed, it is revealing to read the debates in condensed form given by Granville Austin: Sardar Patel closed the debate with a speech that sounded like a requiem for land lords.
What did 'public use ' mean he wondered.
Pant then said: Suppose the government acquires zamindari rights and then abolishes them.
Or what if the Government takes over Connaught Place (the central shopping and office area of New Delhi) and then redistributes the buildings to the tenants? The first stage is acquisition.
Does that come under this clause? To Ayyar 's answer of 'Certainly ', Pant replied that he opposed the wording if it means that the government would not be free to determine the compensation it would have to pay.
If this clause covers all cases of acquisition said Rajagopalachari, then the question of the justness of compensation will go to the courts 'with the result that government functioning will be paralysed '.
Panikkar suggested that they should take out the 'just ' so that it would not be justiciable.
Pant replied that if this covered acquisition for social purposes, 'then I submit payment of compensation should not even be compulsory '.
Patel concluded the discussion.
884 'If the word 'just ' is kept, ' he said, 'we come to the conclusion that every case will go to the Federal Court. ' Therefore "just" is dropped . .
The Assembly greeted the committee 's actions favourably.
We need not go into the details except to state that even Gandhiji took the view that anything like compensation could possibly not be given when property was taken from the property owners by the State for community benefit.
I mention this only to drive home the point that right to property is not part of the basic structure of the Constitution even as right to poverty is not the basic structure of India for ever.
The whole adventure of the Constitution is to remove poverty and in that process remove concentration of property, not for a return, but for almost free, if the justice of the situation commended it self to the legislation to take it that way.
Of course, it may be a deception to say that an "amount" is paid if nothing is paid except a tittle.
So what we have to consider is whether the amount of Rs. 2 lakhs is so utterly deceptive and totally nominal as to be discarded as a farthing with contempt.
Having regard to the human condition of a large percentage of pavement dwellers and slum dewllers in our urban areas and proletarian miserables in our rural vastnesses, any one who gets Rs. 2 lakhs can well be regarded as having got something substantial to go by.
In a society where half of humanity lives below the breadline, to regard Rs. 2 lakhs as a farthing is farewell to poignant facts and difficult to accept.
In my view, with the greatest respect for my learned brother, I am unable to assent to the view that section 11 (6) contravenes article 31 (2) because the Payment stipulated is a mere mockery.
To put a ceiling on the maximum amount payable when property is taken is reasonable and does not spell discrimination unless the maximum itself is a hoax, being trivial.
In a Constitution which creates a Socialist Republic egalite is the rule of life and where gross inequalities mar the economic order, a measure of equalization is but one strategy of promoting equality and has to be viewed as part of the dynamics of social justice.
Indeed, even in the Income Tax Act, at a certain stage, almost all the income is taken away by a steep rate of tax leaving next to nothing to the income earner.
We have to be pragmatic and show empathy with the values 885 of the Constitution.
Chief Justice Earl Warren 's statement is apposite as a reminder to our judicial conscience: Our judges are not monks or scientists, but participants in the living stream of our national life, steering the law between the dangers of rigidity on the one hand and of formlessness on the other.
Our system faces no theoretical dilemma but a single continuous problem: how to apply to ever changing conditions the never changing principles of freedom.
I have no hesitation in holding section 11(6) as invulnerable. 'Family ' as defined in s.2(f) has been held invalid by my learned brother Tulzapurkar, J, as an arbitrary, artificial creation of the statute inconsistent with the natural unit prevalent in the country.
Here again.
I must emphasise that law is never static and must respond to the challenges of change: The law is not an end in itself, nor does it provide ends.
It is preeminently a means to serve what we think is right . .Law is here to serve! To serve what? To serve, insofar as law can properly do so, within limits that I have already stressed, the realization of man 's ends, ultimate and mediate, Law cannot stand aside from the social changes around it.
It is possible that in the last century the prevalent concept of family was of a certain pattern.
Indeed, in the diversity of Indian social structure the concept of 'family ' has varied from region to region and even from community to community and we cannot postulate any parameters in this behalf.
Moreover, fission, not fusion, is the modern trend and wherever might have been the situation in Indian rural life in the 1950s there is no doubt that nuclear families are becoming the vogue in the late 1970s and 1980s of Indian urban life.
In the Western countries the family unit consists of the parents and their minor children and the West has invaded the East in life style 886 atleast in our cities.
Whatever may be the pastoral life of old or the idyllic picture we may cherish the social facts tell a different tale in contemporary India of the cities.
There is hardly space for a unclear family to live in urban conditions and to think of large joint families as the natural unit is to resurrect by gone ways of life and turn the blind eye to the rapid growth of the small family of man and wife 'we two and we shall have two ' is the desideratum and social factum.
In these days of family planning and self reliance of the adult we cannot condemn as arbitrary, by a process of judicial ratiocination, the legislative provision that a family shall be defined as the parents plus their minor children.
I, therefore, hold that 'family ' as defined in section 2(f) of the Act accords with the current lifestyle in urban conditions and is neither artificial nor arbitrary nor violative of Act 14.
It is noteworthy that many agrarion legislations have been upheld by this court in a spate of recent cases where the definition of 'family ' is substantially the same.
I may permit myself a few observations on section 23 of the Act and the grounds of invalidation relied on by the challengers.
The section has been loosely or ambivalently drafted and runs thus: 23.
Disposal of vacant land acquired under the Act.
(1) It shall be competent for the State Government to allot, by order, in excess of the ceiling limit any vacant land which is deemed to have been acquired by the State Government under this Act or is acquired by the State Government under any other law 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 and it shall be lawful for such person to hold such land in excess of the ceiling limit.
Explanation For the purposes of this section, (a) where any land with a building has been acquired by the State Government under any other law and such building has been subsequently demolished by the State Government, than, such land shall be deemed to be vacant land acquired under such other law: 887 (b) "industry" means any business, profession, trade, undertaking or manufacture. . (4) Subject to the provisions of sub sections (1), (2) and (3), all vacant lands deemed to have been acquired by the State Government under this Act shall be disposed of by the State Government to subserve the common good on such terms and conditions as the State Government may deem fit to impose.
Certain basics must be remembered as ideological tools of legal interpretation.
The purpose of the enactment, garnered from the Preamble, is to set a ceiling on vacant urban land, to take over the excess and to distribute it on a certain basis of priority.
The whole story of the legislation, the long gestation of pre legislative consideration, the brooding presence of article 39(b) and (c) and the emphasis in section 23(4) on common good as the guiding factor for distribution point to public purpose, national development and social justice as the cornerstone of the policy of distribution.
It is not and never can be compulsory taking from some private owners to favour by transfer other private owners.
The prevalent pathology of corrupt use of public power cannot be assumed by the court lest the same charge be levelled against its echelons.
The wide definition of 'industry ' or the use of general words like 'any person ' and 'any purpose ' cannot free the whole clause from the inarticulate major premise that only a public purpose to subserve the common good and filling the bill of article 39(b) and (c) will be permissible.
Even a private industry may be for a national need and may serve common good.
Even a medical clinic, legal aid bureau, engineering consultant 's office, private ambulance garage, pharmacist 's shop or even a funeral home may be a public utility.
Professions for the people, trade at the service of the community and industry in the strategic sector of the nation 's development may well be in private hands in the transitional stage of our pluralist economy undergoing a fabian transformation.
Why should lands allotted to such private industries or professionals be condemned? The touchstone is public purpose, community good and like criteria.
If the power is used for favouring a private industrialist or for nepotistic reasons the oblique act will meet with its judicial Waterloo.
To presume as probable graft, nepotism, patronage, political cloth, 888 friendly pressure or corrupt purpose is impermissible.
The law will be good, the power will be impeccable but if the particular act of allotment is mala fide or beyond the statutory and constitutional parameters such exercise will be a casualty in court and will be struck down.
We must interpret wide words used in a statute by reading them down to fit into the constitutional mould.
The confusion between the power and its oblique exercise is an intellectual fallacy we must guard against.
Fanciful possibilities, freak exercise and speculative aberrations are not realistic enough for constitutional invalidation.
The legislature cannot be stultified by the suspicious improvidence or worse of the Executive.
I wholly agree with the perspective of my learned brother Sen, J. that Part IV which seeks to build a Social Justice Society, is basic to our constitutional order.
Any transgression of article 39(b) and (c) is beyond the scope of section 23(1) and disposal of land thereunder must subserve the common good and not the reverse.
This limitation on the wide words of section 23(1) is a matter of semantics and reading down meanings of words with loose lexical amplitude is permissible as part of the judicial process.
To sustain a law by interpretation is the rule.
To be trigger happy in shooting at sight every suspect law is judicial legicide.
Courts can and must interpret words and read their meanings so that public good is promoted and power misuse is interdicted.
As Lord Denning said: "A judge should not be a servant of the words used.
He should not be a mere mechanic in the power house of semantics".
May Lord Denning live long, and his shadow never grow less.
" The power of judicial review to stricke at excess or mala fides is always there for vigilant exercise untrammeled by the narrow precedents of Victorian vintage.
Prof. H.W.R. Wade 's note of judicial activism, in his recent Hamlyn Lectures, will set the sights right: Brainwashed though British lawyers are in their professional infancy by the dogma of legislative sovereignty, they ought to excuse rather than criticise the logical contortions and evasions to which Judges must resort in their struggle to preserve their powers.
I do not see how 889 they can fairly be accused, to borrow words used by Lord Devlin, of moving too far from their base.
They would be much more open to criticism if they remained content with the wretchedly narrow base to which they confined themselves 30 years ago, when they took clauses of the "if the minister is satisfied" type at face value.
For judicial control, particularly over discretionary power, is a constitutional fundamental.
In their self defensive campaign the judges have almost given us a constitution, establishing a kind of entrenched provision to the effect that even Parliament cannot deprive them of their proper function.
They may be discovering a deeper constitutional logic than the crude absolute of statutory omnipotence.
I have no doubt even the crude drafting of section 23 (4) by the unwanted 'subject to ' will not whittle down the power, why the obligation, to distribute vacant land, not according to personal, political or official fancy but strictly geared to the good set down in article 39 (b) and (c) The question of basic structure being breached cannot arise when we examine vires of an ordinary legislation as distinguished from a constitutional amendment.
Kesavananda Bharati cannot be the last refuge of the proprietariat when being legislation takes away their 'excess ' for societal weal.
Nor, indeed, can every breach of equality spell disaster as a lethal violation of the basic structure.
Peripheral inequality is inevitable when large scale equalisation processes are but into action.
If all the judges of the Supreme Court in solemn session sit and deliberate for half a year to produce a legislation for reducing glaring economic inequality their genius will let them down if the essay is to avoid even peripheral inequalities Every large cause claims some martyr, as sociologists will know.
Therefore, what is a betrayal of the basic feature is not a mere violation if article 14 but a shocking, unconscienable or unscrupulous travesty of the quintessence of equal justice.
If a legislation does go that far it shakes the democratic foundation and must suffer the death penalty.
But to permit the Bharati ghost to haunt the corridors of the court brandishing fatal writs for every feature of 890 inequality is judicial paralysation of parliamentary function.
Nor can the constitutional fascination for the basic structure doctrine be made a Trojen horse to penetrated he entire legislative camp fighting for a new social order and to overpower the battle for abolition of basic poverty by the 'basic structure ' missile.
Which is more basic? Eradication of die hard, deadly and pervasive penury degrading all human rights or upholding of the legal luxury of perfect symmetry and absolute equality attractively presented to preserve the status quo ante? To use the Constitution to defeat the Constitution cannot find favour whit the judiciary I have no doubt that the strategy of using the missile of 'equality ' to preserve die hard, dreadful societal inequality is a stratagem which must be given short shrift by this court.
The imperatives of equality and development are impatient for implementation and judicial scapegoats must never be offered so that those responsible for stalling economic transformation with a social justice slant may be identified and exposed of.
Part IV is a basic goal of the nation and now that the court upholds the urban ceiling law, a social audit of the Executive 's implementation a year or two later will bring to light the gaping gap between verbal valour of the statute book and the executive slumber of law in action.
The court is not the anti hero in the tragedy of land reform urban and agrarian.
After all, in a rapidly changing society running on the rails of the rule of law and operated according to constitutional paradigms, the proprietariat is bound to suffer but the country cannot defer the transformation because, then, hunger will know no law.
This is the root of the matter.
And then comes the irony of continual litigative Clamour and the periodic chorus for property.
Dosn 't thou 'ear my 'erse 's, as they canters awaay? Proputty, proputty, proputty than 's what I 'ears 'em saay.
And holders and hoarders of wealth may pensively reflect: Few rich men own their own property.
The property owns them.
891 I have not had the leisurely advantage of my learned brothers ' full judgments save some discussions but my impending retirement impels a hurried recording of my reasons for subscribing to the order passed just now. 'Tomorrow to fresh woods and pastures new ', but to day must be fulfilled before tomorrow arrives, and so, I deliver this judgment as is my duty to do, TULZAPURKAR, J.
By these writ petitions the petitioners, who are holders of vacant land in the urban agglomerations in various States, are seeking to challenge the vires of some of the salient provisions of the Urban Land (Ceiling and Regulation) Act, 1976 (33 of 1976) and since, according to them, some of the impugned provisions are pivotal and non severable, having an impact on its entire scheme, the whole Act is liable to be struck down as being invalid and unconstitutional.
The petitioners have, therefore, prayed for an order quashing notices issued to them by the concerned competent authorities under the Act and a mandamus directing the respondents not to implement the provisions thereof against them.
The impugned enactment has its genesis in the resolutions passed by eleven sponsoring States under article 252 (1) of the Constitution.
The State Legislatures of Andhra Pardesh, Gujarat, Haryana, Himachal Pradesh, Karnataka, Maharashtra, Orissa, Punjab, Tripura, Uttar Pradesh and West Bengal considered it desirable to have an uniform legislation enacted by Parliament for the imposition of ceiling on urban property for the country as a whole and as required by the first part of article 252 (1) of the Constitution passed a resolution to that effect.
Parliament accordingly enacted the Urban Land (Ceiling and Regulation) Act, 1976.
It received the assent of the President on February 17, 1976 and, in the first instance, it come into force on that day in all the Union Territories and the 11 States which had passed the requisite resolution under the first part of article 252 (1).
Subsequently, the Act was adopted, by passing resolutions under the second part of article 252 (1) by the State Legislatures of Rajasthan on March 9, 1976, Manipur on March 12, 1976, Assam on March 25, 1976, Bihar on April 1, 1976, Meghalaya on April 7, 1976 and Madhya Pradesh on September 9, 1976.
Thus, the enactment is in force in 17 States and all the Union Territories in the country.
It seeks to impose ceiling on vacant lands in urban agglomerations having a population of two lakhs or more and for that purpose classifies such urban agglomerations in various cities and towns in all the State and Union Territories into four categories 892 and fixes the ceiling limit for each of the categories thus: Ceiling limit on vacant land is fixed at 500 sq. metres for the urban agglomerations of the metropolitan areas of Delhi, Bombay, Calcutta and Madras having a population exceeding ten lakhs falling under category 'A ', at 1,000 sq. metres for urban agglomerations with a population of ten lakhs and above, excluding the four metropolitan areas, falling under category 'B ', at 1,500 sq. metres for urban agglomerations with a population between three lakhs and ten lakhs falling under category 'C ' and at 2,000 sq. metres for urban agglo merations with a population between two lakhs and three lakhs falling under category 'C ': vide s.4 read with Schedule I of the Act.
The said Schedule does not mention the urban agglomerations having a population of one lakh and above but if a particular State which passed a resolution under article 252 (1) (first part) or if a State which subsequently adopts the Act by passing a resolution under article 252 (1) (second part) wants to extend the Act to such areas, it could do so by a Notification under section 2 (n) (A) (ii) or section 2 (n) (B), as the case may be, after obtaining the previous approval of the Central Government.
Chapter III, being the main Chapter, comprising sections 3 to 24, deals principally with imposition and limits of ceiling on vacant land, acquisition and vesting in the State Government of vacant land in excess of the ceiling limits, payment to be made to the holders for such acquisition, disposal of excess vacant land so acquired and exemptions from the applicability of this Chapter.
Chapter IV comprising sections 25 to 30 deals with regulation of transfer and the use of urban property; while Chapter V which includes sections 31 to 47, deals with appeals, revisions, offences and punishments and other miscellaneous matters.
The primary object and purpose of the Act, as its long title and the Preamble show, is to provide for the imposition of a ceiling on vacant land in 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 bring about an equitable distribution of land in urban agglomerations to subserve the common good, presumably in furtherance of the Directive Principles of State policy contained in article 39 (c) and (b) respectively.
The enactment has also been but in the Ninth Schedule as Item 132 by the Constitution (Fortieth Amendment) Act, 1976, in other words, the enactment enjoys the benefit of protective umbrella 893 of both the articles, article 31B and 31C as it stood prior to its amendment by the Constitution (Forty second Amendment) Act, 1976.
Dealing with these two articles, namely, articles 31B and 31C and the protective umbrella provided by them in the context of the decision in Kesavananda Bharati 's case this Court in Waman Rao and others vs Union of India & others, has by its order passed on May 9, 1980, held thus: "In Kesavananda Bharati decided on April, 24, 1973 it was held by the majority that Parliament has no power to amend the Constitution so as to damage or destroy its basic structure.
We hold that all amendments to the Constitution which were made before April 24, 1973 and by which the 9th Schedule to the Constitution was amended from time to time by the inclusion of various Acts and Regulations therein, are valid and constitutional.
Amendments to the Constitution made on or after April 24, 1973 by which the 9th Schedule to Constitution was amended from time to time by the inclusion of various Acts and Regulations therein, are open to challenge on the ground that they, or any one or more of them, are beyond the constituent power of the parliament since they damage the basic or essential features of the Constitution or its basic structure.
We do not pronounce upon the validity of such subsequent constitutional amendments except to say that if any Act or Regulation included in the 9th Schedule by a constitutional amendment made after April 24, 1973 is saved by Article 31C as it stood prior to its amendment by the 42nd Amendment, the challenge to the validity of the relevant Constitutional Amendment by which that Act or Regulation is but in the 9th Schedule, on the ground that the Amendment damages or destroys a basic or essential feature of the Constitution or its basic structure as reflected in Articles 14, 19 or 31, will became otiose.
894 Article 31C of the Constitution, as it stood prior to its amendment by section 4 of the Constitution (42nd Amendment) Act, 1976, is valid to the extent to which its constitutionality was upheld in kesavonanda Bharati.
Article 31C, as it stood prior to the Constitution (42nd Amendment) Act does not damage any of the basic or essential features of the Constitution or its basic structure.
" Since the impugned Act has been put in the Ninth Schedule by the Constitution (Fortieth Amendment) Act, 1976 i. e. after April 24, 1973, the said Constitutional Amendment would be open to challenge on the ground that the same is beyond the constituent power of the Parliament if it damages the essential features or basic structure of the Constitution; but at the same time the impugned Act has, apparently, received the protective umbrella of article 31C as it stood prior to its amendment by 42nd Amendment Act inasmuch as it seems to have been enacted in furtherance of the Directive Principles contained in article 39 (b) and (c) with the result that in order to succeed in their challenge the petitioners will have to cross two hurdles.
In the first place they will have to establish that the Act is outside the pale of the protective umbrella of article 31C which they can do by showing that though purporting to do so, it does not, in fact, further any of the said Directive Principles.
A scrutiny of the Directive Principles contained in article 39 (b) and (c) clearly shows that the basic postulate underlying the former obviously is that diffusion of ownership and control of the material resources of the community is always in public interest and hence the State is directed to ensure such distribution (equitable) there of as best to subserve the common good, while the postulate underlying the latter obviously is that concentration of wealth as well as means of production in the hands of few is detrimental to common interest and hence the State is directed to ensure such economic system to operate which prevents such concentration.
It would, therefore, be clear that if by the impugned enactment the aforesaid objectives of these Directive Principles are not furthered or if the provisions of the enactment run counter to these objectives the Act would lose the benefit of the protective umbrella of article 31 C. Secondly, after crossing this hurdle, the petitioners will have to show further that the 40th Amendment Act by which the impugned Act was included in the Ninth Schedule was beyond the constituent power of the Parliament since it has damaged the basic structure or the 895 essential features of the Constitution as reflected in articles 14, 19 and 31, which of course, they will be able to do by showing that the impugned Act itself flagrantly violates aspects of articles 14, 19 and 31 which constitute the basic structure or the essential features of the Constitution.
It may be stated that Counsel for the petitioners principally attacked four provisions of the impugned Act (a) artificial definition of 'family ' given in section 2 (f) in relation to the prescription of ceiling area, (b) provision contained section 11 relating to amounts payable in respect of excess vacant land acquired by the State (c) provision containedins.
23 relating to disposal of excess vacant land acquired by the State and (d) prohibition or restriction on transfer of a building or a part thereof or a flat therein, though unconcerned with excess vacant land, without permission, as being flagrantly violative of those aspects of the petitioners ' fundamental rights under articles 14, 19 and 31 as constitute the essential features or basic structure of the Constitution.
Counsel for the petitioners also contended that some of the aforesaid impugned provisions which are pivotal and have an impact on the entire scheme of the Act, in fact, run counter to the Directive Principles of article 39 (b) and (c) and, there fore, but the entire Act outside the pale of the protective umbrella of article 31C of the Constitution.
Counsel, therefore, urged that both the 40th Amendment to the extent it inserted the impugned Act in the Ninth Schedule and the impugned Act deserve to be struck down.
On the other hand, the learned Attorney General appearing on behalf of the Union of India and counsel for the concerned States of Rajasthan, Andhra Pradesh, Uttar Pradesh and for the concerned competent authorities under the Act, refuted the contentions urged on behalf of the petitioners.
It was denied that any provision of the Act runs counter to the Directive Principles of article 39 (b) and (c) of the Constitution.
It was pointed out that the impugned Act having been put in the Ninth Schedule and having been enacted in further of the Directive Principles of the State policy contained in article 39 (b) and (c) of the Constitution was protected both under article 31B and 31C of the Constitution.
It was disputed that any provision of the Act violated the petitioners ' fundamental rights under articles 14, 19 and 31 and, it was contended that even if there was any such violation, the Act and its provisions could not be 896 challenged by the petitioners on that ground because of the protective umbrella of article 31B and 31C of the Constitution and, therefore, the petitions were liable to be dismissed.
I shall first deal with those impugned provisions of the Act, which according to the petitioners, not merely violate their fundamental rights but also have an adverse impact on the protective umbrella afforded by article 31C of the Constitution.
In this behalf counsel for the petitioners referred to two provisions, namely.
section 2(f) which gives an artificial definition of 'family ' in relation to prescription of ceiling area and section 23 which contains provision relating to disposal of excess vacant land acquitted by the State.
Re: section 2(f) in relation to prescription of ceiling area.
It is by section 3 of the Act that the ceiling on vacant land in any urban agglomeration is imposed.
That section runs thus: "3.
Except as otherwise provided in this Act, on and from the commencement in this Act, on person shall be 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.
" The ceiling limits referred to in the above section, as stated earlier, have been fixed at 500 sq. metres, 1,000 sq. metres, 1,500 sq. metres and 2,000 sq. metres for vacant lands in urban agglomerations falling in categories A,B,C and D respectively under section 4(1).
Section 2(i) defines 'person ' as including an individual, a family, a firm, a company, or not association or body of individuals, whether incorporated or not; while section 2(f) defines 'family ' thus: "Family", in relation to a person means the individual, the wife or husband, as the case may be, of such individual and their unmarried minor children." And the Explanation to this clause states that "minor" means a person who has not completed his or her age of eighteen years.
There is no doubt that the aforesaid definition of 'family ' is an artificial one inasmuch as is evcludes from its scope major children two 897 are normally included in the concept of a family; it further completely ignores the normal Joint Hindu Family.
Counsel for the petitioners pointed out that if this artificial definition of 'family ' is considered in the context of ceiling limits prescribed under section 4(1) it produces discriminatory results because of adoption of double standard for fixing the ceiling limit one for the artificial family as defined and another for a normal family which includes major children or for Joint Hindu Family governed by Mitakshara Law obtaining in several parts of the country.
For instance, in an urban agglomeration falling under category 'A ' where the ceiling limit is prescribed at 500 sq. metres, a family of a father, mother and say three minor sons (being in all five) together will be entitled to retain for itself only 500 sq. metres of vacant land whereas a family of a father and four major sons (being in all five) will be entitled to retain for itself 2,500 sq. metres of vacant land (500 sq. metres for father as a person and 500 sq. metres each for four sons as persons).
Counsel urged that such discrimination or inequality arises from the classification made between minor children and major children belonging to a family but such classification is not based on any intelligible differentia having any nexus to the object sought to be achieved by the Act, which is to acquire excess vacant land after leaving the ceiling area to a family and as such the same is clearly violative of article 14 of the Constitution.
Counsel strongly relied upon two decisions of this Court in this behalf, namely, decisions in Karimbil Kunhikoman vs State of Kerala and A.P. Krishnasami Naidu etc.
vs State of Madras, where on similar ground the whole of Chapter III of Kerala Agrarian Relations Act, 1961 and the whole of Chapter II of the Madras Land Reforms (Fixation of Ceiling on Land) Act, 1961, respectively were struck down by this Court inasmuch as the artificial definition of family together with adoption of double standard for fixing ceiling limit formed the basis of the concerned Chapter in each Act.
I find considerable force in counsel 's contention.
I may point out that when the agricultural ceiling matters were argued before us counsel for the petitioners therein had raised a similar contention in the context of the artificial definition of 'family ' and the adoption of double standard for fixing ceiling limits obtaining in the several concerned Acts and in support of such contention counsel had placed reliance on the aforesaid two decisions of this 898 Court but we rejected the contention on the ground that ample material had been produced before the Court justifying the adoption of artificial definition of 'family ' and double standard for fixing the ceiling limits in those Acts.
Production of such justifying material distinguished the agricultural ceiling matters before us from the said two decisions relied upon by counsel but in the instant case no material whatsoever has been placed before the Court by the respondents justifying the adoption of the artificial definition of 'family ' in section 2(f) and double standard of fixation of ceiling in the impugned Act.
It has not been shown that the so called nuclear families allegedly in vogue have replaced normal families which include major sons or joint Hindu families in urban areas.
Besides, if the object of the impugned Act is to acquire excess vacant land in urban agglomerations after leaving permissible ceiling area to a family the classification made between minor children and major children belonging to a family has no nexus whatsoever to that object.
In my view, therefore, the artificial definition of 'family ' given in section 2(f) when considered in relation to the prescription of the ceiling area under section 4(1) is clearly violative of and strikes at the root of the equality clause contained in article 14 of the Constitution.
It cannot be disputed that this artificial definition together with the double standard adopted for fixing the ceiling area runs though and forms the basis of Chapter III of the Act and the discriminatory results or inequalities produced thereby are bound to have an impact on the scheme of that Chapter and, therefore, along with it the whole Chapter III must fall as being violative of article 14.
There is yet one more aspect which needs consideration in connection with this adoption of the artificial definition of 'family ' given in s.2 (f) and the double standard for fixing ceiling area.
Apart from the discriminatory results which it produces the question is what is its impact in the context of the directive principle contained in article 39 (c) of the Constitution? As stated earlier the postulate underlying the said directive principle in that concentration of wealth in the hands of few is deterimental to common interest and as such the State should ensure such economic system which prevents such concentration and the Act has been put on the Statute book professedly to achieve that objective.
But, by adopting the artificial definition of 'family ' in section 2(f) and having double standard for fixing ceiling limit a contrary result is obtained inasmuch as the Act actually permits an unwarranted and unjustified concentration of 899 wealth (urban vacant land) in the hands of a family having major sons in it as compared to the family having minor children.
In the illustration given above a family of a father with four major sons is allowed to retain with itself 2,500 sq. metres of vacant land while a family of a father mother and three minor sons is permitted to retain only 500 sq. metres.
The position becomes more glaring if I take the illustration of a Joint Hindu Family consisting of five brothers, each having five major sons, as, in such a case the said Joint Hindu Family will be entitled to retain 15,000 sq. metres of vacant land as against 500 sq.
metres permitted to be retained by the artificial family.
It cannot be said that large joint Hindu families are unknown in urban agglomerations in various cities and towns of the country and instances more glaring than the preceding illustration could be multiplied.
In other words, by adopting the artificial definition of 'family ' and double standard for fixing the ceiling area the Act enables unwarranted and unjustified concentration of wealth in the hands of few rather than preventing the same and this certainly would be in teeth of and not in furtherance of the directive principle of article 39(c); in fact, it is a negation of that principle.
It is not possible to take the view that the Parliament out of inadvertance ignored joint Hindu Family or forgot the possible concentration of vacant land in the hands of major members of large joint Hindu families, because in another context the concept of Joint Hindu Family was present to the mind of the draftsman as is clear from section 4(7) of the Act.
In my view, therefore, the adoption of the artificial definition of 'family ' and double standard for fixing ceiling area one for a family with minor children and another for a family with major children and completely ignoring the concept of Joint Hindu Family in relation to prescription of ceiling area clearly lead to results which run counter to the directive principle contained in article 39(c) of the Constitution.
The Act which contains such provision being in teeth of that directive principle must fall outside the pale of protective umbrella of article 31C.
Re: s.23 relating to disposal of excess vacant land acquired under the Act.
It may be stated that under s.6 every person holding vacant land in excess of the ceiling limit at the commencement of the Act is required to file within the period prescribed a statement before the competent authority having jurisdiction giving full particulars there of 890 and also specifying the vacant land within the ceiling limit which he desires to retain.
Sections 8 and 9 provide for preparation of draft statement as regards vacant land held in excess of the ceiling limit, holding of an inquiry in that behalf and preparation of final statement and service thereof on the concerned person by the competent authority, Section 10 provides for acquisition of excess vacant land by the concerned State Government and determination of claims of all persons interested in such excess vacant land and under sub s.(3) it is provided that upon the publication of a notification in that behalf such excess vacant land as may be specified therein shall be deemed to have been acquired by the State Government and the same shall vest absolutely in the State Government free from all encumbrances with effect from the date specified in the notification.
Then comes s.23 which deals with disposal of such excess vacant land acquired by the State Government under the Act.
It runs as follows: "23.(1) It shall be competent for the State Government to allot, by order, in excess of the ceiling limit, any vacant land, which is deemed to have been acquired by the State Government under this act or is acquired by the State Government under any other law, 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 and it shall be lawful for such person to hold such land in excess of the ceiling limit.
Explanation, For the purposes of this section, (a) Where any land with a building has been acquired by the State Government under any other law and such building has been subsequently demolished by State Government, then, such land shall be deemed to be vacant land acquired under such other law; (b) "Industry" means any business, profession, trade, undertaking or manufacture.
(c) In making an order of allotment under sub section (1), the State Government may impose such conditions 901 as may be specified therein including a condition as to the period within which the industry shall be put in operation or, as the case may be, the residential accommodation shall be provided for: Provided that if, on a representation made in this behalf by the allottee, the State Government is satisfied that the allottee could not put the industry in operation, or provide the residential accommodation, within the period specified in the order of allotment, for any good and sufficient reason, the State Government may extend such period to such further period or periods as it may deem fit.
(3) Where any condition imposed in an order of allotment is not complied with by the allottee, the State Government shall, after giving an opportunity to the allottee to be heard in the matter, cancel the allotment with effect from the date of the non compliance of such condition and the land allotted shall revest in the State Government free from all encumbrances.
(4) Subject to the provisions of sub sections (1), (2) and (3), all vacant lands deemed to have been acquired by the State Government under this Act shall be disposed of by the State Government to subserve the common good on such terms and conditions as the State Government may deem fit to impose.
(5) Notwithstanding anything contained in sub sections (1) to (4), where the State Government is satisfied that it is necessary to retain or reserve any vacant land, deemed to have been acquired by that Government under this Act, for the benefit of the public, it shall be competent for the State Government to retain or reserve such land for the same." Five or six aspects or peculiar features emerge clearly from the provisions contained in section 23 in the context of the entire Act.
In the first place unlike agrarian ceiling which deals with land as means of production, urban ceiling under the impugned Act deals with vacant 902 land in urban agglomerations not as a means of production but as a part of the holder 's wealth or capital asset.
Secondly, unlike agrarian ceiling which has the objective of distributing surplus agricultural land straightway among landless persons, under the impugned Act excess vacant land in urban agglomerations is acquired by and vests in the State to be disposed of as indicated in the section; clearly a legislation in exercise of the State 's power of eminent domain (i.e. power of compulsory acquisition of private property).
Thirdly, such excess vacant land thus acquired is to be disposed of by the State Government "for any purpose relating to or connected with industry or for providing residential accommodation to the employees of any Industry".
Fourthly, under cl.
(b) of the Explanation, 'industry ' has been very widely defined for the purposes of this section to mean any business, profession, trade, undertaking or manufacture; the word 'any ' clearly suggests that business, profession, trade, undertaking or manufacture even in private sector is included.
Fithly. sub section
(1) confers absolute power and discretion on the State Government to allot any amount of such excess vacant land to any person for any industry.
Reading the fourth and fifth aspects together, it is clear that it is open to the State Government to allot any extent of such excess vacant land to any professional person, say a lawyer a medical practitioner or even an astrologer for the purpose of carrying on his private profession.
Sixthly, the section contemplates utilisation of such excess vacant land by the State Government in three ways: (a) allotment for industry (b) allotment to subserve the common good and (c) retention or reservation for the benefit of the public, but, the priorities in the matter of disposal or distribution of such excess vacant land have been peculiarly fixed in the section these priorities, as indicated in sub sections
(1) and (4), are:=(i) allotment for the purpose of an industry, namely any business, profession, undertaking trade or manufacture, (ii) allotment for the purpose of construction of houses for the employees of an industry specified in item (i) above and (iii) disposal to subserve the common good which would include allotment of vacant land for governmental purpose or local authorities or for institutions etc.
In other words, it is after the disposal of such excess vacant land for items (i) and (ii) above that the balance thereof can be disposed of "to subserve the common good" which means private purposes have precedence over public purposes, and this is clear from the fact that disposal under sub section
(4) is "subject to" the prior disposal under sub section
(1) for purposes of industry.
In fact, disposal of excess vacant land for subserving the common good is last in the priorities Sub.
s (5) undoubtedly has an 903 overriding effect over sub sections
(1) to (4) but that provision deals not with disposal or distribution of excess vacant land but with retention and reservation of such vacant land by State Government for the benefit of the public like social housing and provision for basic arenities etc.
Having regard to the aforesaid peculiar features that energe from a consideration of the provisions contained in s.23, counsel for the petitioners contended that the acquisition of excess vacant land in urban agglomerations cannot be said for a public purpose at all and hence the ehactment which is primarily for compulsory acquisition of private property runs counter to a valid exercise of the State 's power of 'eminent domain '.
He pointed out that no scheme for any industrial development for any urban agglomeration has been indicated in the Act, nor any such scheme seems to have been prepared by any State Government or even by the Union Government before undertaking the legislative measure in hand and no definite public purpose of industrialisation with any plan or blue print with set specifications or standards seems to have been within the contemplation of the sponsoring States or the Union Government; at any rate no material in that behalf has been placed on record before the Court and, therefore, according to counsel, compulsory acquisition of all excess vacant land in all urban agglomerations throughout the Union Territories and the 17 States of the country for achieving a bald, indefinite and unspecified objective of an 'industry ' would not be a valid exercise of the power of eminent domain.
Alternatively, counsel contended that even if it were assumed for the purpose of argument that a bald, indefinite and unspecified objective of 'industry ' is a public purpose, when that concept of 'industry ' is widely defined so as to include any business, trade or profession in private sector, the purpose sheds its character as a real public purpose, which position is further componded by the priorities laid down in the section and the acquisition becomes acquisition for private purpose amounting to an invalid exercise of the States 's power of eminent domain.
Counsel, therefore, urged that section 23 flagrantly violates article 31 (2) and is, therefore, ultra vires and unconstitutional and since it is a pivotal provision having an impact on the entire Ceiling scheme and at the same a non severable provision from the rest of the provisions contained in that chapter, the whole of Chapter III must fall with it.
Article 31 of the Constitution has more than one facet, it undoubtedly confers upon individuals (including non citizens) and 904 corporate bodies a fundamental right to property but because of conflict of views in Keshavanada Bharati 's case (supra) it may be debatable whether that right forms part of basic structure or not, but that apart, article 31 incorporates in our Constitution the concept of State 's power of eminent domain i. e. power of compulsory acquisition of private property and prescribes two conditions precedent to the exercise of the power, namely, (i) such acquisition cannot be except for a public purpose and (ii) it must be on payment of compensation (now termed 'amount ') to the claimant having interest in the property.
In Kameshwar Singh 's case this position has been clarifie where Mahajan, J., after referring to some authoritative books has summed up the definition of the concept in one sentence thus "Authority is universal in support of the amplified definition of 'eminent domain ' as the power of the sovereign to take property for public use without the owner 's consent upon making just compensation," The requirement of just compensation under the latter condition is diluted to payment of non illusory amount under the 25th Amendment of the Constitution and subsequent decisions of this Court.
But it is well settled that these two conditions precedent are sine qua non for the exercise of the State 's power of eminent domain ' and, in my view, represent those aspects of the right to property under article 31 which constitute the essential or basic features of our Constitution and for that matter these would be so of any democratic constitution and, therefore, any law authorising expropriation of private property in breach of any one of those conditions would damage or destroy the basic structure of our constitution.
It is extremely doubtful whether a bald, indefinite and unspecified objective like 'industry ' simpliciter without any attempt at dovetailing it by having a proper scheme for industrial development will constitute a valid public purpose for the exercise of the power of 'eminent domain '.
It is because of the absence of any definite scheme for industrial development with plans or blue prints with set specifications or standards for any of the urban agglomerations that wide power has been conferred on the State Government under sub section
(1) in vague terms to allot any extent of such excess vacant land to any person for any industry.
I am conscious that in Kameshwar Singh 's case (supra) this Court speaking through Mahajan, J., observed that "the phrase 'public purpose ' has to be 905 construed according to the spirit of times in which the particular legislation is enacted" and held that so construed, acquisition of estates for the purpose of preventing the concentration of huge blocks of land in the hands of a few individuals and to do away with intermediaries was for a public purpose.
But that case dealt with three statutes (the Bihar Land Reforms Act, 1950, the M. P. Abolition of proprietory Rights Act, 1950 and the U. P. Zamindari Abolition and Land Reforms Act, 1950), the common aim of which, generally speaking, was to abolish zamindaries and other proprietory estates and tenures in the three States, so as to eliminate the intermediaries by means of compulsory acquisition of their rights and interests and to bring the raiyats and other occupants of lands in those areas into direct relation with the Government and therefore, that case is distinguishable and its ratio would not apply to the instant case where the purpose of acquisition of excess vacant (urban) land is a bald objective like 'industry ' simpliciter, surely different considerations would apply.
In my view it is extremely doubtful whether compulsory acquisition of all the excess vacant land in all urban agglomerations throughout the country for a bald, indefinite and unspecified objective like 'industry ' simpliciter would be a valid exercise of the power of 'eminent domain '.
However, it is not necessary for me to decide this larger question inasmuch as in my view the alternative submission of counsel for the petitioners clinches the issue in this case.
Assuming that a bald objective of 'industry ' simpliciter partakes of the character of a public purpose, what Parliament intended by the said objective has been expressly clarified by cl.
(b) of the Explanation where 'industry ' has been very widely defined so as to include any business, trade or profession in private sector which makes a mockery of such public purpose.
Whatever be the merits or demerits of a wide definition of 'industry ' for the purposes of industrial cum labour relations, adoption of such wide definition of the concept in the context of eminent domain is clearly suicidal.
By adopting such definition for the purposes of section 23 the State Government has been empowered under sub section
(1) to allot any extent of such excess vacant land to any businessman, trader or professional man like a lawyer, doctor and astrologer to enable him to carry on his private business, trade or profession.
In other words, acquisition of excess vacant land in urban agglomeration would clearly be for private purposes and what is worse is that under the priorities laid down such private purposes are to be catered to first and then comes the disposal or distribution thereof to subserve common good.
This clearly smacks of depriving peter of his property to give it to Paul 906 and, therefore, clearly amounts to an invalid exercise of State 's power of 'eminent domain '.
Section 23, which thus authorises compulsory acquisitions of property for private purposes flagrantly violates those aspects of article 31 which constitute the essential or basic features of the Constitution and is, therefore, ultra vires and unconstitutional.
Further, indisputably it is the most vital, integral and non severable part of the entire scheme of urban ceiling as without it the scheme will merely remain a scheme for unjust and illegal enrichment of the State and, therefore, the whole of Chapter III, in which it occurs, must fall with it.
Apart from the unconstitutionality of s.23 as indicated above, it is clear that the wide definition of 'industry ' and the priorities for disposal or distribution of excess vacant land laid down therein have adverse impact on the directive principle contained in Art.39(b).
In the first place instead of confining the objective of industrialisation to public sector or cooperative sector and the like where benefit to community or public at large would be the sole consideration, the concept is widely defined to include any business, trade or profession in private sector which enables the disposal or distribution of excess vacant land for private purposes and sub s.(1) authorises the State Government to allot any extent of such land to individuals or bodies for private purposes.
Secondly, the priorities in the matter of disposal or distribution of the excess vacant land under sub sections (1) and (4) are as indicated above, which show that disposal or distribution of excess vacant land for subserving the common good comes last in the priorities.
I have already indicated that the postulate underlying the directive principle of article 39(b) is that diffusion of ownership and control of the material resources of the community is always in the public interest and, therefore, the State is directed to ensure such distribution (equitable) thereof as best to subserve the common good but the priorities prescribed in sub sections
(1) and (4) of s.23 in regard to distribution of material resource produce contrary results or results in the opposite direction inasmuch as private purposes receive precedence over common good.
The enactment which contains such provisions that produce contra results cannot be said to be in furtherance of the directive principle of article 39(b) and cannot receive the benefit of the protective umbrella of article 31C. Counsel for the respondents, however, relied upon three aspects to counter act the aforesaid result flowing from the priorities 907 given in section 23(1) and (4).
It was urged that the disposal of excess vacant land acquired by the State under the Act will be guided by the Preamble which says that enactment was put on the Statute Book with a view to bringing about the equitable distribution of land in urban agglomerations to subserve the common good.
In the first place, it is well settled that it is only when there is some ambiguity in test of any provision in the enactment that the preamble could be looked at and here there is no ambiguity whatsoever in s.23(1) and (4).
Secondly, far from there being any ambiguity there is express provision in s.23(1) and (4) indicating the priorities in the matter of disposal or distribution of excess vacant land, in face of which, the preamble cannot control, guide or direct the disposal or distribution in any other manner.
Next, reliance was placed on section 46(1) which empowers the Central Government to make rules for carrying out the provisions of the Act and the disposal or distribution of excess vacant land could be prescribed by rules.
It may, however be stated that no rules under s.46 have so far been framed by the Central Government and, in any event, no rules framed thereunder can over ride the express provisions of s.23.
Lastly, reliance was placed on certain guidelines issued by the Central Government in its Ministry of Works and Housing under the Act and at page 83 of the "Compendium of Guidelines" (a Govt.
of India publication dated February 22, 1977) a note containing guidelines on utilization of excess vacant land acquired under the Act is published.
Paragraphs 3 and 4 of the said Note deal with the topic of priorities.
In para 3 the disposal or distribution of excess vacant land as per the priorities in section 23 has been set out (which are the same as given above) while para 4 sets out the priorities in accordance with the recommendations made by the 9th Conference of State Ministers of Housing and Urban Development held at Calcutta on the 17th, 18th and 19th December, 1976, which considered the matter and the priorities indicated are: (i) Retention/reservation for the 'benefit of the Public ' like social housing, provision of basic amenities, etc.
(ii) Disposal 'to subserve common good ' which may include allotment of vacant land for Government purposes, local authorities, institutions ' etc.
(iii) Allotment for the purpose of construction of houses for the employees of industries specified in item (iv) A below (v) Allotment for the purpose of industry, viz., any business, profession trade, undertaking of non polluting manufacture; cottage and small scale and wherever possible ancillary industry; manufacture.
It will appear clear that the recommendations made by the 9th Conference of State Ministers of Housing and Urban Development seek to furnish 908 improved guidelines but in the process reverse the priorities given in the section in the matter of disposal or distribution of excess vacant land.
It is obvious that the priorities given in section 23 and as have been summarised in para 3 of the Note must prevail over the priorities indicated in the guidelines contained in para 4 of the Note and the latter are of no avail.
It is thus clear that the priorities as given in section 23(1) and (4) in the matter of disposal or distribution of excess vacant land acquired under the Act run counter to and in a sense operate to negate the directive principle of Art.39(b).
It was then faintly argued by counsel for the respondents that the law in order to receive the protection of article 31C need not fulfil the objectives of both article 39(b) and (c) and even if it fulfils the objective under article 39(c) and not under article 39(b) it will be protected by article 31C.
But here section 23 by no stretch deals with the objective of article 39(c) at all but only deals with the objective underlying the directive principle of article 39(b) and its provisions as discussed above clearly run counter to that objective and as such the enactment which contains such provisions must forfeit the benefit of the protective umbrella of article 31C. Faced with the situation that the constitutional invalidity of section 23 was likely to have adverse repercussion not only on Chapter III in which it occurs but also on the entire Act, counsel for the respondents made a valiant effort to salvage the said section by indulging in interpretative acrobatics with a view to relieve it from the two vices attaching to it, namely, (i) the adoption of the wide definition of 'industry ' in cl.
(b) of the Explanation which makes a mockery of the Public purpose indicated by the bald objective like 'industry ' simpliciter and (ii) the priorities mentioned therein governing the disposal or distribution of excess vacant land acquired under the Act.
It was suggested that the definition of 'industry ' should be read down by the court so as to confine the same to industries in public sector or co operative sector or the like where benefit to community or public at large would be the sole consideration, so that allotment of excess vacant land acquired under the Act to private entrepreneurs for private purposes which runs counter to the doctrine of eminent domain would be completely eschewed.
It is impossible to read down the definition in the manner suggested because parliament has for the purposes of the section (i.e. for purposes of disposal or distribution 909 of such excess vacant land) deliberately and in express terms adopted a vary wide definition which includes within its scope not merely trading or manufacturing activity but also any business or profession in private sector and reading down the definition as suggested would be doing violence to the Parliament 's intention stated in express terms.
It was then submitted that sub section
(1) of section 23 should be construed as an enabling provision which merely permits the State Government to allot excess vacant land for the purposes of industry, while the real obligation in the matter of disposal of excess vacant land arises under sub section
(4) which speaks of disposal of such land "to subserve the common good"; in other words, the disposal under sub section
(4) should over ride the disposal under sub section
(1); at any rate the "common good" spoken of in sub section
(4) should permeate the disposal under sub section
It is impossible to read sub section (1) of s.23 as containing merely an enabling provision; the scheme of sub sections
(1) and (4) read together clearly shows that the disposal of the excess vacant land is first to be done under sub s.(1) and disposal under sub s.(4) comes thereafter.
The opening words of sub s.(4) "subject to sub ss.(1), (2) and (3)" cannot be read as constituting a non obstante clause giving an over riding effect to sub section
(4) nor can sub s.(4) be read as if the opening words were absent.
By indulging in such interpretative acrobatics the Court cannot reach the opposite result than is warranted by the plain text of the provision.
Further, to say that every disposal of excess vacant land under sub s.(1) must be for "common good" is to read into that sub section something which is not there; it amounts to re writing that sub section, which cannot be done, the Preamble notwithstanding.
It is the conferral of such unrestricted power (not its oblique exercise) that is being attacked and hence the submission to read into sub s.(1) this kind of limitation.
These submissions require the re structuring of the entire section a function legitimately falling within the domain of the Legislature.
Moreover, sub ss.(1), (2), (3) and (4) of s.23 are integral parts of one whole scheme dealing with disposal of excess vacant land acquired under the Act and as such cannot be severed from one another.
The attempt to salvage s.23, either wholly or in part, by seeking to free it from the two vices must, therefore, fail.
The next provision challenged by the petitioners as being violative of their fundamental rights is section 11 (6) which puts the maximum limit of Rs. two lakhs on compensation (called 'amount ') payable to the holder of excess vacant land irrespective of the extent of such excess vacant land.
For the purpose of determining the 910 quantum of compensation s.11 (1) divides vacant land in urban agglomerations into two categories (i) vacant land from which income is derived and (ii) vacant land from which no income is derived and in regard to the former category cl, (a) of sub section
(1) fixes the quantum payable at an amount equal to eight and one third times the net average annual income actually derived from such land during the period of five consecutive years immediately preceding the date of publication of the notification issued under section 10 (1) and the net average annual income is to be calculated in the manner and in accordance with the principles set out in Schedule II, while in respect of the latter category, cl.
(b) of sub section
(1) fixes the quantum payable at an amount calculated at a rate not exceeding (i) Rs. 10 per sq.
metre in the case of vacant land situated in urban agglomerations falling with categories A and B and(ii) Rs.5 per sq.
metre in the case of vacant land situated in urban agglomerations falling within categories C and D.
In other words, for vacant land yielding income the method of capitalisation of the income for certain number of years is adopted while for vacant land yielding no income maximum rates of compensation for A and B categories at Rs. 10 per sq.
metre and for C and D categories at Rs 5 per sq.
metre have been fixed.
Compensation (called 'amount ') once determined is payable to the holder under section 14 (2) in a certain manner, namely, 25 % there of will be paid in cash and the balance 75% in negotiable bonds redeemable after expiry of 20 years carrying interest at 5% per annum.
Section 11 (6) which puts the maximum limit of two lakhs on the quantum payable in respect of excess vacant land acquired under the Act runs thus: "11 (6) Notwithstanding anything contained in sub section (1) or sub section (5) the amount payable under either of the said sub sections shall, in no case, exceed two lakhs of rupees.
" Counsel for the petitioners contended that section 11 (6) which puts the maximum limit of Rs. two lakhs on the amount payable to a claimant irrespective of the extent of the excess vacant land acquired under the Act is not only arbitrary but also results in illusory payment and violates articles 14 and 31 (2) respectively.
Counsel pointed out that a person holding excess vacant land which at the prescribed rates is of the value of Rs. two lakhs and a person holding such excess vacant land which even at the same prescribed rates 911 is of the value of Rs. two crores are treated alike, that is to say, both will get compensation (termed 'amount ') of Rs. two lakhs only and is this sense prescribing a limit of maximum of Rs. two lakhs is clearly arbitrary and violates article 14.
Similarly, for a person who holds excess vacant land which even at the prescribed rates it of the value of Rs. two crores a payment of Rs. two lakhs only (i.e. 1/100th of the value at the prescribed rates) must, by any standard, be regarded as illusory and, therefore, the fixation of maximum limit at Rs. two lakhs under section 11(6) irrespective of the extent of excess vacant land held by a person violates article 31(2) of the Constitution.
I find considerable force in both the submissions of counsel for the petitioners.
In fact, in my view, this provision which puts the maximum limit of Rs. two lakhs on the amount payable to a holder of excess vacant land acquired under the Act irrespective of the extent of such excess vacant land held by him is not merely violative of articles 14 and 31(2) of the Constitution in the manner indicated above, but would be a piece of confiscatory legislation, because vacant land in excess of that portion which at the prescribed rates is worth Rs. two lakhs stands confiscated to the State without any payment whatsoever.
I do not suggest that a provision putting a maximum limit upon compensation payable to the owner or holder irrespective of the extent of the property acquired whenever or wherever is found in any enactment has to be regarded as a confiscatory provision.
I am aware that in enactments involving large schemes of social engineering like abolition of Zamindar is, agrarian reforms, nationalisation of undertakings and businesses and the like, such a provision might be justifiably made.
In State of Kerala vs The Gwalior Rayon Silk Mfg. Co. Ltd., this Court upheld the validity of Kerala Private Forest (Vesting and Assignment) Act, 1971 where under private forest lands held on janman right were acquired without payment of any compensation on the ground that such acquisition was for implementing a scheme of agrarian reform by assigning lands on registry or by way of lease to poorer sections of the rural agricultural population, the enactment being protected under article 31A (1) of the Constitution.
Again the whereunder the right, title and interest of the owners in relation to their coal mines specified in the schedule to the Act stood transferred to and became vested absolutely in the Central Govt.
free from encumbrances in exchange of payment of fixed amounts specified in that schedule was upheld by this Court.
912 But such cases involving large schemes of social engineering where avowedly the benefit of the community or public at large is the sole consideration are distinguishable from the instant case, where 'industry ' has been expressly defined to include business, trade or profession in private sector and where power has been conferred upon the State Government to allot properties acquired under the enactment to individual businessman, trader or professional to enable him to carry on his private business, trade or profession, that is to say, where the legislation is a fraud on State 's power of eminent domain, such a provision of putting a maximum limit on compensation payable in respect of the acquired property irrespective of its extent will have to be regarded as confiscatory in nature.
An instance in point is available on the record of these writ petitions.
In writ petition No. 350 of 1977 the petitioner who happens to be the ex Ruler of the former Kota State has averred in paragraphs 17 and 20 of the petition that the urban vacant land owned and possessed by him in the city of Kota admeasures 918.
26 acres and that the Assistant Director, Lands and Buildings Tax, Kota in his assessment order dated 20.12.
1976 had valued the same at market rate of Rs. 15.12 per sq.
metre at Rs 3,98,05021.84 (say about Rs. four crores) and inclusive of other items of properties the total value was put down at Rs. 4.12 crores and these averments are substantially admitted in the counter affidavit filed by section Mahadeva Iyer on behalf of the Union of India where in para 9 he has stated thus: "In reply to para 20 of the writ petition I submit that the total assessment of the entire property comes to Rs. 4.56 crores.
" In other words, in the case of this petitioner the fact that he owns urban vacant land of the value of about Rs. four crores in the city of Kota stands admitted.
Now, under section 11(6) for all this urban vacant land worth nearly Rs. four crores the petitioner will get only rupees two lakhs, it works out to a princely sum of eight annas for property worth Rs. 100, which would clearly be an illusory payment.
In fact, all his vacant land, in excess of that portion which is worth Rs. two lakhs at the prescribed rates, shall stand conficated without any payment whatsoever.
Such a glaring instance, available on the record of these petitions, brings out in bold relief how flagrantly section 11(6) 913 violates articles 14 and 31(2) of the Constitution; it highlights the aspect that such acquisition takes place in breach of the other condition precedent attaching to the power of eminent domain namely, payment of non illusory compensation.
However, section 11(6) is clearly a severable provision, and that alone is liable to be struck down as being ultra vires and unconstitutional.
The next provision challenged by the petitioners is section 27 occurring in Chapter IV to the extent to which it imposes restriction on transfer of an urban land with building or a flat therein though unconcerned or unconnected with the excess vacant land as unconstitutional being beyond the legislative authorisation as also violative of petitioners ' fundamental rights under Arts 14 and 19(1) (f).
Section 27, as its marginal note indicates, deals with the subject of prohibition of transfer of urban property and sub section
(1) thereof runs thus: "27.
(1) Notwithstanding any thing contained in any other law for the time being in force, but subject to the provisions of sub section (3) of section 5 and sub section (4) of section 10, no person shall transfer by way of sale, mortgage, gift, lease for a period exceeding ten years, or otherwise, any urban or urbanisable land with a building (whether constructed before or after the commencement of this Act) or a portion only of such building for a period of ten years of such commencement or from the date on which the building is constructed, whichever is later, except with the previous permission in writing of the competent authority." Inter alia, the aforesaid provision is clearly applicable to a building or a portion of such building which would include a flat therein standing on any urban or urbanisable land falling within the permissible ceiling area which a holder of a vacant land is entitled to retain with himself and under this provision any transfer of such property by way of sale, mortage, gift or lease for ten years or otherwise, is prohibited for the period of ten years from the commencement of the Act except with the previous permission in writing of the competent authority.
Under sub section
(2) if the holder of such property falling within the permissible ceiling area is desirous of effecting a transfer of the type indicated above has to apply in writing for permission from the competent authority and under sub s.(3) the 914 competent authority has been authorised after making such inquiry as it deems fit to grant the permission or refuse the same, but a refusal has to be accompanied by written reasons, copy whereof is to be furnished to the holder.
Sub section (4) provides that if within sixty days of the receipt of the application refusal is not communicated, the permission shall be deemed to have been granted by the competent authority.
Counsel for the petitioners made two submissions in regard to aforesaid restriction as made applicable to transfers of built up properties that fall within the limits of ceiling area permitted to be retained by a holder.
Firstly, such restriction would be outside the legislative authorisation conferred upon the Parliament as well as beyond the ambit and scope of the Act which has assiduously kept built up properties outside the pale of imposition of ceiling.
Secondly, such restriction requiring permission from the competent authority is arbitrary and violative of Art.14 in as much as the power to grant the permission or to refuse it is unguided and untrammeled which is bound to produce arbitrary results.
In my view both the submissions have substance in them.
It cannot be disputed that though the authorisation was for imposition of ceiling on urban immovable property Parliament deliberately kept out built up properties from the purview of the Act and the Act seeks to impose ceiling only on vacant land in urban agglomerations; that being so any restriction on transfer of built up properties or parts thereof (including flats therein) standing on urban land falling within the permissible ceiling area would be outside the purview of the Act.
It was urged for the respondents that such a provision would be incidental or ancillary to the ceiling contemplated by the Act and would fall within the phrase "for matters connected therewith" occurring in the Preamble and the long title of the Act.
It is not possible to accept the contention, for, the words "matters connected therewith" occurring in the concerned phrase must be co related to what precedes that phrase, namely, "an Act to provide for ceiling on vacant land in urban agglomerations, for the acquisition of such land in excess of the ceiling limit, to regulate the construction of buildings on such land" (emphasis supplied) and, therefore, the words "matters connected therewith" must mean matters in relation to the ceiling imposed by the Act.
A reference to objective under article 39(b) and (c) (for the achievement of which the enactment is allegedly taken in hand) in the Preamble or long title cannot enlarge 915 the ambit or scope of the Act.
Any restriction imposed on built up properties falling within the permissible ceiling area left with the holder would, therefore, be outside the ambit and scope of the Act.
The next question is whether the restriction which requires the holder of such property to seek permission of the competent authority before effecting any transfer thereof by way of sale, mortgage or gift, etc.
is violative of article 14 of the Constitution.
The contention is that the requirement in the absence of any guidelines governing the exercise of the power on the part of the competent authority in the matter of granting or refusing to grant the permission is highly arbitrary, productive of discriminatory results and, therefore, violates the equality clause of article 14.
Counsel for the respondents fairly conceded that the section itself does not contain any guidelines but urged that the objectives of "preventing concentration, speculation and profiteering in urban land" recited in the Preamble would afford the requisite guidance for the exercise of the power to grant the permission sought or to refuse the same.
Firstly, which of the three objectives mentioned in the Preamble should guide the exercise of power by the competent authority in any given case is not clear and in any case no standard has been laid down for achieving the objectives of preventing concentration, speculation, and profiteering in urban land or urban property and in the absence of any standard being laid down by the Legislature a purely legislative function, it will be difficult to hold that these broad objectives recited in the Preamble could effectively or adequately guide the exercise of power by the competent authority in the matter of granting or refusing to grant the permission and in the absence of guidelines the exercise of the power is bound to produce arbitrary or discriminatory results.
It was also said that against the order passed by the competent authority under section 27 an appeal to the Appellate Authority has been provided for under section 33 and revision lies to the State Government under section 34 and in view of such provision for appeal and revision the exercise of the power or discretion vested in the competent authority cannot be regarded as unfettered or arbitrary.
Here again I feel that in the absence of any guidelines for the exercise of the power and in the absence of any standards having been laid down by the Legislature for achieving the objectives of prevention of concentration, speculation and profiteering in urban land and urban property, the provision for appeal and revision would not be of much avail to preventing arbitrariness in the matter of granting or refusing to 916 grant the permission.
Section 27 which does not adequately control the arbitrary exercise of the power to grant or refuse the permission sought, is clearly violative of article 14 of the Constitution and as such the requirement of permission contained therein will have to be struck down as being ultra vires and unconstitution.
In the result, in view of the aforesaid discussion.
I would like to indicate my conclusions thus: (1).
The impugned Act, though purporting to do so, does not, in fact, further the directive principles in article 39 (b) and (c).
Section 2(f) in relation to prescription of ceiling area, as shown above, permits unwarranted and unjustified concentration of wealth instead of preventing the same and is in teeth of the objective under article 39(c); similarly, section 23, as discussed above, produces results contrary to the objective under article 39(b).
Therefore, the impugned Act is outside the pale of the protective umbrella of article 31C. (2) Section 2(f) which contains the artificial definition of 'family ' in relation to the prescription of ceiling area, section 23 which deals with disposal or distribution of excess vacant land acquired under the Act as per priorities laid down therein and section 11(6) which puts a maximum limit on the quantum of the amount payable in respect of excess vacant land acquired from a holder irrespective of the extent of area held by him these three provisions flagrantly violate those aspects of articles 14 and 31 which constitute the essential and basic features of our Constitution and hence the protective umbrella of article 31B is not available to the impugned Act inasmuch as the 40th Constitution Amendment Act 1976 to the extent to which it inserts the impugned Act in the Ninth Schedule is beyond the constituent power of the Parliament as the said Amending Act has the effect of damaging or destroying the basic structure of the Constitution.
The artificial definition of 'family ' given in section 2(f) in relation to prescription of ceiling area under section 4(1) is clearly violative of article 14 and as such is ultra vires and unconstitutional.
Similarly, section 23 which authories compulsory acquisition of property for private purposes is in breach of the doctrine of eminent domain and since it flagrantly violates article 31(2) is ultra vires and unconstitutional.
Since section 2(f) together with adoption of double standard for fixing ceiling area runs through and forms basis of the whole Chapter III and since section 23 is a vital, Integral and non severable part 917 of the entire scheme of urban ceiling envisaged by the Chapter III, the whole of Chapter III has to fall along with those two provisions and as such that Chapter is also declared to be ultra vires and unconstitutional.
Further, it cannot be disputed that Chapter III comprises the substratum of the entire scheme of urban ceiling contemplated by the enactment incorporating its main provisions while the other Chapters deal with arcillary or incidental matters which from the decorative frills of the main fabric.
If the substratum is found to be diseased, invalid and bad in law the entire Act has to go and is accordingly struck down as void and unconstitutional.
Section 11(6), a severable provision, being violative of petitioners ' fundamental right under article 31 is declared to be ultra vires and unconstitutional.
Section 27, being severable, is also declared ultra vires and unconstitutional to the extent indicated above as being beyond the ambit of the Act and violative of article 14 of the Constitution.
Before parting with the matter I would like to refer to the manner in which this important and complicated measure came to be enacted.
It cannot be doubted that the 11 sponsoring State Legislatures passed their resolutions under article 252(1) with a laudable object, namely to clothe the Parliament with legislative competence to enact a law for the imposition of ceiling on urban immovable property for the country as a whole Though initially a model bill based on the recommendations made by the Working Group in its Report dated July 25, 1970 had been prepared where ceiling was proposed to be imposed on urban property on the basis of monetary value, Parliament later on realized that the implementation of that proposal was beset with several practical difficulties indicated in the Approach Paper prepared by a Study Group, and, therefore, it was though that ceiling in respect of built up properties should be brought about through some fiscal and other measures and ceiling on vacant land in urban agglomerations on the lines of the impugned Act should be undertaken.
In other words, State wise deep consideration and consultation for over five years had preceded the preparation of the draft Bill and this Court in V.B. Chowdhari 's (1) 918 case has upheld the legislative competence of Parliament to enact such a measure as a first step towards eventual imposition of ceiling on immovable properties of every other description.
However, after the introduction of the Bill on the floor of the house on January 28, 1976, the enactment as drafted in its present form seems to have been rushed through the attenuated Parliament during the Emergency in less than seven hours on February 2, 1976.
The Lok Sabha debates clearly show: (a) that the Bill was moved and taken up for consideration at 11.17 hours on that day, (b) that a motion moved by a member that the Bill be circulated for the purpose of eliciting opinion thereon by May 15, 1976 was negatived, (c) that another motion supported by quite a few members that the Bill be referred to a Select Committee with a view to improve the same by removing defects, deficiencies and omissions therein with instructions to the Select Committee to report by April 1, 1976, was also negatived, (d) that though over 150 amendments had been moved (some of which were received by the members on the very day as speeches were in progress), an earnest request to postpone the second reading of the Bill to the following day to enable the members to consider those amendments (many of which were neither formal nor clarificatory but of substance) was also turned down, and (e) that the original time schedule of six hours fixed by the Speaker for the Bill was adhered to and the entire process (including general discussion, clause by clause reading, consideration of the several amendments and the third reading) was completed in undue haste by 18.01 hours.
In Rajya Sabha also a request to refer the Bill to a Select Committee went unheeded and the entire process was completed in one day, February 5, 1976.
The result is that it has, in the absence of adequate study or discussion about the implications of various provisions thereof, turned out to be an ill conceived and ill drafted measure.
The measure was, undoubtedly, taken in hand with a view to achieve the unexceptional objectives underlying article 39(b) and (c), but as shown above, the enacted provisions misfire and produce the opposite results and also damage or destroy the essential features or basic structure of the Constitution and hence duty bound I am constrained to strike down this impugned piece of purported socioeconomic legislation.
The legislative competence of the Parliament being still there a well drafted enactment within the constitutional limitations on the subject would be the proper remedy.
I would, therefore, allow the petitions and direct issuance of the appropriate writs sought.
919 SEN J.
These writ petitions under Article 32 of the Constitution seek to challenge the constitutional validity of the Urban Land (Ceiling and Regulation) Act, 1976 on various grounds.
The Act has been placed as item No. 132 in the Ninth Schedule by the Constitution (Fortieth Amendment) Act, 1976.
Questions involved are of far reaching importance affecting the national interest.
The history of the legislation is well known.
The State Legislatures of eleven States, namely, all the Houses of the Legislatures of the States of Andhra Pradesh, Gujarat, Haryana, Himachal Pradesh, Karnataka, Maharashtra, Orissa, Punjab, Tripura, Uttar Pradesh and West Bengal considered it desirable to have a uniform legislation enacted by Parliament for the imposition of a ceiling on urban property in the country as a whole and in compliance with clause (1) of Article 252 of the Constitution passed a resolution to that effect.
Parliament accordingly enacted the Urban Land (Ceiling and Regulation) Act, 1976.
In the first instance, the Act, came into force on the date of its introduction in the Lok Sabha that is, January 28, 1976 and covered Union Territories and the eleven States which had already passed the requisite Resolution under Article 252(1) of the Constitution.
Subsequently, the Act was adopted, after passing resolutions under Article 252(1) of the Constitution by the State of Assam on March 25, 1976, and those of Bihar on April 1, 1976, Madhya Pradesh on September 9, 1976, Manipur on March 12, 1976, Meghalaya on April 7, 1976 and Rajasthan on March 9, 1976.
Thus, the Act is in force in seventeen States and all the Union Territories in the country.
The legislative competence of Parliament to enact the Urban Land (Ceiling and Regulation) Act, 1976 having been upheld by this Court in Union of India etc vs Valluri Basavaiah Chaudhary,(1) there remains the question of its constitutional validity.
Schedule I to the Act lists out all States, irrespective of whether or not they have passed a resolution under article 252(1) authorizing the Parliament to enact a law imposing a ceiling on urban immovable property, and the urban agglomerations in them having a population of two lace or more.
The ceiling limit of vacant 920 land of metropolitan areas of Delhi, Bombay, Calcutta and Madras having a population exceeding ten lacs falling under category 'A ' is 500 sq. metres, urban agglomerations with a population of ten lacs and above, excluding the four metropolitan areas falling under category 'B ' is 1000 sq.
meters agglomerations with a population between three lacs and ten lacs falling under category 'C ' is 1500 sq. metres and urban agglomerations with a population between two lacs and three lacs falling under category 'D ' is 2000 sq. metres.
The schedule does not mention the urban agglomerations having a population of one lac and above; but if a particular state which passed a resolution under article 252(1), or if a State which subsequently adopts the Act, wants to extend the Act to such areas, it could do so by a notification under s.2(n) (B) or s.2 (n) (A) (ii), as the case may be, after obtaining the previous approval of the Central Government.
The primary object and the purpose of the Urban Land (Ceiling and Regulation) Act, 1976, 'the Act ' as the long title and the preamble show, is to provide for the imposition of a ceiling on vacant land in 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 subserve the common good, in furtherance of the Directive Principles of State Policy under article 39(b) and (c).
The Statement, of objects and Reasons accompanying the Bill reads as follows: "There has been a demand for imposing a ceiling on urban property also, especially after the imposition of a ceiling on agricultural lands by the State Governments.
With the growth of population and increasing urbanisation, a need for orderly development of urban areas has also been felt.
It is, therefore, considered necessary to take measures for exercising social control over the scarce resource of urban land with a view to ensuring its equitable distribution amongst the various sections of society and also avoiding speculative transactions relating to land in urban agglomerations.
With a view to ensuring 921 uniformity in approach Government of India addressed the State Governments in this regard, eleven States have so far passed resolutions under article 252(1) of the Constitution empowering Parliament to undertake legislation in this behalf.
" The Act consists of five Chapters.
Chapter I contains the short title and the extant clause and Chapter II contains section 2, which is the definition section.
Chapter III deals with 'Ceiling on vacant Land Chapter IV deals with 'Regulation of transfer and use of urban land ' and Chapter V contains miscellaneous provisions, There can be no doubt that the legislative intent and object of the impugned Act was to secure the socialisation of vacant land in urban agglomerations with a view to preventing the concentration of urban lands in the hands of a few persons, speculation and profiteering therein, and with a view to bringing about an equitable distribution of land in urban agglomerations to subserve to common good, in furtherance of the Directive Principles of State Policy under article 39 (b) and (c).
The Act mainly provides for the following: (i) imposition of a ceiling on both ownership and possession of vacant land in urban agglomerations unders.
3, the ceiling being on a graded basis according to the classification of the urban agglomerations under s.4; (ii) acquisition of the excess vacant land by the State Government under s.10(3), with powers to dispose of the vacant land with the object to subserve the common good under s.23; (iii) payment of an amount for the acquisition of the excess land in cash and in bonds under section 14(2), according to the principles laid down in s.11(I) subject to the maximum specified in s.11(6 ) (iv) granting exemptions in respect of vacant land in certain cases under ss.20 and 21; (v) regulating the transfer of vacant land within the ceiling limits under s.26; 922 (vi) regulating the transfer of urban or urbanisable land with any building (whether constructed before or after the commencement of the Act, for a period of ten years from the commencement of the Act or the construction of the building whichever is later under s.27; (vii) restricting the plinth area for the construction of future residential buildings under s.29; and (viii) other procedural and miscellaneous matters.
The Act is thus intended to achieve the following objectives: (I) to prevent the concentration of urban property in the hands of a few persons and speculation and profiteering therein; (2) to bring about socialisation of urban land in urban agglomerations to subserve the common good to ensure its equitable distribution, (3) to discourage construction of luxury housing leading to conspicuous consumption of scarce building materials.
and (4) to secure orderly urbanisation.
Thus the dominant object and purpose of the legislation is to bring about socialisation of urban land.
In order to appreciate the rival contentions, it is necessary to set out the relevant provisions: Section 3 which is all important for the purpose of these writ petitions, provides: "3.
Except as otherwise provided in this Act, on and from the commencement of this Act, no person shall be 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.
" Section 4 divides the urban agglomerations into four broad categories, categories A, B, C and D, and fixes the ceiling limits varying from five hundred sq. metres in Category A to two thousand sq. metres in Category D thereof.
The word 'person ' is defined in s.2(i) as: "2(i) "person" includes an individual, a family, a firm, a company, or an association or body of individuals, whether incorporated or not.
" 923 The definition of the word 'family ' in s.2(f) is in the following terms: "2(f) "family" in relation to a person, means the individual, the wife or husband, as the case may be, of such individual and their unmarried minor children.
" In order that the burden of compensation, that is, the amount payable for such excess vacant lands by the Government, may not be high, the Act incorporates a specific provision, namely, sub section (1) of s.11 which fixes the amount broadly on the following basis: (1) eight and one third of the annual net income from the land during the last five years or where such annual income is not being derived, at rates not exceeding Rs. 10 per sq.
metre or Rs. 5 per sq.
metre in Categories A and B, and C and D urban agglomerations respectively, and classifying the area into different zones.
There is also a ceiling on the maximum amount payable in any single case placed by subsection (6) of s.11.
Sub section (1) s.27 provides for the freezing of all transfers of urban land with or without a building or portion of a building in all agglomerations for a period of ten years from the date of the commencement of the Act or from the date on which the building is constructed.
The constitutional validity of the Act which has been placed in the Ninth Schedule by the Fortieth Amendment, is challenged principally on the ground that, firstly, it is violative of the fundamental rights guaranteed under Arts 14, (19(1)(f) and 31(2), since it seeks to alter the "basic structure" of the Constitution as formulated by this Court in His Holiness Kesavananda Bharti vs State of Kerala and; therefore, has not the protective umbrella of Art.31B, and secondly that it is a law in negation of, and in furtherance of the Directive Principles of State Policy under Art.39(b) and (c) and is, therefore, not protected under Art.31C. In Waman Rao & Ors.
vs Union of India Ors.
this Court by its order, in the context of the decision in Kesavananda Bharati 's case, has laid down.
"Amendments to the Constitution made on or after April 24, 1973 by which the 9th schedule to the Constitution was amended from time to time by the inclusion of 924 various Acts and Regulations therein, are open to challenge on the ground that they, or any one or more of them, are beyond the constituent power of the Parliament since they damage the basic or essential features of the Constitution or its basic structure.
We do not pronounce upon the validity of such subsequent amendments except to say that if any Act or Regulation included in the 9th Schedule by a constitutional amendment made after April 24, 1973 is saved by Article 31.C as it stood prior to its amendment by the 42nd Amendment, the challenge to the validity of the relevant Constitutional Amendment by which that Act or Regulation is put in the 9th Schedule, on the ground that the Amendment damages or destroys a basic or essential feature of the Constitution or its basic structure as reflected in Articles 14, 19 or 31, will become otiose.
Article 31 C of the Constitution, as it stood prior to its amendment by Section 4 of the Constitution (42nd Amendment) Act, 1976, is valid to the extent to which its constitutionality was upheld in Kesavananda Bharati Article 31 C, as it stood prior to the Constitution (42nd Amendment) Act does not damage any of the basic or essential features of the Constitution or its basic structure.
" The validity of the impugned Act is challenged on four grounds Namely the inclusion of an artificial definition of 'family ' in s.2 (f) results in total exclusion of a joint Hindu family from the purview of the Act and also in adoption of double standard between a family with major sons, each of whom is a separate unit by himself, and a family with minor children, which constitutes a family unit for fixing a ceiling and thus s.3 of the impugned Act offends against the equal protection clause in Art.14, as persons similarly situate are differentially treated without any rational basis; (2) the impugned Act is inconsistent with, takes away and abridges the fundamental right guaranteed under article 31 (2) inasmuch as the fixation of the maximum amount payable under sub section
(6) of Sec 11, makes the Act confiscatory or at any rate, the amount payable illusory; (3) sub section (1) of section 27 of 925 he Act freezing all transfers by way of sale, mortgage, gift, lease for a period exceeding ten years or otherwise, of any urban or urbanisable land with a building (whether constructed before or after the commencement of the Act), or a portion of such building, for a period of ten years from such commencement or from the date on which the building is constructed, whichever is later, except with the previous permission in writing of the competent authority, even though such vacant land in an urban agglomeration is within the ceiling limits, is an unreasonable restriction on the fundamental right to property guaranteed under article 19 (1); and (4) the 'priorities ' laid down in s.23 of the impugned Act are not in keeping with part IV of the Constitution and, therefore, liable to be struck down.
It is urged upon these grounds that the impugned Act is flagrantly violative of those aspects of the petitioners ' fundamental rights under articles 14, 19 and 31 as constitute the basic structure or framework of the Constitution, and therefore, it is not protected under article 31B or 31C. Land in urban areas is a vital physical recourse capable of generating and sustaining economic and social activities.
It should be properly utilised by the community for social good.
But the attraction of urban areas has led to profiteering and racketeering in land in these areas.
There is also mis application of this scarce resource of urban land for undesirable purposes.
Therefore, a comprehensive policy of effective control of land covering its use.
distribution amongst the various sections of the society and individuals and for different social purposes, and its disposal by owners subject to their sharing the profits with the community at large, has been evolved.
The Act has been designed to benefit the weaker sections of the community.
It also grants exemptions in favour of public institutions and co operative housing.
The imposition of ceiling on land and plinth area of future dwelling units, and regulation of transfer of urban property under the Act, seeks to achieve the objective of social control over the physical resources of land.
A unique feature of the Act is that it covers seventeen States and all the Union Territories and provides for aggregation of holdings in urban agglomerations in the different States where the law is applicable for purposes of ceiling limits.
In other words, persons holding vacant lands or vacant and other built up property with dwelling units therein in different urban agglomerations throughout the country will have to make a choice of retaining only one piece of vacant land within the ceiling limit and surrender excess vacant lands else where.
926 Since the Act applies to firms, companies, and undertakings, future construction of industrial or commercial premises requiring large areas cannot take place in the notified urban agglomerations without obtaining the requisite land from the Government.
This enables Government to regulate and canalise the location of industries and thus serve the broad policy approach in dispersal of economic activity.
Hoarding of land by industrialists based on prospects for expansion in the distant future, is thus sought to be avoided.
The fundamental issue is: Whether section 23 of the impugned Act impairs the basic structure or framework of the Constitution being violative of article 39 (b) and (c) and Art, 31 (2) of the Constitution and is, therefore, not protected under articles 31 B and 31 C.
The impugned Act is designed as a law for the imposition of a ceiling on vacant land in 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 subserve the common good, in furtherance of the Directive Principles under article 39 (b) and (c).
The constitutional validity of section 23 of the Act depends on whether in truth and substance these objectives have been translated into action.
Section 23 of the Act reads: "23.
(1) It shall be competent for the State Government to allot, by order, in excess of the ceiling limit any vacant land which is deemed to have been acquired by the State Government under this Act or is acquired by the state Government under any other law, 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 and it shall be lawful for such person to hold such land in excess of the ceiling limit.
Explanation.
For the purpose of this section, 927 (a) where any land with a building has been acquired by the State Government under any other law and such building has been subsequently demolished by the State Government, then, such land shall be deemed to be vacant land acquired under such other law; (b) "industry" means any business, profession, trade, undertaking or manufacture.
(2) In making an order of allotment under sub section (1), the State Government may impose such conditions as may be specified therein including a condition as to the period within which the industry shall be put in operation or, as the case may be the residential accommodation shall be provided for: Provided that if, on a representation made in this behalf by the allottee, the State Government is satisfied that the allottee could not put the industry in operation, or provide the residential accommodation, within the period specified in the order of allotment, for any good and sufficient reason, the State Government may extend such period to such further period or periods as it may deem fit.
(3) Where any condition imposed in an order of allotment is not complied with by the allottee, the State Government shall, after giving an opportunity to the allottee to be heard in the matter, cancel the allotment with effect from the date of the non compliance of such condition and the land allotted shall revest in the State Government free from all encumbrances.
Subject to the provisions of sub sections (1), (2) and (3), all vacant lands deemed to have been acquired by the State Government under this Act shall be disposed of by the State Government to subserve the common good on such terms and conditions as the State Government may deem fit to impose.
928 (5) Notwithstanding anything contained in sub sections (1) to (4), where the State Government is satisfied that it is necessary to retain or reserve any vacant land, deemed to have been acquired by that Government under this Act, for the benefit of the public, it shall be competent for the State Government to retain or reserve such land for the same.
" The submission is that though the impugned Act is designed as a law for the imposition of a ceiling on vacant land in urban agglomerations, to subserve the common good, in furtherance of the Directive principles under article 39 (b) and (c), the dominant object of the impugned Act for the acquisition of vacant land in urban agglomerations under section 23 of the Act, was to facilitate the setting up of industries in the private sector and, therefore, the Act was not in furtherance of part IV of the Constitution and void being violative of article 31 (2).
It was urged that section 23 of the impugned Act must, therefore, be struck down as unconstitutional, it being not in keeping with part IV of the Constitution was not protected under article 31C and that it cannot also have the protective umbrella of article 31B as it seeks to alter the basic structure of the Constitution.
Although the impugned Act is enacted with a laudable object, to subserve the common good, in furtherance of the Directive Principles of state policy under Art, 39 (b) and (c), it appears from the terms of sub ss.(1), (2) and (3) of section 23 that it would be permissible to acquire vacant land in urban agglomerations and divert it for private purpose.
The whole emphasis is on industrialisaton.
The opening words in section 33 (4) "subject to the provisions of sub sections (1), (2) and (3)" make the provisions of section 23 (4) subservient to section 23 (1) which enables the Government to allot vacant land in an urban agglomeration 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 further makes it lawful for the allottee that is, the industrialist, to hold such land in excess of the ceiling limit.
The definition of the word 'industry ' in Explanation (b) to section 23 (1) is wide enough to include any business, profession, trade, undertaking or manufacture, and necessarily includes the private sector.
The proviso to section 23 (2) fortifies that construction of mine.
It is incomprehensible that vacant lands in all urban agglomerations throughout the country should be acquired for the 929 purpose of setting up industries.
More so, that it should permissible to allow setting up of industries for private gain.
There is no material placed before us showing that the Government has prepared any blue print for industrialisation of all the urban agglomerations in India in the public sector.
In fact, faced with this difficulty, the learned Attorney General attempted to justify the provisions contained in s.23 by submitting that the opening words in section 23(4) "subject to the provisions of sub sections (1), (2) and (3)" must, in the context of the preamble and the Directive Principles under Art 39(b) and (c), be construed to mean "notwithstanding anything to the contrary contained in subsections (1), (2) and (3)" According to him, the "brooding spirit ', of the Preamble permeates through the entire section, and, therefore the provisions of s.23 of the Act should be read in the light of the preamble.
The contention cannot be accepted.
When the language of the section is clear and explicit, its meaning cannot be controlled by the preamble.
It is not for the Court to re structure the section.
The re structuring of a statute is obviously a legislative function.
The matter is essentially of political expediency, and as such it is the concern of the statesmen and, therefore, the domain of the legislature and not the judiciary.
It was, however, urged that s.23(1) of the Act is only an enabling provision, and the real power was under s.23(4), and if there is ambiguity in the language of s 23, it was possible to read the section in the light of the preamble and the Directive Principles under article 39(b) and (c) and as such s.23(1) is subject to s.23(4).
The use of the words "subject to the provisions of sub sections (1), (2) and (3)" in s.23(4) takes away the compulsion on the State Government to adhere to the Directive Principles under article 39(b) and (c) in making allotment of the vacant lands in an urban agglomeration acquired under the Act.
The words "subject to the provisions of subsections (1), (2) and (3)" in s.23(4), appearing in the context of s.23(1) means 'in addition to; if anything is left over after the allotment under s.23(1) '.
I cannot, therefore, read the provisions of sub ss.(1), (2) and (3) s.23 of in the light of the preamble or the Directive Principles under article 39(b) and (c).
By no rule of construction can the operation of sub s(1) of s.23 of the Act be controlled by the operation of sub s.(4).
930 A legislation built on the foundation of article 39(b) and (c) permitting acquisition of private property must be for a public purpose, that is, to subserve the common good.
In my view, sub sections
(1), (2) and (3) of s.23 of the Act negate that principle.
Furthermore, article 31(2) consists of three pre requisites namely (i) the property shall be acquired by or under a valid law, (ii) it shall be acquired only for a public purpose, and (iii) the person whose property has been acquired shall be given an amount in lieu thereof.
The definition of ' industry ' in Explanation (b) to section 23(1) is wide enough to include any business, trade or vocation carried on for private gain.
There cannot be 'mixed purpose ' of public and private to sustain a legislation under article 39(b) and (c).
The vice lies in section 23(1) and the Explanation (b) thereto, which on a combined reading, frustrate the very object of the legislation.
One is left with the feeling that sub sections
(1), (2) and (3) of section 23 of the impugned Act are meant to promote the interests of the business community and further professional interests.
While setting up of an industry in the private sector may, at times, be for the public good, there cannot be acquisition of private property for private gain.
Acquisition can only be for a public purpose '.
That is to say, a purpose, an object or aim in which the general interest of the community as opposed to the particular interest of the individual, is directly and vitally concerned.
The concept of 'public purpose ' necessarily implies that it should be a law for the acquisition or requisition of property in the interest of the general public, and the purpose of such a law directly and vitally subserves public interest.
If in reality the object of the acquisition under the Act is to set up industries in the private sector as is permissible from the provisions of section 23(1) of the Act, nothing prevents the State from taking recourse to section 40 of the Land Acquisition Act, 1894, for which there must be quid pro quo, that is, payment of compensation according to the market value.
Our attention was drawn to the Guidelines issued by the Government of India, Ministry of Works and Housing clarifying the intent and purpose of the provisions of the Act.
It may be stated here that these Guidelines cannot supersede or alter any of the provisions of the Act or the rules made thereunder.
The Guidelines issued under section 23 are in these terms: 931 "Section 23 of the Urban Land (Ceiling and Regulation) Act, 1976, governs, inter alia, disposal of vacant land acquired under the Act.
In brief, this Section enables the State Government to allot any vacant land for the purpose of an industry or to subserve the common good, or to retain or reserve such land for the benefit of the public.
For the purpose of the Section 'industry ' has been given a wider meaning so as to cover any business, profession, trade, undertaking or manufacture.
The section also enables Government to allot land for providing residential accommodation of such type as may be approved by the State Government to the employees of any industry.
Thus the excess vacant land acquired by the State Government under the Act can be dealt with in the following manner: (i) allotted for the purpose of an industry namely, any business, profession, trade, undertaking or manufacture; (ii) allotted for the purpose of construction of houses for the employees of an industry specified in item(i) above; (iii) disposed of to subserve the common good which may include allotment of vacant land for Government purpose, for institutions, etc., and (iv) retained/reserved for the benefit of the public" It appears that the Government issued the following guidelines pursuant to the recommendations made at a conference of State Ministers of Housing and Urban Development with a view to implement the policy of socialisation of urban land: "The 9th Conference of State Ministers of Housing and Urban Development held at Calcutta on the 17th, 18th and 19th December, 1976, considered the matter and 932 recommended that, in order to bring about social objectives of the Act more prominently, the utilisation of the excess vacant land should be according to the priorities set down below subject to the prescribed land uses: (i) Retain/reserve for the benefit of the public for social housing, provision of basic amenities, etc.
(ii) Dispose of to subserve common good which may include allotment of vacant land for Government purposes, local authorities, institutions, etc.
(iii) Allot for the purpose of construction of houses for the employees of industries specified in item (iv) below.
(iv) Allot for the purpose of industry, viz., any business, profession, trade, undertaking of non polluting manufacture; cottage and small scale and wherever possible ancillary industry, manufacture.
" It is significant to notice that there was an attempt made in these aforesaid Guidelines to alter the 'priorities ' laid down in section 23.
The Guidelines cannot alter the 'priorities ' laid down in the section.
The Guidelines are nothing but in the nature of Executive Instructions and cannot obviously control the plain meaning of the section.
Where the language of the Act is clear and explicit, we must give effect to it, whatever may be the consequences, for in that case the words of the statute speak the intention of the legislature.
The Court cannot be called upon to interpret the provisions of section 23 of the Act in the light of the Guidelines issued by the Government of India, Ministry of Works and Housing.
I am, therefore, constrained to hold that the provisions of sub sections
(1), (2) and (3) of section 23 and the opening words "subject to the provisions of sub sections (1), (2) and (3)" in section 23(4) which make the setting up of industries the dominant object for the acquisition of vacant land in urban agglomerations under the Act, are not in keeping with Part IV of the Constitution and, therefore, not protected under Article 31 C. 933 A legislation which directly runs counter to the Directive Principles of State Policy enshrined in article 39(b) and (c) cannot by the mere inclusion in the Ninth Schedule receive immunity under article 31B.
The Directive Principles are not mere homilies.
Though these Directives are not cognizable by the Courts and if the Government of the day fails to carry out these objects no Court can make the Government ensure them, yet these principles have been declared to be fundamental to the governance of the country.
Granville Austin considers these Directives to be aimed at furthering the goals of the social revolution or to foster this revolution by establishing the conditions necessary for its achievement.
He explains: "By establishing these positive obligations of the State, the members of the Constituent Assembly made if the responsibility of future Indian governments to find a middle way between individual liberty and the public good, between preserving the property and the privilege of the few and bestowing benefits on the many in order to liberate 'the powers of all men equally for contributions to the common good '." In short, the Directives emphasise, in amplification of the preamble, that the goal of the Indian polity is not laissez faire, but a welfare State, where the State has a positive duty to ensure to its citizens social and economic justice and dignity of the individual.
It would serve as an 'Instrument of Instructions ' upon all future governments, irrespective of their party creeds.
Article 38 requires that the State should make an effort to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life.
In other words, the promise made by the Constitution to the citizens of India in its Preamble is directly included in one of the Directive Principles of State Policy.
Article 39, cl.
(a) requires that all citizens shall have a right to adequate means of livelihood.
Article 39(b) enjoins that the State shall ensure that the ownership and control of the material resources of the community are so distributed as best to 934 subserve the common good.
Article 39(c) mandates that the State shall direct its policy towards securing that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment.
Dr. P.B. Gajendragadkar in 'Law, Liberty and Social Justice ', observes: "These directive principles very briefly, but eloquently, lay down a policy of action for the different State Governments and the Central Government, and in a sense, they embody solemnly and recognize the validity of the charter of demands which the weaker sections of the citizens suffering from social economic injustice would present to the respective governments for immediate relief." Chandrachud J. (as he then was) in Smt.
Indira Gandhi vs Raj Narain(1) after observing that the ratio of the majority in Kesevananda Bharti 's case were merely illustrative of what constitutes the basic structure and are not intended to be exhaustive, observes: I consider it beyond the pale of reasonable controversy that if there be any unamendable features of the of the Constitution, on the score that they form a part of the basic structure of the Constitution, they are that: (i) India is a Sovereign Democratic Republic; (ii) Equality of status and opportunity shall be secured to all its citizens, (iii) The State shall have no religion of its own and all persons shall be equally entitled to freedom of conscience and the right freely to profess, practise and propagate religion and that (iv) the Nation shall be governed by a Government of laws, not of men.
These in my opinion, are the pillars of our constitutional philosophy, the pillars therefore of the basic structure of the Constitution." According to him, the pillars of the Constitution are Sovereign Democratic Republic, Equality of Status and Opportunity, Secularism, Citizen 's right to religious worship, and the Rule of Law.
With respect, I would add that the concept of social and economic justice to build a Welfare State is equally a part of the basic structure or 935 the foundation upon which the Constitution rests.
The provisions of sub sections
(1), (2) and (3) of section 23 and the opening words "subject to the provisions of sub sections (1), (2) and (3)" in section 23(4) are the very antithesis of the idea of a Welfare State based on social and economic justice.
Since these provisions permit acquisition of property under the Act for private purposes, they offend against the Directive Principles of State Policy of article 39(b) and (c) and are also violative of article 31(2) and therefore, not protected under article 31B.
I would, therefore, declare that the provisions of sub sections (1), (2) and (3) of section 23 and the opening words "subject to the provisions of sub sections (1), (2) and (3)" in section 23(4) are ultra vires of the Parliament.
With the striking down of the invalid provisions what remains, that is, the remaining provisions of the impugned Act, including section 23(4) thereof being in conformity with Part IV of the Constitution and Article 31(2), are valid and, therefore, the impugned Act has the protection of both Article 31 B and Article 31 C.
I find no justification to strike down the whole Act as it would be against the national interest.
Unless it becomes clear beyond reasonable doubt that the legislation in question transgresses the limits of the organic law of the Constitution it must be allowed to stand as the true expression of the national will.
The provisions of sub sections
(1), (2) and (3) of s 23 and the opening words "subject to the provisions of sub sections (1), (2) and (3)" in section 23(4), which are, in my view, invalid, cannot effect the validity of the Act as a whole.
The test to be applied when an argument like the one addressed in this case is raised, has been summed up by the Privy Council in Attorney General for Alberta vs Attorney General for Canada in these words: "The real question is whether what remains is so inextricably bound up with the part declared invalid that what remains cannot independently survive or, as it has sometimes been put, whether on a fair review of the whole matter it can be assumed that the legislature would have enacted what survives without enacting the part that is ultra vires at all.
" 936 It is quite clear that the provisions of sub sections
(1), (2) and (3) of section 23 and the opening words "subject to the provisions of sub sections (1), (2) and (3)" in section 23(4) struck down by me are not inextricably bound up with the remaining provisions of the Act, and it is difficult to hold that the legislature would not have enacted the Act at all without including that part which is found to be ultra vires.
The Act still remains the Act as it was passed, i.e., an Act for imposition of ceiling on urban land.
In determining the effect of the law upon the individual 's right to property, the Court must take judicial notice of the fact of vast inequalities in the existing distribution of property in the country.
The Court 's concern lies not merely with applying the pre existing sets of theories, concepts, principles and criteria with a view to determining what the law is on a particular point.
The proper approach should be to view the principles with the realisation that the ultimate foundation of the Constitution finds its ultimate roots in the authority of the people.
This demands that constitutional questions should not be determined from a doctrinaire approach, but viewed from experience derived from the life and experience or actual working of the community, which takes into account emergence of new facts of the community 's social and economic life affecting property rights of the individual, whenever, among others, the validity of a law prescribing preference or discrimination is in question under the "equal protection" guarantee.
It should be remembered that the Directive Principles cannot be regarded only as idle dreams or pious wishes merely by reason of the fact that they are not enforceable by a court of law.
A rule of law in facts does not cease to be such because there is no regular judicial or quasi judicial machinery to enforce its commands.
An attempt to create a truly social Welfare State also carries with it the idea that in a country like India concentration of wealth in the country must be done away with and its distribution on an equitable basis effected in order to bridge the gap between the rich and the poor.
The very purpose of creating such a state is to benefit the weaker and poorer sections of the community to a much greater extent than the rich persons so that the living standards of the people in general may improve.
In fact, in such a State, all welfare schemes in their operation generally tend to benefit the poor people to a much greater extent than others.
If an equal protection guarantee were enough to invalidate such schemes, improvement in the economic 937 and social conditions of the country would be impossible.
One should not be swayed away by emotions but should be guided by the real needs of the country.
Hence a paradoxical situation should be avoided by refusing to perpetuate the existing inequality among the social classes and maintain that gap to the same extent as before by intending to pay to the rich compensation at the same full rates as in the case of the poorer sections of the community.
The impugned Act is meant to remove inequalities with a view to promote 'the greatest happiness of the greatest number '.
During the last thirty years much has been done to implement the State 's policy of socialisation of agricultural land by imposition of a ceiling on agricultural holding.
There is much that still remains to be done.
There is need for prevention of concentration of wealth in a few hands in the urban areas and to provide for equitable distribution of vacant land among others.
The great disparity between the rich and the poor is more visible in the urban areas particularly in the great cities.
A majority of the people in the urban areas are living in abject poverty.
They do not even have a roof over their heads.
Concentration of wealth in a few hands is not conducive to the national well being.
The challenge to the validity of the artificial definition of 'family ' in s.2(f) of the impugned Act must fail.
The Court has recently upheld the validity of an identical definition of 'family ' appearing in the different State laws relating to imposition of ceiling on agricultural land.
Some marginal hardship is inevitable in the working of the legislation.
The ultimate object is to reduce inequalities in the larger interest.
That takes us to the question whether the definition of 'family ' in s.2(f) of the Act results in the exclusion of a joint Hindu family.
The definition of 'family ' contained in s.2(f) is in the following terms: "2.(f) "family" in relation to a person, means the individual, the wife or husband, as the case may be, of such individual and their unmarried minor children.
" As a result of the artificial definition of 'family ' in s.2(f), there is no denying the fact that a joint Hindu family is excluded from the purview of the Act.
Section 3 of the Act provides that no person, on 938 and from the commencement of the Act, shall be entitled to hold any vacant land in excess of the ceiling limit in the territories to which the Act applied.
The word 'person ' is defined in s.2(i) as: "2.(i) "person" includes an individual, a family, a firm, a company, or an association or body of individuals, whether incorporated or not;" The question is whether the total exclusion of joint Hindu family renders the Act void and unconstitutional as violative of Art.14.
I do not think that this is so.
Parliament deliberately excluded a joint Hindu family from the purview of s.3 of the impugned Act.
As already pointed out in Vasavaiah Chaudhary 's case, Parliament was beset with difficulties in imposing a ceiling on urban immovable property.
While dealing with imposition of ceiling on vacant urban land it was presumably faced with another difficulty, viz., the institution of a joint Hindu family.
According to the Mitakshara School of Hindu Law, there is community of interest and unity of possession.
Under the Mitakshara School a copartner cannot predicate the extent of his share, while under the Dayabhaga school a member of joint Hindu family takes as a tenant in common.
We, therefore, do not find anything wrong in excluding a joint Hindu family.
The impugned Act applies to Hindus, Mohamedans and Christian alike.
By the exclusion of a joint Hindu family the members of a joint Hindu family, whether governed by the Mitakshara School or the Dayabhaga School, were brought at par with others.
The contention that the impugned Act offends against Art.14 must, therefore, fail.
The contention that the amount fixed by sub s.(6) of s.11 of the impugned Act is totally arbitrary and illusory since there is no nexus between the value of the property and the amount fixed and, therefore, the maximum amount fixed under sub s.(6) makes the Act confiscatory in total abrogation of the fundamental right guaranteed under Art.31(2) cannot be accepted.
The Constitution (25th Amendment) Act, 1971, which came into force on April 20, 1972, by s.2(a) substituted the word 'amount ' for the word 'compensation ' in the new Art.31(2), which reads: "31(2) No property shall be compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for acquisition or 939 requisitioning of the property for an amount which may be fixed by such law or which may be determined in accordance with such principles and given in such manner as may be specified in such law; and no such law shall be called in question in any court on the ground that the amount so fixed or determined is not adequate or that the whole or any part of such amount is to be given otherwise than in cash.
" Under the original Art.31(2), no property could be acquired for a public purpose under any law, unless it provided for compensation of, or acquired and either fixed the amount of the compensation, or specified the principles on which, and the manner in which, the compensation was to be determined and given.
It will be seen that Art.31(2) provides for acquisition or requisitioning of the property for an amount which may be fixed by such law, or which may be determined in accordance with such principles and given in such manner as may be specified in such law.
No such law can be called in question on the ground that the amount is not adequate, or that the whole or any part of it is to be given otherwise than in cash.
Section 2(b) of the 25th Amendment Act inserted a new clause (2B) to Art.31 which provides: "31.(2B) Nothing in sub clause (f) of clause (1) of article 19 shall affect any such law as is referred to in clause (2).
" The substitution of the neutral word 'amount ' for the word 'compensation ' in the new Art.31(2) still binds the legislature to give to the owner a sum of money in cash or otherwise.
The legislature may either lay down the principles for the determination of the amount or may itself fix the amount.
The choice open to the legislature is that the amount should be directly fixed by or under the law itself or alternatively, the law may fix principles in accordance with which the amount will be determined.
Sub section (1) of s.11 reads: "11(1) Where any vacant land is deemed to have been acquired by any State Government under sub section (3) 940 of section 10, such State Government shall pay to the person or persons having any interest therein, (a) in a case where there is any income from such vacant land, an amount equal to eight and one third times the net average annual income actually derived from such land during the period of five consecutive years immediately preceding the date of publication of the notification issued under sub section (1) of section 10; or (b) in a case where no income is derived from such vacant land, an amount calculated at a rate not exceeding (i) ten rupees per square metre in the case of vacant land situated in an urban agglomeration falling within category, A or category B specified in Schedule 1; and (ii) five rupees per square metre in the case of vacant land situated in an urban agglomeration falling within category C or category D specified in that schedule." In order that the burden of compensation, that is, the amount payable under Art.31(2) for taking over vacant land in excess of the ceiling limit in sub section
(3) of s.10 by the government may not be high, the Act incorporates a specific provision in sub section
(6) of s.11 to fix a ceiling on the maximum amount payable in any single case.
The sub section reads: "11(6) Notwithstanding anything contained in sub section (1) or sub section (5), the amount payable under either of the said sub sections shall, in no case, exceed two lakhs of rupees.
" It is not suggested that sub s.(1) of section 11 does not lay down any principles for determination of the amount payable for the taking of excess vacant lands in an urban agglomeration or that the principles laid down in sub s.(1) are not relevant for the determination of the amount payable.
It is also not suggested that payment of the amount at the rate of Rs. 10 per sq.
metre and Rs. 5 per sq.
metre, 941 for the vacant land in categories and B, and categories C and D respectively, makes the amount illusory or the Act confiscatory.
The submission is that the fixation of the maximum amount payable at Rs. 2 lacs in a single case by sub s.(6) makes the amount payable under sub s (1) wholly illusory and, therefore, the Act is confiscatory.
That cannot be so, because the fixation of ceiling on the maximum at Rs. 2 lacs under s.11(6) implies that it would affect only persons owning 20,000 sq. metres of vacant land in metropolitan cities like Delhi, Calcutta, Bombay and Madras or large cities like Hyderabad, Bangalore, Poona, Kanpur and Ahmedabad falling in categories A and B, or persons owning 40,000 sq.
meters in big cities like Lucknow, Allahabad, Nagpur, Jaipur etc.
falling in categories C and D.
One is left to wonder how many own such vast tracts of vacant land in such cities.
If any, very few indeed.
Even if there are, the amount cannot be related to the value of the property taken.
It is pure arithmetics.
Twenty thousand sq. metres would make 23,920 sq.
yards and forty thousand sq. metres 47,840 sq.
yards.
In a city like Delhi, Calcutta, Bombay and Madras the value of a square yards of vacant land would depend upon the situation of the land.
If that be the criteria, then there can be no ceiling on vacant land in urban agglomerations, much less geiling on immovable property in such cities, when it comes to be imposed.
The State has not the capacity to bear the burden.
If the contention were to prevail, then no law for the implementation of the Directive Principles of State Policy under article 39(b) or (c) can ever be implemented.
We may recall the words of Pandit Jawaharlal Nehru, who while introducing the Constitution (Fourth Amendment) Act, 1955, said in Parliament: "If we are aiming, as I hope we are aiming and verepeatedly say we are aiming, at changes in the social structure, then inevitably we cannot think in terms of giving what is called full compensation.
Why ? Well, firstly because you cannot do it, secondly because it would be improper to do it, unjust to do it, and it should not be done even if you can do it for the simple reason that in all those social matters, laws etc., they are aiming to bring about a certain structure of society different from what it is at present.
In that different structure among other things that will change is this, the big, difference between the have 's and the havenot 'section Now, if we are giving full 942 compensation, the have 's remain the have 's and the have not 's, have not 'section It does not change in shape or form if compensation takes place.
Therefore, in any scheme of social engineering, if I may say so, you cannot give full compensation apart from the patent fact that you are not in a position nobody has the resources to give it.
" There can be no scheme for nationalisation of any industry, there can be no socioeconomic measures enacted if the concept of 'just equivalent ' were to be introduced even after the 25th Amendment.
To emphasise the point that the amount of Rs. 2 lacs fixed under sub s.(6) of s.11 makes the Act confiscatory, our attention was drawn to the fact that the petitioner in writ Petition No. 350 of 1977, Maharao Saheb shri Bhim Singhji, the former Maharana of Kotah owns 971.50 acres of vacant land appurtenant to and covered under his Umed Bhawan Palace in the city of Kotah, which is an urban agglomeration falling under category 'D ', and which stands requisitioned under s.23(1) of the Defence and Internal Security of India Act, 1971.
There is no dispute that the property of the Maharana is valued for the purposes of the Rajasthan Lands and Buildings Tax Act, 1964, at Rs. 4,12,27,726.84.
Does it mean that the amount should be geared to the value of the vacant land taken under sub section
(3) of s 10? When the Court has no power to question the adequacy of the amount under Art.31(2), can it be said that the amount fixed determined according to the principles laid down in sub s.(1) of s.11, subject to the maximum fixed under sub s.(6) thereof is illusory merely because of inadequacy? Who are we to say that it should be 10 per cent or less, or 50 per cent or more.
The legislature in its wisdom has laid down the principles and fixed a ceiling on the maximum amount payable.
That is a legislative judgment and the Court has no power to question it.
Seeravai in his book on Constitution, 2nd Ed., vol.
I, p.656, while dealing with the Fourth Amendment states that in permitting 'inadequate compensation ' the 4th Amendment removed a fixed yard stick and made all discussion about 'relevant ' and 'irrelevant ' principles meaningless.
The learned author says: "If the questions were asked, why has the law fixed compensation amounting to 60 per cent and not to 70 or 50 per cent of the market value, the answer would be that in the legislative judgment the amount fixed by the law was 943 a fair and just compensation for the acquisition of property under the at law, and if a law fixing compensation at amounts ranging from 90 to 50 per cent or less, of the market value of the property acquired, cannot be struck down by a Court, equally, principles of compensation cannot be struck down when they produce the same result.
The consequences of the transformation brought about by the 4th Amendment is that 'principles of compensation ' do not mean the same thing before and after the 4th Amendment." As the learned author explains, 'considerations of social justice are imponderable and, therefore no fixed money value can be put on them by any principle ', and goes on to say 'The question whether the Court can go into the question whether the amount is illusory is difficult to answer '.
The legislature considers a maximum amount of Rs.2 lacs to be a fair and just recompense for the acquisition of excess vacant land in an urban agglomeration.
By no standard can an amount of Rs.2 lacs be considered to illusory.
The 25th Amendment has placed the matter of adequacy of compensation beyond the pale of controversy by substituting the word 'amount ' for the word 'compensation ' in Art.31(2) and made the adequacy of the amount payable for acquisition or requisition of property nonjusticiable.
In Kesavananda Bharti 's case, the Court upheld the constitutional validity of the 25th Amendment.
The impact of the new Article 31(2) was also considered as well as the content and meaning of the word 'amount '.
According to the majority, the amount fixed or determined to be paid cannot be illusory.
But one thing is clear the meaning which the Court placed on the word 'compensation ' in R. C, Cooper 's case of adequacy of compensation and on relevant principles has been held to have been nullified by the 25th Amendment.
The two decisions directly in point are the State of Kerala & Anr.
vs The Gwalior Rayon Silk Mfg. Co. and State of Karnataka vs Ranganatha Reddy.
In Gwalior Rayon 's case the Court upheld 944 the validity of the Kerala Private Forests (Vesting and Assignment) Act, 1971, which provided for the vesting of private forest lands held in Janman rights, even though there was no provision for payment of compensation.
The Court held that since the Act envisaged a scheme of agrarian reform, it was protected under Art.31A and could not be challenged on the ground that it take aways, a bridges or abrogates the fundamental rights guaranteed by Arts.14, 19 and 31.
In Ranganatha Reddy 's case the Court upheld a scheme for nationalisation of contract carriages in the State, since it laid down the principles for the determination of the amount payable under Art.31(2) and they were not irrelevant for the determination of the amount.
Untwalia J. speaking for the majority observed: "On the interpretations aforesaid which we have put to the relevant provisions of the Act, it was difficult rather impossible to argue that the amount so fixed will be arbitrary or illusory.
In some respects it may be inadequate but that cannot be a ground for challenge of the constitutionality of the law under Article 31(2)." Krishna Iyer J. in a separate but concurring judgment after deducing the discernible principles from the decision in Kesavananda Bharati 's case, held that the 25th Amendment bars the Court 's jurisdiction to investigate the adequacy of the amount.
In view of these two decisions, the contention that fixation of maximum amount by sub section
(6) of section 11 renders the amount payable under sub section
(1) illusory or in the alternative makes the Act confiscatory cannot be accepted.
There still remains the contention regarding the invalidity of sub section
(1) of section 27, which reads: "27.
(1) Notwithstanding anything contained in any other Law for the time being in force, but subject to the provisions of sub section (3) of section 5 and sub section (4) of section 10, no person shall transfer by way of sale, mortgage, gift, lease for a period exceeding ten years, or otherwise, any urban or urbanisable land with a building (whether constructed before or after the commencement of this Act) or a portion only of such building for a period of ten years of such commencement or from the date on which the building is constructed, whichever 945 is later, except with the previous permission in writing of the competent authority.
" It is urged that sub section
(1) of section 27 confers arbitrary and uncontrolled powers on the competent authority to grant or refuse permission for transfer and that the conferral of such uncontrolled and uncanalised power without any guidelines renders the provision illegal and void and unenforceable being an unreasonable restriction on the right to acquire, hold and dispose of property guaranteed under article 19(1(f).
It is said that the matter is left to the whim and fancy of the competent authority, and the power so conferred is capable of misuse and thus be an instrument of great oppression.
The learned Attorney General tried to meet the contention by urging that there was no reason to think that the competent authority would refuse to grant permission where the transaction is bona fide.
According to him, the competent authority would be justified in refusing to grant permission where the transaction is calculated to defeat the provisions of the Act.
It is said that the whole object of freezing of the transactions was to hold the price line of urban land.
He drew our attention to the guidelines issued by the Government of India, Ministry of Works and Housing to the various State Governments directing that all applications for grant of permission under sub section
(1) of section 27 of the Act should be dealt with expeditiously with a view to prevent any inconvenience to the members of the public and further that permission should be granted, as a matter of course, within three days of the receipt of such application.
In my judgment, there is no justification at all for the freezing of transactions by way of sale mortgage, gift or lease of vacant land or building for a period exceeding ten years, or otherwise, for a period of ten years from the date of the commencement of the Act, even though such vacant land with or without building thereon falls within the ceiling limits.
In Excel Wear vs Union of India & Ors.
the Court held that the right to carry on a business guaranteed under article 19(1) (g) carries with it the right not to carry on business.
It must logically follow, as a necessary corollary, that the right to acquire, hold and dispose of property guaranteed to a citizen under article 19(1)(f) carries with it the right not to hold any property.
It is difficult to appreciate how could a citizen be compelled to own property against his will.
946 If vacant land owned by a person falls within the ceiling limits for an urban agglomeration, he is outside the purview of section 3 of the Act.
That being so, such a person is not governed by any of the provisions of the Act.
When this was pointed out to the learned Attorney General, he was unable to justify the imposition of the restriction imposed by sub section
(1) of section 27 in case of land falling within the ceiling limits as a reasonable restriction.
It must, accordingly, be held that the provision of sub section
(1) of section 27 of the impugned Act is invalid insofar as it seeks to affect a citizen 's right to dispose of his urban property in an urban agglomeration within the ceiling limits.
I would for the reasons stated, declare sub sections (1) (2) and (3) of section 23 and the opening words "subject to the provisions of sub sections (1), (2) and (3)" in section 23(4) of the Urban Land (Ceiling and Regulation) Act, 1976 as ultra vires of the Parliament and that these provisions are not protected under Articles 31 B and 31 C of the Constitution, and further declare that sub section (1) of section 27 of the Act is invalid insofar as it imposes a restriction on transfer of urban property for a period of ten years from the commencement of the Act, in relation to vacant land or building thereon, within the ceiling limits.
Having struck down sub sections (1) (2) and (3) of section 23 and the opening words "subject to the provisions of Sub sections (1), (2) and (3)" in section 23(4) of the Act, I would declare the remaining provisions of the Urban Land (Ceiling and Regulation) Act, 1976, including sub section (4) of section 23 thereof as valid and constitutional.
In the result, the writ petitions, except to the extent indicated, must fail and are dismissed.
There shall be no order as to costs.
S.R. Petitions dismissed.
| The Urban Land (Ceiling and Regulation) Act, 1976 (Act XXXIII of 1976) is in force in 17 States and all the Union Territories in the country.
It seeks to impose a ceiling on vacant lands in urban agglomerations having a population of two lakhs or more and for that purpose classifies such urban agglomerations in various cities and towns in all the States and Union Territories into four categories and fixes the ceiling limit for each such category.
The primary object and purpose of the Act, as its long title and the Preamble show, is to provide for the imposition of a ceiling on vacant land in urban agglomerations, for the acquisition of such land in excess of the ceiling limit, to regulate the construction of buildings on such land for matters connected there with, 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 bring about an equitable distribution of land in urban agglomerations to subserve the common good, presumably in furtherance of the Directive Principles of State Policy contained in Article 39(c) and (b) respectively.
The enactment has also been put in the Ninth Schedule as Item 132 by the Constitution (Fortieth Amendment) Act, 1976; in other words, the enactment enjoys the benefit of protective umbrella of both the articles, Article 31 B and 31 C as it stood prior to its amendment by the Constitution (Forty second Amendment) Act, 1976.
By these writ petitions the petitioners, who are holders of vacant land in the urban agglomerations in various States, are seeking to challenge the vires of some of the salient provisions of the Urban Land (Ceiling and Regulation) Act, 1976 (XXXIII of 1976) and since, according to them, some of the impugned provisions are pivotal and non severable, having an impact on its entire scheme, the whole Act is liable to be struck down as being invalid and unconstitutional.
The petitioners have, therefore, prayed for an order quashing notices issued to them by the concerned competent authorities under the Act and a mandamus directing the respondents not to implement the provisions thereof against them.
Dismissing the petitions and upholding the constitutional validity save and except section 27(1) by a majority of 4:1 (A P. Sen, J partially dissenting on the validity of sub sections (1),(2), (3) and the opening words of sub section (4) of section 23), the Court.
^ HELD: Permajarity: (Y.V. Chandrachud, C.J., P.N. Bhagwati, V.R, Krishna Iyer and an.
jj; V.D, Tulzapurkar, J. dissenting).
864 1.
The Urban Land (Ceiling and Regulation) Act, 1976 is constitutionally valid save and except section 27(1) in so far a it imposes a restriction on transfer of any urban of urbanisable land with a building or of a portion of such building.
which is within the ceiling area.
[877 E F] Per Chandrachud.
C.J. and P.N. Bhagwati, J. 1.
The Urban Land (Ceiling and Regulation) Act.
1976 is valid.
The vice from which a provision here or a provision there of the impugned Act may be shown to suffer will not justify the conclusion that the Act is not intended to or does not, by its scheme; in fact implement or achieve the purposes of clauses (b) and (c) of Article 39 of the Constitution.[878 C D] 2.
The definition of "family" in section, 2(f) of the Act, which in relation to a person means the individual, the wife or husband, as the case may be, of such individual and their unmarried minor children, will not necessarily lead to concentration of wealth in the hands of a few persons or families.
Such is not the intendment, nor the drive, nor the direct and inevitable consequences of the definition of "family", [873 D E] 3.
Section 11(6) of the Urban Land (Ceiling and Regulation) Act, 1976 which provides that the amount payable under sub section (I) or sub section (5) of section 11 shall, in no case, exceed two lakhs of rupees is valid.
The amount thus payable, is not illusory and the provision is not confiscatory Rupees two lakhs is not like a farthing even if the excess land may be a fortune.
[879 F] 4.
Section 23 of the Urban Land (Ceiling and Regulation) Act is valid and does not suffer from any constitutional infirmity.
Sub section (4) of section 23 is the prepondering provisio governing the disposal of excess vacant land acquired under the Act.
Though it is "subject to the provisions of sub section (1) (2), and (3)", the provisions of sub section (1) are enabling and not compulsive and those of sub sections (2) and (3) are incidental to the provisions of sub section (1).
The disposal of excess vacant lands must therefore be made strictly in accordance with the mandate of sub section (4) of section 23, subject to this, that in a given case such land may be allotted to any person, for any purpose relating to, or in connection with any "industry" or the other purposes mentioned in sub section (1), provided that by such allotment, a common good will be subserved.
The governing test of disposal of excess land being "social good", any disposal in any particular case or cases which does not subserve that purpose will be liable, to be struck down as being contrary to the scheme and intendment of the Act.
The preamble to the Act ought to resolve interpretational doubts arising out of the defective drafting of section 23.
"Common Good", being the writing on the wall, any disposal which does not serve that purpose will be outside the scope of the Act and, therefore, lacking in competence in diverse senses.
Private property cannot under the Constitution be acquired or allotted for private purposes though an enabling power like that contained in sub section (I) of section 23 865 may be exercised in cases where the common good dictates the distribution of excess vacant land to an industry, as defined in clause (b) of the Explanation to Section 23.
[878 ' G H; 879 A E] 5.
Sub section (I) of section 27 of the Act is invalid insofar as it imposes a restriction on transfer of any urbanisable land with a building or a portion only of such building, which is within the ceiling area.
Such property will therefore be transferable without the constraints mentioned in sub section (I) of Section 27 of the Act.
Nothing usefully can be added to the Judgment delivered by Krishna Iyer, J and the reasons given therein are fully agreed to.
[879 G H] Per Krishna Iyer, J. (Concurring) 1.
The legislation on the Ceiling and Regulation of urban lands is constitutionally valid, though section 27(1) is partially invalid.
The legislation is obviously a measure for inhibiting concentration of urban lands in the hands of a few persons and for equitable distribution of such land to subserve the common good.
Article 39(b) and (c) of the Constitution are directly attracted and the fullest exploitation of the material resources of the community undoubtedly requires distribution of urban land geared to the common good.
[880 E F] 2, Family as defined in section 2(f) of the Act accords with the current life style in urban conditions and is neither artificial nor arbitrary nor violative of Article 14.
And the courts, in these days of family planning and self reliance of the adult cannot condemn as arbitrary, by a process of judicial ratiocination, the legislative provision that a family shall be defined as the parents plus their minor children.
[886 B C] 3.1 The payment, fixed under section 11(6) of the Act of a sum of Rs. two lakhs whatever be the total value of the property in the market is not so fictitious and flimsy as to be a farthing.
There are no absolutes in law as in life and the compulsions of social realities must unquestionably enter the judicial verdict.
[881 G H] 3.2 The various amendments to Article 31 culminating in the present provision which provides for the payment of the "amount" disclose a determined approach by Parliament in exercise of its constituent power to ensure that full compensation or even fair compensation cannot be claimed as fundamental right by the private owner and that short of paying a "farthing for a fortune" the question of compensation is out of bounds for the court to investigate.
[881 D F] 3.3 Having regard to the human condition of a large percentage of pavement dwellers and slum dwellers in our urban areas and proletarian miserables in our rural vastnesses, any one who gets Rs. 2 lakhs can well be regarded as having got something substantial to go by.
In a society where half of humanity lives below the breadline, to regard Rs. 2 lakhs as a farthing is farewell to poignant facts and difficult to accept.
Therefore, section 11(6) is invulnerable and does not contravene Article 31(2) the payment stipulated is reasonable, neither a mere mockery or discriminatory.
[884 E F] 866 4.
The whole story of the legislation, the long gestation of pre legislative consideration, the brooding presence of Article 39(b) and (c) and the emphasis in Section 23(4) on common good as the guiding factor for distribution point to public purpose, national development and social justice as the cornerstone of the policy of distribution.
Any transgression of Article 39(b) and (c) is beyond the scope of Section 23(1) and disposal of land thereunder must subserve the common good and not the reverse.
This limitation on the wide words of section 23(1) is a matter of semantics and reading down the judicial process.
To sustain a law by interpretation is the rule.
To be trigger happy in shooting at sight every suspect law is judicial legicide.
Courts can and must interpret words and read their meanings so that public good is promoted and power misuse is interdicted.
The wide definition of "industry" or the use of general words like "any person" and "any purpose" cannot free the whole clause from the inarticulate major premise that only a public purpose to subserve the commom on good and filing the bill of Article 39(b) and (c) will be permissible.
The touchstone is public purpose, community good and like criteria.
If the power is used for favouring a private industrialist or for nepotistic reasons the oblique act will meet with its judicial Waterloo.
To presume as probable graft, nepotism.
patronage, political clout.
friendly pressure or corrupt purpose is imper missible.
The law will be good, he power will be impeccable but if the particular act of allotment is mala fide or beyond the statutory and constitutional parameters such exercise will be a casualty in court and will be struck down.
The power of judicial review to strike at excess or mala fides is always there for vigilant exercise.
Hence, even the crude drafting of section 23(4) by the unwanted "subject to" will not whittle down the power, why the obligation, to distribute vacant land, not according to personal, political or official fancy but strictly geared to the good set down in Article 39(b) and (c).
[887 D H; 888A; 889D] 5.
Section 27(1) of the Act, is invalid, partially.
[880 A] 6.1 The question of basic structure being breached cannot arise when examining the vires of an ordinary legislation as distinguished from a Constitutional amendment.
Nor, indeed, can every breach of equality spell disaster as a lethal violation of the basic structure.
Peripheral inequality is invitable when large scale equalization processes are put into action.
What is a betrayal of the basic feature is not a mere violation of Article 14 but a shocking, unconscionable or unscrupulous travesty of the quintessence of equal justice.
If a legislation does go that far it shakes the democratic foundation and must suffer the death penalty.
But to permit the Bharti ghost to haunt the corridors of the court brandishing fatal writs for every feature of inequality is judicial paralysation of parliamentary function.
Nor can the constitutional fascination for the basic structure doctrine be made a Trojan horse to penetrate the entire legislative camp fighting for a new social order and to overpower the battle for abolition of basic poverty by the basic structure 'misslle.
[889 E H; 890A] 6.2 Right to property is not part of the basic structure even his right to develop is not the basic structure of India for ever.
The whole adventure of the Constitution is to remove poverty and in that process remove concentration of 867 property, not for a return, but for almost free, if the justice of the situation commended itself to the legislation to take it that way.
Kesavanda Bharati vs State of Kerala [1972] Supp.
SCR p. I referred to.
6.3 Part IV which seeks to build a Social Justice Society, is basic to our constitutional order.
The Directive Principles of State Policy being paramount in character and fundamental in the country 's governance, distributive justice, envisaged in Article 39(b) and (c) has a key role in the developmental process of the Socialist Republic that India has adopted.
[888 C; 880 G] Per Tulzapurkar, J. (dissenting) 1.
The urban Land (Ceiling and Regulation) Act, 1976, though purporting to do so, does not, in fact, further the directive principles in Article 39(b) and (c).
The measure was, undoubtedly, taken in hand with a view to achieve the unexceptional objectives underlying Article 39(b) and (c) and supported by several State Legislatures as per their resolutions passed under Article 252(1) with a laudable object namely, to clothe the Parliament with legislative competence to enact a law for the imposition of ceiling on urban immovable property for the country as a whole, but the enacted provisions misfire and produce the opposite results and also damage or destroy the essential features or basic structure of the Constitution.
Section 2(f) in relation to prescription of ceiling area permits unwarranted and unjustified concentration of wealth instead of preventing the same and is in teeth of the objective under Article 39(c): Similarly section 23 produces results contrary to the objectives under Article 39(b) Therefore, the impugned Act is outside the protective umbrella of Article 31 C. Further, sections 2(f) 23 and 11(6) which puts a maximum limit on the quantum of the amount payable in respect of excess vacant land acquired from a holder irrespective of the extent of area held by him these three provisions flagrantly violate those aspects of Articles 14 and 31 which constitute the essential and basic features of the Constitution and hence the protective umbrella of Article 31 B is not available to the impugned Act inasmuch as the Fortieth Constitution Amendment Act, 1976 to the extent to which it inserts the Act in the Ninth Schedule is beyond the constituent power of the Parliament.
Section 23 which authorises compulsory acquisition of property for private purposes is in breach of the doctrine of eminent domain and since it flagrantly violates Article 31(1) is ultra vires and unconstitutional.
Similarly section 27 being severable is partially ultra vires and unconstitutional, being beyond the ambit of the Act and also violative of Article 14 of the Constitution.[916 H, 917A D] The legislative competence of the Parliament bring still there, a well drafted enactment within the constitutional limitations of the subject would be the proper remedy.[198 G H] Union of India vs Valluri Basaviah Chowdhry, ; referred to.
2.1 The artificial definition of " Family" given in section 2(f) of(t) of Act, when considered in relation to the prescriptions of the ceiling area under 868 section 4(1) is clearly violative of and strikes at the root of the equality clause contained in Article 14 of the Constitution.
This artificial definition together with the double standard adopted for fixing the ceiling area runs through and forms the basis of chapter III of the Act and the discriminatory result or inequalities produced thereby are bound to have an impact on the scheme of that chapter and, therefore, along with it the whole chapter III must fall being violative of Article 14.
[898 C F] 2.2 The classification made between minor children and major children belonging to a family is not based on any intelligible differentia having no nexus to the object sought to be achieved by the Act, which is to acquire excess vacant land after leaving the ceiling area to the family.
It has not been shown that so called nuclear families alleged by in vogue have replaced normal families which include major sons or joint Hindu families in urban areas.
[898 B C] Karimbil Kunhikoman vs State of Kerala [1962] Supp. 1 SCR 829; A.P. Krishnasami Naidu vs State of Madras [1964] 7 S.R 82 followed.
2.3 Apart from the discriminatory result which the artificial definition of family in section 2(f) produces, the adoption of the artificial definition of "family" and double standard for fixing ceiling area one for a family with minor children and another for a family with major children and completely ignoring the concept of Joint Hindu Family in relation to prescription of ceiling area clearly lead to results which run counter to the directive principles contained in Article 39 (c) of the Constitution.[899 E F] 3.1 Section 11(6) of the Act, which puts the maximum limit of Rupees Two lakhs on the amount payable to a holder of excess vacant land acquired under the Act irrespective of the extent of such excess vacant land held by him is not merely violative of Articles 14 and 32(2) of the Constitution, but would be a piece of confiscatory legislation, because vacant land in excess of that portion which at the prescribed rates is worth Rupees Two lakhs stands confiscated to the State without any payment whatsover.
[911 C D] 3.2 The enactments involving large schemes of social engineering like abolition of Zamindars, agrarian reforms nationalisation of undertakings and businesses and the like, where avowedly the benefit of the community or public at large is the sole consideration are distinguishable from the instant case, where "industry" has been expressly defined to include business, trade or profession in private sector and where power has been coffered upon the State Government to allot properties acquired under the enactment to individual businessman, trader or professional to enable him to carry on his private business, trade or profession, that is to say, where the legislation is a fraud on State 's power of eminent domain, such a provision of putting a maximum limit on compensation payable in respect of the acquired property irrespective of its extent will have to be regarded as confiscatory in nature.
[911E 912 A C] 869 However, section 11 (6) is clearly a severable provision, and, therefore, ultra vires and unconstitutional.
[913A] State of Kerala vs The Gwalior Rayon Silk Mfg.Co. Ltd. [1974] I SCR 671 distinguished.
4.1 Section 23 of the Act which authorises compulsory acquisition of property for private purposes flagrantly violates those aspects of Article 31 which constitute the essential or basic features of the Constitution and is, therefore, ultra vires and unconstitutional.
Further, indispensably, it is the most vital, integral and non severable part of the entire scheme of urban ceiling as without it the scheme will merely remain a scheme for unjust and illegal enrichment of the State, and therefore, the whole of chapter III in which it occurs, must fall with it.
[906 A B] 4.2 Article 31 of the Constitution has more than one facet: it undoubtedly confers upon individuals (including non citizens) and corporate bodies a fundamental right to property and incorporates in our Constitution the concept of State 's power of eminent domain i.e. power of compulsory acquisition of private property and prescribes two conditions precedent to the exercise of that power, namely, (i) such acquisition cannot be except for a public purpose and (ii) it must be on payment of compensation (now termed amount") to the claimant having interest in the property.
But these two conditions precedent are sine qua non for the exercise of the State 's power of eminent domain and, represent those aspects of the right to property under Article 31 which constitute the essential or basic features of our Constitution and for that matter these would be so of any democratic constitution and, therefore, any law authorising expropriation of private property in breach of anyone of those conditions would damage or destroy the basic structure of our Constitution.
[903 H, 904A, B E] H.H. Kesavananda Bharati vs Union of India & Ors.
[1973] Supp.
SCR 1 referred to.
State of Bihar vs Kameshwar Singh, [1952]SCR 889 relied on.
4.3 It is extremely doubtful whether compulsory acquisition of all the excess vacant land in all urban agglomerations throughout the country for a bald, indefinite and unspecified objective like "industry" simpliciter without any attempt at dovetailing it by having a proper scheme for industrial development will constitute a valid public purpose for the exercise of the power of eminent domain" [905 C D] 4.4 The adoption of a wide definition of a wide definition of industry so as to include any business, trade or profession in private sector not only makes a mockery of "public purpose", but also, in the context of eminent domain is clearly suicidal.
What is worse is that under the priorities laid down such private 870 purposes are to be catered to first and then comes the disposal or distribution thereof to subserve common good, which clearly smacks of depriving Peter of his property to give it to Paul and, therefore, clearly amounts to an invalid exercise of State 's power of "eminent domain".
[905 F,G H,906 A] 4.5 Besides, the wide definition of "industry" and the priorities for disposal or distribution of excess vacant land laid down in sub sections (1) to (5) have adverse impact on the directive principle contained in Article 39(b) in as much as private purposes receive precedence over common good.
The enactment which contains such provisions that produce contra results cannot be said to be in furtherance of the directive principle of Article 39(b) and cannot receive the benefit of the protective umbrella of Article 31 C. [906 C D,G H] 4.6 It is well settled that it is only when there is ambiguity in the text of any provision in the enactment that the preamble could be looked into.
Here, there is no ambiguity whatsoever in section 23(1) and (4).
Far from there being any ambiguity there is express provision in section 23(1) and (4) indicating the priorities in the matter of disposal or distribution of excess vacant land, in face of which, the Preamble cannot control, guide, or direct the disposal or distribution in any other manner.
[907 A C] 4.7 No rules framed under section 46(1), which empowers the Central Government to make rules for carrying out the provisions of the Act, and the disposal or distribution of excess vacant land can override the express provisions of section 23.
Here, no rules have so far been framed.
907 C D] 4.8 No reliance can be made on the "Compendium of Guidelines" issued by the Central Government in the Ministry of Works and Housing under the Act either.
No doubt, the recommendations made by the 9th Conference of State Ministers of Housing and Urban Development seek to furnish improved guidelines but in the process reverse the priorities given in section 23 in the matter of disposal or distribution of excess vacant land.
Hence, the priorities given in section 23 and as have been summarised in para 3 of the Note must prevail over the priorities indicated in the guidelines contained in para 4 of the Note and the latter are of no avail.
[907 F G H, 908 A B] 4.9 Section 23 by no stretch deals with the objective of Article 39(c) at all but only deals with the objective underlying the directive principle of Article 39(b) and its provisions clearly run counter to that objective and as such the enactment which contains such provisions must forfeit the benefit of the protective umbrella of Article 31 C. [908 C D] 4.10 The definition of "industry" in section 23 cannot be read down by the Court so as to confine the same to industries is public sector or co operative sector or the like where benefit to community or public at large would be the sole consideration, so that allotment of excess vacant land acquired under the Act to private entrepreneurs for private purposes which runs counter to the 871 doctrine of eminent domain would be completely eschewed, because Parliament has for the purpose of section (i.e. for purposes of disposal or distribution of such excess vacant land) deliberately and in express terms adopted a very wide definition which includes within its scope not merely trading or manufacturing activity but also any business or profession in private sector and reading down the definition would be doing violence to the Parliament 's intention stated in express terms.
[908 G H, 909A] 4.11 Nor can sub section (1) of section 23 of the Act be read as containing merely an enabling provision; the scheme of sub sections (1) to (4) read together clearly shows that the disposal of excess vacant land is first to be done under sub section (1) and disposal under sub section (4) comes thereafter.
The opening words of sub section (4), "subject to sub sections (1), (2) and (3)" cannot be read as constituting a non obstante clause giving an overriding effect to sub section (4) nor can sub section (4) be read as if the opening words were absent.
By indulging in such interpretative acrobatics, the Court cannot reach the opposite result than is warranted by the plain text of the provision.
Further, to say that every disposal of excess vacant land under sub section (1) must be for 'common good is to read into that sub section something which is not there; it amounts to rewriting that sub section, which cannot be done, the preamble notwithstanding.
Such interpretations require the restructuring of the entire section a function legitimately falling within the domain of legislature.
Moreover, sub sections (1), (2), (3) and (4) of section 23 are integral parts of the whole scheme dealing with the disposal of excess vacant land acquired under the Act and as such cannot be severed from one another.
The attempt to salvage section 23, either wholly or in part, by seeking to free it from the two vices, namely (i) the adoption of the wide definition of "industry" and (ii) the priorities mentioned therein governing the disposal of excess vacant land acquired under the Act, must, therefore.
[909 C G] 5.1 Though the authorisation was for imposition of ceiling on whom immovable property Parliament deliberately kept out built up properties from the purview of the Act and the Act seeks to impose ceiling only on vacant land in urban agglomerations; that being so any restriction on transfer of built up properties or part thereof (including flats therein) standing on urban land falling within the permissible ceiling area would be outside the purview of the Act.
[915 E F] 5.2 Such a provision, as in Section 27 of the Act would not be incidental or ancillary to the ceiling contemplated by the Act and would not fall within the phrase "for matters connected therewith" occurring in the Preamble and the long title of the Act, for the words "matters connected therewith" occurring in the concerned phrase must be correlated to what precedes the phrase, namely, "an Act to provide for ceiling on vacant land in urban agglomerations, for the acquisition of such land in excess of the ceiling limit, to regulate the construction of buildings on such land", and therefore, the words "matters connected therewith" must mean matters in relation to the ceiling imposed by the Act.
A reference to objectives under Article 39(b)(c) 872 (for the achievement of which the enactment is allegedly taken in hand) in the Preamble or long title cannot enlarge the ambit or scope of the Act.
Any restriction imposed on built up properties falling within the permissible ceiling area left with the holder would, therefore, be outside the ambit and scope of the Act.
[914 G H, 915A] 5.3 In the absence of any guidelines for the exercise of the power and in the absence of any standards having been laid down by the Legislature for achieving the objectives of prevention of concentration, speculation and profiteering in urban land and urban property, it cannot be said that there three broad objectives recited in the Preamble could effectively or adequately guide the exercise of power by the competent authority in the matter of granting or refusing to grant the permission under section 27 and is bound to produce arbitrary or discriminatory results.
Further, the provision for appeal under section 33 the Appellate Authority and a revision under section 34 to the State Government would not be of much avail to preventing arbitrariness in the matter of granting of refusing to grant the permission.
Section 27 which does not adequately control the arbitrary exercise of the power to grant or refuse the permission sought, is clearly violative of Article 14 of the Constitution and as such the requirement of permission contained therein is ultra vires and unconstitutional, [915 G H,916A B] Per A.P. Sen, J. (concurring) 1.1 Sub sections (2) and (3) of Section 23 and the opening words subject to the provisions of sub sections (1), (2) and (3) "in section 23(4) of the Urban Land (Ceiling and Regulation) Act, 1976 are ultra vires of the Parliament and these provisions are not protected under Article 31 B and 31 C of the Constitution.
Sub section (1) of section 27 of the Act is invalid in so for as it imposes a restriction of transfer of urban property for a period of ten years from the commencement of the Act, in relation to vacant land or building thereon, within the ceiling limits.
The remaining provisions of the Act, including sub section (4) of section 23 being in conformity with Part IV of the Constitution and Article 31(2) are valid and constitutional.
The Act is in furtherance of the directive principles under Article 39(b) and (c) and has the protection of both Article 31 B and 31 C. [946 B F] 1.2 To strike down the whole Act would be against the national interest.
Unless it becomes clear beyond reasonable doubt that the legislation in question transgresses the limits of the organic law of the Constitution, it must be allowed to stand as the true expression of the national will.
Here, the invalidity of the provisions of sub sections (1) to (3) of section 23 and the opening words "subject to the provisions of sub sections (1), (2) and (3)" in section 23(4) cannot affect the validity of the Act as a whole, in as much as the said provisions are not inextricably bound up with the remaining provisions of the Act.
Further, the legislature would have enacted what survives without enacting the part that is ultra vires.
The Act still remains the Act as it was passed i.e. an Act for imposition of ceiling on urban land [935 D E, 9.6 A B] Attorney General for Alberin vs Attorney General for Canada [1947] AC 505 at 518 quoted with approval.
873 1.3 In determining the effect of law upon the individual 's right to property, the Court must take judicial notice of the fact of vast inequalities in the existing distribution of property in the Country.
The Court 's concern lies not merely with applying the preexisting sets of theories, concepts, principles and criteria with a view to determining what the law is on a particular point.
The proper approach should be to view the principles with the realisation that the ultimate foundation of the Constitution finds its ultimate roots in the authority of the people.
And, constitutional questions should not be deter mined from a doctrinaire approach, but viewed from experience derived from the life and experience or actual working of the community, which takes into account emergence of new facts of the community 's social and economic life affecting property rights of the individual, whenever, among there, the validity of a law prescribing preference or discrimination is in question under the "equal protection" guarantee.
[936 B E] 2.
The artificial definition of family in section 2 (f) of the Act is valid.
As a result of the artificial definition of "family" in section 2(f), a Joint Hindu family is excluded from the purview of section 2 of the Act, but such a total exclusion of Joint Hindu Family does not render the Act void and unconstitutional as violative of Article 14.
Parliament deliberately excluded a joint family from the purview of the section as it was beset with difficulties in imposing a ceiling.
The Act applies to Hindus, Mohammedans and Christians alike.
By the exclusion of a Joint Hindu Family the members of a Joint Hindu family, whether governed by the Mitakshara school or the Dayabhaga school were brought at par with others.
Therefore, there is nothing wrong in the exclusion.
[937E H, 938A, C E] 3.1 The contention that the amount fixed by sub section (6) of section (1) of the impugned Act is totally arbitrary and illusory since there is no nexus between the value of the property and the amount fixed and, therefore, the maximum amount fixed under sub section (6) makes the Act confiscatory in total abrogation of the fundamental right guaranteed under Article 31(2) cannot be accepted.
[938 F A] 3.2 The Constitution (Twenty fifth Amendment) Act, 1971, has placed the matter of adequacy of compensation beyond the pale of controversy by substituting the word " amount" for the word "compensation" in Article 31(2) and made the adequacy of the amount payable for acquisition or requisition of the property nonjusticiable.
When the Court has no power to question the adequacy of the amount under Article 31(2), it cannot be said, that the amount determined according to the principles laid down in sub section (1) subject to the maximum fixed under sub section (6) thereof is illusory merely because of inadequacy.
The legislature in its wisdom has laid down the principles and fixed a ceiling on the maximum amount payable and considers that Rupees Two Lakhs is a fair and just recombines.
That is a legislative judgment and the Court has no power to question it.
[938 G, 939 FG, 942 E F,G] H.H. Kesavananda Bharati vs State of Kerala [1973] Supp.
SCR P.I; R.C. Cooper vs Union of India ; State of Kerala vs Gwalior Rayan 874 Silk Manufacturing Co. ; ; State of Karnataka vs Ranganatha Reddy ; followed.
4.1 Sub sections (1), (2) and (3) of section 23 and the opening words "subject to the provisions of sub sections (1), (2) and (3) in sub section (4) of section 23 are ultra vires of the Parliament [935 B C] 4.2 Apart from the five pillars or the Constitution, namely, Sovereign Democratic Republic, Equality of status and opportunity, Secularism, Citizen s right to worship and the Rule of law , the concept of social and economic justice to build a welfare State , is equally a part of the basic structure or the foundation upon which the Constitution rests.
The provisions of sections 23(1), (2) and (3) and the opening words in sections 23(4) are the very antithesis of the idea of a welfare State based on social and economic justice.
Since these provisions permit acquisition of property under the Act for private purposes, they offend against the Directive Principles of State Policy of Article 39 (b) and (c) and are also violative of Article 31(2) and therefore, not protected under Article 31 B, [934 G H 935 A B] Indira Nehru Gandhi vs Raj Narain, [1976]2SCR 347 relied on H.H. Kesavananda Bharyti vs State of Kerala [1973] Supp.
SCR p.1 explained.
4.3 It is extremely doubtful whether compulsory acquisition of all the excess vacant land in all urban agglomeration throughout the country for a bold, indefinite and unspecified objective like ' industry", simpliciter would be a valid exercise of the power of eminent domain.
[928H 929A] 4.4 Although the impugned Act is enacted with a laudable object to subserve the common good, in furtherance of the Directive Principles of State Policy under Article 39(b) and (c), in terms of sub sections (1), (2) and (3) of section 23 it would be permissible to acquire vacant land in urban agglomerations and divert it for private purposes, the whole emphasis being on industrialisation.
The opening words in section 23 (4) "subject to the provisions of sub section (1), (2) and (3)" make the provisions of section 23(4) subservient to section 23(1), which make it lawful for the allottee that is the industrialist to hold such land in exceess of the ceiling limit.
[928 D F] 4.5 The provisions of sub section(1), (2) and (5) of section 23 cannot be read in the light of the Preamble of the Act or the Directive Principles under Article 39(b) and (c).
[929 B C] When the language of the section is clear and explicit, its meaning cannot be controlled by the Preamble.
It is not for the Court to restructure the section.
The restructuring of a statute is obviously a legislative function.
The matter is essentially of political expediency and as such it is the concern of the statements and, the therefore, the domain of the legislature and not the judiciary.
[929 C E] 875 The use of the words "subject to the provisions of sub sections (1), (2) and (3)" in section 23(4) takes away the compulsion on the State Government to adhere to the Directive Principles under Article 39 (b) and (c) in making allotment of the vacant lands in an urban aggolomereration acquired under the Act.
The words " subject to the provisions of sub sections (1), (2) and (3)" in section 23(4), appearing in the context means " in addition to if anything is left over after the allotment under section 23(1)"[929 F G] A legislation built on the foundation of Article 39(b) and (c) permitting acquisition of private property must be for a Public purpose.
that is to subserve the common good Sub sections (1), (2) and (3) of section 23 of the Act negate that principle.
Furthermore, Article 31(2) consists of three prerequisites, namely, (i) the property shall be acquired by or under a valid law; (ii) it shall be acquired only for a public purpose, and (iii) the person whose property has been acquired shall be given an amount in lieu thereof.
The definition of 'industry ' in Explanation (b) to section 23(1) is wide enough to include any business, trade or vocation carried on for private grain.
There cannot be "mixed purpose of public and private to substain under legislation Article 39(b) and (c) The vice lies in section 23(1) and the Explanation (b) thereto, which on a combined reading, frustrate the he very object of the legislation.
[930 A C] 4.6 The concept of "public purpose" necessarily implies that it should be a law for the acquisition or requisition of property in the interest of the general public, and the purpose of such a law directly and vitally subserves public interest.
If In reality the object of the acquisition under the Act is to set up industries in the private sector as is permissible from the provisions of section 23(1) of the Act, nothing prevents the State from taking recourse to section 40 of the Land Acquisition Act, 1894, for which there must be quid pro quo that is, payment of compensation according to the market value.
[930 F G] 4.7 The guidelines issued by the Government of India, Ministry of Works and Housing clarifying the intent and purpose of the provisions of the Act cannot supersede or alter any of the provisions of the Act or the rules made thereunder.
The Guidelines cannot alter the "priorities" laid in the sections.
The guidelines are nothing but in the nature of Executive Instructions and cannot obviously control the plain meaning of the section.
[930 G H, 932E] Where the language of the Act is clear and explicit, the Courts must give effect to it, whatever may be the consequences for in that case the words of the statute speak the intention of the legislature.
Therefore, the courts cannot be called upon the interpret the provisions of section 23 of the Act in the light of the Guidelines issued by the Government of India, Ministry of Works and Housing.
932 E F] 4.8 The provisions of sub sections (1), (2) and (3) of section 23 and the opening words "subject to the provisions of sub sections (1), (2) and (3) in section 23(4) which makes the setting up of industries the dominent object for 876 the acquisition of vacant land in urban agglomerations under the Act are not in keeping with Part IV of the Constitution and, therefore, not protected under Article 31 C. [932 G H] 4.9 A legislation which directly runs counter to the Directive Principles of State Policy enshrined in Article 39(b) and (c) cannot by the mere inclusion in the Ninth Schedule receive immunity under Article 31 B.
The Directive Principles are not mere homilies.
Though these Directives are not cognizable by the Courts and if the Government of the day fails to carry out these objects no court can make the Government ensure them , yet these principles have been declared to be fundamental to the governance of the country.
In short, the Directives emphasise, in amplification of the Preamble, that the goal of the Indian policy is not laissez faire, but a welfare State, where the State has a positive duty to ensure to its citizens social and economic justice and dignity of the individual.
It would serve as an "Instrument of Instructions" upon all future governments, irrespective of their party creeds.
933A B, E F] 5.1 The provisions of sub section ( 1) of section 27 of the Act is invalid in so far as it seek to affect a citizen 's right to dispose of his urban property in an urban agglomeration within the ceiling limits.
[946 B C] 5.2 The right to acquire, hold and dispose of property guaranteed to a citizen under Article 19(1)(f) carries with it the right not to hold any property.
As such a, citizen cannot be compelled to own property against his will [945 G H] There is no justification at all for the freezing of transactions by way of sale, mortgage, gift or lease of vacant land or building for a period exceeding ten years or otherwise for a period of ten years from the date of the commencement of the Act, even though such vacant land with or without building thereon falls within the ceiling limits.
[945 E F] If vacant land owned by a person falls within the ceiling limits for an urban agglomeration he is outside the purview of section 3 of the Act.
That being so, such a person is not governed by any of the provisions of the Act.
[946A] Excel Wear vs Union of India and Ors. ; relied on.
|
ivil Appeal No. 3551 of 1979.
the Judgment and Order dated 20/21.8.1979 of the Gujarat High Court in C.R. Appln.
No. 1218 of 1977.
293 Dr. Shankar Ghosh, P.H. Parekh and Ayesh Misra for the Appellant.
T.U. Mehta, R.C. Bhatia and P.C. Kapur for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
Whether the appellant herein and his father had sublet the premises in question in or about 1960 in terms of section 13(1)(e) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter called the 'Rent Act ') is ' the question involved in this appeal by special leave from the judgment and order of the High Court of Gujarat dated 21st of August, 1979.
In order to decide this question, it is necessary to decide the scope and ambit of section 29(2) of the Rent Act.
To decide this, facts must be referred to.
The appellant claimed to be the tenant in respect of the two premises which are quite adjacent to each other, one of which is involved in this appeal.
The respondent is the landlord of the two premises and these were situated at Raikhad Ward, Ahmedabad.
The respondent had alleged in the two suits that the appellant was his tenant in the suit premises which were leased out to him and before him his father, for conducting the business in the name of Ahmedabad Fine & Weaving Works and according to the terms of tenancy suit premises were leased for manufacturing cloth in the name of Ahmedabad Fine & Weaving Works.
The respondent had further alleged that the appellant No. 1 had closed the business and he was not using the said premises for the purpose for which it was let to him.
It was the case of the appellant that in respect of the suit premises he was carry ing on his business with respondents Nos. 2, 4 and 5 in the name of respondent No. 2, M/s. Bharat Neon Signs (hereinaf ter referred to as respondent No. 2).
We are concerned in this appeal with only one of the premises which was involved in Suit No. 553 of 1969.
It is not in dispute and it never was that the premises was being used by Bharat Neon Signs firm being the defendant No. 2 in the original suit.
At the time of the institution of the suit the defendants Nos. 2 to 5 were admittedly the part ners.
The present appellant who was the original defendant No. 1 claimed to be a partner.
The main controversy was whether the appellant had sublet the premises to defendant No. 2, Bharat Neon Signs or 294 whether he being a partner of the said firm had permitted the said firm to use the premises in question.
It is clear from the evidence on record that the partnership firm had undergone metamorphosis from time to time and again ever since the year 1960.
The firm Bharat Neon Signs first origi nated on 4th of October, 1960.
As many as six persons were named in the partnership firm, on or about 4th of October, 1960 and they had executed a deed of partnership on 13th of October, 1960 which is Exhibit 114 on the record.
The said partnership deed records six persons who were to run the business in manufacturing and selling Bharat Neon Signs tubes.
However, the document is silent as to where the business was started.
On or about 24th of October, 1960 another partnership deed being Exhibit 69 came to be execut ed among the six persons and the father of the appellant Girdharlal.
The document is Exhibit 69 and is signed by the father of the appellant and the appellant himself also.
It may be mentioned that the partnership deed Exhibit 114 was executed by six persons and at that stage the appellant or his father were not partners in the firm.
But thereafter when the partnership deed Exhibit 69 was executed the appel lant and his father joined the firm with an agreement to share profits only and their share was fixed at 0.03 paise in a rupee.
There is a third partnership deed Exhibit 70 which showed that the deceased tenant Girdharlal had died on 1st of February, 1961 and so by the remaining seven partners with same terms and conditions, a new partnership deed being Exhibit 70 was executed on 22nd September, 1961.
At this time the share of the appellant was fixed at 0.03 paise in a rupee to share the profits only.
In 1965 some partners retired and the remaining four partners executed a fresh partnership deed Exhibit 117 on 1st April, 1965.
This last partnership deed was executed by the appellant and original defendants Nos. 3, 4 and 5.
The main question in issue in this appeal as well as before the High Court in revision was whether there was a genuine partnership at the appellant was a partner.
It is true that since after 4th of October, 1960 the partnership firm was carrying on business in the premises in question.
It is well settled that if there was such a partnership firm of which the appellant was a partner as a tenant the same would not amount to subletting leading to the forfeiture of the tenan cy.
For this proposition see the decision of the Gujarat High Court in the case of Mehta Jagjivan Vanechand vs Doshi Vanechand Harakhchand and others, A.I.R. 1972 Gujarat 6.
Thakkar, J. of the Gujarat High Court, as the learned Judge then was, held that the mere fact that a tenant entered into a partnership and allowed the premises being used for the benefit of partnership does not constitute assign 295 ment or subletting in favour of the partnership firm enti tling a landlord to recover possession.
This view is now concluded by the decision of this Court in Madras Bangalore Transport Co. (West) vs Inder Singh and others, The trial court in the instant appeal held that there was subletting.
It accordingly decreed the suit for posses sion instituted by the landlord.
The suit, inter alia, was filed by the landlord on the ground of subletting.
There was an appeal before the Court of Small Causes, Bombay and by judgment and order delivered by the Court of Small Causes, Bombay on 18th of August, 1977, it was held that the learned Trial Judge had erred in passing a decree for possession on the ground of subletting, change of user and breach of terms of tenancy.
In the premises, the appeal was allowed.
It may be mentioned that the respondent No. 1 is the landlord of two premises which were quite adjacent as mentioned before.
The respondent plaintiff had alleged in both the suits that the appellant was his tenant in the suit premises which were leased to him for conducting his business in the name of Ahmedabad Fine & Weaving Works, and according to the terms of tenancy suit, the suit premises were leased for manufac turing cloth in the name of Ahmedabad Fine & Weaving Works.
The landlord had alleged that the appellant had closed that business and he was not using the premises in question for the purpose for which it was let to him.
It was further alleged by the landlord that the appellant had unlawfully sublet the major part of the premises in question of both the suits to defendant Nos. 2 to 5 in the original suit and these defendants were running business in partnership for manufacturing of neon signs in the name of Bharat Neon Signs.
It was further alleged that the appellant had also unlawfully sublet one room of the suit premises to defendant No. 6 in Suit No. 553 of 1969 who was residing in that room.
For the purpose of the Suit No. 553 of 1969 with which the appeal is concerned, it is relevant to state that the appel lant had raised the contention that Ahmedabad Fine & Weaving Works was not the tenant of the suit premies but the suit premises was tenanted by the father of the appellant Gird harlal Chimalal in 1938 and he was the original tenant of the premises and appellant subsequently joined the business of his father as a partner and the name of the partnership firm was Ahmedabad Fine Weaving Works.
He has stated further that the suit premises were to be used for business and he could use it for any business and he joined in partnership with Defendants Nos.
2 to 5 somewhere in 1961 to prepare neon signs and the defendants Nos. 2 to 5 were his partners and doing business in the suit premises.
He contended fur ther that the suit premises was with him and the 296 defendants Nos. 2 to 5 had not acquired any tenancy rights in the suit premises.
It is further stated that he had filed a civil suit to dissolve the partnership and to take account and his suit was pending in City Civil Court.
It may be mentioned that by the time the revision petition came to be decided by the High Court the suit had been decreed in his favour directing a dissolution of the said partnership and directing taking of the accounts.
There was an appeal filed from that decree and that appeal was also dismissed and disposed of affirming the decree for the dissolution of the partnership, inter se between the parties being the partners of the said firm.
These facts were accepted that there was a partnership.
As mentioned hereinbefore the learned trial Judge consolidated both the suits and in the instant suit being No. 553 of 1969 with which this appeal is concerned, it was held by the learned trial Judge that there was unlaw ful subletting.
There was a decree for possession.
This was set aside in appeal.
The Appellate Court so far as the material for the present appeal is concerned held that there was no subletting and there was only carrying on of the business in partnership with defendants Nos.
2 to 5 in the name of Bharat Neon Signs.
Therefore, the first question that had to be decided by the Appellate Court being the Court of Small Causes, Bombay and if a revision lay before the High court was whether there was any genuine partnership.
The partnership deeds were there, the appellant was not to share in the losses.
The Court of Small Causes came to the conclusion on an analysis of the evidence before it and the terms of the three partnership deeds referred to hereinbefore that there was a genuine partnership in law which was acted upon.
The High Court in revision reversed that finding.
The first question therefore, is, whether the High Court could do so in the facts of this case and second ly whether the High Court was right in so doing.
Whether there was a partnership or not may in certain cases be a mixed question of law and fact, in the sense that whether the ingredients of partnership as embodied in the law of partnership were there in.a particular case or not must be judged in the light of the principles applicable to partnership.
The first question, therefore, is what is a partnership? That has to be found in section 4 of the , it says "Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all" (Emphasis supplied).
Section 6 of the said Act reiterates that in determining whether a group of persons is or is not a firm, or whether a person is or is not a partner in a firm, 297 regard shall be had to the real relation between the par ties, as shown by all relevant facts taken together.
The following important elements must be there in order to establish partnership, (1) there must be an agreement en tered into by all parties concerned, (2) the agreement must be to share profits of business; and (3) the business must be carried on by all or any of the persons concerned acting for all.
The partnership deeds were there entitling the petitioner to share in the partnership.
It is true that in the partnership deeds the bank accounts were not to be operated by the appellant, and further that irrespective of the profit the clause of the partnership deed provided that there should be a fixed percentage of profit to be given to the partner appellant No. 1.
The appellant was not to share the losses.
But there is nothing illegal about it.
The appellant was to bring his asset being the tenancy of the premises in question for the user of the partnership.
All these tests were borne in mind by the Court of Small Causes, Bombay in the appeal from the decision of the learned trial Judge.
The Appellate Court had considered the partnership deeds.
One point was emphasised by Mr. Mehta, learned coun sel appearing for the respondents, that the original first partnership deed did not mention the appellant or his father as a partner.
It was in the second partnership deed that the appellant and his father joined the firm.
The firm started as emphasised by Mr. Mehta on 4th of October, 1960 and it was only on the 24th of October, 1960 the second partnership deed was executed.
Therefore, it was emphasised that there was a gap of time when there was user by the partnership firm of the premises in question when the appellant was not a member of the firm.
It was emphasised that this aspect was not considered by the Court of Small Causes and the High Court, therefore, was justified in interfering with the findings of the Court of Small Causes.
We are unable to agree.
These deeds were there, the partners were cross examined, there was no specific evidence as to from what date the firm started functioning from the particular prem ises in question.
Secondly, it was emphasised by Mr. Mehta that the partnership deed was a camouflage.
It is evident from the sales tax registration and other registration certificates and licences under the Shops and Establishments Act that the partnership was registered in the name of the appellant and the appellant was also indicated as a partner.
It was so in the Income Tax returns and assessments.
There fore, it was submitted that the Court of Small Causes com mitted an error of law resulting in miscarriage of justice.
It was submitted by Mr. Mehta that once it was accepted that the partnership deed was a mere camouflage the other subse quent acts and conducts were merely ancillary and were put in a formal way.
But the question is from the three deeds itself which were examined in detail by the Court 298 of Small Causes and which were re examined by the High Court could it be said unequivocally that there was no partner ship.
The deeds gave the appellant the right to share the profits and made him agent for certain limited purposes of the firm and there was evidence that the partnership deeds were acted upon.
There was evidence of suit of dissolution of the partnership where none of the partners took the plea that it was a false or a fictitious document.
Though the decree in the dissolution suit was not binding in these proceedings, inter se between the parties as partners it is a piece of evidence which cannot be wholly ignored.
All these factors were present before the Court of Small Causes.
These were reappraised by the High Court.
One point was emphasised by Mr. Mehta that in the partnership deed which is not necessary to recite the terms, the petitioner was completely excluded in operating the bank accounts etc.
There is nothing inherently illegal or improbable making a provision of such a type.
In the eye of law, such a clause is really non sequitur or neutral proving neither the exist ence nor non existence of a genuine firm.
The first partnership deed which is Exhibit 114 is dated 13th October, 1960.
It recited that the partnership firm should be presently started at Ahmedabad and the same should later be started in another city.
In this the appellant was not a partner.
Exhibit 69 at page 136 of Volume II of the paper book is a partnership deed wherein Girdharlal the father of the Appellant No. 1 and the appellant No. 1 joined as partners.
It recited that the partnership started from 4th of October, 1960 at Ahmedabad.
It was registered in the name of 7th and 8th partners, Girdharlal who was the appel lant and his father.
It was recited that the work of the partnership would be done by the parties of the fourth, fifth, sixth, seventh and eighth as per advice and instruc tions of the first, second and third.
All the work had been done by some of the partners of which appellants were not parties and that they had to do the said work as per in structions of the other partners.
Clauses 6 and 7 of the said partnership deed recited inter alia as follows: "6.
The year of accounts of our partnership shall be Aso Vadi 30th day i.e. Diwali and the first account year is decided to be the Aso Vadi 30th day of Samvat Year 2017.
While settling accounts at the close of the year, 33% amount from the sum which may remain as net profit after deducting all expenditures, viz interest, discount, rent of the shop, rent of the godown, insurance, brokerage, travelling, tele grams, postage, salaries of employees, etc.
shall 299 be carried to Reserve Fund and thereafter, in the sum that remains as net profit, the shares of us the partners have been fixed as under: Rs. Np.
Ratanlal Jivabhai.
0 16 2.
Manubhai Lalbhai.
0 16 3.
Keshavlal Mulchand.
0 05 4.
Kantilal Bhogilal.
0 10 5.
Virchand Keshavji.
0 23 6.
Satyapal Jeshal.
0 24 7.
Girdharlal Chimanlal.
0 03 8.
Helper Girdharlal.
0 03 0 100 i.e. Re. 1/ 7.
While settling accounts at the close of the year, if the sum less than Rs. 1500 falls to the 0 03 shares of the partners of the seventh and eighth parts, the amount falling short has to be debited towards the head of expenditure and Rs. 1500 (fifteen hundred only) have to be paid in full to each of them two, and in those circumstances or if there be loss, the parties of the seventh or eighth parts have not been held liable therefore; and in the year or ' losses, it has been decided to pay Rs. 1500 (fifteen hundred only) to each of them, after debiting the same towards the head of expenditure and in the year of losses nothing has to be carried to the 'Reserve Fund ' and the loss has to be borne by us to parties first to sixth parts in the following proportion: 1.
Ratanlal Jivabhai 0 17 2.
Manubhai Lalbhai 0 17 3.
Keshavlal Mulchand 0 05 4.
Kantilal Bhogilal 0 11 5.
Virchand Keshavji 0 25 6.
Satyapal Jeshal 0 25 0 100 i.e. Re. 1/ 300 Clause 8 empowered the operating of the bank accounts by partners other than the appellant and his father.
We find intrinsically nothing improbable.
It is embodied in the deeds the functioning of the partnership.
The third partner ship which is dated 22nd of September, 1961 also indicates as parties of sixth part the name of the appellant.
The relevant portion of the partnership deed reads as follows: "To wit, the parties of the first to sixth parts out of us, deceased Khristi Girdharbhai Chimanlal and Shah Virchand Keshavji had jointly started the business of manufacturing and selling Neon Signs Tubes, in partnership in Ahmedabad from 4.10.1960, in the name and style of Bharat Neon Signs.
However, on account of the death of Khristi Girdharbhai Chimanlal on 1.2.61 and other reasons, the said partnership was dissolved from 8.9.61.
Thereafter, we the parties from the first to seventh part have, after purchasing at its cost price, all the debts and dues, goods, stock etc., together with goodwill of the dissolved partnership, started manufac turing and selling of Neon Signs Tubes in partnership from 9.9.61.
We, the parties of all the seven parts execute the deed of the said partnership to day i.e. 22.9.61.
The terms and conditions thereof are as under: (1) The entire work of our partnership has to be carried out in the name of "Bharat Neon Signs.
" (2) The work to be carried out by our partnership is of manufacturing and selling Neon Signs Tubes and of obtaining orders therefore.
(3) Whatever moneys that may be required to be invested in our partnership, are to be invested by the parties of the first, second, third, fourth and seventh parts out of us and the interest at the rate of 71/2 per cent per annum has to be paid for the moneys that may be invested in this partnership.
" We are of the opinion that these were evidence that these terms were acted upon.
There was nothing intrinsically wrong in law in constituting a partnership in the manner it was done.
It was contended by Mr. Mehta that there was no agency; reading the partnership deeds as we have read that conclusion does not emanate from position 301 appearing debiting the fixed amount payable to the appellant in the expenses account which also is not inconsistent with partnership.
This is also not inconsistent with treating the rent of the firm in the context of the total expenditure of the firm.
In any event all these factors were considered by the Court of Small Causes bearing in mind the correct legal principles.
The High Court on a reappraisal of these very evidence came to the conclusion that the partnerships were camouflages and were not acted upon and in fact and in reality the partnership firm was a sub tenant of the appel lant herein.
The question is, can the High Court do so in law.
The power of the High Court to revise the order is contained in section 29(2) of the Bombay Rent Act as applicable at the relevant time to Gujarat, The said provision reads as fol lows: "29(2) no further appeal shall lie against any decision in appeal under sub section (1) but the High Court may, for the purpose of satisfying itself that any such decision in appeal was according to law, call for the case in which such decision was taken and pass such order with respect thereto as it thinks fit.
" The ambit and power of revision generally and in particular with respect to the provisions with which we are concerned have from time to time come up for consideration by this Court.
This Court in Hari Shankar vs Rao Girdhari Lal Chowd hury; , had to consider section 35(1) of the Delhi & Ajmer Rent Corntrol Act, 1952.
The said section reads as follows: "35(1) The High Court may, at any time, call for the record of any case under this Act for the purpose of satisfying itself that a decision made therein is according to law and may pass such order in relation thereto as it thinks fit.
" It was held in the majority judgment by HidayatuIIah, J. as the learned Chief Justice then was, that though section 35 of the Delhi and Ajmer Rent Control Act was worded in general terms but it did not create a right to have the case re heard.
This Court emphasised that the distinction between an appeal and revision is a real one.
A right to appeal carries with it right of re heating on law as well as fact, unless the statute conferring the right to appeal limits the re hearing in some 302 way.
The power to hear a revision is generally given to a superior court so that it may satisfy itself that a particu lar case is decided according to law.
The expression "ac cording to law" in section 35 of the said Act referred to the decision as a whole, and was not to be equated to errors of law or of fact simpliciter.
This Court was of the view that what the High Court could see is that there has been no miscarriage of justice and that the decision was according to law in the sense mentioned.
Kapur, J. who delivered a separate judgment, however, observed that the power under section 35(1) of the said Act of interference by the High Court is not restricted to a proper trial according to law or error in regard to onus of proof or proper opportunity of being heard.
It is very much wider than that, when in the opinion of the High Court the decision is erroneous on the question of law which affects the merits of the case or decision was manifestly unjust the High Court is entitled to interfere.
The revisional authority could ensure that there was no miscarriage of justice and the principles of law have been correctly borne in mind, the facts had been properly comprehended in that light.
If that was done in a particular case then the fact that the revisional authority or the High Court might have arrived to a different conclusion is irrel evant.
This view had also been expressed in the decision of this Court in Puranchand vs Motilal, [1963] Supp. 2 S.C.R. 906.
This principle was reiterated in Krishnawati vs Hans Raj, ; which was dealing with section 39(2) of the Delhi Rent Control Act, 1958 in second appeal.
It was observed that under section 39(2) of the said Act, the High Court could interfere in second appeal only if there was a substantial question of law.
In that case, the question whether the appellant was legally married no find ing was necessary in the eviction suit.
It was sufficient for the rent court to proceed on the finding that the appel lant and S were living together as husband and wife, whether they were legally married or not.
It was further held that whether there was subletting was not a mixed question of law and fact.
In Phiroze Bamanji Desai vs Chandrakant M. Patel & Ors., ; the question involved was whether there was reasonable and bona fide requirement of premises for personal use and occupation as also the question of greater hardship under the Bombay Rent Act and the ambit and scope of the power of Section 29(3) of the said Act with which we are concerned came up for consideration.
Bhagwati, J. as the learned Chief Justice then was, referred with approval the observations of Hidayatullah, J. referred to hereinbefore in Hari Shankar 's case (supra).
Bhagwati, J. observed that the ambit of section 35(1) of the Delhi & Ajmer Rent Control Act which fell for consideration in Hari Shanker 's case (supra) was the same as section 29(3) of the Bombay Rent Act and therefore, he expressed the opinion that the 303 High Court could interfere only if there was miscarriage of justice due to mistake of law.
We must take note of a decision in the case of M/s Kasturbhai Ramchand Panchal & Brothers and Others vs Firm of Mohanlal Nathubhai and Others, , upon which the High Court had placed great reliance in the judg ment under appeal.
There the learned judge relying on sec tion 29(2) of the said Act held that the revisional power with which the High Court was vested under section 29(2) was not merely in the nature of jurisdictional control.
It extended to corrections of all errors which would make the decision contrary to law.
The legislature, the learned Judge, felt, further empowered High Court in its revisional jurisdiction to pass such order with respect thereto as it thought fit.
The power according to the learned Judge was of the widest amplitude to pass such orders as the Court thought fit in order to do complete justice.
He dealt with the human problem under section 13(2) of Bombay Rent Act considering the relative hardships of the landlord and the tenant and to arrive at a just solution he was of the opin ion that the court should have such wide field.
The juris diction of High Court is to correct all errors of law going to the root of the decision which would, in such cases, include even perverse findings of facts, perverse in the sense that no reasonable person, acting judicially and properly instructed in the relevant law could arrive at such a finding on the evidence on the record.
In this view in our opinion the ambit of the power was expressed in rather wide amplitude.
As we read the power, the High Court must ensure that the principles of law have been correctly borne in mind.
Secondly, the facts have been properly appreciated and a decision arrived at taking all material and relevant facts in mind.
It must be such a decision which no reasonable man could have arrived at.
Lastly, such a decision does not lead to a miscarriage of justice.
We must, however, guard our selves against permitting in the guise of revision substitu tion of one view where two views are possible and the Court of Small Causes has taken a particular view.
If a possible view has been taken, the High Court would be exceeding its jurisdiction to substitute its own view with that the courts below because it considers it to be a better view.
The fact that the High Court would have taken a different view is wholly irrelevant.
Judged by that standard, we are of the opinion that the High Court in this case had exceeded its jurisdiction.
In the case of Punamchandra Revashankar Joshi vs Ramjib hai Maganlal, Gujarat Law Reporter (1966) at page 807, the Gujarat High Court after dealing with the Gujarat Amendment Act (XVIII) of 1965 304 observed that the Legislature has not intended to equate the ambit of the power with the one exercised in an appeal.
The authority vested in the High Court under the amendment still remained only in the domain of the jurisdiction and power of revision and no further.
The amending provision, therefore, only related to procedure and not to any rights of the parties.
This Court in the case of Bhai Chand Ratanshi vs Laxmis hanker Tribhavan, [1982] 1 Rent Control Journal 242 observed that where lower courts applied their minds properly in deciding a matter under section 13(2) of the Bombay Rent Act, the High Court could not substitute its own finding for the one reached by the courts below, on a reappraisal of evidence under section 29(2) of the Act as substituted by the Gujarat Act 18 of 1965.
This Court reiterated that although the High Court had wider power than that which could be exercised under section 115 of C.P.C., yet its revisional power could only be exercised for a limited purpose with a view to satisfying itself that the decision was according to law.
The High Court could not substitute its own finding for the one reached by the courts below on a reappraisal of evidence.
In the instant case the basic question is whether keep ing in background the partnership deeds referred to herein before and the facts that came to light, was there partner ship or not.
Sharing of profits and contributing to losses were not the only elements in a partnership, existence of agency was essential and whether there was a partnership or not is a mixed question of law and fact, depending upon the varying circumstances in different cases.
This view was reiterated by Chief Justice Beaumont, in Chimanram Motilal and another vs Jayantilal Chhaganlal and another, A.I.R. 1939 Bombay 410.
Ramaswami, J. in Mohammed Musa Sahib (dead) and others vs N.K. Mohammed Ghouse Sahib and another, A.I.R. 1959 Madras 379 observed that whether the relation of part nership between two or more persons does or does not exit must depend on the real intention and contract of the par ties and not merely on their expressed intention.
He also referred to section 4 of the Partnership Act about the principles of partnership namely, (1) there must be agree ment entered into by all the persons concerned; (2) the agreement must be to share the profits of a business; and (3) the business must be carried on by all or any of the persons concerned acting for all.
In the instant case judged by the aforesaid principles, it is possible to hold that there was a partnership of which the appellant was a part ner.
The Court of Small Causes considered these principles, evaluated the evidence and held that there was in fact and in law a partnership.
Such a view was not an impossible one or a perverse one.
305 If that was so, there was nothing that could be clone about such a view, within the ambit and scope of the power of section 29(2) of the Rent Act.
We may mention that in Gunda lapalli Rangamannar Chetty vs Desu Rangiah and others, A.I.R. 1954 Madras 182, Subba Rao, J. as the learned Chief Justice then was, held that there cannot be a subletting, unless the lessee parted with legal possession.
The mere fact that another is allowed to use the premises while the lessee retains the legal possession is not enough to create a sub lease.
In the light of the aforesaid principles and the facts that have emerged, we are of the opinion that the High Court exceeded its jurisdiction under section 29(2) of the Rent Act.
We are further of the opinion that the Court of Small Causes was right in the view it took and it was a possible view to take.
In the result the appeal is allowed and the judgment and order of the Gujarat High Court dated 21st of August, 1979 are set aside.
The order and judgment of the Court of Small Causes Ahmedabad dated 18th of August, 1977 are restored.
The suit for possession is accordingly dis missed.
The appellant herein is entitled to the costs throughout.
P.S.S. Appeal allowed.
| Sub section (2) of section 29 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, as it stood at the relevant time, barred further appeal against any decision in appeal under sub section
(1), and instead conferred revisionary powers on the High Court in such a case.
The appellant tenant was a partner in firm 'A ' which was carrying on business of manufacturing cloth in the suit premises.
That business was closed on October 4, 1960 and a new firm 'B ' came into being to run the business in manufac turing and selling neon sign tubes.
On October 13, 1960 a partnership deed was executed by six persons as partners of the new firm.
The document was silent as to where the busi ness was started.
On or about October 24, 1960 another partnership deed was executed by these six persons and the appellant and his father with an agreement to share only profits to the extent of 3 paise in a rupee.
After the death of the appellant on February 1, 1961 a new partnership deed was executed by the remaining seven partners with the same terms and conditions.
The respondent landlord filed eviction suits against the appellant defendant alleging that the premises which were leased to the appellant for manufacturing cloth in the name of firm 'A ' had been unlawfully sublet in major part to defendants 2 to 5 who were running business in partnership for manufacturing neon signs.
The appellant contended that firm 'A ' was not the tenant of the suit premises, that his father was the original tenant with whom he had joined in business as a partner in firm 'A ', that the suit premises were to be used for business and he 290 could use it for any business, that he had joined firm 'B ' in partnership, that the suit premises was with him and defendants 2105 had not acquired any tenancy rights in the suit premises, and that lie had filed a civil suit to dis solve the partnership, and to take account which was later decreed in his favour and affirmed in appeal.
The trial court held that there was unlawful subletting, and decreed the suit for possession.
The appellate court, Court of Small Causes, found that the appellant was only carrying on the business in partnership with defendants 2 to 5 in the name of firm 'B ' in the suit premises, and held that there was no subletting, change of user, and breach of terms of tenancy.
The High Court in revision on a reapprais al of evidence took the view that the partnership was a camouflage and was never acted upon, and in fact and in reality the partnership firm was a sub tenant of the appel lant.
In the appeal by special leave it was contended for the appellant that there was a genuine partnership which was acted upon and this finding of the appellate court could not have been reversed by the High Court in revision under section 29(2) of the Act.
For the respondents it was contended that the original first partnership deed did not mention that the appellant or his father was a partner, that it was in the second partnership deed that the appellant and his father joined the firm, that there was a gap of time when there was user by the partnership firm of the premises in question when the appellant was not a member of the firm, which fact was not considered by the appellate court, and that the partnership deed was a camouflage.
Allowing the appeal, HELD: 1.
The High Court exceeded its jurisdiction under section 29(2) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 in reversing the view of the appellate court.
[305BC] 2.1 The distinction between an appeal and revision is a real one.
A right to appeal carries with it a right of re hearing on law as well as fact, unless the statute confer ring the right to appeal limits the re hearing in some way.
The power to hear a revision is generally given to a superi or court to ensure that the principles of law have been correctly borne in mind, that the facts have been properly appreciated and a decision arrived at taking all material and relevant facts in mind, that the decision is such which a reasonable man could have arrived at and which does not lead to a miscarriage of justice.
[301H 302A; 303EF] 291 2.2 The Court must guard itself against permitting in the guise of revision substitution of one view where two views are possible and the appellate court has taken a particular view.
If a possible view has been taken, the High Court would be exceeding its jurisdiction to substitute its own view with that of the courts below because it considers it to be a better law.
The fact that the High Court would have taken a different view is wholly irrelevant.
Whether there was a partnership or not is a mixed question of law and fact, depending upon the varying circumstances in dif ferent cases.
[303FG; 304E] Hari Shankar vs Rao Girdhari Lal Chowdhiry, ; ; Puranchand vs Motilal, [1963] Suppl.
2 SCR 906; Krishnawati vs Hans Rai, ; ; Phiroze Bamanji Desai vs Chandrakant M. Patel & Ors., ; ; Bhai Chand Ratanshi vs Laxmishankar Tribhavan, [1982] 1 Rent Control Journal 242; M/s Kasturbhai Ramchand Panchal & Brothers and Others vs Firm of Mohanlal Nathubhai and Oth ers, and Punamchandra Revashankar Joshi vs Ramjibhai Maganlal.
7 Gujarat Law Reporter (1966) at page 807, referred to.
In the instant case, the 'Court of Small Causes consid ered the principles of law, evaluated the evidence and held that there was in fact and in law a partnership.
Such a view was not an impossible one or a perverse one.
Therefore, there was nothing that could be done about such a view within the ambit and scope of the revisional powers under section 29(2) of the Act and the High Court could not have substi tuted its own finding for the one reached by the appellate court.
[404H 305A; 304D] 3.
Whether the ingredients of partnership as embodied in the law of partnership were there or not in a particular case must be judged in the fight of principles applicable to partnership, that is (1) there must be an agreement entered into by all the persons concerned, (2) the agreement must be to share the profits of a business, and (3) the business must be carried ou by all or any of the persons concerned acting for all.
Sharing of profits and contributing to losses are not the only elements in a partnership, existence of agency is essential.
[296FG; 304G; 304E] Chimanram Motilal and Another vs Jayantilal Chhaganlal and another, AIR 1939 Bombay 410 and Mohammed Musa Sahib (dead) and Others vs N.K. Mohammed Ghouse Sahib and Another, , referred to.
In the instant case, judged by these principles it could not be said 292 unequivocally that there was no partnership.
The partnership deeds gave the appellant the right to share the profits ' and made him an agent for certain limited purposes of the firm and there was evidence that the partnership deeds were acted upon.
It is true that the bank accounts were not to be operated by the appellant, that he was to be given a fixed percentage of profit irrespective of profit and that he was not to share the losses.
There is nothing inherently illegal or improper in making provision of such a type.
In the eyes of law such a claim is really non sequitur or neutral prov ing neither the existence nor non existence of a genuine firm.
The appellant was to bring in his asset being the tenancy of the premises in question for the user of the partnership.
Debiting the fixed amount payable to the appel lant in the expenses account is also not inconsistent with partnership.
This is also not inconsistent with treating the rent of the firm in the context of the total expenditure of the firm.
There was evidence of a suit of dissolution of the partnership where none of the partners took the plea that it was a false or a fictitious document.
Though the decree in the dissolution suit was not binding in these proceedings inter se between the parties as partners, it is a piece of evidence which cannot be wholly ignored.
All these factors were present before the appellate court.
These were reap praised by the High Court.
[304G; 298A; 297B; 298C; 297C; 301A; 298B] 4.
The partnership firm was carrying on business in the premises in question since October 4, 1961.
If there was such a partnership firm of which the appellant was a partner as a tenant the same would not amount to subletting leading to forfeiture of the tenancy, for there cannot be a sublet ting, unless the lessee parted with the legal possession.
The mere fact that another person is allowed to use the premises while the lessee retains the legal possession is not enough to create a sublease.
[294FG; 305B] Madras Bangalore Transport Co. (West) vs Inder Singh and others, ; Mehta Jagjivan Vanechand vs Doshi Vanechand Harakhchand and others, (AIR 1972 Gujarat 6) and Gundalapalii Rangamannar Chetty vs Desu Rangiah and others, (AIR 1954 Madras 182), referred to.
|
Civil Appeal No. 1148 of 1975.
Appeal by special leave from the judgment and order dated the 2 12 1974 of the Andhra Pradesh High Court in writ petition No. 2250 of 1973.
327 M. C. Bhandare and Miss A. Subhashini for the appellant.
P. Ram Reddy and P. P. Rao for the respondent.
The Judgment of the Court was delivered by FAZAL ALI, J.
This is an appeal special leave against the judgment of the Andhra Pradesh High Court dated December 2, 1974 and arises under the following circumstances.
Itikala Kollayya and his brother in law Kovvuru Narasimhaiah constituted partnership firm dealing in foodgrains.
The firm carried on the business in the name and style of "Kovvuru Narasimhaiah and Ktikala Kollayya".
The firm, however, stood dissolved in 1963.
The firm appears to have been in serious financial difficulties and incurred debts to the tune of about Rs. 70,000/ .
The creditors filed an insolvency petition but the petition was ultimately dismissed because it was held that the firm had no means to discharge the debts.
Subsequently the business was started in the name of B. V. section Rao son of Bala Seshaiah.
After the death of Itikala Kollayya his son Bala Seshaiah and his son B. V. section Rao carried on joint Hindu family business.
In fact B. V. section Rao applied on May 8, 1966 for a certificate of registration to the Sales Tax Department of the State and was given the same.
B. V. section Rao who was a minor had applied for the certificate through his guardian Bala Seshaiah.
Thereafter the Sales Tax Department continued to make assessments in the name of B. V. section Rao.
Thus for the years 1966 67, 1967 68 and 1968 69 the provisional assessments were made in the name of B. V. section Rao the minor.
It is not disputed that during all these years the business was run in the name of B. V. section Rao the minor grandson of Kollayya.
There are also materials on the record to show that B. V. section Rao had informed the Sales Tax Department that the business was in fact carried on by the Joint Hindu family and yet no assessment was made in the name of the Joint Hindu family until 1971.
It is true that the High Court has held that B. V. section Rao was merely a benamidar for Kollayya who was the real proprietor of the firm and therefore the real dealer would be Kollayya and not B. V. section Rao.
The High Court also relied on the circumstance that KollayYa did not appear before the Sales Tax Department in obedience to the notices issued to him and therefore the High Court thought it was too late in the day for Kollayya to contend that he was not a dealer within the meaning of the Andhra Pradesh General Sales Tax Act.
Mr. Ram Reddy learned counsel for the respondent did not support this part of the reasoning of the High Court because the Sales Tax Department having itself issued the certificate of registration to B. V. section Rao and having recognised him as a dealer could not make a somersault and start assessing tax in the name of Kollayya who was not at all a registered dealer.
Furthermore, it would appear that B. V. section Rao had himself informed the Sales Tax Department that his business had come to an end and that the business was carried on by his grandfather and yet the Sales Tax Department did not choose to cancel the registration of B. V. section Rao or to issue fresh notice to Kollayya.
In these circumstances the ball was in the court of the Sales Tax Department which appears to have taken delayed action in the matter for assessing Kollayya as the manager of the 328 joint Hindu family for the first time in 1971.
Mr. Ram Reddy confined his arguments only to the question that in view of the circumstances of the case Kollayya must be deemed to have knowledge as the karta of the joint Hindu family that he had earned sales tag liability and from this alone an inference was sought to be raised that the trust was a fraudulent transaction.
We are, however, unable to press this inference too far in view of the reasons which we shall give hereafter.
It appears that on May 26, 1969 B. V. section Rao informed the Sales Tax Department that he had stopped the business with effect from August 1, 1968 and despite this fact the Sales Tax Department went on making assessment orders in the name of B. V. section Rao.
Further on January 17, 1968 the Deputy Commercial Tag officer while makeing the assessment order had stated that the business was being carried on as joint family business by Bala Seshaiah the father of B. V. section Rao.
It appears that on September 16, 1968 Itikala Kollayya and Kovvuru Narasimhaiah, i.e. the partners of the dissolved firm, executed a registered deed of trust by which the properties mentioned in Schedule 'B ' were vested in the trustees for the purpose of paying off the creditors who were named in Schedule 'A ' of the trust deed.
Thirteen persons were named in Schedule 'A '.
According to the assessees the creditors mentioned in Schedule 'A ' had obtained decrees against the settlors and it was for the purpose of discharging the previous debts of those creditors that the trust was executed.
Subsequently it appears that the assessments were made against the joint Hindu family on January 18, 19 and 24, 1971 and penalties were also imposed on the assessees for not paying the sales tax.
The sales tax authorities, therefore, made the assessment in the name of the joint Hindu family for the first time on January 18, 1971 and prior to that the assessments were made in the name of the minor B. V. section Rao.
The Sales Tax Department having found that the assessees had constituted a trust in respect of the properties and as the amounts could not be realised from the assessees notices were issued on the petitioners who were the trustees for payment of the amounts due under the various assessments made by the Sales Tax Department on the joint Hindu family.
The Sales Tax Department was of the view that the deed of trust dated September 16, 1968 was void and fraudulent and was brought about to defeat the debts of the Sales Tax Department in the shape of the assessments made against the joint Hindu family whose business was carried on by its karta Bala Seshaiah.
Demand notices under section 17(1) of the Andhra Pradesh General Sales Tax Act were served on the petitioners who filed a writ petition before the Andhra Pradesh High Court for quashing the notices, on the basis of which the amounts were sought to be recovered.
The High Court held that the deed of trust was fraudulent and had been executed to defeat the Sales Tax Department of its dues and the petitioners were, therefore, trustees of an invalid trust and being in possession of the properties held the same on behalf of the debtor assessees who were liable to pay the amounts.
On this finding the writ petition was dismissed by the High Court.
The petitioners moved the High Court for granting certificate of fitness for leave to appeal to this Court which having been 329 refused they obtained special leave from this Court and hence this appeal.
It is true that the Sales Tax Department as also the High Court have held in a very summary fashion that the trust deed was void and fraudulent and, therefore, it could be ignored by the Sales Tax Department.
Normally this should have been a finding of fact which could have settled the matter beyond any controversy.
But on a perusal of the facts and circumstances of the case we find that the real point of law which arose on the admitted facts does not appear to have been considered either by the sales tax authorities or even by the High Court.
Merely because the joint Hindu family had earned liability to pay sales tax it had been inferred by the High Court as also by the sales tax authorities that the registered deed of trust executed on September 16, 1968, about three years before the actual assessments were made in the name of the joint Hindu family was a colourable transaction.
Learned counsel for the appellants Mr. M. C. Bhandare submitted that the petitioners were merely trustees who were to discharge the debts of the creditors mentioned in Sch. 'A '.
The moment the trust deed was executed by Kollayya and Narasimhaiah the title to those properties vested in the trustees and thus put beyond the reach of the Sales Tax Department.
It cannot be said in the circumstances that the trustees were holding the properties either on account of or on behalf of the joint Hindu family, because they had acquired an independent title under the trust.
In our opinion, the contention put forward by the learned counsel for the appellants is sound and must prevail.
The learned counsel appearing for the respondent, however, submitted that the mere fact that the members of the joint Hindu family were aware that they had incurred the sales tax liability because they were dealers in foodgrains and had conducted a number of sales was sufficient to show that the trust deed was fraudulent and unlawful.
It was also submitted that under section 17(1) of the Andhra Pradesh General Sales Tax Act, the sales tax authorities could realise the sales tax dues even from the trustees and the execution of the trust deed would not stand in the way of the recoveries sought to be made against the petitioners.
We would first consider the question as to the nature of the trust deed executed by the settlors.
It is not disputed that the trust deed was a registered instrument and came into existence three years before the actual assessments were made in favour of the joint Hindu family.
Furthermore it is clearly stipulated in the trust deed that the object of the trust was to discharge the debts of the previous creditors of the settlors who had obtained decrees from the Courts.
The names of those creditors are mentioned in Schedule 'A ' arid there is no material before us to show that the creditors mentioned in Schedule 'A ' are fictitious persons.
It is true that in the cow of the trust deed printed in the paper book the names of the creditors are not mentioned but from the certified copy of the original trust deed it appears that the names are there which constitute of the following persons: 1.
Narendrakumar Manoharlal & Co. 2.
Devraj Dhanumal.
330 3.
Dhupaji Phoolchand.
Bhubutmal Chandumal.
Bhubutmal Bhoormal.
Kesarmal Mancharlal.
Taraohand Santilal.
Manrupji Nathumall.
Pokhraj Kantilal.
Pratapchand Kundanmal.
Ambapuram Bachu Pedda Subbiah & Sons.
Meda Krishnayya.
T. Nagalakshmidevamma Minor by guardian husband T. Sanjeeva Rao.
It is well settled that it is open to the settlors to create a trust for discharging the debts of their creditors.
Such an object cannot be said to be unlawful.
Section 4 of the , runs thus: "4.
A trust may be created for any lawful purpose.
The purpose of a trust is lawful unless it is (a) forbidden by law, or (b) is of such a nature that, if permitted, it would defeat the provisions of any law, or (c) is fraudulent, or (d) involves or implies injury to the person or property of another, or (e) the Court regards it as immoral or opposed to public policy.
* * * * *" The. Object of the trust is neither forbidden by law, nor does it defeat any legal provision, nor it can be said to be fraudulent ex facie.
In these circumstances.
the view taken by the High Court or the Sales Tax authorities that the trust executed in favour of the petitioners was fraudulent or unlawful cannot be accepted.
The other question raised by Mr. Ram Reddy learned counsel for the respondent was that the trust is hit by section 53 of the , the relevant portion of which runs thus: "53(1) Every transfer of immovable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed." Before analysing the ingredients of the section mentioned above, it may be necessary to state the admitted facts: (1) that at the time when the trust was executed no assessment order against the joint Hindu family which was managed by one of the executants of the trust had been passed.
Thus there was no real debt due from one of the executants of the trust at the time when the trust was executed; 331 (2) that the trust did not have for its object any unlawful purpose; (3) that the names of the creditors were clearly mention ed in Schedule 'A ' of the trust as also the properties some of which had already been sold to liquidate debts of the settlors; (4) that under the trust the executants did not reserve any advantage or benefit for themselves; and (5) there is no material in the present case to show that the creditors mentioned in Schedule 'A ' had obtained collusive decrees or that they were aware of the debts owed by one of the executants to the Sales Tax Department before the execution of the trust deed.
In the facts and circumstances of this appeal therefore it cannot be said that the trust deed was executed to defraud the creditors namely the Sales Tax Department.
Under section 53 of the a person who challenges the validity `of the transaction must prove two facts (1) that a document was executed by the settlor; and (2) that the said document was executed with clear intention to defraud or delay the creditors.
How the intention is proved would be a matter which would largely depend on the facts and circumstances of each case.
It is well settled that the mere fact that a debtor.
chooses to prefer one creditor to the other, either because of the priority of the debt or otherwise, by itself cannot lead to the irresistible inference that the intention was to defeat the other creditors.
In Musahar Sahu and another vs Hakim Lal and Anr.(l) where the Privy Council observed as follows: "The transfer which defeats or delays creditors is not an instrument which prefers one creditor to another, but an instrument which removes property from the creditors to the benefit of the debtor.
The debtor must not retain a benefit for himself.
He may pay one creditor and leave another unpaid: Middleton vs Pollock (1876)2 Ch.
D. l04, l08.
So soon as it is found that the transfer here impeached was ` made for adequate consideration in satisfaction of genuine debts, and without reservation of any benefit to the debtor ` it follows that no ground for impeaching it lies in the fact that the plaintiff.
who also was a creditor was a loser by payment being make to this preferred creditor there being in the case no question of bankruptcy.
" This decision was endorsed by the Privy Council in Ma Pwa May and another vs section R. M. M. A. Chettiar Firm(2) where the Judicial Committee observed as follows: "A debtor is entitled to prefer a creditor, unless the transaction can be challenged in bankruptcy, and such a pre ference cannot in itself impeached as falling within section 53.
" (1) L.R. 43 I.A. 104.
(2) A.l.R. , 281.
332 The learned counsel for the appellants relied on a decision of the Gujarat High Court in Sampatraj Chhogalalji and others vs V. 5.
Patel, Sales Tax officer, and others(l) where a Division Bench of the High Court observed as follows : "The effect of the assignment is to create a valid title in the trustees and a valid and enforceable trust for the benefit of the creditors as soon as the deed has been executed and the creditors have assented to it.
It is thus clear under the said deed of arrangement, the petitioners as trustees became the legal owners of the properties assigned " to them, holding the trust premises upon trust to collect them in the first instance and after selling them to distribute the sale proceeds thereof rateably amongst the various creditors, a list of whom was annexed to Schedule II to the deed of arrangement.
It follows, therefore, that the trustees were not holding the sale proceeds which they deposited with the said bank in a separate account in their names as agents of the said firms or any one of them, nor were they the transferees of or successors to those businesses.
* * * * * It is also not possible to say that the bank '.
I) was a person from whom any amount of money was due ' to any one of the aforesaid firms who were the dealers in respect of the arrears of tax.
That being the position, the very first condition necessary for the application of section 39 is totally wanting in this case.
" The facts of the present case appear to be on all fours with the facts in the Gujarat case cited above.
The High Court clearly held that the fact of the assignment was to create a valid title in the trustees and once the title passed to the trustees on the registration of the trust deed, the trustees could not be said to hold the properties which vested in them either on behalf or on account of the settlors.
Mr. Ram Reddy relied on section 17(1) of the Andhra Pradesh General Sales Tax Act which runs thus: "17.
(1) The assessing authority, may at any time or from time to time, by notice in writing (a copy of which shall be forwarded to the dealer at his last address known to the assessing authority) require any person from whom money is due or may become due to the dealer, or any person who holds or may subsequently hold money for, or on account of the dealer, to pay to the assessing authority either forthwith if the money has become due or is so held within the time specified in the notice (but not before the money becomes due or is held) so much of the money as is sufficient to pay the amount due by the dealer in respect of arrears of tax, penalty or fee or the whole of the money when it is equal to or less than that amount.
" Particular reliance was placed on the words underlined in the section in order to contend that even if the trust was a valid document the (1) 17 S.T.C. 29, 34.
333 trustees would be deemed by virtue of section 17 to hold the money for A or on account of the dealer.
This contention is clearly negatived by the decision of the Gujarat High Court in Sampatrai Chhogaiaiji 's case (supra) which we have cited above and which, in our opinion, lays down the correct law on the subject.
It is obvious that the object of section 17 of the Andhra Pradesh General Sales Tax Act is to follow up the money due to the Sales Tax Department in the hands of either the assessee or any person who may be holding the money on behalf .
of the assessee.
The section, however, does not empower the Sales Tax Department to follow the money in the hands of a bona fide f transferee from the assessee even before the dues have accrued.
There 1 can be no doubt that the Sales Tax Authorities had the power to determine in a summary fashion as to whether or not the petitioners , were holding the monies on behalf of the assessee, but the enquiry would be limited to this question only and cannot be projected further.
Where a transfer is made by the assessee after the assessment order has been passed against him in favour of persons who are either relatives or friends of the assessee and the said transfer prima facie appears to be colourable or fraudulent, it is open to the Sales Tax Department to ignore such a transaction and proceed against the transferee on the basis that the transaction is a sham one and no section `title has in fact passed under the transfer.
But this is quite different from proceeding against a transferee who has acquired an independent title under the transfer even before the assessment is made against . the transferor.
The Sales Tax Authorities under section 17 of the Andhra Pradesh General Sales Tax Act can only determine the jurisdictional facts and cannot proceed beyond that.
In Katikara Chintamani Dora & Os.
vs Guntreddi Annamnaidu & Ors(1) it was ruled by this Court that a Tribunal possesses the power to determine a jurisdictional fact which gives the jurisdiction or empowers the Tribunal to try a certain issue.
This, however, does not empower the Tribunal to be a judg in its own cause and determine or decide complicated questions of title.
In the special and peculiar facts of the present case which have been catalogued above, in our opinion, this is not a fit case In which the sales tax authorities can be allowed to hold that the deed of trust executed by the settlors was hit by section 53 of the .
It may be noted that under section 53 of the if a transfer is made with intent to defeat or delay the creditors it is not void but only voidable.
If the transfer is voidable, then the ' sales tax authorities cannot ignore or disregard it but have to get it set aside through a properly constituted suit after impleading necessary parties and praying for the desired relief.
In Chutterput Singh & ors.
vs Maharaj Bahadoor and others,(2) the Privy Council observed as follows: "No issue was stated in this suit whether the transfers were or were not liable to be set aside at the instance of Dhunput under section 53 of the Transfer for Property Act, and no decree has been made for setting them aside.
Such an (1) ; (2) L.R. 32 I.A. 1.
7 L522SCI/76 334 issue could be raised and such a decree could be made only in a suit properly constituted either as to parties or other wise.
" To the same effect is the later decision of the Privy Council in Safer Hasan and others vs Farid Ud Din and others,(l) where Lord Thankerton made the following observations: "Further, under section 53 the wakfnama would only be voidable at the option of the "person so defrauded or delayed".
Until so voided the deed remains valid.
" Lastly it was contended by counsel for the respondent that the liability of the appellant arose as early as 1966 67 and the Trust Deed came into existence on September 16, 1968.
This being the case, it was stressed that Itikala Kollayya and the trustees could not be unaware of the tax liability or the amount due at that time when the trust deed was executed.
This tax liability was the first charge on the property and its sale proceeds.
Therefore, the creation of the deed and subsequent sale of the property on January 10, 1971, for liquidation of the supposed debts of the trustees and other creditors was merely a device to evade the payment of arrears of sales tax due to the Government.
Our attention has been invited in this connection v to the order dated November 13, 1972, of the Deputy Commercial Tax officer.
The contention is devoid of force.
As rightly pointed out by Mr. Bhandare, when the impugned notice dated July 20, 1970, was issued to M/s. Uma Traders with copy to Itikala Kollayya Setty by the respondent, the tax had not been quantified; the assessments.
were made subsequently.
So long as the tax had not been assessed and qualified, it could not be said that any specific debt due to the Revenue from the assessee had come into existence.
The question of such a non existent debt, being a first charge on the property at the date of the execution of the trust deed, did not arise.
The contention of the respondent on this scone is, therefore, overruled.
In this view of the matter, we feel that it cannot be said in the present case that the trust deed executed by the settlors is prima facie fraudulent or a colourable transaction.
It will, however, be open to the Sales Tax Authorities to avoid the document by bringing a properly constituted suit, if so advised.
We could also like to make it clear .
that any observation regarding the validity of the document that has l been made in this case by us will be confined only to the materials that have been placed before us and will not prejudice the merits of either party in a suitable action which may be brought.
For these reasons the appeal is allowed, the judgment of the High Court is set aside and the notices issued by the respondent against the appellants are hereby quashed.
We would ,however, direct that the sum of Rs. 31,100/ which has been deposited by the appellants in Union Bank.
Kurnool, under the directions of this Court, would not be refunded to the appellants before the expiry of three months from to day 's date.
In the circumstances of this case, we make no order as to costs in this Court.
P.H.P. Appeal allowed.
(I) A.I.R.1946 P.C. 177.
| The appellant was an erstwhile member of the Indian Administrative Service in the cadre of the State of orissa.
At the relevant time in the year 1967, he was serving as Commissioner of Land Reforms, orissa.
According to the appellant he had disputes, differences and animosity with respondent No. 1, the Chief Secretary to the Government of orissa and respondent No. 2 who was at the relevant time Director of Vigilance and Additional Secretary to the Government of orissa.
The First Information Report was lodged against the appellant under section S(2) of the Prevention of Corruption Act, 1947, on 24 11 1967.
The appellant 's house was searched on 27 11 1967.
An order of suspension was made against the appellant by the Government of orissa on 28 11 1967 under rule 7(3) of the All India Services (Discipline and Appeal) Rules, 1955.
The Writ Petition filed by the appellant against his order of suspension and investigation was dismissed by the High Court in limine.
This Court allowed an appeal filed by special leave by the appellant against the High Court judgment and directed the High Court to admit and dispose of the petition in accordance with law.
The State Government approached the Central Government to accord sanction for prosecution of the appellant.
In spite of reminders, the Central Government neither accorded the sanction nor refused it.
Appellant was compulsorily retired by the Government in 1971.
Thereafter, charge sheet was submitted against him in the Court of the Special Judge, Sambalpur.
The trial concluded but because of the stay order passed by this Court judgment could not be delivered.
Against the order of the compulsory retirement, the appellant filed a writ petition in the Delhi High Court which was dismissed by a learned single Judge and against which a Letters Patent appeal is pending.
The orissa High Court dismissed the writ petition of the appellant on the ground of it having become infructuous since the appellant was no longer in suspension since he was compulsorily retired.
The High Court also did not think it necessary to examine the legality of the investigation against the appellant as chargesheet had already been submitted.
In an appeal by special leave the appellant contended: The suspension order may be quashed on the following grounds: (1) It was passed without following the various Governmental instructions on the point.
(2) The order was in violation of rule 7(3).
(3) The order was malafide.
^ HELD: (1) It is true that all the instructions contained in the circulars issued by the Central Government do not seem to have been strictly followed.
That would, however, not invalidate or nullify the order of suspension made under rule 7(3).
In dealing with the cases of high officers of the Administrative Service care ought to have been taken to follow the instructions as far as possible.
On the facts of the present case.
however.
failure to follow the instructions fully, does not render the order of suspension per se invalid.
[353GH] (2) Under rule 7(3) a member of the Service in respect of or against whom an investigation, enquiry or trial relating to a criminal charge is ponding, may at the discretion of the Government be Placed under suspension.
The 351 expression investigation, enquiry and trial are well known in the realm of the A criminal law under the Criminal Procedure Code.
In the present case, the First Information Report was lodged and the search warrants were issued before the suspension orders were passed.
Most of the allegations against the appellant were in relation to his alleged acts of corruption and misuse of his official position.
Whether the allegations are true or false is irrelevant.
Order under rule 7(3) was, therefore, legal and valid.
[354A E] (3) The suspension order came to an end by the compulsory retirement of the appellant.
After retirement from service he could no longer be deemed to be under suspension.
Since we are remitting the case back to the High Court we permit the appellant to raise the question of his salary and emoluments during the suspension period to be raised in the High Court.
The counsel for the appellant, however, assured this Court that if the appellant would be exonerated of the charges levelled against him and acquitted in the criminal proceedings the State Government would pay him his full pay and allowances for the period of suspension.
[354G H, 355B C] (4) We do not think it advisable to decide the point of malafide in the absence of the judgment in the criminal cases.
Since the two matters are so interwoven and interconnected that it would be expedient for the High Court to decide this issue after the judgment is delivered in the criminal trial.
[3 55D E]
|
Appeal No. 459 of 1958.
Appeal by special leave from the judgment and decree dated June 29,1955, of the former Andhra High Court in Second Appeal No. 730 of 1949.
A.V. Viswanatha Sastri and 'P. V., R. Tatachari, for the appellants.
K. Bhimasankaram and G. Gopalakrishanan, for the respondents.
September 29.
The judgment of Wanchoo, Das Gupta and Shah, JJ., was delivered Wanchoo, J., Dayal J. delivered a separate 912 WANCHOO, J. This is an appeal by special leave from the judgment and decree of the Madras High Court.
The appellants were defendants in a suit brought by the respondents for possession of certain properties which originally belonged to one Subbarayudu.
The case of the respondents was that Subbarayudu executed a will dated September 15, 1885.
Under that will the property passed on hit; death to his wife with life interest and after her death absolutely to his daughter Krishnavenamma who was in enjoyment thereof till her death in 1933.
The daughter executed a will on March 24, 1933, in favaur of her step son Nagaraju who came into possession of the property on her death soon after.
Nagaraju in his turn executed a will on August 16, 1933, by which he gave life interest to his wife who was the first plaintiff (now the first respondent before us) and thereafter the property was bequeathed absolutely to his daughters.
The second respondent is the tenant of the first respondent.
Nagaraju died soon after executing the will and the case of the first respondent was that she came into possession of the property on his death and was in enjoyment thereof till she was forcibly ejected in 1943 by the appellants who claimed to be the purchasers of the property from Seetaramayya and Ramakotayya who in their turn claimed to be the reversioners of Subbarayudu.
Consequently, the suit out of which the present appeal has arisen was filed in June, 1944, for possession and mesne profits.
The suit was resisted by the appellants, and their case was that they had purchased the property from the reversioners of Subbarayudu in 1942.
It was further contended on their behalf that on the death of Krishnavenamma the reversioners came into possession of the property through the tenants who had been in possession from before under a lease granted to them by Krishnavenamma.
These tenants remained in possession till the sale deed in favour of the appellants and attorned to the 913 appellants thereafter.
Later the two tenants surrendered possession to the appellants who thus came into actual possession of the property in suit.
The appellants also contended that the so called will executed by Subbarayudu was a forgery and the first respondent had no title to the property.
On these pleadings, the main point that arose for decision was whether the first respondent had title to the property and was in possession of it till she was dispossessed in 1943.
Further the title set up by the appellants was also gone into and their claim as to possession came up for consideration.
The trial court found that the will said to have been executed by Subbarmyudu was not proved.
In consequence of this finding, it came to the conclusion that the title of the first respondent which depended upon the proof of this will was not a legal title.
Further it found that it was not established that Seetaramayya and Ramakotayya were the next reversioners to the estate of Subbarayudu.
The result of these findings was that no title was found in either party.
These findings have been upheld by the Subordinate Judge and also by the High Court in second appeal and therefore it must now be accepted that both the parties have no title to the property in suit.
The main contest therefore centred round possessory title which was also asserted by both the parties in the trial court.
On this question the trial court found that after the death of Krishnavenamma, the name of the first respondent was entered in the revenue papers in her place but the property was actually in possession of the two tenants by virtue of the lease executed in their favour by Krishnavenamma in 1929 for six years.
Therefore, there was a kind of race between respondent No. I and Seetaramayya and Ramakotayya who set themselves up as reversioners to obtain the favour of these two tenants, and the so.
called reversioners managed to obtain in June, 1933, a kadapa from the two tenants for five years 914 ending with May, 1938.
They also executed a cowle in favour of the tenant,% and both these documents were registered in July, 1933.
But the finding of the trial court was that there was no payment of rents in the years 1933 'and 1934 and that the real fight for the land started towards the end of 1935 or the beginning of 1936 and although documents were taken from the tenants by the so called reversioners no actual payment of rent was made to them.
It also held that in this game of winning the favour of the tenants the real gainers were the tenants who paid no rent to either the first respondent or the so called reversioners.
The trial court further held that it was in 1936 that the first respondent managed to dispossess the tenants forcibly through her tenant Moka Subbarao who seems to have been a person of some influence in the village.
Thereafter the first respondent remained in possession through her tenant till she was dispossessed in November, 1943, forcibly by the present appellants after they had purchased the lands from the go called reversioners.
In effect, therefore.
the finding of the trial court was that neither party was in Possession.
of the property up to 1936 and it was only in 1936 that the first respondent came into possession through Moka Subbarao by dispossessing the tenants who were holding the land from the time of Krishnavenamma and had paid no rent to anybody after her death In consequence the trial court hold that as the possession of the first respondent was earlier she was entitled to succeed at least on the ground of possessory title.
Incidentally it also held that although the title of the first respondent was defective for the reason that Krishnavenamma did not have absolute right in the property it was not :void but was only voidable at the instance of the nearest reversioner or some one else having better title, which the appellants or their predecessors in interest did not have.
In the result the suit was decreed with mesne profits.
915 This was followed by an appeal to the Subordinate Judge by the present appellants.
We have already said that the Subordinate Judge upheld the findings of the trial court on the title of the parties and came to the conclusion that the title of neither party was proved.
He also rejected the view of the trial court that the first respondent at any rate had some title though defective it might be.
He then addressed himself to the question of possessory title and considered whether the finding of the trial court that the first respondent was in possession ' earlier than the appellants and was therefore entitled to recover possession on the basis of her.
possessory title, was correct.
He. came to the conclusion that the so called reversioners had got possession of the property peacefully immediately after the reversion opened.
in 1933 and therefore the appellants were entitled to maintain their possession as they derived their title from the so called reversioners who had earlier possession than the first respondent.
In coming to this conclusion the Subordinate Judge relied on the Kadapa executed by the tenants in favour of the so called reversioners in June, 1933, and the cowle executed by the so called reversioners in favour of the tenants.
But the Subordinate Judge did not consider the further question which was considered by the trial court,.
namely, whether after the execution of the Kadapa and the cowle the so called reversioners.
ever collected rents from the tenants who were there from the time of Krishnavenamma between 1933 and 1936.
This question had been specifically considered by the trial court and it had come to the conclusion that though the kadapa and the cowle had been executed they were mere paper transactions and the so called reversioners had never collected rents during this period and the tenants had never paid the rent to anybody during this period.
The Subordinate Judge, however, allowed the appeal and dismissed the 916 suit on the view taken by him that the so called reversioners had come into possession of the property after the death of Krishnavenamma end were forcibly ejected in 1936 by Moka Subbarao as the tenant of the first respondent.
This was followed by a second appeal by the respondents.
The High Court took the view that the finding of the Subordinate Judge that the so called reversioners were in possession from 1933 to 1936, could not be accepted.
According to the High Court, the main question was whether the tenants who were there from before really attorned to the reversioners.
The High Court then went into some of the evidence and held that various matters which should have received the attention of the Subordinate Judge in coming to a conclusion on this important point of fact were not considered by him; therefore it was not prepared to accept the finding of the Subordinate Judge in second appeal and required the Subordinate Judge to submit a fresh finding on this question.
When the ' matter went back to the Subordinate Judge he examined the entire evidence and came to the conclusion that the so called reversioners in order to create evidence of possession had taken the kadapa from the tenants after winning them over to their side, perhaps by a promise not to collect rent from them.
He also came to the conclusion that the so called reversioners were not in possession of the property after the death of Krishnavenamma from 1933 to 1936 and that it appeared that during that period neither party was in possession and only 'the tenants who were there from the time of Krishnavenamma continued to being possession but without paying rent to anybody.
He further held that in the circumstances the possession of the tenants could only 'be treated as that of the rightful owner which neither party was in this case.
Finally he came to the conclusion that it was for the first time in 1936 that Moka Subbarao took possession of the 917 land as the tenant of the first respondent and the appellants got possession for the first time in 1943.
Therefore he held that as the first respondent 's possession was earlier it must be restored.
This finding was accepted by the High Court with the result that the second appeal was allowed and the order of the trial court restored.
The appellants have come to this Court by special leave.
The main contention urged before us on behalf of the appellants is that the High Court had no jurisdiction in second appeal to reverse the finding of fact arrived at by the first appeal court as to possession, and inasmuch as the High Court indirectly reversed that finding by calling for a further finding on the question of possession, the judgment of the High Court should be set aside as without jurisdiction.
On the other hand it has been urged on behalf of the respondents that though the first order of the High Court calling for a finding looks as if it was interfering with a finding of fact as to possession, a close examination of the circumstances and the findings of the trial court and the first appellate court will show that in fact there was no finding by the first appellate court on the crucial question which arose in the suit resting on possessory title and therefore the High Court was justified in calling for a finding in the matter.
It is urged that where the case is based on possessory title only, a party must establish effective possession before it can succeed on its possessory title.
On the question of effective possession the trial court had found that though there was a kadapa by which, it may be said, the tenants who were there from before had attorned to the so called reversioners, that was a mere paper transaction and the tenants never paid rents to the so called reversioners; as such,the reversioners never had effective possession between 1933 and 1936.
According to the respondents, this finding of the trial court should have been specifically considered by the Subordinate 918 Judge; but all that 'the Subordinate Judge did 'was" to rely on the kadapa and hold on the basis of that document that the so called reversioners had come into possession peacefully.
It is said that whatever may be said about the value of attornment: made in favour of the true owner the position.
is different where attornment is in favour of a person who is not the true owner.
In such case before the person in whose favour an attornment has been made, can establish that , his possession was effective it must also be shown that he was paid rent by the tenants who attorned to him.
Therefore, it is urged that, as there was no finding by the Suboridnate Judge on this crucial question the, High Court was justified in sending the case back to the Subordinate Judge for a finding in this regard.
As such, it is urged that this is not a case where the High Court had reversed, a finding of fact by the first appellate court which it is admitted it has no jurisdiction to 'do; but it is a case where there was no finding on the crucial question of fact by the Subordinate Judge and the High Court therefore hid jurisdiction to call for a finding in this regard.
We are of opinion that though on a first reading of the High Court judgment calling for,a finding it does look as if the High Court was reversing the finding of fact as to possession ' when it called for a further finding on the question, a closer examination of its Judgment calling for a finding along with the findings by the Munsif and the Subordinate Judge on the crucial question involved in this case shows that it held that there was no 'finding by the Subordinate Judge on that crucial question,, though the trial court had given a finding in favour of the first respondent in that respecter, As both parties were relying on possessory title, it was necessary that they should prove effective possession over the, property in order to succeed on the basis of possessory title.
By effective possession we mean either ' actual possession or 919 possession through a tenant who must have paid rent voluntarily or under a decree to the person claiming possessory title.
The kadaps by the previously existing tenants in favour of the so called reversioners all along been treated as an attornment by all the three courts and we therefore accept it as such.
If the so called reversioners Third title in the sense that they were the next reversioners, then attornment by the kadapa would have been sufficient to establish their possession over the property; but where the person in whose favour the attornment bad been made has no title,, a mere paper attornment would not be enough to establish as against third parties the possession of the person in whose favour attornment has been made and it will still have to be shown that the possession.
was effective in, the sense that the person who attorned also paid rent voluntarily or under a , decree to the person in whose favour he made the attornment.
The fact that, the tenants who had executed the kadapa may be estopped from challenging the title of the so cAlled reversioners, if a suit was brought Against them makes no difference to the position stated above.
The finding of the Munsif was that no rent had been paid to anyone by the tenants; further no suit had, been brought by the so called reversioners, to recover the rent before the first respondent got into possession.
The kadaps therefore remained a mere paper transaction and attornment through it would not be sufficient to put the so called reversioners in effective possession and confer possessory title on them which could be taken advantage of by the appellants to show earlier possessory title as against the undoubted Possessory title of the first respondent from 1936.
It seems to us that, that is what the High Court meant when it said that the crucial question in this case was "whether the tenants really attorned to the reversioners".
We emphasise the word "really" Which shows that the High Court was not satisfied With mere paper attornment which was all 920 that was found by the Subordinate Judge and rightly required in a case based on possessory title only that the attornment should be a real attornment, i. e., one in which the person attorning should also have paid rent either voluntarily or under a decree to the person in whose favour the attornment was made.
The Subordinate Judge, however, had merely considered the paper attornment and had not considered the evidence as to payment of rent, which was, there and which had been considered by the trial court.
The trial court had come to the conclusion after considering the evidence relating to payment of rent that in fact there was no payment though the attornment was made through the kadapa.
The trial court therefore held that from 1933 to 1936, only the tenants were in possession but they never paid rent to anybody and thus neither party was in possession through them.
This aspect of the finding of the trial court was completely overlooked by the Subordinate Judge who decided the question of possession merely on the paper attornment (namely, the kadapa).
What the High Court seems to have meant when it said that the real question was not properly considered by the Subordinate Judge therefore was that he was merely satisfied with paper attornment in a case based on possessory title which was not enough in law and had not given any finding as, to whether the attornment was a reality in the sense that the rent was paid and would thus result in effective possession of the so called reversioners through the tenants.
It seems to us therefore that though the form in which the High Court expressed itself when it called for a finding was not happy, what the High Court really did was to hold that there was no finding by the Subordinate Judge on the question of effective possession of the so called reversioners after a consideration of the evidence relating to payment of rent etc.; it therefore called for a finding on the question of effective, possession after 921 consideration of the entire evidence.
This in our opinion the High Court was justified in doing because the trial court had considered the entire ,evidence and had come to the conclusion that the so called reversioners had no effective possession and the attornment through the kadaps was a mere paper transaction.
In these circumstances it cannot be said that the High Court had no jurisdiction to call for a finding.
It is not disputed that if the High Court had jurisdiction to call for a finding the final order of the.
High Court allowing the appeal based on the finding which was submitted was not open to question.
We therefore dismiss the appeal but in the circumstances pass no order as to costs of this Court.
RAGHUBAR DAYAL, J.
I agree that the appeal be dismissed, but for different reasons.
If Narasimhulu and Ramudu alias Mark, who were in possession of the land in suit under the lease, exhibit P 6, dated May 6, 1929, for six years from Josyula Krishnavenamma, had attorned to Ramakotiah and Seetharamiah by executing the Kadapa (Kabuliat) exhibit D 4, on March 16, 1933, I do not think that any further payment of rent was necessary to make the attornment effective and am of opinion that in that case the view of the learned Subordinate Judge to the effect that the predecessors in interest of the defendants appellants were in possession through their tenants over the land in suit, Was correct.
The High Court did not decide by its first order remitting the point No. 2, viz., ,whether the plaintiffs got into possession of the suit properties earlier than the defendants and their predecessor in title and whether they are entitled to recover possession of the suit properties on the strength of their Possessory title ' for a fresh finding that the attornment by the execution of the deed of Kadapa was not good attornment without the executants paying rent to Ramakotiah and Seetharamiah.
The learned Judge simply said: 922 "Apart from 'the question whether the principle of law adopted by the learned.
Judge is welf founded or not, on which I express no opinion at present it seems to me that the finding of the learned Judge that,, the first defendant bad prior, possession from 193 to 1936 cannot be accepted in second appeal" The finding about the prior possession, of the learned Subordinate Judge was not accepted by the High Court because it considered that the Subordinate Judge bad not closely scrutinized the evidence in the case on the very crucial question in issue between the parties.
This crucial question was formulated as 'whether the tenants really attorned to the reversgioners and the reversioners recognized the possession of the tenants as theirs. ' What was want by the High Court from this question, is not clear to me.
If the execution of the deed, exhibit D 4, amounted to the attornment by the tenants in favour of Seetharamiah and Ramakotiah, who claimed to be the heirs of Krishnavenamma, and the execution of the cowle, exhibit D 5, by those two persons in favour of the tenants, to the recognition of the tenants as their tenants, no further question of scrutiny of any other evidence on record could have arisen.
The other evidence on record about which the High Court expressed its opinion, and that too not in a final form, as a fresh finding was being called on the basis of that evidence, mainly consisted of the evidence in favour of the defendant,%.
Non consideration of that evidence could have been a grievance to the defendants, but not to the plaintiffs appellants before the High Court.
Expression of opinion in that form on such evidence wag detrimental to the interest of the defendant in a fresh 'consideration of that evidence by the Subordinate Judge, who,, naturally, in his fresh finding, followed a practically similar line of criticism against "that evidence.
The mere fact that certain evidence had not been closely scrutinized or, in other orders, not scrutinized, in & manner, in which the second 923 appellate Court desires, it to be scrutinized, cannot be round for interference with the finding of fact in the second appeal.
If the High Court considered, is being now urged for the respondent, that without proof of the tenants actually paying rent to,, Seetharamiah and Ramakotiah, who laid claim as heirs but have been proved to be not heirs of Rat Krishnavenamma, there was no valid attornment, the order for a fresh finding about attornment could be justified on the ground that the Subordinate Judge had not referred to the evidence having a hearing on the question of the payment of rent by the tenants and its receipt by the new landlords Seetharamiah and Ramakotiah.
I however find it difficult to put such a construction on the High Court 's order when it did not decide upon the principle of law adopted by the first appellate Court.
"Attornment, in its strict sense, is an agreement of the tenant to a grant of the reversion made by the landlord to another, or, as it has been defined ', 'the act of the tenants putting one person in the place of another as his landlord" see paragraph 732, Foa 's General Law of Landlord and Tenant.
This means that in the first instance attornment is made in favour of the person who has derived his title or supposed ' title from the Original landlord.
It implies a continuity of the tenancy created by the original landlord in favour of the tenant.
It is in these circumstances that the existing tenant, for the rest of the period of his Tenancy, agrees to acknowledge the new landlord as his landlord.
Such an agreement of the tenant amounts to attornment and by such an attornment the tenant by his act substitutes the new landlord in place of the previous one.
Such attornment is complete the moment the tenant agrees to acknowledge the new landlord to be his landlord.
Any future payment or non payment of rent does not affect the relationship created by the attornment.
The new landlord will have his remedies with respect to the rents falling in arrears.
924 Again, it is stated in paragraph 745 at page 475 : "With regard to the title of person from whom the possession was not obtained, but who has been recognised as landlord by the tenant, such recognition may be by express agreement, by attornment, or other formal acknowledgment (as by paying a nominal sum of money), by payment of rent, or of a. nominal sum as rent, or by submission to a distress.
" The attornment is here described as one mode of recognising a person as one 's landlord, just as payment of rent is another mode for the purpose.
Expression to similar effect is to be found in paragraphs 746, and also 747 where it is further noted : "But the tenant is not allowed to impeach the title of a person to whom he has paid rent, or whose title he has otherwise recognised, without showing a better title in some other person.
Thus he cannot, after attorning to a person who derives his title under a will, contend merely that upon a true construction o f the will he had no title; nor can he, after paving him rent, dispute his title merely on the ground that the devise to him was void, owing to the incapacity of the testator.
" In krisna Proshad Lal Singha Deo vs Baraboni Coal Concern (1) the Privy Council said at page 318, when considering the scope of section 116 of the Indian Evidence Act: "Whether during the currency of a term the tenant by attornment to A who claims to have the reversion, or the landlord by acceptance of rent from B who claims to be entitled to the term, is estopped from disputing the ' claim which he has once admitted,, we important questions, but they are instances of cases which are outside section 116 altogether.
" (1) (1937) L. R. 64 I. A. 311.
925 And again, at page 319 "In the ordinary case of a lease intended as a present demise which is the case before the Board on this appeal the section applies against the lessee, any assignee of the term and any sub lessee or licencee.
What all such persons are precluded from denying is that the lessor had a title at the date of the lease, and there is no exception even for the case where the lease itself discloses the defect of title.
The principle does not apply to disentitle a tenant to dispute the derivative title of one who claims to have since become entitled to the reversion, though in such cases there may be other grounds of estoppel, e.g., by attornment, acceptance of rent etc.
In this sense it is true enough that the principle only applies to the title of the landlord who let the tenant in ' as distinct from any other person claiming to be reversioner." These observations make it clear that simply by attornment the tenant is estopped from questioning the derivative title of the claimant 's successor just as the acceptance of rent will create an estoppel against the landlord from denying the person, who paid the rent, to be his tenant.
These observations do not indicate that any actual payment of rent by the tenant who has attorned is necessary to make the attornment effective.
If it was otherwise, the new landlord in whose favour the tenant has attorned, will not be able to take successfully any action against that person till that person had made the first payment of rent.
I am therefore of opinion that on co the tenant has agreed to accept the person claiming title from the previous landlord, that amounts to effective attornment in favour of the landlord and is no more dependent on the future conduct of the tenant by way of payment of rent or otherwise.
926 A person can establish his possessory title by establishing that he had been in actual possession of the land in suit or had been in possession through tenants.
So long as the persons in actual possession are deemed to be his tenants on account of their conduct in recognising that person as their landlord and are estopped to question his title, I see no good reason why their possession be not taken to be, the possession on behalf of that person, irrespective of the fact whether that person bad legal title or not.
If he had legal title, no question of relying on possessory title would ever arise.
It is only in the case of his failure to establish his legal title that he has to fall back upon possessory title.
I see no good reason why the possession of tenants who had attorned to a person having no title be not considered to be his possession in determining whether he had preferential possessory title to that of another, who too has no title and secured possession of the land subsequent to the attornment.
In this view of the matter, I am of opinion that the High Court was wrong in asking for a fresh finding on the question of possession when it bad not decided that the tenants had not, in law, attorned to Seetharamiah and Ramakotiah, on the basis of the two documents Kadapa exhibit D 4 and Cowle exhibit D 5, and when according to the first appellate court, the effect of those documents was that the tenants had attorned to them.
I am, however, of opinion, though the point was not raised, that the Kadapa exhibit D 4 is not an agreement by tenants simply accepting the claimants to be the new landlords as, by this document, they do not just substitute the new landlords in the place of the old.
They really took a new lease from those two persons.
The terms of the new lease were different from those of the lease of Krishnavena The unexpired period of the tenancy was two years.
Under the Kadapa, the new tenancy was to continue for five years from June, 1933.
The lease does not cover just the land which they held under 927 their previous tenancy, but included some other land as well.
The amount of rent they were to pay also differed.
It was much reduced.
Such a document is not a deed of attornment but is a document accepting fresh tenancy.
Seetharamiah and Ramakotiah could not in law lease the land in suit to those tenants as they had no tit ,in themselves, they being not heirs of Krishnavenamma.
Any lease executed by them created no right.
These lessors were not in actual possession of the land at any time.
They could not have, therefore, conveyed possession to their tenants.
As the new lesseess got no title under the lease, their continued possession over the land in suit could not be possession under the lease on behalf of the new lessors, especially when their possession can be traced to the valid tenancy under the deed, exhibit P 6, in favour of Krishnavenamma and will be deemed to be on behalf of legal heir.
Seetharamiah and Ramakotiah, therefore, cannot be held to be in possession of the land in suit through their tenants between June, 1933, and some time in 1936, when those tenants were dispossessed by Moka Subba Rao on behalf of plaintiff No. 1.
It follows that the predecessors in interest of the defendants have been rightly held to be not in possession of the land in suit prior to plaintiff No. 1, 'who too.
, had no title, getting possession of the land in suit and that the order under appeal is correct.
Appeal dismissed.
| The expression " decree for recovery of possession " in section 18 (1), of the West Bengal Premises Rent Control (Temporary Provisions) Act (Act XVII of 1950) does not include an order for recovery of possession made under section 43 'of the , and a person against whom an order for 534 recovery of possession has been passed under section 43 of the , is not therefore entitled to claim relief under the provisions of section 18 (1) of Act XVII of 1950.
Rai Bahadur Atulya Dhan Banerjee vs Sudhangsu Bhusan Dutta ([1951] 5 , Dhanesh Prokash Pal vs
Lalit Mohan Ghosh ([1951] , Mohan Lal Khettry vs Chuni Lal Khettry ([1951] Jethmull Sethia vs Aloke Ganguly ([19511 , Iswari Prosad Goenka vs N. B. Sen ([19511 overruled.
In construing a statute it is not competent to any court to proceed upon the assumption that the Legislature has made a mistake and even if there is some defect in the phraseology used by the Legislature, the Court cannot aid the defective phrasing of an Act or add and amend, or by construction, make up deficiencies which are left in the Act.
Commissioner for Special Purposes of Income Tax vs Pemsel (11891] A.C. 531); Crawford vs Spooner ([1846 51] 4 M.I.A. 179) and Hansraj Gupta vs Official Liquidator of Dehra Dun Mussourie Electric Tramway Co. Ltd. ([1933] 60 I.A. 13) referred to.
|
Special Leave Petition (Crl).
1682 And 3120 of 1983.
377 From the Judgment and Order dated 12.4.1983 of the Punjab and Haryana High Court in Crl.
Revision No. 1427 & 1428 of 1980.
Govind Mukhoty and Sarva Mitter for the Petitioners.
M.C. Bhandari, Harbans Lal, Dr. Y.S. Chitale, C.V. Subba Rao, S.K. Bisaria, Ravindra Bana and N.S. Das Bahl for the Respondents.
The Order of the Court was delivered by These two special leave petitions and a writ petition were filed for a common purpose the writ petition question ing the vires of section 321 of the Code of Criminal Proce dure of 1973 and these two special leave petitions question ing the correctness of the order of the (High Court by which it affirmed the order of the Chief Judicial Magistrate of Bhiwani, according permission under the same section 321 for withdrawal of a prosecution against the respondents except ing the State of Haryana.
We have already dismissed the writ petition and now proceed to dispose of the special leave applications.
As lengthy arguments were advanced we propose to make a brief but speaking order.
Having heard learned counsel for the parties we are inclined to think that the order of the learned Chief Judi cial Magistrate was perhaps not appropriate in law.
The High Court did go into the question afresh in its revisional jurisdiction but there could also be some arguments possible with reference to what the High Court has said.
We are, however, definitely of the view that no useful purpose will be served in setting aside the order of the Chief Judicial Magistrate as affirmed by the High Court and in directing the prosecution to proceed as there is, in our opinion, no chance of ultimate conviction.
Allowing such a prosecution to proceed will only be harassment to the parties and wast age of public time.
Now we briefly indicate some features to justify this conclusion of ours.
The incident is dated 2.4.1974.
The First Information Report has been registered suo motu by the police in November 1977 after a gap of more than 3 1/2 years.
The victims of the injuries were also accused of criminal offences said to have taken place at the same point of time and were produced before the Judicial Magistrate of Bhiwani on 3.4.1974.
The Judicial Magistrate enlarged them on bail and finding in juries on their persons directed them to be medically exam ined.
There is no material before us to show that the vic tims had complained to the learned Judicial Magistrate that the present accused persons were the authors of the injuries on them.
We gave an opportunity to the petitioners to pro duce such material but with no result.
For the first time, 378 witnesses to the occurrence were examined towards the end of 1977 and beginning of 1978 during investigation.
The learned counsel drew our attention to the fact that one of the accused persons happens to be the son of a polit ical figure wielding influence.
We find that this fact did not deter the Judicial Magistrate in ordering release of the victims who had been produced before him as accused persons.
The learned Magistrate also made an order for their medical examination and that was carried out.
There is no justifica tion as to why a private complaint was not made contempora neously and the matter had to wait for 3 1/2 years for investigation on the basis of the First Information Report.
The learned counsel also pointed out that Emergency had intervened and during that period a situation prevailed where the victims could not open their mouths.
A period of more than 14 months intervened between the occurrence and the promulgation of emergency.
A Commission was set up after the emergency had ended and holding a fresh elections, a different political party had come to power.
Following the report of the Commission this prosecution had been launched.
The petitioners ' learned counsel did not dispute the position that the finding of the Commission is not evidenced and no conviction can lie on the conclusion either.
In these circumstances, chances of con viction are too far fetched and bleak.
We do not think it is in public interest that the prosecution should proceed.
We may add that in a report under section 173(8) of the Code, the investigating agency has also indicated that adequate evidence has not been forthcoming to support the prosecu tion.
It is thus not necessary to examine the legal aspect canvassed in the special leave petitions and argued during hearing.
Both the petitions are dismissed.
S.R. Petitions dismissed.
| In respect of certain incident dated 2.4.1974, the First Information Report has been registered suo motu by the Police after 3 1/2 years, on the basis of the report of Commission of Inquiry.
The victims of the injuries were also accused of criminal offences said to have taken place at the same point of time who were produced before the Judicial Magistrate of Bhiwani on 2.4.74 and were also medically examined.
They did not file any private complaint, though released on bail.
Based on the report of the Investigating Agency under section 173(8) of the Code of Criminal Proce dure Code, the Public Prosecutor filed an application under section 321 of the Code for withdrawal of the prosecution case which was granted by the Chief Judicial Magistrate, Bhiwani.
The High Court also affirmed the said order.
Hence the Special Leave Petitions.
Dismissing the petitions, the Court, HELD: In the facts and circumstances of the case, it is in public interest that the Prosecution should not proceed with the prosecution.
A report under section 173(8) of the Code of Criminal Procedure by the investigating agency indicated that adequate evidence has not been forthcoming to support the prosecution which was commenced suo motu on the basis of a report of the Commission of Inquiry on whose finding no conviction can lie.
The victims themselves who were the accused of criminal offences said to have taken place at the same point of time did not complain before the Magistrate concerned and did not file private complaints.
The pica that one of the accused persons was the son of a political figure wielding influence did not deter the Magis trate in ordering release the victims in the earlier case.
Further chances of conviction are too far fetched and bleak.
[378E, B]
|
Appeal No. 261 of 1955.
Appeal from the judgment and decree dated April 22, 1949, of the Bombay High Court, in Appeal No. 403 of 1945, from Original Decree arising out of the judgment and decree dated August 14, 1945, of the Civil Judge Senior Division, Nasik, in Special Civil Suit No. 5 of 1943.
Purshottam Tricumdas, Mrs. E. Udayaratnam and section section Shukla, for the appellant.
R. Ganapathy Iyer, K. L. Hathi and R. H. Dhebar, for respondent No. 1.
W. section Barlinge, Shankar Anand and A. G. Ratnaparkhi, for respondents Nos. 6 and 7. 1959.
September 22.
The Judgment of the Court .was delivered by HIDAYATULLAH J.
This appeal with a certificate Hi, of the High Court of Judicature, Bombay, has been filed against the judgment and decree of that Court 776 dated April 22, 1949, in First Appeal No. 403 of 1945, confirming the judgment and decree of the Civil Judge, Senior Division, Nasik, in Special Suit No. 5 of 1943, decided on August 14, 1945.
The High Court made a slight modification in the matter of costs, to which we shall refer later.
The plaintiff, who is the appellant here, is the descendant of one Ganpati Maharaj, who was a devotee of " Shri Venkatesh Balaji ".
Ganpati Maharaj died in 1701 at the ripe age of 98.
When Ganpati Maharaj was 72 years old, it was vouchsafed to him in a dream that an image of Venkatesh Balaji would be found by him in river Tambraparni in Tirunelveli District.
He found the image, brought it to his house in Junnar (Poona District) and installed it.
The worship of Shri Venkatesh Balaji was carried on by him, and when he died, he left behind him three sons and a daughter.
His eldest son, Timmayya, at the time of his death was 12 years old.
Timmayya succeeded Ganpati Maharaj and lived till 1768, when he died at the ripe age of 79.
During his lifetime, Timmayya obtained several properties as presents and gifts.
The present suit concerns those properties which are described in the schedules attached to the plaint.
The, appellant is the direct descendant of Ganpati in the eldest male line, and respondents 1 to 4 are the descendants from Ganpati 's daughter, Nagubai.
On April 23, 1942, the first four respondents made an application to the District Court tinder section 3 of the Charitable and Religious Trusts Act, 1920 (No. 14 of 1920), hereinafter called the Act, against the appellant and two others asking that the appellant be directed to furnish full particulars of the properties and their application and for accounts of the income as also of the properties during the three preceding years.
The appellant in reply denied that there was a trust, much less a public trust, and claimed the idol and the properties as private.
He understook to bring a suit under section 5(3) of the Act, and the suit out of which the present appeal arises, was filed on March 21, 1943.
He claimed in the suit three declarations, which were as follows : 777 (1) It may be declared that 'Shri Vyankatesh Balaji Deity ' and 'Shri Vyankatesh Balaji Sansthan ' are not legal trust as alleged by the Defendants and their nature also is not such as alleged by the Defendants.
(2) If the court holds that a trust in the matter of Shri Vyankatesh Balaji Deity ' and 'Shri Vyankatesh Balaji Sansthan ' exists, then it may be declared that the said trust is not a public one, that the same has not come into existence for the religious and charitable purposes and that the Religious and Charitable Trusts Act (sic.)(No. 14 of 1920) is not applicable to the same.
(3)It may be declared that the Defendants for themselves or as the representatives of the entire Hindu Community have no right and authority whatever over 'Sri Vyankatesh Balaji Devta ' and Shri Vyankatesh Balaji Sansthan ' and that they or the entire Hindu Community has no right and authority whatever in any capacity whatever to interfere in the matter of Devta ' (deity) and ' Sansthan ' or to ask for the Yadi ' (list) of the properties or accounts in respect of the income thereof and to ask for reliefs mentioned in prayer clauses of the Miscellaneous Application No. 19 of 1942.
" The trial Judge framed eight issues.
The first two involved the declarations sought.
Three others concerned the position of defendants 1 to 4, 6 and 7 in respect of maintenance, share in the right of customary worship and management.
One issue raised the question whether the suit was had because the deity was not joined and the remaining two were consequential.
The trial Judge decided all the issues against the appellant.
He held that the suit properties were not the personal or private properties of the appellant, that the plaintiff was estopped from making such a claim, that the deity itself was not a family or private deity, and that the deity Shri Venkatesh Balaji was the owner of the properties, and that there was a public, religious and charitable trust in respect of them.
It was, however, held that the appellant was entitled as the hereditary shebait to manage them.
778 The trial Judge also gave a finding that the first four defendants were entitled to customary worship and emoluments as might be fixed by the Pujadhikaris descended from the eldest branch of Bapaji Buva and could be removed for failure to perform the duties assigned to them.
The application under section 3 of the Act was held to be competent, and the suit was also held to be bad in the absence of the deity.
In the result, the trial Judge dismissed the suit, awarding two sets of costs to the defendants.
It may be pointed out that after the suit was filed, a public notice under section 1, R. 8 of the Code of Civil Procedure was issued and other defendants were joined, representing the Hindu Community.
During the early stages of the suit, the first four defendants raised the question whether the deity was not a necessary party to such a suit, and desired that the deity should be joined, represented by an independent guardian ad litem.
This application was opposed by the appellant, who stated that inasmuch as his case was that the deity and the properties were his personal properties, there was no need to join the deity because of an averment by the defendants that the temple was a public one and the properties were public religious endowments.
The trial Judge after expressing some surprise that the plaintiff should have taken this stand, acceded to his contention and did not join the deity as a party.
He, however, warned the appellant by his order that in case the deity was found to be a necessary party, the suit might have to be dismissed for that reason alone.
Against the decree dismissing the suit, an appeal was taken to, the High Court of Bombay.
The learned Judges of the High Court (Rajadhyaksha and Chainani, JJ.), dismissed the appeal but modified the order about costs, directing that only one set of costs be paid to the defendants in the suit.
The learned Judges traced the history of the various properties and how they were acquired, and concluded that in respect of some of the properties there was no doubt that they formed religious endowments of a public nature, but in respect of others, though they were inclined to hold that they were personal properties, 779 they held that no declaration could be given, since the deity was not a party to the proceedings.
They, however, granted a certificate of fitness under article 133 of the Constitution, read with sections 109 and 110 of the Code of Civil Procedure, and the present appeal has been filed as a result.
Before dealing with the appeal proper, it is necessary to refer to certain landmarks in the history of Shri Venkatesh Balaji and this family.
As we have stated earlier, the deity was placed in his house by Ganpati Maharaj at Junnar in Poona District.
Ganpati Maharaj did not acquire any property, but in the lifetime of his son, the deity was moved from Junnar to Nasik.
A tradition in the family says that this was the result of a dream by Timmayya, who was warned that Junnar would be burnt to ashes and the deity must be removed.
Timmayya soon acquainted the people of the locality with the miraculous powers of the deity, and not content with this alone, he took the deity to the Courts of the various Rulers and also from place to place acquiring the properties in dispute, cash allowances and gifts.
After Timmayya died his eldest son, Bapaji Buva, obtained a plot of land in gift from the Peshwa near the bank of the Godavari river at Nasik and built a temple on it.
The deity was installed in that temple, and has continued in that abode ever since.
Bapaji Buva had raised a loan for the construction of the temple, and a substantial portion of it was paid off by the Peshwa and other Rulers like Holkar and Scindia.
In Bapaji 's Buva 's time, a large Sabha Mandap was built in the premises of the temple to accomodate about 600 persons at the time of darshan and worship of the deity.
In 1774 family disputes arose and a Tahanama (exhibit 121) was executed, whereby the right of management was vested in the eldest male member of the senior branch of the family, and provision was made for the maintenance of that branch as well as the junior branches.
Again in 1800, further disputes took place in the family and a Tharav Yadi (exhibit 122) was drawn up.
By that agreement, instead of the cash allowances for the maintenance of the branches certain 780 villages were assigned to them.
Next came the Inam Commission under the Bombay Rent free Estates Act, 1852 (Bom.
11 of 1852), by which in accordance with the policy laid down by Lord Bentick, all jagirdars and inamdars were required to prove the sources of their title and the conditions on which the jagirs or inams were held.
The Assistant Inam Commissioner recorded the grant of the villages under R. 3 of Sch.
B to that Act as personal inams.
Damodar Maharaj who was then the Pujadhikari or Sansthanik appealed to the Inam Commissioner, and contended that the villages were not held as personal inams but were Devasthan inams and could only be recorded under R. 7 of Sch.
The difference between the two Rules was that whereas personal inams could be held only so long as the family survived, Devasthan inams were held permanently and were to be recorded as such.
The Inam Commissioner accepted this contention, and caused the entries to be changed from personal inams to Devasthan inams in respect of the villages.
Damodar Maharaj died in 1885, and was succeeded by Krishnarao Maharaj, who died in 1893, whose eldest son, Bhagwantrao Maharaj died in 1900 and was succeeded by the appellant, during whose minority the property was managed by a guardian appointed by Court.
The appellant became major in 1921, and took over the management of these properties.
In 1929, the appellant caused a history of the deity to be written and it was published by him.
A reference to all these documents will be necessary hereafter to consider the argument whether there was a religious endowment of a public nature, or whether the properties in dispute were privately owned.
As pointed out already, the two Courts below have concurred in holding that the deity was not a mere family deity in which the public had no interest, and that the properties given to the deity constituted a religious and charitable endowment of a public nature.
Ordinarily, such a finding is a finding of fact, not open to further scrutiny by this Court, but the appellant contended that the legal inference drawn from the proved facts in the case was erroneous and a point of law 781 therefore arose.
A mistaken inference from documents is no less a finding of fact, if there is no misconstruction of the documents, and this principle should be applied to the discussion of the documentary evidence in this case, because if there was no misconstruction of the documents, the concurrent findings would be not of law but of fact and the error, if any, equally of fact.
Both the Courts below have analysed at length the documents which number several hundreds, and have pointed out that there was nothing inconsistent in them with the contention of the respondents that there was a religious and charitable endowment of a public character in favour of the deity.
Before us, the attempt of the appellant was to show that this conclusion was not correct and that the documents pointed to grants in favour of individuals for the time being managing the affairs of a family deity.
In addition to the examination of the documents, the two Courts below relied strongly against the appellant on the admissions made by his predecessors in title from 1774 onwards.
Learned counsel for the appellant contended that the documents were misconstrued and thus, the inference from them in which these so called admissions were contained, was exactly the opposite of what the Courts have deduced.
In this appeal, therefore, all that is necessary is to see whether the inferences are vitiated by a misconstruction of the documents as such.
The appellant contended that this was a special suit under section 5(3) of the Charitable and Religious Trusts Act, 1920, and that the burden lay upon the respondents to prove that there was a religious and charitable trust of a public character in favour of the deity.
He contended that the two Courts below had placed the burden of proof upon him to show by positive evidence that the deity was a family deity, and that the properties were his private properties.
According to him the defendants ought to have proved their case, and if they failed to prove affirmatively that case, then the suit ought to have been decreed in his favour.
The expression "burden of proof" really means two different things.
It means sometimes that a party is 99 782 required to prove an allegation before judgment can be given in its favour; it also means that on a contested issue one of the two contending parties has to introduce evidence.
Whichever way one looks, the question is really academic in the present case,, because both parties have introduced their evidence on the question of the nature of the deity and the properties and have sought to establish their own part of the case.
The two Courts below have not decided the case on the abstract question of burden of proof ; nor could the suit be decided in such a way.
The burden of proof is of importance only where by reason of not discharging the burden which was put upon it, a party must eventually fail.
Where, however, parties have joined issue and have led evidence and the conflicting evidence can be weighed to determine which way the issue can be decided, the abstract question of burden of proof becomes academic.
In the present case, the burden of proof need not detain us for another reason.
It has been proved that the appellant and, his predecessors in the title which he claims, had admitted on numerous occasions that the public had a right to worship the deity, and that the properties were held as Devasthan inams.
To the same effect are the records of the revenue authorities, where these grants have been described as Devasthan, except in a few cases, to which reference will be made subsequently.
In view of all these admissions and the revenue records, it was necessary for the appellant to prove that the admissions were erroneous, and did not bind him.
An admission is the best evidence that an opposing party can rely upon, and though not conclusive, is decisive 'of the matter, unless successfully withdrawn or proved erroneous.
We shall now examine these admissions in brief and the extent to which they went and the number of times they were repeated.
The earliest admission that the property belonged to the Devasthan and that there was no private ownership is to be found in the Tahanama (exhibit 121) of the year 1774.
This Tahanama was entered into by the sons of Timmayya Maharaj in the presence of 783 Panchas long before the present dispute arose.
It is stated there that " Shrimant Pant Pradhan and other Sardars of (both) Nizam and Deccan (States) have granted in Inam villages for the purposes of Seva (worship) of Shri (deity).
" It *as again stated that the Shri 's temple which was newly built on the banks of the river Ganga (Godavari) belonged to Shri 's Sansthan and nobody had a share therein.
By the Tahanama, the three brothers set apart a certain sum for the Seva (worship) of the deity in accordance with their practice which sum was not to be diminished under any circumstance.
They, however, took a small portion of the income as their own Nemnuk (maintenance), which Nemnuk was to be reduced if the income was not sufficient to meet the expenses of Shri (deity).
Learned counsel for the appellant stated that the Tahanama was misconstrued by the two Courts below.
He contended that this was a private temple, and if anything could be spelt out from this document, it was that the three brothers constituted a private trust in favour of the deity.
According to him, the brothers were dividing the income which was theirs into two parts, namely, (1) for the Seva of the deity and (2) for their maintenance.
This, in, our opinion, is a strained reading of the document as a whole.
This deity was " Swayambhu " and not a consecrated idol.
If none of the members of the family had any interest in the Shri 's temple or any shares in the properties thereof, obviously the properties were not private properties, nor the idol a family idol.
The document clearly shows that the deity was regarded as the owner and the family were its servants.
This is made clear by the subsequent document, which is the Tharav Yadi of 1800; the Nemnuk allowance which the members of the family had taken out of the income was described as Vetan (remuneration) for doing service to the deity and Sansar Begmi " for themselves.
The use of the word Vetan " does not indicate ownership, but on the contrary, paid service.
Even as far back as 1774 to 1800, the predecessors of the appellant considered themselves as the servants of the deity, and all that they did was to make a stable arrangement for the 784 application of the funds, so that the deity could enjoy its own property and the servants were regularly paid.
When the Inam Commission was established to enquire into the jagirs and inams which had passed into the territory of the East India Company, Act No. 1 of 1852 was passed.
The Inam Commission purported to be established under that Act and for purposes of enquiry as laid down under that Act.
The Assistant Inam Commissioner at that time held that the inam was a personal one, and ordered that it be recorded as such.
This was in the years 1857 to 1859.
Damodar at that time went up in appeal to the Inam Commissioner, complaining against the record of the inams as personal, and claimed that they should be recorded as Devasthan inams.
His appeal is exhibit D 643 dated March 5, 1858.
He stated therein that the mokass Amal and the jagir and Sardeshmukhi in the villages were granted " for the expenditure on account of the Shri ".
He relied on the Sanads, in which it was stated that the Amals (revenue shares) were for the purpose of worship and Naivedya (food offering) to the Devasthan of Shri Venkatesh.
He referred to the earlier documents to which we have referred, and claimed that the order of the Assistant Inam Commisioner was erroneous, because the inams must be recorded in the name of the deity under R. 7 of Sch.
B to the Act of 1852 and not under R. 3, as was ordered by the Assistant Inam Commissioner.
We have already pointed out the different effect of the two Rules, and proviso (6) to R. 7 stated that no personal inam could be recorded permanently under R. 7.
The effect of this appeal was to claim on behalf of the deity a permanent recognition of its rights to the inam properties without any share on behalf of the family, apart from remuneration such as the Pujadhikaris might from time to time settle, in accordance With the Tahanama and the Tharav Yadi of the earlier times.
The Inam Commissioner acceded to this contention; and after examining all the Sanads that had been produced in the case, ordered that, " the order issued by Meherban, Assistant Inam Commissioner be annulled and under Section 7 (sic.) 785 Supplement No. 2 of Act 11 of 1852 the remaining portion of this village . to remain as perpetual Inam with the Devasthan of Shri Vyankatesh . and the management do remain continued from generation to generation of the lineal descendants with the male descendants of Timaya Gosavi bin (i.e. son of) Ganesh Gosavi and Apatia bin (i.e. son of) Konher Gosavi.
" The effect of all these documents therefore was to get recognition in invitum of the right of the deity as the owner.
It also indicated that in the family of Bapaji Buva there were the hereditary Pujadhikaris or Shebaits of the deity who were not entitled to anything more than reasonable remuneration for their services of the deity.
In the year 1907 when the plaintiff was still a minor, his mother made a deposition as a witness.
She stated that there were Annachatra and Sadavarat Kulkarni Inams and other Inams, but that they all belonged to the Sansthan, and that there was " no private (or personal) property at all".
Even the gardens were described by her as belonging to the deity and not to any individual.
The guardian also took the same stand throughout the minority of the plaintiff.
Even earlier, in 1899 the father and uncle of the present appellant stated that the village, Savergaon, one of the items of the properties of the Devasthan, was not in the private ownership of any person.
It was stated on this occasion as follows: "Except this Shri Vyankatesh deity no one else has anyright, interest or ownership with regard to the village and the Sansthan.
We both are the managers of the aforesaid Sansthan and we have been looking after all the affairs of the Sansthan and in that connection we are carrying on the management of the aforesaid village.
" The statement was made in Suit No. 515 of 1898.
Again, in exhibit 700, the written statement by the guardian of the plaintiff, in Civil Suit No. 295 of 1920, it was stated as late as November 5, 1920, as follows: "It is denied that Damodar Timmayya or any other " particular individual owned the Balaji 786 Sansthan at any time in his individual capacity.
The temple of balaji belongs to the Sansthan and several villages are granted to Balaji Sansthan purely for temple purposes by Sanads granted by the British Government and the Defendant 's family is appointed only the vahiwatdar.
" The said Damodar Timaya had no separate property of his own." To the same effect is the application made by Ramabai, the mother of the present appellant, in exhibit 702.
These later documents may not bind the appellant, who was a minor at the time, but as late as December 1, 1927, the appellant himself stated that village in question (Savergaon) was a Devasthan inam, and was alienated to the deity, Shri Venkatesh, who was the owner.
He also referred to the family settlement of 1801, and stated that the other villages were also similarly given to the deity.
He observed that in the case of Devasthan inam the idol was the grantee and the real owner, and since the property Had to be managed by a human beinG, the so called manager therefor managed the villages on behalf of the deity.
He claimed only to be the manager of the village for and on behalf of the deity, Shri Balaji, and did not claim any private ownership.
At that time, he referred to the Land Alienation Register and produced a certified copy of the Register to show that Shri Venkatesh was shown as the alienee.
exhibit 634 is the genealogy filed by the plaintiff wherein Bhagwant Annaji, uncle of Damodar Timmayya, wrote against the name of Timmayya that he had acquired nine villages, and was the founder of Puja Naivedya, Utsav, Annachhatra and Sadavarat dedicated to Shri Venkatesh.
It was stated there that the villages were grants to the deity.
Similar are the admissions in the Yadi, exhibit 626 dated December 15, 1886, by the Mamlatdar addressed to Krishnarao Damodar and in a letter, exhibit 199, by the plaintiff himself addressed to Mankarnikabai, wife of Krishnarao Damodar in 1922.
In several suits which others filed, the defendant there was described as " Shri 787 Venkatesh Balaji Sansthan, Nasik, through manager" that is the appellant.
He represented as manager the owner, namely, the deity.
Lastly, there is the history of this Sansthan published by the appellant himself and written from original documents supplied by him.
This was in 1931.
The appellant in his deposition admitted that he was intimately connected with this writing and its publication.
This history is exhibit 642.
It gives an account of the idol and the temples, and describes how from time to time Peshwas and various Sardars granted villages to the " Shri " and dedicated them to the deity.
The conclusion alone need be stated, because the document is a long one 'and the admissions are contained in numerous places in it.
This is what was stated; "The reader of the present history will have observed that the sansthan belongs to the deity and (the members of the house of) Timaya Maharaj are merely the managers and administrators of the same. . .
The management of it shall not be like that of a private property.
" As a result of the Faisalnamas of the Inam Commission which are to be found in Exs. 135 to 144, 634 and 644, the record of rights showed the deity as the owner and the jagirs and inams as Devasthan.
Learned counsel for the appellant contends that these admissions do no prove anything more than this that the entire establishment of Balaji Mandir was described as 'a Sansthan and the ownership thereof was in the members of the family.
We cannot accept this contention, which runs counter to the plain tenor of those documents.
In these documents, the ownership of the family over the temple, the deity and the properties of the deity is not only not admitted but is denied.
On the other hand, the assertion always has been that the members of the family were merely the servants of the deity getting remuneration for their services and that the ownership vested in the deity and none other.
In view of these admissions, the question of burden of proof, as we have already pointed out, is really 788 academic, and if any burden lay upon any party, it was upon the appellant to displace by cogent and convincing evidence that these admissions were erroneous and need not be accepted in proof.
These admissions are two fold; they concern the nature of the properties in dispute and the nature of the idol.
Added to these are the decisions of the Inam Commissioner in respect of the villages, which were recorded as Devasthan inams at the instance of Damodar, who appealed against the order to record them as personal inams.
The value to be attached to the decisions of the Inam Commissioner had come up for consideration before the Judicial Committee in a series of cases.
It is sufficient to refer to only one of them.
In Arunachellam Chetty vs Venkatachellapathi Guru Swamigal (1), the Judicial Committee while dealing with the Inam Register for the year 1864 which had been produced for their inspection, attached the utmost importance to it.
It observed : " It is true that the making of this Register was for the ultimate purpose of determining whether or not the lands were tax free.
But it must not be forgotten that the preparation of this Register was a great act of State, and its preparation and contents were the subject of much consideration under elaborately detailed reports and minutes.
It is to be remembered that the Inam Commissioners through their officials made enquiry oil the spot, heard evidence and examined documents, and with regard to each individual property, the Government was put in possession not only ?of the conclusion come to as to whether the land was tax free, but of a statement of the history, and tenure of the property itself.
While their Lordships do not doubt that such a report would not displace actual and authentic evidence in individual cases; yet the Board, when such is not available, cannot fail to attach the utmost importance, as part of the history of the property, to the information set forth in the Inam Register.
" The nature and quantum of the right and interest in the land was thus gathered from the Inam Registers and enquiries, which preceded them, (1) (1919) L.R. 46 I.A. 204.
789 Thus, it was doubly necessary for the appellant to bring before the Court all the documents in which his title was created, recognised or confirmed.
He has, however, filed only a selection, and has refrained from bringing into evidence all the material in his possession which as late as 1931 was available to him.
We have pointed out above that in 1931 he caused a history of the Sansthan to be published, and it refers to numerous documents, which have not found their way into Court.
The learned Judges of the High Court also mentioned this fact, and stated that in view of the failure of the appellant to prove conclusively that a higher title than the one made out before the Inam Commission was available to him, no reliance could be placed upon such documents as had been exhibited.
We have to see whether this statement is correct in 'all the circumstances of this case.
The property in the case consists of eleven villages, cash allowances and other urban properties to which separate reference will be made.
All the eleven villages were the subject of an enquiry by the Inam Commission, and the decisions were uniform, except in one case where a technical ground came in the way.
We were taken through documents relating to two such villages as indication of the kind of title enjoyed by the appellant.
It may be pointed out here that the appel.
lant himself made no distinction between one property and another, and stated that all the properties were held by him under an identical title.
At the hearing of the appeal, he attempted to show that these properties were granted to him, impressed with service of the deity.
But that was not the case he had made out either before the District Court under the Charitable and Religious Trusts Act or in the plaint filed in this case.
It is not open to him now to change his plea with regard to his ownership, and the case must be decided only on the contention that the properties were private.
The first batch of documents to which our attention was drawn, concerns mostly Vihitgaon.
It consists of Exs.
200 to 206.
The first four are letters written to Mukadams, Kamavisdars and Mamlatdars to continue 100 790 the Mokasa, Sahotra or Inam to Timayya, to whom the village was given as Madade Mnash.
The earliest of them is of 1714 and the last is of 1755.
Exs. 204 and 206, however, mention even earlier sanads and the latter particularly mentions the original grant of the ruler, Mahomed Shah, under his own seal.
Those sanads, however, have not been produced, as also some of the sanads of the Peshwas, which were mentioned by the Inam Commission in exhibit 135.
None of these documents shows the terms on which the original grant was made, and in view of the meagreness of this evidence and its inconclusive nature, the High Court was justified in accepting the finding of the Inam Commission that the grant was to the Devasthan and constituted a Devasthan Inam.
The next village of which the documents were shown to us is Belatgaon.
Here too, the documents are of later dates, the original grant not being produced.
In connection with this village also, the Inam Commission held that the village was a Devasthan inam, and the documents produced in this case do not show anything to the contrary.
These documents are merely letters and so called sanads and direct the Mukadams, etc., to pay a share of the revenue to Timayya.
Learned counsel for the appellant stated that the documents in respect of the other villages were also of similar character.
On an examination, we have found them to be so.
In all the order, , made by the Inam Commission in respect of each and every village, there is a reference to other sanads of earlier dates, which have not been produced before us.
The respondents bad, in the Court of First Instance, served a notice upon the appellant to produce all the sanads admittedly in his possession and mentioned in exhibit 642, but the appellant avoided doing so by pretending that the demand was vague.
In this view of the matter, it cannot be said that there has been a misconstruction of any documents.
On the other band, the judgments in the two Courts below have proceeded on the ground that the appellant having an opportunity to prove his case against the findings of the Inam Commission and the admissions made from time to time, had suppressed 791 the original documents conferring villages upon him as he alleged, and had produced letters and so called sanads of later dates, which were no more than mere pay orders to continue the privilege which had been granted by the rulers in the earlier documents.
We do not therefore find any misconstruction of the documents such as have been produced, and we hold that the admissions and the revenue records remain uncontradicted.
This brings us to the cash allowances, which were granted from the villages to the predecessors in title of the appellant.
These documents number a few hundreds.
They too are merely letters written from time to time to the Mukadams, Kamavisdars and Mamlatdars to pay the arrears of annuities, Varshashan, Aivaj to Haribakthi Parayana Rajeshri Timayya Gosavi.
In almost all the documents, there is a reference that the original sanads had been filed, but the original sanads have not been produced.
The respondents, on the other hand, produced some of these documents to show that the original grant was to the Devasthan and that in some of them, there is specific mention that it was for the expenses of " Shri ".
These are Exs. 228, 229, 639, 230, 231 and 233.
The respondents connect these documents with the history of Shri Venkatesh Balaji Sansthan (exhibit 642) to show that similar documents exist with regard to the grant of all the villages and the cash allowances but have not been produced.
The appellant also admitted in exhibit 151 that his ancestors had received these grants in order to do Puja Archa, Sadavarat, etc., of the deity.
The two Courts below have from these circumstances ,drawn the conclusion that the grant cannot be considered as personal but must be regarded as one made in favour of the deity or the Sansthan.
It is for this reason also that the appellant stated that all the properties including the temple and the idol go in the name of ' Sansthan ', and that this word was used compendiously to describe the properties and the Vahiwatdar.
In our opinion, the appellant was conscious of the weakness of his case, because the grants to Sansthan or to the "Shri" could not be regarded as grants to an 792 individual, and he therefore included himself and the deity in the expression 'Sansthan ', so as to be able to show that the grants to the Sansthan were grants to him as much as to the deity.
The appellant, however, contended that this case was covered by the decision of the Privy Council in Babu Bhagwan Din vs Gir Har Saroop (1).
That case was entirely different.
There, the grant which was a single one, was made to an individual and his heirs in perpetuity from generation to generation, and there was no evidence otherwise.
The Judicial Committee interpreted the grant in favour of the individual, and stated that it was made to one Daryao Gir and his heirs in perpetuity.
It observed: " Had it been intended as an endowment for an idol it would have been very differently expressed; the reference to the grantee 's heirs, and the Arabic terminology 'naslan ba 'da naslin wa batnam ba 'da batnin ' (descendant after descendant and generation after generation) are not reconcilable with the view that the grantor was in effect making a wakf for a Hindu religious purpose, even if it be assumed that this is not otherwise an untenable hypothesis." Though, in that case, the origin of the idol was not completely traced, the grant itself disclosed the existence of a sanyasi, with an idol in a mud hut, to whom and not to the little temple the grant, in effect, was made.
The history of this deity is well known, and it shows the manner in which the grants were made from time to time.
To apply that case to the facts here is impossible.
In our opinion, the principle to apply to this case is the one stated by the Privy Council in Srinivasa Chariar vs Evalappa Mudaliar(2).
It was there observed: " Their Lordships must dissent entirely from the view that where the discoverable origins of property show it to be trust property the onus of establishing that it must have illegitimately come into the trustee 's own right rests upon the beneficiaries.
Upon the contrary, the onus is heavily upon the trustee to show by the clearest end most unimpeachable evidence the the legitimacy of his personal acquisition.
" (1) (1939) L.R. 67 I.A. 1.
(2) (1922) L.R. 49 I.A. 237.
793 The appellant next argued that those properties in respect of which the High Court felt disposed to giving a finding that they were private, should at least be declared as private properties, He also made an application in this Court for joining the deity as a party to the appeal, and requested that this Court should send down an issue for a finding by the Court of First Instance in the presence of the deity, whether these properties were private.
We shall deal with these matters a little later, because it is necessary at this stage to decide whether the public have any right of worship in the temple.
Both the Courts below have agreed that the deity and the temple were public.
The High Court correctly pointed out that the matter has to be judged in accordance with the dictum of Varadachariar, J., in Narayanan vs Hindu Religious Endowments Board (1).
In that case which arose under section 9 of the Hindu Religious Endowments Act, the definition of a temple ' meant a place used as a place of public religious worship and dedicated to, or for the benefit of, or used as of right by the Hindu community, or any section thereof as a place of religous worship.
The learned Judge observed as follows: " The question of intention to dedicate the place for the use of the public or of the user by the public being as of right is necessarily a matter for inference from the nature of the institution and the nature of the user and the way the institution has been administered . once a long course of user by the public for the purpose of worship is established, and the fact of a separate endowment in trust for the deity is also proved, it is fair to infer that the institution must have been dedicated for user by the public (unless the contrary is established) particularly when the character of the temple, its construction, the arrangement of the various parts of the temple and the nature of the deities installed there are similar to what obtains in admittedly public temples.
Similarly, when user by the public generally to the extent to which there is a worshipping public in the locality is established, it is not unreasonable to (1) A.I.R. 1938 Mad. 209.
794 presume that the user by the public was as of right, ' unless there are circumstances clearly suggesting that the user must have been permissive or that the authorities in charge of the temple have exercised such arbitrary power of exclusion that it can only be ascribed to the private character of the institution.
" The two Courts below reached the conclusion that the public had a right in the temple and the idol from a number of considerations.
Shortly, they are as follows: The building of the temple is public in character inasmuch as the staircase leads straight to the idol, and the public are admitted throughout the day between 7 a.m. and 10 p.m.
There is no evidence to show that the public or any member of it were ever excluded from the worship.
There is only one instance when a member of the family was excluded, but that was because he had used abusive language towards the mother of the present appellant.
Indeed, the public are invited to worship the deity, and no gift is ever refused.
The merchants of the locality keep a separate khata in the name of the deity, in which they set a part a portion of their earnings as kangi, which is paid regularly to the temple.
The extent of the ceremonies performed at the temple also indicates the existence of a deity in which the public are interested rather than a family deity.
There are celebrations, Utsavs etc., and daily a large number of Brahmans and others are fed and at the time of the festivals all the visitors are also fed.
The deity also goes out on such occasions in processions through a marked route, and there are ten carriages in which it rides for ten days.
These festivals are celebrated with great e 'clat, and the public not only of Nasik but of other parts of the country freely join in them.
Even the daily routine of the deity is of a form uncommon in the case of family deities.
The appellant himself admitted that the idol was being worshipped with Rajopchar.
It may be mentioned that for playing music or performing the services, the deity has conferred hereditary inams upon those who attend to them.
There is also a collection box placed at the temple where the public, who are so minded, are invited to place their offerings.
795 No doubt, the Privy Council in Babu Bhagwan Din vs Gir Har Saroop (1) stated that the mere fact that offerings were accepted from the public might not be a safe foundation on which to build an inference that the deity was public.
Still, the extent to which the offerings and the gifts go, may be a fair indication not merely of the popularity of the deity but of the extent of the public right in it.
As has been pointed out above, the Judicial Committee was dealing with a single grant which was made to the Mahant in per petuity, and the temple itself was a mud hut.
Here, the temple covers several acres of land, and has a vast structure.
There is a Sabha Mandap, which accommodates 600 persons.
It is inconceivable that such a big temple was built only for the use of the family.
It indicates that there was an invitation to the public to use it as of right, and user and continuous user for 200 years, without let or hindrance, by the public has been proved in the case beyond doubt.
It is also unusual for Rulers to make grants to a family idol.
The fact that many Rulers have made grants of land and cash allowances to the deity for seva,puja etc., is itself indicative of the public nature of the trust.
We think that the extensiveness of the temple and of grants to it are pertinent circumstances to be taken into account in judging the nature and extent of the public right.
It may be remembered that in the documents to which we have referred in an earlier portion of this judgment, there is reference to special endowments for festivals.
These endowments would not be made if the deity was a family deity.
In the Gazetteer dealing with Nasik District there is a full description of the temple and the deity.
Extracts from it have been quoted by the two Courts below, and they show that the temple is a public one.
Indeed, the history of the deity written at the instance of the appellant himself (exhibit 642) indicates the public right in the deity.
As against these, the appellant contended that there were other circumstances which indicated that the deity was a family diety.
He examined Dr. Kurtkote, (1) (1939) L. R. 67 I. A. 1. 796 who gave some reasons for an opinion that the temple was not a public one but a mere Deva ghar.
He stated that the idol of 'Balaji did not appear to have been firmly installed, that it was installed on an upper floor, that householders resided in the temple and that daily worship was suspended when there was a birth or death in the family, and last of all, he stated that the deity being movable, must be regarded as a family deity.
It may be pointed out here that the deity is sometimes invited to private residences at the time of festivals, for dinner.
This circumstance was also pleaded as indicating that the temple is private and the deity a family deity.
We shall now briefly examine these reasons to see whether they outweigh the evidence of the public character of the deity, which we have analysed above.
We begin with a very small point which was made that the temple of Balaji at Nasik has no dome or Kalas.
This is an admitted fact, but vasudev (P.W. 12) admitted that there was no dome or Kalas at Balaji temple at Devalgaon Raja, which is a public temple.
So also other temples mentioned in the case.
It seems that nothing really turns upon the existence of a dome or Kalas, and no authority has been cited before us to show that it is a conclusive circumstance in deciding that the temple is public.
It must be remembered that this idol was found in a river and did not need consecration ceremonies, which are necessary for a new idol, which is set up in a new temple.
It was first placed inside the house of Bapaji Buva at Juniar, and was removed from that place as a result of instructions vouchsafed by the deity itself to Bapaji Buva 's successor.
It was then installed at Nasik ' Where a big temple has grown.
No doubt, in some portions of this building the family of the Pujadhikhris reside without any objection from any person The extensiveness of the building makes it impossible to think that they are residing within the temple, or that the Thakurbari is within their private residence.
Indeed, the description of the temple as given in the Gazetteer clearly shows that the temple in quite distinct 797 from the residential quarters, and that also is the evidence of the appellant himself.
With regard to the installation of the idol on the first floor, we have already mentioned that the staircase from the ground leads direct to the sanctum.
It was, however, admitted by Dr. Kurtkote that the deity at Bindu Madhav temple at Benares in also installed on the upper storey, though he explained that beneath the idol there is a solid stone pedestal, which runs right from the ground to the first floor.
No question was put to him as to whether the deities there, were firmly installed or moveable, He, however, admitted that the text of Prathista Mayukha did not mention that the idol should not be installed on an upper storey.
In our opinion, in the absence of any text prohibiting the installation of the deity on an upper floor, we cannot draw any inference that the temple is private.
The real ground on which the claim has been made that the deity is a family deity is that it is capable of being moved from one place to another, and, in fact, is so moved.
Evidence was led to show that in the early history of this temple the Pujadhikaris took the deity on visits to the various ruling chiefs.
Documents have been filed to show how arrangements were made for the journey of the deity and instructions issued to all concerned to give all facilities for it.
It is also in evidence and is indeed admitted that when the deity is invited on festive occasions to private residences, a substitute idol is also left at the main temple for the public to worship.
Further, all these removals are temporary, and the deity is brought back and installed in its abode afterwards.
The deity at the Jaganath temple at Puri is also shifted for periodic processions, and is brought back to its place.
Dr. Kurtkote stated that the installation of an idol can be either in a movable form (chala) or stationary form (sthira), and that it is so mentioned in the Prathista Mayukha.
He also admitted that it could not be said that the idol was not installed because it could be moved from one place to another.
No other authority was cited before us at the hearing as to whether s a idol cannot at all be 101 798 moved from the place where it is installed, even though it may be installed in a movable form (chala).
There are, however, cases in which this matter has come up for consideration before the Courts.
In Ram Soondur Thakoor vs Taruck Chunder Turkoruttun (1), there was a destruction of the temple by the erosion of the river on the banks of which the idol was installed.
The suit was filed by the plaintiffs for a declaration of their right to remove the idol to their own house and to keep it there for the period of their turn of worship.
This claim was decreed.
On appeal, Dwarknath Mitter and Ainslie, JJ., interfered only to the extent that the lower Court ought to have defined the precise period for which the plaintiffs were entitled to worship the idol before it could make the declaratory decree, which it had passed in their favour.
They also directed that if it was found by the lower appellate Court that the plaintiffs and the defendants were jointly entitled to worship the idol during any part of the period mentioned by the plaintiffs, the,lower appellate Court should not allow the plaintiffs to remove the idol to their own house at Khatra for that portion of time.
It appears from the judgment that though the plaintiffs were allowed to remove the idol to their own house, they were to re convey it at their own expense to the place where it was at the time of the institution of the suit.
The learned Judges, however, qualified their judgment by saying that it was not contended in the case before then that the idol was not removable according to the Hindu Shastras.
In Hari Raghunath vs Anantji Bhikaji (2), the temple was a public one.
It was held by the High Court that under Hindu law, the manager of a public temple has no right to remove the image from the old temple and instal it in another new building, especially when the removal is objected to by a majority of the worshippers.
It is interesting to note that in this case Dr. P. V. Kane appeared, and in the course of his argument, he stated as follows: "According to the Pratishtha Mayukha of Nilkantha and other ancient works an image is to (1) (1873) 19 Weekly Reporter 28.
(2) Bom.
466. 799 be removed permanently only in case of unavoidable necessity, such as where the current of a river carries away the image.
Here the image is intact.
It is only the temple that is dilapidated.
For repairing it, the image need not necessarily be removed.
Even if it may be necessary to remove the image, that will be only temporarily.
The manager has under Hindu law no power to effect permanent removal of an image in the teeth of opposition from a large number of the worshippers.
In the instances cited by the appellant, worshippers had consented to the removal.
Permanent removal of an image without unavoidable necessity is against Hindu sentiment." (italics supplied) Shah, J. (Crump, J. concurring) observed as follows: " It is not disputed that the existing building is in a ruinous condition and that it may be that for the purpose of effecting the necessary repairs the image may have to be temporarily removed.
Still the question is whether the defendant as manager is entitled to remove the image with a view to its installation in another, building which is near the existing building.
Taking the most liberal view of the powers of the manager, I do not think that as the manager of a public temple he can do what he claims the power to do, viz., to remove the image from its present position and to instal it in the new building.
The image is consecrated in its present position for a number of years and there is the existing temple.
To remove the image from that temple and to instal it in another building would be practically putting a new temple in place of the existing temple.
Whatever may be the occasions on which the installation of a new image as a substitute for the old may be allowable according to the Hindu law, it is not shown on behalf of the defendant that the ruinous condition of the existing building is a ground for practically removing the image from its present place to a new place permanently.
We are not concerned in this suit with the question of the temporary removal which may be necessary when the existing building is repaired." 800 The case is an authority for the proposition that the idol cannot be removed permanently to another place, because that would be tantamount to establishing a new temple.
However, if the public agreed to a temporary removal, it could be done for a valid reason.
In Pramatha Nath Mullick vs Pradyumna Kumar Mullick (1), the deed of trust created an injunction against the removal of the deity.
The following quotation from that deed of trust shows the powers of the manager : " Shall be for ever held by the said Jadulal Mullick, his heirs, executors, administrators and representatives to and for the use of the said Thakur Radha Shamsunderji to the intent that the said Thakur may be located and worshipped in the said premises and to and for no other use or intent whatsoever provided always that if at any time hereafter it shall appear expedient to the said Jadulal Mullick, his heirs, executors, administrators or representatives so to do it shall be lawful for him or them upon his or their providing and dedicating for the location and worship of the said Thakur another suitable Thakur Bari of the same or greater value than the premises hereby dedicated to revoke the trusts hereinbefore contained and it is hereby declared that unless and until another Thakur Bari is provided and dedicated as aforesaid the said Thakur shall not on any account be removed from the said premises and in the event of another Thakur Bari being provided and dedicated as aforesaid the said Thakur shall be located therein, but shall not similarly be removed therefrom on any account whatsoever." The Privy Council analysed this provision, and stated that the last condition made the idol immovable, except upon providing for the dedicatee another Thakur Bari of the same or larger value.
It observed: " The true view of this is that the will of the idol in regard to location must be respected.
if, in the course of a proper and unassailable administration (1) (1925) L.R. 52 I.A. 245. 801 of the worship of the idol by the Shebait, it be thought that a family idol should change its location the will of the idol itself, expressed through his guardian, must be given effect to.
" Their Lordships ordered the appointment of a disinterested next friend, who was to commune with the deity and decide what course should be adopted, and later the instructions of the deity vouchsafed to that representative were carried out.
In this case, there was a family deity and there was a provision for removing the idol to another better and more suitable Thakur Bari, if it appeared necessary.
The wishes of the deity were considered and consulted.
The case, however, is not quite clear as to whether in all circum stances the idol can be removed from one place to another.
The last case on the subject is Venkatachala vs Sambasiva (1).
The headnote quite clearly gives the decision, and may be quoted here: " Where all the worshippers of a temple, who are in management of it, decide to build a new temple, the old one being in ruins and the site on which it stood becoming insanitary and inconvenient for worshippers, then, unless there is clear prohibition against their demolishing the old temple and building a new temple, the Court is not entitled to prevent the whole body from removing the temple with its image to a new site in the circumstances.
" Devadoss, J., quoted passages from Kamika Agama, and referred to Prathista Mayukha by Nilakanta, Purva Karana Agamam and Nirnaya Sindhu.
He, however, relied upon certain passages from Purva Thanthiram by Brighu, Kamika Agama, Siddhanta Sekhara and Hayasirsha Pancharatra, and came to the above conclusion.
The effect of the decision is that the whole body of worshippers, if they are of one mind, can even permanently remove an idol to another habitation.
In the present case, the idol was not permanently removed except once when it was taken away from Junnar and installed at Nasik.
As we have already (1) A I.R. 1927 Mad. 465; 52 M.L.J. 288.
802 pointed out, that was at the behest of the deity itself.
Afterwards, the deity which is installed in a removable form (chala) has been temporarily removed for purposes of processions, invitations to dinner and visits to other parts of India, so that worshippers may have a chance of making their devotion.
This has continued for over 250 years, and has not been objected to at any time.
Indeed, a huge concourse of worshippers always followed and follows the deity every time it is taken out temporarily for the purpose of affording the votaries chances of worship at close quarters.
This appears to be a custom which has received recognition by antiquity and by the consent of the worshipping public it may be noted that the deity is brought back to the old site after its temporary sojourn at other places, and that further during the absence of the deity, a substitute idol is placed, so that the dedicatee is never out of possession of the temple.
In view of these circumstances and the cases to which we have referred, and in view, further, of the fact that no text or authority was cited against such course of conduct with the consent of the worshipping public, we do not see any reason for holding that the temple was private and the deity, a family idol.
The appellant raised a special argument in respect of certain properties, which, he stated, were private.
He relied upon the observations of the learned Judges of the High Court that they were inclined to hold that these properties were private but refrained, from giving a declaration in view of the fact that the deity had not been joined.
These properties are jat inams, recently built properties, namely, the Balaji temple and the 'Shree Theatre ', and an allowance which goes in the name of Kulkarni commutation amounting to Rs. 24 per year.
The difficulty in the way of the appellant is real.
He refrained from joining the deity, if not as a necessary, at least as a proper party to the suit.
If he had joined the deity and the deity was represented by a disinterested guardian, necessary pleas against his contention could have been raised by the guardian, and it is likely that some evidence would also have been given.
The appellant seeks to 803 cover up his default by saying that the suit was one under section 1, r. 8 of the Code of Civil Procedure, and that the Hindu public was joined and the deity was adequately represented.
In a suit of this character, it is incumbent to have all necessary parties, so that the declaration may be effective and binding.
It is obvious enough that a declaration given against the interests of the deity will not bind the deity, even though the Hindu Community as such may be bound.
The appellant would have avoided circuity of action, if he had acceded to the very proper request of the respondents to bring on record the deity as a party.
He stoutly opposed such a move, but at a very late stage in this Court he has made an application that the deity be joined.
It is too late now to follow the course adopted by the Privy Council in Pramatha Nath Mullick vs Pradyumna Kumar Mullick (1) and Kanhaiya Lal vs Hamid Ali (2), in view of the attitude adopted by the appellant himself and the warning which the trial Judge had issued to him in his order.
There is yet another reason why the case cannot be re opened, because the appellant himself did not choose to make any distinction between one property and another as regards the claim of his ownership.
He stated that each item of property was acquired and owned in the same manner as another.
Arguments were addressed with regard to the Balaji Mandir, which is situated on section Nos. 1353 and 1354.
This land was granted to one of the appellant 's predecessors by exhibit 571 by the Peshwa.
At that time 3 bighas of land were given to Bapaji Buva, son of Timayya, because he was a "worthy and respectful " Brahman, for the express purpose of building a temple.
No doubt, in Exs. 878 and 153 the name of the Vahiwatdar has been mentioned, and the latter is a sanad of the Governor of Bombay confirming the grant free from land revenue.
The original grant was obviously made not to the Brahman concerned but for the express purpose of building a temple upon the land.
We have already held that the public have a right in the deity and the temple is also public and (1) (1925) L.R. 52 I.A. 245.
(2) (1933) L.R. 66 I.A. 263, 804 that, therefore, the grant must be regarded also as part of the property of the deity.
It is significant that after the temple was built with borrowings from others a sum of no less than Rs. one lakh was paid the Peshwas and other Rulers to satisfy them.
The finding of the learned Judges of the High Court could not therefore given in the absence of the deity, and we think that we should only say that in view of the case as pleaded, the declaration should have been re fused without any comments adverse to the deity.
A Court should not, in a case which goes by the board on a cardinal point, decide matters which cannot arise in it but may be pertinent in another case between different parties.
We are, however, clear that no declaration can now be granted in respect of this property.
The next property which was specially mentioned for our consideration is the " Shree Theatre ", in which the appellant claims to hold a third share.
Here also, the extracts from the property register have been filed, and the appellant has drawn our attention to exhibit 290, which is a deed of purchase and exhibit 691, the permission by the Municipality to build upon the land.
It was necessary for the appellant to show that this Theatre was built from monies derived from a private source and not from the income of the Devasthan.
He has not furnished satisfactory evidence, and in describing the source of money he referred to the sale of one property, the price whereof according to him was utilised for the Theatre.
It, however, appears from the record of the case that with that money Balaji Vihar was purchased, and the case made before us was that it was the sale proceeds of Balaji Vihar which were used to build the Theatre.
If that be so, then the evidence to connect the Theatre with Balaji Vihar ought to have been tendered and a plea to that effect taken.
We cannot accept the argument in lieu of plea and evidence, and we think that the appellant has neglected to bring the necessary evidence to reach a finding, This matter also suffers from the same defects, namely, the failure to join the deity as a party and also not waking a distinction between one, 805 kind of property and another.
Here too, the High Court should not have expressed any opinion adverse to the deity, without the deity being a party.
The same has to be said of items 3 to 10 in the first part of Sch.
A annexed to the plaint and three survey numbers of Belatgavan, Deolali and other jat inams.
No useful purpose will be served in examining in detail the evidence relating to these properties in the absence of the deity.
It may also be pointed out that the appellant maintained no separate accounts for these properties, and made no distinction between them and the other properties to which we have referred earlier.
A trustee must not mix private property with trust property, because if he does so, he undertakes a heavy burden of proving that any particular property is his, as distinct from the trust.
See Lewin on Trusts, 16th Edn., p. 225.
To the same effect are the observations in Srinivasa Chariar vs Evalappa Mudaliar (1).
The result is that the declaration which the appellant sought in his suit that the temple, the deity and plaint properties were all of private ownership, was rightly refused by the Courts below.
The trial Judge gave a declaration that defendants 1 to 4 are en titled to custom ary worship and maintenance.
Strictly speaking, such a finding was not necessary in a case of this character, and other matters concerning rights of individuals should not have been gone into in a suit filed under section 5(3) of, the Act.
The appellant is partly to blame.
He set up a case of private ownership with all rights centred in himself, and defendants 1 to 4 therefore not only raised the plea that the appellant was a mere manager but also asserted their rights in the property.
We think that the Courts below might have refrained from pronouncing upon the rights of the defendants, because all that they had to do was to decide whether the property was trust of a public nature.
We, however, do not wish to give any direction in the matter, because the suit, as a whole, as laid by the plaintiff has been dismissed, and to make any observations might lead to further litigation, which is not in the interests of the deity.
(1) (1922) L. R. 49 I.A. 237.
102 806 Respondents 6 and 7 raised before us the question of costs.
They stated that the trial Judge had given two sets of costs, which was changed to one set by the High Court.
These respondents should have cross objected on this point against the judgment of the High Court, and in the absence of any such cross objection, no relief can be granted to them.
For the same reason, no relief can be given to respondent 7, in respect of whom the finding that he bad no right of performing the seva and getting emoluments attached to that right, as respondents 1 to 4, has not been vacated, as was done in the case of respondent 6.
In view of our observations that these matters were alien to the suit which had been filed, we do not propose to deal with them.
In the result, the appeal is dismissed.
The appellant will personally pay the costs of Respondent 1.
The other set of respondents will bear their own costs.
Appeal dismissed.
| In exercise of the powers under section 3 of the Essential Supplies (Temporary Powers) Act, 1946, the Central Government made the Cotton Textile (Control of Movement) Order, 1948.
The 1946 Act was to expire on January 26, 1955, but before that, on January 21, 1955, the Essential Commodities Ordinance was promulgated which conferred on the Central Government a power similar to that conferred by section 3 of the 1946 Act.
Section 16 of the Ordinance provided that all Orders made under the 1946 Act in so far as such Orders could be made under the Ordinance shall continue in force and that accordingly any appointment made, license or permit granted or direction issued under any such Order shall continue in force.
The , ,955 by section 16(i)(a) repealed the Ordinance and by section 16(i)(b) 727 repealed any other law in force in any State in so far as such law controlled the production, supply and distribution of, and trade, and commerce in any essential commodity.
The savings clause section 16(2) of the 1955 Act was a repetition of section 16 of the Ordinance.
The respondent contended that the amplitude of the first part of section 16 of the Ordinance was cut down by the second part and consequently section 16 did not save the Order but only the acts done under the Order, and that even if the Order was saved by section 16 of the Ordinance it was repealed by section 16(i)(b) of the 1955 Act and was not continued under that Act.
Held, that the Cotton Textiles (Control of Movement) Order, 1948 was saved by section 16 of the Ordinance and was continued by section 16(2) of the , and was in force on August 30, 1955, when the offence was committed.
The first part of section 16 of the Ordinance saved the order and the acts done under the Order subsequent to the coming into force of the Ordinance and the second part of section 16 saved past acts done under the Order before the coming into force of the Ordinance.
The words " any other law " in section 16(i)(b) of the 1955 Act meant any law other than the Ordinance and an order made or deemed to be made under the Ordinance was not repealed by section 16(i)(b).
Such an order was saved by section 16(i)(a) of the Act.
Held, further, that this was not a fit case for interference under article 136 of the Constitution with the order of the High Court discharging the respondent.
The offence was committed more than four years ago; the application by the appellant to the High Court for a certificate of fitness to appeal to the Supreme Court was belated ; there was plausible justification for the belief of the accused that the Order did not survive the expiry of the 1946 Act in view of the varying views expressed by the Courts; the State filed the appeal presumably to get the legal position clarified ; in such circumstances public interest did not require that the stale matter should be resuscitated.
|
ivil Appeal Nos.
998 999 of 1991.
From the Judgment and Order dasted 1.3.1990 of the Allahabad 480 High Court in C.M.W.P. Nos. 11465 & 3085 of 1987.
Satish Chandra, and Prashant Bhushan for the Appellants.
V.C.Mahajan, S.D. Sharma, S.N.Terdol and Mrs.Suri for the Respondents.
The Judgment of the Court was delivered by YOGESHWAR DAYAL, J.
1.
Civil Appeal Nos.
998 and 999 of 1991 have been filed against the judgment of the Division Bench of the Allahabad High Court dated 1st March, 1990 whereby the Allahabad High Court dismissed the writ petitions filed by the District Exhibitors Association, Muzaffarnagar and others as well as some other Theatres upholding the Notification dated 30th April, 1986 issued by the Central Government under Section 5 read with sub section (1) of Section 7 of the Employees ' Provident Funds and Miscellaneous Provisions Act,1952 (hereinafter referred to as`the Provident Funds Act ').The main judgment was delivered by the High Court in the Civil Miscellaneous Writ Petition filed on behalf of Shakti Theatre, Civil Lines, Bijnore, which was followed in the petition filled by the District Exhibitors Association Muzaffarnagar and others and some other writ petitions.
Before us also the Notification dated 30th April, 1986 of the Goernment of India, Ministry of Labour, amending the Employees ' provident Funds Scheme, 1952 (For short `Scheme ') issued under the Provident Funds Act has been challenged.
2.The Provident Funds Act came into force on 14th March,1952.
The preamble of the Act states that it is an Act to provide for the institution of provident funds, family pension fund and deposit linked insurance fund for employees in factories and other establishments.
The Act by Section 1(3) makes it applicable to every factory referred to in clause (a) and also to any other establishment referred to in clause (b) employing twenty or more persons or class of such establishments which the Central Government may, by Notification in the Official Gazette, specify in that behalf.
The scheme under Section 5 alongwith other schemes were issued in 1952.
The Provident Funds Act by Notification of the Government of India issued on 31st July, 1961, under Section 1(3) was made applicable to cinema theatres employing twenty or more persons.
The (hereinafter referred to as `the Cinema 481 Theatre Workers Act) received the assent of the President on 24th December, 1981, and was published in the Gazette on the same day.
The Cinema Theatre Workers Act came into force with effect from 1st October, 1984.
The preamble of the Act says that it is to provide for the regulation of the conditions of employment of certain cine workers and cinema theatre workers and for matters connected therewith.
Section 2(a) defines `cinema theatre ' to mean a place which is licensed under of the , or under any other law for the time being in force in a State for the exhibition of cinematograph films.
Section 24 enacts: "The provisions of the Employees~ Provident Funds and Miscellaneouss Provisions Act, 1952, as in force for the time being, shall apply to every cinema theatre in which five or more workers are employed on any day, as if such cinema theatre were an establishment to which the aforesaid Act had been applied by a notification of the Central Government under the proviso to sub section (3) of section 1 thereof, and as if each such worker were an employee within the meaning of that Act." 4.
The Notification of the Government of India amending the Scheme under the Provident Funds Act was issued in conformity with Section 24 of the Cinema Theatre Workers Act.
The impugned Notification dated 30th April, 1986 is being reproduced for facility of under standing the submissions made on behalf of the appellants: `NOTIFICATION G.S.R.
In exercise of the powers conferred by Section 5 read with Sub section (1) of Section 7 of the (19 of 1952), the Central Government hereby makes the following Scheme further to further to amend the Employees ' Provident Funds Scheme, 1952 namely; 1.
This Scheme may be called the Employees ' Provident Funds (Amendment) Scheme, 1986.
In the Employees ' Provident Funds Scheme in paragraph 1, in sub paragraph (3), in clause (b) after item (XOV11) the following item shall be added, namely: 482 `(XOV11) as respect the Cinema Theatre employing 5 or more workers as specified in Section 24 of the Cine WorKers and Cinema Theatres Workers (Regulation of Employment) Act, 1981 (50 of 1981) be deemed to have come into force with effect from the 1st day of October, 1984 '.
(No. S 35016/1/86 SS11) Sd/ A.K.Bhattari Under Secretary 30.4.1986 ' 5.
A perusal of the Notification shows that the Scheme has been retrospectively made applicable in respect of cinema theatres employing five or more workers as specified in Section 24 of the Cinema Theatre Workers Act with effect from 1st October , 1984 though the Notification was issued on 30th April, 1986.
1st October, 1984 is also the date of coming into force of Cinema Theatre Workers Act.
Before the High Court the main arguments raised by the appellants were: a) that the Notification dated 30th April 1986 was ultra vires of the provisions of the provident Funds Act inasmuch as the Central Government could not extend the scheme to an establishment which is neither an industry nor a notified establishment under Section 3(b) of the Provident Funds Act; b) that there was no liability under the scheme framed by the Central Government to make contribution towards the provident fund in respect of the employees who ceased to be a cinema employee before the Provident Funds Act came into force from 30th April,1986:and c) that the demand of the Provident Funds Commissioner from the employers about the arrears of contribution even for prediscovery period i.e. the date from which the scheme became applicable to employers, who were called upon to pay contribution by notice, leads to hardship and injustice and, therefore, violates Article 14 of the Constitution.
483 7.
The High Court while dealing with these submissions took the view that Section 24 of the Cinema Theatre Workers Act has applied the provisions of the Provident Funds Act to every cinema theatre in which five or more workers were employed on any day, as if such cinema theatre were an establishment to which the provisions of the Provident Funds had been applied by a Notification of the Central Government under the proviso to clause (b) of sub section (3) of Section 1 of the Provident Funds Act.
The High Court, in view of the averments made in the counter affidavit filed on behalf of the respondent as well as on the interpretation of the scheme, took the view that only those employees who were in employment on 30th April, 1986 and had not ceased working in a cinema in respect of whom the benefit was being claimed, could be entitled to get the benefit of the scheme.
In the notice the demand of contribution was sought under the Sachem in respect of the employees working on 30th April, 1986 with effect from Ist October, 1984.
The High Court took the view that since the demand was made for the employers ' contribution in respect of the employees who were working on 30th April, 1986, it was wrong to argue that the scheme was being incorrectly applied.
Those workers who had left the cinema and had ceased to be its workers on 3oth April, 1986, would certainly not be entitled to any benefit under the scheme.
Regarding the challenge to the demand by the Provident Fund Commissioner from the employers about the arrears of contribution, the High Court felt that there was no substance in that argument.
Before us Mr. Satish Chandra, learned counsel for the appellants submitted: i) that the Provident Funds Act would not be applicable so long as the Notification as required by the proviso to Section 1(3)(b) has not been issued; ii) even if we assume that Section 24 of the Cinema Theatre Workers Act takes the place of a Notification being issued as contemplated by the proviso to Section 1(3)(b) of the Provident Funds Act, an express Notification under Section 5 is required to make the scheme applicable to those establishments and without such a Notification the scheme will not be applicable: iii) that under Section 6 of the Provident Funds Act, the liability is only fixed for employers; share of contribution towards Provident Funds and there is no liability fixed to 484 pay employees ' share, and unless paragraph 30 of the scheme is made applicable there is no inability of the employers to pay employees ' share; iv) that the Notification is very harsh and unjust as the appellants are being asked to pay the contribution of the employees share to the Provident Fund Account retrospectively without the corresponding right of employer to recover it from the wages of employees.
It may be mentioned that the vires of any of the provision of the Provident Funds Act or the Scheme has not been challenged before us.
As would be seen from the preamble of the Provident Funds Act, the Act is intended for the benefit of the employees.
It is also so clear from its objects and reasons extracted below: "The question of making some provision for the future of the industrial worker after he retires or for his dependants in case of his early death, has been under consideration for some years.
The ideal way would have been provision through old age and survivors ' pensions as has been done in the industrially advance countries.
But in the prevailing conditions in India the institution of a pension scheme cannot be visualised in the near future.
Another alternative maY be for provision of gratuities after a prescribed period of service.
The main defect of a gratuity scheme, however, is that amount paid to a worker or his dependants would be small, as the worker, would not himself he making any contribution to the fund.
Taking into account the various difficulties, financial and administrative, the most appropriate course appears to be the institution compulsorily of contributory provident funds in which both the worker and the employer would contribute.
Apart from other advantages, there is the obvious one of cultivating among the workers a spirit of saving something regularly.
The institution of a provident fund of this type would also encourage the stabilisation of a steady labour force in industrial centres".
It is a legislation for the benefit of the worker sections of the society and the beneficial legislation is made applicable to cinema theatres if it employs five or more workers.
The classification of cinema theatres as a separate class for purposes of coverage under the Provi 485 dent Funds Act has also not been challenged.
Further no challenge has been made to any of the provision of the Cinema Theatre Workers Act.
Before we deal with the submissions of learned counsel for the appellants we may notice the relevant part of provisions of the Provident Funds Act and the Scheme.
Section 1(3) of the Provident Funds Act reads as follows: "Subject to the provisions contained in Section 16, it applies (a) to very establishment which is a factory engaged in any industry specified in Schedule 1 and in which twenty or more persons are employed, and (b) to any other establishment employing twenty or more persons or class of such establishments which the Central Government may, by notification in the Official Gazette, specify in this behalf: Provided that the Central Government may, after giving not less than two months ' notice of its intention so to do, by notification in the Official Gazette, apply the provisions of this Act to any establishment employing such number of persons less than twenty as may be specified in the notification.
Section 5(1) and (2) provide as follows: "5.
Employees ' Provident Fund Schemes (1) The Central Government may, by notification in the Official Gazette, frame a Scheme to be called the Employees ' Provident fund Scheme for the establishment of provident funds under this Act for employees or for any class of employees and specify the establishments or class of establishments to which the said Scheme shall apply and there shall be established as soon as may be after the framing of Scheme, a Fund in accordance with the provisions of this Act and the Scheme.
(1 A). . . (1 B). . . 486 (2) A Scheme framed under sub section (1) may provide that any of its provisions shall take effect either prospectively or retrospectively on such date as may be specified in this behalf in the Scheme" 14.
The relevant part of Section 6 reads as follows: "6.
Contributions and matters which may be provided for in Schemes The contribution which shall be paid by the employer to the Fund shall be eight and one third per cent of the basic wages, dearness allowance and retaining allowance, if any, for the time being payable to each of the employees, whether employed by him directly or by or through a contractor, and the employee 's contributions shall be equal to the contribution payable by the employer in respect of him and may, if any employee so desires, b an amount exceeding eight and one third per cent of his basic wages, dearness allowance and retaining allowance, if any, subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable under this section.
Para 1(1) and relevant parts of paras 1(3)(a) and 1(3)(b) of the Scheme read as follows: "1.
Short title and application (1) This Scheme may be called the Employees ' Provident Funds Scheme 1952.
(2). . . (3)(a) Subject to the provisions of Sections 16 and 17 of the Act, this Scheme shall apply to all factories and other establishments to which the Act applies or is applied under sub section (3) or sub section 4(1) of Section 1 or Section 3 thereof: . . . (b) Provisions of this Scheme shall . . . . (xcviii) as respect the cinema theatres employing 5 or more workers as specified in Section 24 of the Cine Workers and Cinema Theatres Workers (Regulations of Employment) Act, 1981 (50 of 1981) be deemed to have come into force with effect from the 1st day of October, 1984." 487 16.
The relevant parts of paras 30 and 32 of the Scheme read as follows: "30.
Payment of contribution (1) The employer shall, in the first instance, pay both the contribution payable by himself in this Scheme referred to as the employer 's contribution and also, on behalf of the member employed by him directly or by or through a contractor, the contribution payable by such member 's in the Scheme referred to as the member 's contribution.
(2). . . (3) It shall be the responsibility of the principal employer to pay both the contribution payable by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor and also administrative charges.
Explanation . . . . 32.
Recovery of a member 's share or contribution (1) The amount of a member 's contribution paid by the employer or a contractor shall, notwithstanding the provisions in this Scheme or any law for the time being in force or any contract to the contrary, be recoverable by means of deduction from the wages of the member and otherwise: Provided that no such deduction may be made from any wage other than that which is paid in respect of the period or part of the period in respect of which the contribution is payable: . . . .
Provided further that where no such deduction has been made on account of an accidental mistake or a clerical error, such deduction may, with the consent in writting of the Inspector, be made from the subsequent wages.
(2). . . (3). . . 17.
A combined reading of Section 6 of the Provident Funds Act 488 and paras 30 to 32 of the Scheme is that the contribution to the Provident Fund is to be 12 1/2% of the basic wages and dearness allowance, that is to be borne equally by the employer and the employee and that the employer is to pay the whole of it, half on his account, and the other half on account of the employee and he is to recoup himself by deducting it from the wages of the employee.
A bare reading of Section 24 of the Cinema Theatre Workers Act shows that it has fulfilled the purpose of the Notification which the Central Government could have issued under Section 1(3)(b) of the Provident Funds Act read with the proviso.
Therefore, no further Notification as contemplated by Section 1(3)(b) of the Provident Funds Act was necessary.
Section 24 has taken the place of the Notification contemplated by Section 1(3) (b) of the Provident Funds Act read with the proviso thereto.
Therefore the Provident Funds Act became applicable to the theatres who employ five or more workers with effect from 1st October, 1984.
Again in view of Section 6 of the Provident Funds Act, noticed earlier, the employers became liable to pay their contribution to the fund as soon as the Act came into force i.e. w.e.f. 1st October, 1984.
It is also clear from reading of Section 5 of the Provident Funds Act that before the Provident Funds Scheme can become applicable, the Central Government has to frame a Scheme and also specify the establishment to which the said Scheme shall apply.
Till the impugned Notification dated 30th April, 1986 was published the Scheme was not applicable to such cinema theatres who are employing less than 20 employees and it became applicable to cinema theatres employing five or more workers only when the impugned Notification was issued under Section 5 of the Provident Funds Act.
It is only by the impugned Notification that the scheme was amended so as to be made applicable in respect of cinema theatres employing five or more persons.
Without such a Notification the Scheme would not have became applicable.
The Notification on the face of it shows that the Scheme has been made applicable to the cinema theatres covered by the Notification with effect from 1st October, 1984.
This could be done in view of not only the provisions of Section 5(2) of the Provident Funds Act but also in view of Section 7(1) of the Provident Funds Act.
Both these provisions confer express powers of making the Scheme applicable retrospectively.
The question however, is whether by making the Scheme with retrospective operation, the employer could be saddled with the 489 liability to pay employees ' contribution w.e.f.
1st October, 1984 and if not from what other date? The answer to the question turns upon the implementation of the Scheme and in particular the giving effect to paras 30 and 32 of the Scheme.
Para 30 provides that the employer shall, in the first instance, pay both the contributions payable by himself and also the contribution payable by the employees.
It shall be the responsibility of the principal employer to pay both the contributions payable by himself and also in respect of the employees directly employed by himself and also in respect of the employees directly employed by himself and also in respect of the employees employed by him or through a contractor.
Para 32 confers upon the employer the right to recover the employees contribution that has been paid by him under para 30.
That could be recovered by the employer by means of deduction from the wage of the employees who are liable to pay.
First proviso to para 32(1) however, limits that liability in expressly stating that no such deduction may be made from any wage other than that which is paid in respect of the period of which the contribution, is payable.
It is obvious from paras 30 and 32 that the employer has to pay the contribution of the employee 's share but he has a right to recover that payment by deducting the same from the wages due and payable to the employees.
It is significant to note that the deduction is not from the wages payable for any period, but only from the wages for the period in respect of which the contribution is payable and no deduction could be made from any other wages payable to the employees.
In other words, the payment of employees contribution by the employer with the corresponding right to deduct the same from the wages of the employees could be only for the correct period during which the employer has also to pay his contribution.
In the instant case for the period from 1st October, 1984 up to the date of the impugned Notification the employer has paid the full wages to the employees since during that period, there was no scheme applicable to his establishment.
By retrospectively applying the scheme, could he be asked to pay the employees contribution for the period antecedent to the impugned notification.
We think not.
The Act and the Scheme neither permit any such payment nor deduction.
He cannot be saddled with the liability to pay the employees ' contribution for the retrospective period, since he has no right to deduct the same from the future wages payable to the employees.
Mr. Vikram Mahajan, learned counsel for the Central Government submitted that it may be possible for the employers to make deduction from subsequent wages of the workmen with the consent in writing of the Inspector as required under the third proviso to 490 para 32(1) of the Scheme.
This submission cannot be accepted since the third proviso could be taken advantage of by the employer only where no deduction has been made from the wages of the employees due to accidental mistake or clerical error when the scheme is operative.
Such deduction which has not been made by accidental mistake or clerical error, could be made from the subsequent wages with the consent in writing of the Inspector concerned.
The case with which we are concerned is not covered by the third proviso.
It is not the case of any body that the employer could not make deduction from the wages of the employees by accidental mistake or clerical error.
The employer indeed could not have made the deduction prior to the impugned notification dated 30th April, 1986 since the Scheme was not then applicable.
The Scheme has been given retrospective effect w.e.f.
1st October, 1984.
The employer therefore, cannot take the benefit of the third proviso to para 32(1) for deducting the employees contribution in their wages payable in future.
Reference was also made to the decisions of this Court in M/s. Orissa Cement Ltd. vs Union of India, [1962] (Suppl) 3 SCR 837 and in M/s. Lohia Machines Ltd., vs Union of India and Ors., [1965]2 SCR 686 by learned counsel for the appellants in support of his contentions.
It will be noticed that the Supreme Court in Orissa Cement Ltd. [1962] (Suppl) 3 SCR 837 was concerned with the validity of certain Notifications which were struck down as infringing Article 19(1)(g) of the Constitution.
The decision, has no applicability to the facts of the present case.
Equally, the decision, in Lohia Machines Ltd., has also no applicability to the facts of the present case.
In the result and for the foregoing reasons, we allow the appeals as indicated above by setting aside the judgment of the High Court.
We declare that the appellants are not liable to pay the employees contribution for the period from 1st October, 1984 to 30th April, 1986.
In the facts and circumstances of the case, however, we make no order as to costs.
G.N. Appeals partlly allowed.
| The appellants are H.T. electricity consumers of various categories in the State of Andhra Pradesh.
The respondent State Electricity Board (the Board), by its orders B.P. Ms. No. 1014 dated 13.12.1983 revised upwards the tariffs for various categories of consumers including H.T. categories 1 (Industrial) and II (Non Industrial); and by Memo No. DE/COML/IV/2250/83/I of the same date it revised upwards the electricity tariffs for highly power intensive industries falling under 644 H.T. Category III.
Tariffs consisted of three parts.
The said three categories of H.T. consumers fell in Part A. H.T. consumers availing supply of electricity for irrigation and agricultural purposes were included in part B. provided for miscellaneous and general charges.
Tariffs were not revised for consumers availing H.T. supply for purposes of irrigation and agriculture falling in part B or L.T. supply for domestic cottage industries, public lighting and small poultry farms units.
Besides the energy charges, the H.T. consumers included in Part A were also required to pay at different rates effective from 1.9.1982 an additional charge levied as `fuel adjustment charges '; and some amount as `voltage surcharged ' in accordance with the terms of the agreement entered into by the individual consumers with the Board.
The writ petitions filed by the appellants challenging the said upward revision of the Electricity Tariffs were dismissed by the High Court upholding the revision of tariffs made by the respondent Board.
Aggrieved the appellants preferred appeals by special leave to this Court.
It was contended on behalf of the appellants that: (1) the upward revision of tariffs by the State Electricity Board was invalid being made without prior consultation with the State Electricity Consultative Council as envisaged by section 16 of the ; (2) without specification of any surplus by the State Government the Board had no power to adjust its tariffs in a manner which resulted in generating any surplus; (3) there is discrimination in recovery of the entire full cost adjustment from the H.T. consumers alone; (4) the upward hike of the tariffs for the H.T. consumers including power intensive consumers was arbitrary and discriminatory inasmuch as it was not related to the cost of generation and was based on irrelevant factors; and (5) and the Board had acted with profit motive losing its public utility character.
Learned counsel representing the power intensive consumers also contended that in the absence of a clause relating to fuel cost adjustment in the G.Os.
issued in respect of the power intensive units, they could not be governed by the clause of fuel cost adjustment made applicable to the H.T.tariffs.
Dismissing the appeals, this Court, HELD: 1.1 The power of fixation of tariffs in the Board is provided by section 49 of this Supply Act which requires the fixation of uniform 645 tariffs ordinarily having regard particularly to the specified factors and enables fixation of such tariffs for any person having regard to the factors expressly stated and any other relevant factors providing further that no unreasonable or undue preference shall be shown to any person by the Board in exercise of its powers of fixing the tariffs.
section 59, requiring the Board to adjust the tariffs for the purpose of its finance is to be read along with section 49.
[667B C; 668B C] 1.2.
The common premise for the purpose of the instant case that the revision of tariffs by the State Electricity Board is a question of policy may indicate that it would be open to the Consultative Council to advise the Board also on the question of revision of tariffs, and if such advice is given, then the Board must consider the same before taking the final decision.
That, however, does not necessarily mean that where no such advice was taken from the Consultative Council or was rendered on account of the absence of any meeting during the relevant period, it would necessarily render invalid the revision of tariffs made by the Board.
[664A B] Though it is advisable to seek advice of the Consultative Council before revision of the tariffs yet failure to do so does not result in invalidation of the revised tariffs.
This consequence appears to be the logical and reasonable view to take of the requirement of section 16 alongwith other provisions of the Act.
[666A B] 1.3 The consequence of non compliance of section 16 is not provided, and the nature of function of the Consultative Council and the force of its advice being at the best only persuasive, it cannot be said that revision of tariffs without seeking the advice of the Consultative Council renders the revisions of tariffs invalid.
[664B C] 1.4 It is also significant that the annual financial statement containing all particulars relating to revision of tariffs is required to be submitted to the State Government in February each year and the State Government is required after receipt of such statement to cause it to be laid on the table of the House or Houses of the State Legislature and the said statement is open to discussion therein.
The Board is bound to take into consideration any comments made on the said statement in the State Legislature.
The 'laying procedure ' before the legislature effectively controls the exercise of the delegated power of the Board.
Thus there is ample provision for discussion on the revised tariffs in the State Legislature with the Board being bound to take into consideration any comments made thereon.
[664C D; 666A] 646 Kerala State Electricity Board vs M/s. S.N. Govinda Prabhu & Bros. & Ors.
, ; , relied on.
2.1 Mere generation of surplus by the Board as a result of adjusting its tariffs when the quantum of surplus has not been specified by the State Government after the 1978 amendment of section 59 of the Act, cannot invite any criticism unless it is further shown that the surplus generated as a result of the adjustment of tariffs by the Board has resulted in the Board acting as a private trader shedding off its public utility character.
If the profit is made not merely for the sake of profit, but for the purpose of better discharge of its obligations by the Board, it cannot be said that the public enterprise has acted beyond its authority.
[669C E] 2.2 The general principle for the Boards finance indicated by section 59 is that prior to the 1978 amendment, tariffs could be adjusted to avoid any loss, but as a result of the shift made by the 1978 amendment the power could be exercised to generate a surplus and when the State Government specified the amount of surplus then the Board was bound to adjust the tariffs to ensure generation of the specified surplus.
However, generation of a reasonable surplus in any year of account without specification of the surplus amount by the State Government was not contra indicated in the provision inasmuch as the duty to generate a surplus was implicit with the added obligation to ensure generating surplus to the extent specified by the State Government when it was so specified by it.
It cannot be accepted as a reasonable view that in the absence of specification of the surplus by the State Government, the Board could not adjust its tariffs to generate even a reasonable surplus in any year of account.
[668E G] 2.3 In the instant case the Board showed that the surplus resulting from upward revision of tariffs applicable to the H.T. consumers was for the purpose of better discharge of its other obligations under the Supply Act and in effect the same has merely resulted in a gradual withdrawal of the concessional tariffs provided earlier to the power intensive consumers which did not in its opinion require continuance of the concessional tariffs any longer.
It was not proved that this assertion of the Board was incorrect or there was any reasonable basis to hold that the upward revision of tariffs applicable to H.T. consumers was merely with a desire to earn more profits like a private trader and not to generate surplus for utiliasation of the funds to discharge other obligations of the Board towards more needy consumers, such as agriculturists, or to meet the needs of expansion of the supply to deserving areas.
[669E G] 647 3.1 The H.T. consumers, including the power intensive consumers, are known power guzzlers and in power intensive industries, electricity is really a raw material.
This category of consumers, therefore, forms a distinct class separate from other consumers like L.T. consumers who are much smaller consumers.
There is also a rational nexus of this classification with the object sought to be achieved.
Moreover, the power intensive consumers have been enjoying the benefit of a concessional tariff for quite some time, which too is a relevant factor to justify this classification.
Placing the burden of fuel cost adjustment on these power guzzlers, who had the benefit of concessional tariffs, for quite some time and have also a better capacity to pay, cannot, therefore, be faulted since the consumption in the power intensive industries accounts for a large quantity.
[670B C] 3.2 It is not unreasonable to take the view that the thermal power has become costlier on account of the increase in fuel cost and could notionally be allocated to the consumption by H.T. and power intensive consumers and, therefore, the fuel cost adjustment is made applicable to them alone.
[671E F] 4.1 The Court would not strike down the revision of tariffs as arbitrary unless the resulting surplus reaches such a height as to lead to the inevitable decision that the Board has shed its public utility character and is obsessed by the profit motive of private entrepreneur in order to generate a surplus which is extravagant.
[672A B] 4.2 The surplus generated by the Board as a result of revision of tariffs during the relevant period cannot be called extravagant by any standard to render it arbitrary permitting the striking down of the revision of tariffs on the ground of arbitrariness nor is it discriminatory.
It was pointed out on behalf of the Board that its action was based on the opinion of Rajadhyaksha Committee 's report submitted in 1980 and the formula of fuel cost adjustment was on a scientific basis linked to the increase in the fuel cost.
This is a possible view to take and, therefore, the revision of tariffs by the Board does not fall within the available scope of judicial review.
[672C D] Kerala State Electricity Board vs M/s. S.N. Govinda Prabhu and Bros. & Ors., ; , relied on.
Shri Sitaram Sugar Company Limited & Anr.
vs Union of India & Ors.
, ; , followed.
648 5.
It cannot be said that the term relating to fuel cost adjustment had no application to the power intensive consumers during the relevant period.
The Memo dated 18.11.1975 did not merely extend the non specified 'terms and conditions of supply ' applicable to normal H.T. consumers to the power intensive consumers but also "other charges" which were merely illustrated by the words, "such as Misc.
charges, terms and conditions of supply not mention herein".
This express provision in the said Memo clearly provided that except for the provision specifically made for power intensive consumers, in respect of all other provisions the power intensive consumers were to be governed by the provisions, by whatever name called, applicable to the normal H.T. consumers.
However in the bills issued to the power intensive consumers the terms relating to fuel cost adjustment was specifically indicated.
[673D H; 674A] Nav Bharat Ferro Alloys Ltd. vs A.P.S.E. Board Hyderabad, AIR 1985 A.P. 299, approved.
|
Appeal No. 738 of 1963.
Appeal by special leave from the judgment and decree, dated December 16, 1960 of the Madhya Pradesh High Court in First Appeal No. 105 of 1957.
57 B. Sen. M. N. Shroff and I. N. Shroff, for the appellants.
G. section Pathak and C. P. Lal, for respondents 1 (a) 1(c).
K. L. Hathi and R. N. Sachthey, for respondents No. 2.
The Judgment of the Court was delivered by Sarkar, J.
This appeal arises out of a suit filed on August 10, 1956 by Shri Lal Saheb Bhargavendra Singh, now deceased and represented by his legal representatives, against the Union of India, the State of Vindhya Pradesh, now merged in the State of Madhya Pradesh, and the Collector of Satna, for a declaration that he was entitled to receive an allowance of Rs. 650 per month from the Union of India.
There was another claim but that depended on the declaratory relief claimed and need not, therefore, be referred to further.
Shri Lal Saheb was the brother of the Ruler of the former Indian State of Nagod and he contended that the Ruler had by a law passed on March 7, 1948 provided for an allowance for him at the rate of Rs. 650 per month and that law was binding on the defendants who had by an executive order illegally altered the amount of the maintenance.
It was on this basis that the claim was made.
The suit was dismissed by the trial Court but was decreed by the High Court of Madhya Pradesh on appeal by the plaintiff.
Hence this appeal.
Certain events that took place after March 7, 1948 when the allowance was fixed have now to be stated.
On March 18, 1948, the Ruler of Nagod along with the Rulers of various neighbouring ruling States formed a new State called the United State of Vindhya Pradesh into which the component States were merged thereby losing their sovereign status.
Thereafter the United State merged in India by an agreement and pursuant thereto the Government of India took over its administration on January 1, 1950.
Its territories then became the Indian province of Vindhya Pradesh The United State ceased to exist.
On the promulgation of the Constitution on January 26, 1950 the Province of Vindhya Pradesh became a Part C State of Independent India and later from November 1, 1956 it was merged with the State of Madhya Pradesh.
By the agreement constituting the United State all laws in force in the constituent States were continued in force and likewise, the laws of the United State were by a statutory order continued in force when it merged in India.
Article 372 of the Constitution continued in force all laws which were in force in the territories of India immediately before the commencement of the Constitution.
58 Each succeeding State could, of course, alter the laws which were so continued in force in spite of the change of sovereignty, by a law duly made by it.
Neither the United State nor the Indian Province or States which successively administered the territories of the State of Nagod had made any law concerning any allowance to be paid to Shri Lal Saheb.
The Rajpramukh (the head) of the United State and the President of India had passed orders 'from time to time fixing his allowance at amounts lower than that at which it had been fixed by the Ruler of Nagod on March 7, 1948.
These were, however, executive orders and not laws.
They could not reduce the amount of allowance to Shri Lal Saheb fixed by the Ruler of Nagod on March 7, 1948, if he had done so by a law.
All this is not in controversy.
The only question in this appeal is whether the order of the Ruler of Nagod of March 7, 1948 was a law.
If it was, it is not in dispute that the claim made in the suit must be upheld.
The High Court observed that this Court had in various cases ending with the case of Madhaorao Phalka vs State of Madhya Pradesh (1) '.held that the line between the legislative, executive and judicial functions of absolute Rulers like the Ruler of Nagod was not at all clear cut and an attempt to place an order of such a Ruler in one class or the other was of no practical importance.
In this view of the judgments of this Court, the High Court said that it was futile to contend that the order of March 7, 1948 was an executive act of the Ruler and had not the force of law.
The High Court, therefore, held that the allowance had been fixed by law and decreed the suit.
The question whether, an order of a Ruler is law or not arises because an absolute Ruler combined in himself the capacities of the supreme executive, judicial and legislative authorities in the State; any particular action of his might have been in one or other of these capacities.
Therefore, it becomes necessary to decide, when the question arises as it has done.
in the present case, in what capacity the Ruler acted when he made a particular order.
At times, the question has presented some difficulty.
This Court had to discuss this question in many cases but, with respect, we think the High Court was under a misconception about the effect of the decisions in those cases.
It would be unprofitable to discuss these cases for their result may be quoted from the judgment in the recent case of Narsing Pratap Deo vs State of Orissa (2) : "The true legal position is that whenever a dispute arises as to whether an Orders passed by an absolute monarch represents a legislative (1) ; (2) A. I. R. ,1798.
59 act. . all relevant factors must be considered before the question is answered; the nature of the order, the scope and effect of its provisions, its general setting and context, the method adopted by the Ruler in promulgating legislative as distinguished from executive orders, these and other allied matters win have to be examined before the character of the order is judicially determined.
" It is, therefore, not correct to say as the High Court did, that this Court has held that every order of the Ruler is a law made by him.
The question whether it is so or not, has to be determined in each case independently.
We then proceed to discuss whether the order of the Ruler of Nagod was law.
The question arises because, as earlier stated, the covenant constituting the United State, certain statutory orders made from time to time and lastly article 372 of the Constitution said that the existing laws would be so continued.
Now, these are instruments dealing with sovereign States and rights.
They are instruments based on legal ideas and notions founded on modern jurisprudence.
It would, therefore, be legitimate to hold that the word "law" was used in them in a sense acceptable, to modern jurisprudence.
The contention that the order of March 7, 1947 being a law could be set aside only by a law duly passed by the succeeding States, emphasises this view.
A law made by these succeeding States, the last of which is the Union of India, is fully a law as understood in modem jurisprudence.
A law which is to be set aside by such a law must, therefore, have been contemplated as a law of the same kind.
This aspect of the matter has to be kept in mind in approaching the question.
Many tests may be suggested for determining whether a parti cular thing would be considered law in modem jurisprudence.
In the decisions of this Court on the point, several of them have been referred to.
It may be that they are not all applicable, to every case.
It may also be that it is not possible to give an exhaustive list of all these tests.
None the less however the question is capable of decision in each case.
The order of the Ruler of Nagod which is said to be a law, is addressed to the Chief Minister of the State and directs him to do certain things.
It starts by reciting that Shri Lal Saheb 's financial position was deplorable and the Ruler felt it to be his duty to see that Shri Lal Saheb did not experience difficulties in his advancing years and as no permanent arrangement had been made for him till then, the ruler was making the order.
Then follows the operative part of the order which is in these terms SUP.
C.I/66 5 60 "Hence, I order that (the Kothi) (in which he is at present residing) be given to Shri Lal Saheb for generation to generation and an allowance of Rs ' 650 (Rupees six hundred and fifty), per month be granted, in addition to the same a tonga and a horse be given, the expenses for which shall be borne by himself and Rs. 5,000 (Rupees five thousand), be granted to him so that he may be able to make improvements in agriculture and satisfy his debts (partly).
" We think it quite impossible that this order was a law.
First, it is a direction to the Chief Minister.
It is an order by which the Ruler required the Chief Minister to do certain things.
It has not been shown to us, that a direction to an officer to be carried out by him, has ever been held to be a law or can be such.
It cannot be so according to notions of modem jurisprudence.
Then we find that a copy of the order was sent under the, direction of the Revenue Minister to Shri Lal Saheb and various parts of it, to the different departments of the Nagod Administration respectively concerned with them, obviously with the object that they might be carried out.
This would indicate that even the Administration was not treating it as law for it would be difficult to imagine different parts of a law being communicated to different branches of the Administration.
Further, it appears that the Revenue Minister directed the Accounts Officer to make a report regarding the provision to be made for the sum of Rs. 5,000 mentioned in the order.
This is not how a law is carried out.
The order was also an instrument granting something to Shri Lal Saheb.
Under it a kothi (house), a tonga (carriage) and horse and Rs. 5,000 in a lump were to be made available to Shri Lal Saheb.
In regard to these the order was only a grant; it gave him these things.
A grant is, of course, not a law.
That would follow from the decisions of this Court in Narsing Pratap Deo 's case(1) and State of Gujarat vs Vora Fiddali(2).
Now if the rest of the order was a grant, it would be strange that one part of it only, namely, the part providing for the monthly allowance only, was a law.
Obviously this was also intended to be a grant; the fact that the order provided for future payments cannot make it a law.
The context is overwhelmingly against the view that it was a law.
Again, the recitals in the order put it beyond doubt that the Ruler was only discharging what he considered his moral obligation.
After referring to Shri Lal Saheb 's deplorable financial (1) A.T.R. (2) ; 61 position, he said, "I take it to be my duty to, see that Shri Lal should not experience difficulties in his old days".
The Ruler was, therefore, providing for something out of his bounty and in discharge of his moral obligation.
A law is never made for these reasons.
It was said that the money was to be paid out of the State Exchequer.
There is nothing to show, however, that it was so or that in Nagod the private funds of the Ruler were separate from the State Exchequer.
But assume that the payment was to come from the State Exchequer.
That cannot turn a directive or a grant into a law.
Our attention was drawn to the decision of this Court in Promod Chandra Dev vs The State of Orissa(1) where a grant of an allowance was held to be law.
That case is clearly distinguishable.
There the nature and condition of allowances to be granted to persons entitled to them from the State had been laid down in Order 31 of the Rules, Regulations and Privileges of Khanjadars and Khorposhdars.
It was held that "those rules, regulations of Talcher etc.
(1937)" were the laws of the State and that the grants made by the Ruler in accordance with those laws became the absolute property of the grantee.
What bad happened there was that earlier lands had been granted to a certain Khorposhdar (maintenance holder) under Order 31 aforesaid and Subsequently these were commuted into payments of monthly amounts.
It was in those circumstances that it was held that the maintenance was payable under a law.
No such circumstances exist in the present case.
We should *fore concluding state that the Ruler of Nagod who made the order of March 7, 1948 himself gave evidence stating that lie had passed the order "under his legislative powers".
This statement obviously does not conclude the matter.
It was not relied upon in any of the Courts below.
The internal evidence to which we have earlier referred shows that the order was not a Legislative act.
For all these reasons we have come to the conclusion that the order of the Ruler of Nagod of March 7, 1948 was not a law.
It was not continued in force after the State of Nagod lost its sovereignty in the circumstances earlier mentioned.
The order was an executive act of the Ruler providing for certain allowance to Shri Lal Saheb.
It was, therefore, competent to the President (1) (1962] Supp.
1 section C. R. 405 62 acting in his executive capacity to reduce it to a sum of Rs. 530 per month as he did by his order of September 24, 1951 which was challenged in the, suit.
In the result, we hold that the appeal must be allowed and we direct accordingly.
There will be no 'order as to costs.
Appeal allowed.
| The 1st respondent had gone to, the 2nd respondent after previous arrangement with him, with a large sum of money to purchase gold which was known to them to be smuggled and to have been imported into India against the restrictions imposed on the import of gold.
The police intervened.
recovered the gold and arrested them.
The gold was confiscated under section 167(8) of the .
The respondents were prosecuted for an offence under section 167(81) and they were convicted by the trial court.
On appeal the High Court acquitted the 1st respondent because it was of the view that as the 1st respondent merely attempted to purchase the gold it could not be said that he was concerned in dealing with the smuggled gold within the meaning of the section.
The High Court also acquitted the 2nd respondent because it held that before a person could be convicted under section 167(81), it must be shown that he was either a direct importer or concerned in some way in the import of the smuggled article,, and that the section did not include in its scope a person who subsequently obtained the smuggled goods and then dealt with them, though the smuggled goods themselves might be liable to confiscation.
In appeal to this Court, HELD, (per Wanchoo, Shah, Sikri and Ramaswami, JJ.) : (i) The High Court was in error in holding that simply because the purchase was not complete the 1st respondent was not concerned in dealing with the smuggled gold which was with the 2nd respondent.
[14 D] The words "in any way concerned or in any manner dealing with any goods" in the section, are of very wide import.
The words "concerned in" mean "interested in, involved in, mixed up with", while the words "deal with" mean "to have something to do with, to concern one self, to treat, to make arrangement, to negotiate with respect to some thing." Therefore, when a person enters, into some kind of transaction or attempts to enter into some kind of transaction with respect to prohibited goods, and it is clear that the act was done with some kind of prior arrangement or agreement, it must be held that such a person is concerned in dealing with prohibited goods.
[13 A B; H] (ii) On the language of the section, it applies not only to an actual smuggler or a person concerned in smuggling but also to all others who may be concerned with smuggled goods after the smuggling is over provided they know that the smuggled into the country in spite of a prohibition or restriction, or they knew that the duty thereon had not been paid.
It follows that the 1st respondent had the necessary knowledge and intent or evade the prohibition or the restriction even though he dealt 2 with the gold after the smuggling was over and was not in any way concerned with the actual smuggling.
He would therefore be guilty under the section.
The 2nd respondent wag also guilty under the section inasmuch as he was dealing with prohibited or restricted good sand had the necessary knowledge and intent as required under the section.[21 B, C, E] If the intention of the legislature was that the person guilty under s.167(81) could only be a person who was concerned in some way or other with the actual importation or exportation it would have been easy for it to use the same words as were used in the first part of section 167(8) but it has not done so,.
What section 167(81) requires is that the person who comes inter alia into possession of prohibited goods must know that there is some prohibition in force with respect thereto.
But before he is found guilty it has further to be shown that he intends to evade the prohibition.
Where the case is not of prohibition but of duty, the person accused under the section must be shown to know that the duty has not been paid and also to have the intention to, defraud the government of the duty payable on the goods.
long as the duty is payable and has not been paid or so long as the prohibition or restriction remains in force, any person acquiring possession of goods, on which duty has not been paid or with respect to which the restriction or prohibition has been evaded, would have the intent either to defraud the government of the duty payable, for he acquires goods at a lower price, or would have the intention to evade the restriction or prohibition because no one would take the risk of smuggling unless he can find a purchaser for the smuggled 'goods.
If this were not so, there would be a premium on successful smuggling and the purpose of the section to punish smuggling and stop it if possible, would be completely defeated, as there would be a serious lacuna in the provision.
[15 E G; 17 A D] Cases under the English Act referred to.
Per Subba Rao, J. (Dissenting) : it had not been establish ad that the respondents had dealt with the gold with an intention to evade any restriction or prohibition imposed on their import.
[7 F] It is not open to the court to strain the language of a statute in order to read a causes omissus and the court cannot fill up a lacuna.
Also, the court cannot construe the section with reference to the corresponding English Section and English decisions because, the Indian and English sections are not in pari materia.
Under section 167(81) the material ingredients constituting an offence are; (i) a person must have a knowledge that there is a prohibition or restriction against doing any of the enumerated acts with respect to goods imported or exported contrary to the restriction or prohibition imposed against their import or export, and (ii) he must have acted with an intention to evade such a restriction or prohibition.
That is, the two elements of mens rea, namely, knowledge and intention must be established, because, knowledge of an offence cannot be equated with an intention to commit the offence.
The crux of the offence is the import of goods with the requisite intent contrary to the prohibition.
The importer who smuggles the goods is certainly guilty under the section because he imports them in derogation of the prohibition or restriction.
Also, any person who deals with the goods in the context of the import in any of the connected ways set out in the section, with the requisite knowledge and intention would equally be guilty of the offence, because, the enumerated dealings with the goods prohibited or restricted may be necessary to complete the import vis a vis the importer, even though they cover a field beyond the point of import as normally understood, that is, when the goods cross the customs barrier.
But the intention to contravene the prohibition cannot be imputed to subsequent dealers in 3 the goods after the importer parts with them, though the good.% themselves can be confiscated in the hands of whomsoever they are found.
[4H; 5C, E F; 6B C, H]
|
Civil Appeal No. 1980 of 1970.
From the Judgment and order dated 16.11.69 of the High Court of Punjab & Haryana in F.A.O. No. 120/62.
Mrs. Urmila Kapur and S.K. Bagga for the Appellant.
The Judgment of the Court was delivered by MISRA , J.
Hardyal , the respondent , entered into a contract with the State of Punjab , Public Works Department (Buildings and Roads Branch) for the construction of certain bridges and culverts on the Mukerian Naushehra Road.
The agreement between the parties was evidenced by a writing.
The written agreement contained an arbitration clause which provided that dispute , if any , between the parties would be referred to the Superintending Engineer, Public Works Department (Buildings and Roads) , Jullundur Circle.
It 11 appears that no period was fixed in the agreement of reference for giving the award and therefore Period of four months as prescribed 652 in clause 3 of the First Schedule attached to the would be the statutory period for giving the award.
Some dispute did arise between the parties.
The respondent , therefore , sent a notice on January 7, 1960 to the Superintending Engineer requesting him to accept his claim to the tune of Rs. 7,568 and give his award accordingly.
The respondent claimed this amount of compensation broadly on two counts: (1) that the sub Divisional Officer had got certain bridges demolished which according to the respondent had been constructed strictly in terms of the agreement , and (2) that the respondent had also been directed to stop the work.
The arbitrator gave his award against the respondent on April 28 , 1961 , but after the expiry of the prescribed period.
It is , how ever admitted by the respondent that he participated in the proceedings before the arbitrator even after the expiry of the statutory period.
The respondent challenged the award by filing an objection under section 30 of the on a number of grounds.
On the pleas taken by the respondent the Senior Sub Judge framed the following four issues: (I) whether the objections were premature , (2) whether the arbitrator had misconducted himself or the proceedings , (3) whether the award was against natural justice , and (4) whether the award was made after inordinate delay.
The learned Judge overruled all the objections and upheld the award.
Issue No. l Was not pressed before him.
The contention of the respondent that reasonable opportunity had not been afforded to him to adduce evidence , by the arbitrator , was also repelled by the learned Judge.
He observed "One of the grounds taken up for setting aside the award as stated in the application was that the petitioner was not afforded a reasonable opportunity to adduce evidence.
But the record of the proceedings dated 24th of April , 1961 shows that the parties did not want to say any thing further and the hearing of the case was , therefore, closed under such circumstances.
" The plea regarding misconduct on the part of the arbitrator was also overruled and dealing with this point the learned Judge observed: 653 "Nothing has been POINTED out to me in the court during the course of the arguments as to how the arbitrator has misconducted himself and the proceedings.
" The plea regarding delay in giving the award was rejected on the ground that the respondent had been participating in the proceedings before the arbitrator even after the expiry of the prescribed period of limitation.
The respondent took the matter in appeal to the High Court.
When the matter came up before a learned Single Judge he referred the following two points for decision by a Division Bench on account of the importance of the question involved in the case and also on account of conflict of judicial opinion on the point: 1.
Whether the award given after the expiry of the prescribed period without extension of time by the court was invalid ? 2.
Whether the rejection of the objection regarding delay in giving the award on the ground that the objector had participated in the arbitration proceedings even after the expiry of the period of limitation prescribed would by necessary implication amount to extending the time under section 28 of the by the Court ? The Division Bench allowed the objection of the respondent regarding delay in giving the award holding that a party to an arbitration agreement is not estopped from challenging the award on the ground of delay merely because it has participated in the arbitration proceedings even after the expiry of the prescribed period without any demur.
On the second point the High Court held that mere dismissal of the objection regarding delay in the award does not amount to extension of time by the court under section 28(1) of the and indeed time can be extended by the Court by the exercise of sound judicial discretion.
Accordingly the appeal was allowed , the order of the Senior Sub Judge was set aside and the case was sent back to the trial court for deciding afresh whether it was a fit case for condoning the delay in giving the award by the arbitrator after affording opportunity to the parties to adduce evidence, 654 The State has now come up in appeal on a certificate granted by the High Court under article 133(1)(c) of the Constitution , as it then stood.
The same points have been reiterated before this Court.
Before dealing with the points involved it will be convenient to refer to the relevant provisions of the .
Section 3 reads; "3.
An arbitration agreement , unless a different intention is expressed therein , shall be deemed to include the provisions set out in the First Schedule in so far as they are applicable to the reference.
" Section 28 reads: "28.
(1) The court may , if it thinks fit , whether the time for making the award has expired or not and whether the award has been made or not , enlarge from time to time the time for making the award.
(2) Any provision in an arbitration agreement whereby the arbitrators or umpire may , except with the consent of all the parties to the agreement , enlarge the time for making the award , shall be void and of no effect.
" Clause 3 of First schedule provides: "3.
The arbitrators shall make their award within four months after entering on the reference or after having been called upon to act by notice in writing from any party to the arbitration agreement or within such extended time as the court may allow.
" A perusal of these provisions indicates that it is open to the parties to an arbitration agreement to fix the time within which the arbitrator must give award , but it has to be so stated in the agreement itself.
If per chance no time has been specified by the parties in the arbitration agreement.
then by virtue of operation of section 3 read with cl. 3 of the First Schedule the award must be given within four months of the arbitrator entering on the reference or after having been called upon to act by notice in writing from any party to the arbitration agreement or within such extended time as the court may allow.
655 Sub section (I) of section 28 is very wide and confers full discretion on the court to enlarge time for making the award at any time.
The discretion under sub section
(I) of section 28 should , however , be exercised judiciously.
Sub section (2) of section 28 also makes it evident that the court alone has the power to extend time.
It further provides that a clause in the arbitration agreement giving the arbitrator power to enlarge time shall be void and of no effect except when all the parties consent to such enlargement.
It is not open to arbitrators at their own pleasure without consent of the parties to the agreement to enlarge time for making the award.
In H.K. Wattal vs V.N. Pandya(1) dealing with section 28(1) of the this Court observed: "There is no doubt that the arbitrator is expected to make his award within four months of his entering on the reference or on his being called upon to act or within such extended time as the court may allow.
Reading clause 3 of the Schedule along with section 28 one finds that the power to enlarge the time is vested in the court and not in the arbitrator.
Clause 3 and section 28(1) exclude by necessary implication the power of the arbitrator to enlarge the time.
This is emphasised by section 28(2) which provides that even when such a provision giving the arbitrator power to enlarge the time is contained in the agreement , that pro vision shall be void and of no effect , The headnote of section 28 brings out the force of this position in law by providing that the power is of the court only to enlarge time for making the award.
Sub section (2) of section 28 , however , indicates one exception to the above rule that the arbitrator cannot enlarge the time , and that is when the parties agree to such an enlargement.
The occasion for the arbitrator to enlarge the time occurs only after he is called upon to proceed with the arbitration or he enters upon the reference.
Hence it is clear that if the parties agree to the enlargement of time after the arbitrator has entered on the reference , the arbitrator has the power to enlarge it in accordance with the mutual agreement or consent of the parties.
That such a consent must be a post reference consent , is also clear from section 28(2) which renders null and void a provision l. ; 656 in the original agreement to that effect.
In a sense where a provision is made in the original agreement that the arbitrator may enlarge the time , such a provision always implies mutual consent for enlargement but such mutual consent initially expressed in the original agreement does not save the provision from being void.
It is , therefore, clear that the arbitrator gets the jurisdiction to enlarge the time for making the award only in a case where after entering on then arbitration the parties to the arbitration agreement consent to such enlargement of time.
The next question that crops up for consideration is what will be the effect if a party to the arbitration took part in the proceedings before the arbitrator even after the expiry of four months , that is , the period prescribed for giving the award.
Some High Courts have taken the view that in such a situation the condition of four months period will be deemed to have been waived.
Such a view has been taken by the Allahabad High Court in Shambhu Nath vs Surja Devi.(1) A learned Single Judge of that High Court observed: "A party to an arbitration agreement who voluntarily takes part in the arbitration proceedings after the expiry of four months will be deem , d to have waived the implied condition as to time." A similar view has been taken by the Madhya Pradesh High Court in Shivlal vs Union of India(2).
In Ganesh Chandra vs Artatrana(3) a single Judge of the Orissa High Court observed: "If the parties , after the expiry of four months, submit themselves to the jurisdiction of the arbitrators and take part in the proceedings enabling them to pass an award , it cannot be said that the arbitrators acted without jurisdiction.
In such a contingency , the principle of waiver and estoppel would have full application.
Once we hold that the law precludes parties from extending time after the matter has been referred to the arbitrator , it will be (1) AIR 1961 All. 180.
(2) AIR 1975 M.P. 40.
(3) AIR 1965 Orissa 17.
657 contradiction in terms to hold that the same result can be brought about by the conduct of the parties.
The age long established principle is that there can be no estoppel against a statute.
It is true that the time to be fixed for making the award was initially one of agreement between the parties but it does not follow that in the face of a clear prohibition by law that the time fixed under cl. 3 of the Schedule can only be extended by the court and not by the 1 parties at any stage , it still remains a matter of agreement and the rule of estoppel operates.
It need be hardly emphasized that the Act has injuncted the arbitrator to give an award within the prescribed period of four months unless the same is extended by the court.
The arbitrator has no jurisdiction to make an award after the fixed time.
If the award made beyond the time is invalid the parties are not estopped by their conduct from challenging the award on the ground that it was made beyond time merely because of their having participated in the proceedings before the arbitrator after the expiry of the prescribed period.
The policy of law seems to be that the arbitration proceedings should not be unduly prolonged.
The arbitrator therefore has to give the award within the time prescribed or such extended time as the court concerned may in its discretion extend and the court along has been given the power to extend time for giving the award.
As II observed earlier , the court has got the power to extend time even after the award has been given or after the expiry of the period prescribed for the award.
But the court has to exercise its discretion in a judicial manner.
The High Court in our opinion was justified in taking the view that it did.
This power , however , can be exercised even by the appellate court.
The present appeal has remained pending in this Court since 1970.
No useful purpose will be served in remanding the case to the trial court for deciding whether the time should be enlarged in the circumstances of this case.
In view of the policy of law that the arbitration proceedings should not be unduly prolonged and in view of the fact that the parties have been taking willing part in the proceedings before the arbitrator without a demur, this will be a fit case , in our opinion , for the extension of time.
We accordingly extend the time for giving the award and the award will be deemed to have been given in time.
The other questions involved in the case.
however , have not been dealt with by the High Court and it rest content by making a 658 bald observation that there is no other point to be decided in this appeal.
The objector respondent had raised a number of pleas fore challenge the award giving rise to four issues.
It was , therefore , obligatory for the High Court to consider those points unless they had been given up by the objector respondent.
There is nothing on the record to suggest that the respondent had given up those grounds.
The case will , therefore , have to be sent back to the High Court for deciding the other issues involved in this case.
We accordingly allow the appeal in part and set aside that part of the order by which the High Court remanded the case to the trial court for deciding whether time should be extended.
The case is sent back to the High Court for deciding other issues involved.
In the circumstances of the case the parties shall bear their own costs.
A.P.J. Appeal allowed.
| Section 2(1) (f) of the Provides that an article of food shall be deemed to be adulterated if the article consists wholly or in part of any filthy, putrid, disgusting, rotten, decomposed or diseased animal or vegetable substance or is insect infested or is otherwise unfit for human consumption.
The respondent was prosecuted for an offence under section 7 read with section 16 of the Act.
The prosecution case was that a sample of lal mirchi powder was taken from the grocery shop of the respondent.
On an analysis by the Public Analyst it was found that the sample contained nine living meal worms.
Thor was no other evidence in support of the case of the prosecution that the lal mirch powder was adulterated.
The learned Magistrate found that the prosecution had failed to prove that the lal mirchi powder was adulterated and acquitted the respondent.
The High Court dismissed the Criminal Revision Petition filed by the appellant State in limine.
Dismissing the appeal by the State, ^ HELD: (I) The words 'worm ', 'infest ' and 'insect ' are defined in Webster 's New World Dictionary (1962 Edition). 'Worm ' means "any of many long, slender, soft bodied Creeping animals, some segmented, that live by burrowing underground or as parasites, as the earth worm, tapeworm," 'Infest ' means "to overrun or inhabit in large numbers, usually so as to be harmful or 465 bothersome, swarm in or about. 'Insect ' means "any of a large group of small invertebrate animals characterized, in the adult state, by division of the body into head, thorax, and abdomen, three pairs of membranes wings: beetles, bees, flies, wasps, mosquitoes, etc.
are insects.
" The same meaning is given of the above three words in the Shorter Oxford Dictionary.
Therefore, it is not possible to hold that a worm and an insect are the same.
[467C E] M/S Narkeklange Roller Flour Mills and another vs The Corporation of Calcutta 1973 (Prevention of Food Adulteration Cases) 257, referred to.
(2) Even if the nine worms found by the Public Analyst in the sample are considered to be insects, the certificate of the Public Analyst does not support the case of the prosecution that the lal mirchi powder was adulterated, for the Public Analyst has not expressed his opinion that the lal mirchi powder was either worm infested or insect infested or that on account of the presence of the meal worms the sample was unfit for human consumption.
Therefore, the prosecution has not established by any satisfactory evidence the requirement of Section 2(1) (f) of the Act.
Consequently no interference is called for with the Judgement of the High Court.
[473G H] Municipal Corporation of Delhi vs Kacheroo Mal ; , Municipal Corporation of Delhi vs Tek Chand Bhatia ; , held inapplicable.
Per Varadarajan J.
No opinion is expressed as to which of the two views expressed in Municipal Corporation of Delhi vs Kacheroo Mal, ; , and Municipal Corporation of Delhi vs Tek Chand Bhatia [1980] I S.C.R.910 is correct, Since this Bench also is of equal strength.
Moreover, it is not necessary to do so having regard to the facts of the present case.
[473F ] Per Ranganath Misra 1.
(concurring in the conclusion) The true meaning of section 2(1) (f) has been brought out in Municipal Corporation of Delhi vs Tek Chand Bhatia, 11980] I SCR 910 and the conclusion that 'it would not be necessary in such a case to prove further that the article of food was unfit for human consumption ' is a correct statement of the law.
In the instant case, the prosecution evidence is inadequate to warrant interference.
[474B C]
|
ew Petition No. 37 of 1959.
Petition for Review of this Court 's judgment and order dated October 29, 1959, in Civil Appeal No. 38 of 1958.
C. K. Daphtary, Solicitor General of India, B. Sen, J. B. Mehta and J. B. Dadachanji, for the petitioner.
N. C. Chatterjee and section section Shukla, for respondents.
J. B. Mehta and J. B. Dadachanji, for interveners Nos. 1 to 13.
J. B. Dadachanji, for interveners Nos.
14 to 19. 1960.
August 3.
The Judgment of the Court was delivered by WANCHOO J.
This is an application for review of the judgment delivered by this Court, to which three of us were party, on October 29, 1959.
The ground on which review is sought is that there are mistakes and/ or errors apparent on the face of the record and therefore the judgment in question should be reviewed.
The petitioner contends further that the judgment under review had dealt with the matter of issue of writs by High Courts under article 226 of the Constitution and this involved a question which could only have been dealt by a bench of not less than five judges and that is why the review application has been placed before a bench of five judges.
Lastly it is contended that this Court should have decided the question of jurisdiction as various.
other parties had agreed to be governed by the decision in this case and that would have saved multiplicity of proceedings.
115 Before we deal with the points urged in support of the petition we should like to state what exactly has been decided by the judgment under review.
The appeal in which the judgment under review was given came up before the Court on special leave granted under article 136 of the Constitution from a decision of the Bombay High Court in a writ petition filed there under article 226 against an order of the Payment of Wages Authority.
The question of jurisdiction of the Payment of Wages Authority was raised before this Court and reliance in that connection was placed on the decision in A. V. D 'Costa vs B. C. Patel and another(1).
It was remarked in the judgment under review that there appeared to be some force in the contention relating to the jurisdiction of the Payment of Wages Authority; but this Court did not go further and decide that question on the view that as there had been no failure of justice this Court would not interfere under its powers under article 136 of the Constitution, particularly as the matter came before it from a decision of the Bombay High Court and not directly from the Authority.
In that connection reference was made to the case of A. M. Allison vs B. L. Sen (2), in which in similar circumstances this Court had refused to decide the question of jurisdiction, because it was satisfied that there had been no failure of justice.
All that therefore the judgment under review decided was that where this Court is of the view that there is no failure of justice it is not bound to interfere under its powers under article 136 of the Constitution.
Reference to Allisons ' Case (2) was made only to show that in almost similar circumstances (except that Allison 's Case came to this Court on a certificate granted under article 133(1) (c) of the Constitution), this Court had refused to decide the question of jurisdiction as there was no failure of justice.
The judgment under review did not deal with the powers of the High Court under article 226 of the Constitution and nowhere laid down anything in conflict with the previous decision of this Court in H. V. Kamath vs Syed Ahmad Ishaque and others(3).
(1) ; (2) ; (3) ; 116 Thus the narrow point decided by the judgment under review was that when dealing with an appeal under article 136 of the Constitution this Court comes to the conclusion %that there is no failure of justice, it is not bound to decide and interfere even when a question of jurisdiction of the original court or tribunal is raised in a case where the matter had been considered by a higher tribunal, which undoubtedly had jurisdiction, and the appeal to this Court is from the decision of the higher tribunal.
This being the decision of this Court in the judgment under review, let us see if there is any reason to review that judgment on the grounds urged in the petition.
Before we consider the main ground in support of the review we should like to observe that the fact that other parties had agreed to be governed by the decision in the judgment under review can be no ground for review.
Are there then such mistakes and/ or errors apparent on the face of record which would justify a review? It is said that in dealing with whether there has been failure of justice in this case, this Court omitted to consider certain provisions of the Bombay Industrial Relations Act, 1946.
Assuming this to be correct, the question still is whether even after a consideration of those provisions the decision of this Court on the question of failure of justice would have been different.
On a further consideration of the reasons given in the judgment under review for holding that there was no failure of justice we feel that the decision on this point would have been still the same even if the provisions referred to had been considered.
In the circumstances we are of opinion that there is no ground for review of the judgment even if it be assumed that certain provisions of the Bombay Industrial Relations Act, 1946, were relevant and had not been considered.
The main plank however of the petitioner is that this Court was bound to consider the question of jurisdiction and the question whether there was failure of justice or not was bound up with the question of jurisdiction and a decision on that question was necessary to arrive at the conclusion that there was no 117 failure of justice.
This contention also must in our opinion be rejected, specially in the context of the narrow point which, as we have already indicated, was decided in the judgment under review.
Besides it is not unknown to law that decisions of original courts and tribunals may be allowed to stand even though there may be some doubt as to the jurisdiction of such courts or tribunals.
There are provisions in the revenue laws where in case of doubt whether the civil court or the revenue court has jurisdiction the decision of the original court is allowed to stand in certain circumstances if there has been no failure of justice : (see, for example, sections 290 and 291 of the U. P. Tenancy Act, 1939).
Therefore when the judgment under review left the question of jurisdiction open on the ground that there was no failure of justice and in consequence this Court refused to exercise its jurisdiction under article 136, it cannot be said that something was done which was unknown to law.
It is necessary to remember that wide as are our powers under article 136, their exercise is discretionary; and if it is conceded, as it was in the course of the arguments, that this Court could have dismissed the appellant 's application for special leave summarily on the ground that the order under appeal had done substantial justice, it is difficult to appreciate the argument that because leave has been granted this Court must always and in every case deal with the merits even though it is satisfied that ends of justice do not justify its interference in a given case.
In the circumstances we are of opinion that this Court was not bound to decide the question of jurisdiction on the facts and circumstances of this case when it had come to the conclusion in dealing with an appeal Under article 136 of the Constitution that there was no failure of justice.
The review application therefore fails and is hereby dismissed with costs.
Review application dismissed.
| The appellant 's nomination paper for election to the Assam Legislative Assembly was rejected by the Returning Officer on the ground of disqualification under section 7(b) of the Representation of the People Act, 195, in that he had been convicted and sentenced to three years ' rigorous imprisonment under section 4(b) of the Explosive Substances Act (VI of 1908) and five years had not expired after his release.
The appellant had applied to the Election Commission for removing the said disqualification but it had refused to do so.
The appellant 's sentence was, however, remitted by the Government of Assam under s 401 of the Code of Criminal Procedure and the period for which he was actually in jail was less than two years.
The Election Tribunal held that the nomination paper had been improperly rejected and set aside the election but the High Court taking a contrary view, dismissed the election petition.
Held, that the High Court was right in holding that the appellant was disqualified under section 7(b) of the Representation of the People Act and that his nomination paper had been rightly rejected.
That section speaks of a conviction and sentence by a Court and an order of remission of the sentence under section 401 of the Code of Criminal Procedure, unlike the grant of a free pardon, cannot wipe out either the conviction or the sentence.
Such order is an executive order that merely affects the execution of the sentence and does not stand on the same footing as an order of Court, either in appeal or in revision, reducing the sentence passed by the Trial Court.
Venkatesh Yeshwant Deshpande vs Emperor, A.I.R. 1938 Nag.
513, distinguished.
Ganda Singh vs Sampuran Singh, , over ruled.
Held, further, that an inference as to whether a successful candidate was a consenting party to the corrupt ractice under 134 section 100(i)(b) of the Act from facts found on evidence was a question of fact and not a mixed question of fact and law.
Meenakshi Mills, Maduyai vs The Commissioner of Income tax, Madyas, ; , referred to.
|
minal Appeal No. 195 of 1966.
Appeal from the judgment and order dated February 25, 1966 of the Andhra Pradesh High Court in Criminal Revision, Case No. 382 of 1964.
P. Ram Reddy and G.S. Rama Rao, for the appellant.
A.V. Rangam, Miss Sen, A. Vedavalli and Subhashini, for the respondent.
The Judgment of the Court was delivered by Shah, J.
Motor Lorry No. A.P.P. 4695 belonging to the respondent Yedla Perraya was seized by the Forest Range Officer, Gokavaram, early in the morning of December 25,1963, when it 624 was being used without a license for carrying,eight Yegisi logs on Rajahmundry Gokavaram Road.
The driver of the motor lorry and another person were tried before the 2nd Additional, 2nd Class Magistrate, Rajahmundry on a complaint 'by the Forest Range Officer for offences under sections 35 and 36 of the Andhra Pradesh Forest Act and the rules framed thereunder.
The two accused admitted that they had committed the offence of illicit transportation of timber, and on their plea of guilty they were convicted.
The respondent applied to the Trial Magistrate for an order releasing the motor lorry on the plea that the offence of transportation of timber was committed without his knowledge and that the value of the timber seized was not more than Rs. 50/ at the relevant time.
The learned Magistrate observed: "After careful perusal of the deposition of R.W. 1, I find that there is nothing in it to indicate that the petitioner knowingly lent his lorry for the illicit transport of timber on the night of 24 12 63.
There is also nothing in the case records to show that the petitioner allowed the lorry to illicitly transport the timber on the above date.
1 accordingly hold that the petitioner cannot be said to have knowingly allowed his lorry to illicitly transport the timber.
" But the learned Magistrate was of the view that by section 43 of the Andhra Pradesh Forest Act, where it was proved that the value of the timber transported exceeded Rs. 50/ , he was enjoined to direct confiscation of the vehicle in which the forest produce was being transported without a license.
In his view the value of eight logs of timber seized from the lorry was Rs. 311/ at the market rate in Rajahmundry.
In appeal by the respondent to the Court of Session at Rajahmundry the order of confiscation was set aside and the High Court of Andhra Pradesh confirmed the order of the Court of Session.
The State of Andhra Pradesh has appealed to this Court with certificate.
granted under article 134( 1 ) (c) of the Constitution.
The Andhra Pradesh (Andhra Area) Forest Act 5 of 1882 provides by section 41 that when there is reason to believe that a forest offence has been committed in respect of any timber or forest produce, such timber or produce, together with all tools, ropes, chains, boats, vehicles and cattle used in committing any such offence may be seized by any Forest officer or Police officer.
Section 43 as amended by Act 11 of 1963 provides: "Where a person is convicted of any forest offence, the Court sentencing him shall order ,confiscation.
to the Government of, the timber or the ' forest produce in respect of which such 'offence was committed, and also any 625 tool, boat, cattle and vehicle and any other article used in committing such offence: Provided that it shall be open to such Court not to order confiscation of any tool, boat, cattle, vehicle or any other article used in committing such offence when the value of the timber or the forest produce in respect of which such offence was committed does not exceed fifty rupees.
" It may be observed that before the Forest Act was amended by Act 11 of 1963, the Magistrate was not obliged to direct confiscation of the articles, vehicles, cattle, tools or boats used for committing a forest offence.
The Trial Magistrate was of the view that after the amendment of the Forest Act by Act 11 of 1963 he had no option and he was bound on conviction of the offender in respect of any forest offence to direct confiscation of the vehicle used in the commission of such offence.
Counsel for the respondent contended that if the interpretation put by the Trial Magistrate upon section 43 as amended is correct, the enactment imposes an unreasonable restriction upon the fundamental right ' of the owner of the vehicle declared by article 19(1)(e) of the Constitution, and is on that account void.
Counsel urged that a statute which imposes upon a person who has himself not committed any offence or infraction of the law liability to forfeit his valuable property must be regarded as unreasonable.
It was urged that if a vehicle is stolen and then used for commission of a forest offence, or is borrowed by some person for a legitimate purpose and then used without the consent or knowledge of the owner for committing an offence under the Forest Act, or where with a view to involve the owner of the vehicle into a forest offence, forest produce is surreptitiously introduced into the vehicle, and the vehicle is liable to be forfeited, the provision making it obligatory to impose the penalty of forfeiture of the vehicle must be deemed to impose an unreasonable restriction on the owner of the vehicle and is ultra rites on that account.
It is not necessary for the purpose of this case to express any opinion on that part of the case.
Assuming that the statute which enjoins the Magistrate to confiscate the vehicle used in the commission of the forest offence, even when it is used without the knowledge or consent of the owner, is valid, in our judgment, section 47 of the Act enables the Court of Session and the High Court to make an appropriate order with regard to the vehicle which is just.
That section provides: "Any person claiming to be interested in property seized under section 41, may, within one month from the date of any order passed under section 43, 44 or 626 45, present an appeal therefrom which may be disposed of in the manner provided by section 419 Code of Criminal Procedure.
" The reference to section 419 is to the Code of Criminal Procedure of 1872 in force when the Andhra Pradesh Forest Act 5 of 1882 was enacted.
Section 419 of the Code of 1872 is now substituted by section 520 of the Code of Criminal Procedure, 1898, and by section 520 power is conferred, inter alia, upon the court of appeal to direct that any order passed under sections 517, 518 or 519 by a Court subordinate thereto be stayed pending consideration by the Court of appeal, and that Court may modify, alter or annul such order and make any further order that may be just Section 43 of the Andhra Pradesh Forest Act does not restrict the power of the appellate court to pass any appropriate order as may be just regarding disposal of the property.
The Court of Session in the present case has on the finding recorded by the Magistrate and confirmed by it passed an order which is essentially a just order and that has been confirmed by the High Court.
The Legislature had originally conferred a discretion both upon the Magistrate and the Court of Appeal to pass appropriate order with regard to the disposal of property used in the commission of the offence as may be just.
The Legislature has thereafter amended section 43 by Act 11 of 1963 and made it obligatory upon the Magistrate to confiscate the property or the vehicle used in the commission of Such offence.
No such restriction has, however, been placed upon the power of the appellate court and we will not be justified, having regard to the clear expression of the legislative intent, that the power is to be limited in the manner provided by section 43.
There is no warrant for implying that the power conferred by section 47 of the Act upon the appellate court is subject to some unexpressed limitation.
The High Court was, therefore, right in holding that the motor lorry belonging to the respondent, on the finding recorded by the Magistrate was not liable to be confiscated.
The appeal therefore fails and is dismissed.
V.P.S, Appeal dismissed.
| Six months after the, appelIant 's Standing Orders as modified had come into operation, the respondent applied for further modification of the Standing Orders, under section 10(2) of the , 'as amended in 1956.
The certifying officer allowed some of the modifications and on appeal by the respondent, the Appellate Authority allowed some more modifications.
In appeal, to this Court under article 136 of the Constitution, the appellant objected to four modifications, namely: (i) that the appellant should give reasons and communicate them to the workmen even in cases of discharge simpliciter; (ii) that appeals against penalties imposed should be disposed of within 60 days; (iii) that when a workman is removed on the ground of inefficiency due to physical unfitness, the appellant should offer to such workman alternative; employment on reasonable emoluments; and (iv) that a second show cause notice should be served on the workman at the stage of taking a decision on the suitable punishment.
The grounds urged were: (1 )The authorities under the Act can certify modifications of existing Standing Orders under section 10(2) only when a change of circumstances is established, because, section 6 of the Act confers finality on certified Standing Orders or modifications thereof; (2).
On principles analogous to res Judicata, the authorities had no jurisdiction to grant the modifications in the present case; and (3) the modifications were not reasonable or fair.
HELD: (1) [Per Shelat and Vaidialingam, JJ.]: A change of circumstances is not a condition precedent to the maintainability of an application for modification under section" 10(2).
Under the Act before its 'amendment in 1956, a workman could not object that the Standing Orders were not reasonable or fair.
His only remedy was to raise an industrial dispute, but that remedy was unsatisfactory, since the dispute had to be sponsored by a union or at least a substantial number of workmen and even then, the process was a protracted one.
Parliament knew that the workmen had the right to raise an industrial dispute and also the defects in that remedy and so amended sections 4 and 10 of the Act by Act 36 of 1956.
The amendment conferred on individual workman the right to object to draft Standing Orders submitted by an employer on the ground that they are either not fair or not reasonable, and also gave the right to apply for their modification.
Under section 6, a person aggrieved by the order of the certifying officer certifying or modifying Standing Orders, may appeal to the Appellate Authority whose decision shall be final.
But the finality only means that there is no further appeal or revision against the order and that the order cannot be challenged in 'a civil court.
It can, however.
be modified under section 10(2).
The only limitations on the power are, (a) reason. 132 ableness and fairness of the modification and (b) except on agreement between employer and the workmen six months must have elapsed from the date on which the Standing Orders or the last modifications thereof, came into operation, the object being that Standing Orders or the modifications should be allowed to work for some time to see if they are satisfactory.
In an application for modification the issue before the authority would be not as to reasonableness or fairness of the existing Standing Orders.
but whether the modification 'applied for is fair and reasonable.
Such an application is an independent application and merely because it could be made on the ground that the existing Standing Orders are discovered to be unsatisfactory even without any change in circumstances, it would not amount to a review of an earlier order.
Further, there will not be a multiplicity of applications because the workmen individually have the right to apply for modifications.
For, unless there is some justification for the modification, the authorities under the Act would reject the applications.
[139 G H; 140 C D; 141 A C; 142 A C; G H; 143 A C] Bangalore Woollen Cotton & Silk Co. Ltd. vs The Workmen [1968] l L.L.J. 555, Buckingham and Carnatic Co. Ltd. v Workmen C.A. No. 674 of 1968 dt.
25th July 1968 and Hindustan Brown Boveri Ltd. vs The Workmen C.A. No. 1631 of 1966 dt.
31st July 1967, referred to.
[Per Bhargava, J. dissenting]: When an application under section 10(2) is made, the certifying officer can modify Standing Orders already certified, only if the request is not made on the basis of the same material which existed at the earlier stage when they were certified.
[155 G H] Before the amendment in 1956 if the workmen had any grievance on the ground of unfairness or unreasonableness of the Standing Orders, their only remedy lay under the Industrial Disputes Act.
By amendment in 1956, a limited remedy was provided for them in the Act itself by conferring on the certifying officer the power of judging the reasonableness and fairness of the Standing Orders and of modifying them under section 10(2).
Therefore, after 1956 the workmen have two alternative remedies for seeking alteration in the Standing Orders proposed or certified.
Under section 10(2) a request for modification can only be made on the basis of fresh facts or fresh circumstances arising subsequent to the passing of the order by the Appellate Authority under section 6 on the limited ground of reasonableness and fairness.
The Industrial Tribunal, however.
can direct the alteration of a Standing Order held to be reasonable and fair, without any fresh grounds, material, or change in circumstances if an industrial dispute, in 'relation to it is raised, and this is the only remedy available if a modification is desired without a change of circumstances.
If it is held that even the certifying officer can reconsider the reasonableness or fairness of a Standing Order already certified and confirmed under section 6 the finality envisaged by the section would be nullified.
After a period of six months had elapsed, the certifying officer could set aside an order passed earlier by his superior, or a succeeding Appellate Authority may interfere with his predecessor 's order, merely because the certifying officer or Appellate Authority considers the modification to be reasonable and fair even though there was no change in the circumstances.
[153 F G; 154 A B, D F; 155 C F; 156 A C] (2) [Per Shelat and VaidiaIingam, JJ.]: It is doubtful whether principles analogous to res judicata can property be applied to industrial adjudication.
[143 H] Burn & Co. vs Their Employees, ; , Guest, Keen, Williams (P) Ltd. vs Sterling, ; and Workmen of Balmer Lawrie & Co. vs Balmer Lawrie & Co. , referred to, 133 [Per Bhargava, J.]: This Court bas expressed conflicting views on the question of 'applying the principle underlying the rule of res judicata to industrial adjudication.
[150 E] Burn & Co. 's case; , , Balmer Lawrie Co. 's case; , and Associated Cement Staff Union vs Associated Cement Co. referred to.
(3) [Per Shelat and Vaidialingam, JJ.]: So far as modifications (ii) and (iii) are concerned, in an appeal under article 136, this Court would not interfere with the conclusion of the authorities under the Act since no principle is involved.
[144 F] As regards modification (iv), the authorities under the Act held that it was fair and reasonable, and there is no justification for this Court to interfere with the decision.
In Industrial matters, at present, the doctrine of hire and fire is completely abrogated, because, security of employment is one of the necessities for industrial peace and harmony.
If reasons for discharging an employee are furnished tO him he not only has the satisfaction of knowing why his services are dispensed with, but in appropriate cases he can challenge it, as even when the services of an employee are terminated by an order of discharge simpliciter, its legality and propriety can be challenged before an industrial tribunal.
[145 A E] As regards modification (iv) the requirement of a second show cause notice is peculiar to cases coming under article 311 of the Constitution and neither the ordinary law nor the industrial law requires an employer to give such a notice.
Even in article 311, the requirement is now removed and so, it is not necessary to import it into industrial matters.
[145 E F] [Per Bhargava J. dissenting]: The order must be set aside because the four modifications were not based on any fresh facts, material or change of circumstances.
In fact, modification (i) was, specifically disallowed by the Appellate Authority at an earlier stage and merely because his successor considered it reasonable and fair it was permitted without any change in the circumstances.
[156 E F, H]
|
Appeal No. 30 of 1965.
5 9 0 Appeal by special leave from the judgment and order dated September 8, 1962 of the Bombay High Court in Special Civil Application No. 364 of 1961.
C. B. Agarwala, 0.
P. Malhotra, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellant.
G. L. Sangli and A. G. Ratnaparkhi, for respondent No. 3.
The Judgment of the Court was delivered by Wanchoo, J.
The only question raised in this appeal by special.
leave is whether the Central Provinces and Berar Industrial Disputes Settlement Act, No. XXIII of 1947, (hereinafter referred to as the Act) is applicable to the head office of the appellant which is known as the Ballarpur Collieries Company.
The head office is situate in Nagpur and has a staff of about 35 employees.
The business of the head office is to look after the sale of coal extracted from the collieries.
The question arises in this way.
Bapat respondent was a stenographer working in the head office at Nagpur.
He was dismissed from service on July 31, 1959.
It is not necessary for present purposes to go into the facts and circumstances leading to this dismissal.
Suffice it to mention that an enquiry was said to have been held before the dismissal order was passed.
While this enquiry was pending Bapat made an application under section 16 of the Act before the Assistant Commissioner of Labour, Nagpur, on July 21, 1959.
In this application Bapat prayed that the employer should be ordered to pay him wages from the date of dismissal, discharge or removal to the date of the order under section 16 in addition to a sum not exceeding Rs. 2,500 by way of compensation.
It was also prayed that the employer should be ordered to pay retrenchment compensation under Chap.
V A of the Industrial Disputes Act, No. 14 of 1947 (hereinafter referred to as the Central Act No. 14).
Though this application was headed as application for reinstatement and compensation etc.
, there was no prayer for reinstatement and Bapat was only content to ask for a sum of Rs. 2,500 by way of compensation.
While this application was pending, Bapat was, as already indicated, dismissed on July 31, 1959.
Thereupon he filed another application under section 16 of the Act on August 19, 1959.
In this application he prayed for reinstatement or in the alternative for full com pensation amounting to Rs. 2,500 and such other relief as he might be entitled to.
The main contention of the appellant before the Assistant Commissioner of Labour was that the Act did not apply to it and 591 therefore the Assistant Commissioner had no jurisdiction to proceed in the matter.
The Assistant Commissioner held that the Act applied and he had jurisdiction to deal with the matter.
He therefore gave relief by setting aside the order of dismissal and directing that the employer should pay Rs. 2,000 as compensation and wages from the date of dismissal to the date of his order.
This order was taken in revision by the appellant to the State Industrial Court at Nagpur, and the main contention again urged there was that the Act did not apply to the appellant and the Assistant Commissioner had no jurisdiction to deal with the matter.
This contention did not find favour with the State Industrial Court with the result that the revision was dismissed.
The appellant then filed a petition under Articles 226 and 227 of the Constitution in the High Court, and the same contention was raised that the Act did not apply and the Assistant Commissioner had no jurisdiction in the matter.
The High Court held on a construction of the relevant provisions of the Act and the notification issued thereunder that the Act was applicable and in consequence the writ petition was dismissed.
The High Court having refused to give leave to appeal to this Court, the appellant obtained special leave from this Court; and that is how the matter has come before us.
Section 1 of the Act came into force on June 2, 1947, andas provided by section 1(3) thereof, the rest of the Act came into force on November 21, 1947, on a notification being issued by the State Government in that behalf.
Section 1(3) lays down that "the State Government may by notification bring the remaining sections or any of them into force in such area or industry and on such date as may be specified in the notification.
" By virtue of the power conferred on the State Government by section 1(3) the following notification was issued on November 2, "In exercise of the powers conferred by sub section (3)of section 1, of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947, the Provincial Government are pleased to direct that sections 2 to 61 of the said Act shall come into force on the 21st November 1947, in all the industries except the following namely : (i) Textile industry.
(ii) Employment in any industry carried on by or under the authority of the Central Government 592 by an Indian State Railway or by a Railway Company operating an Indian State Railway.
(iii) Mines.
(iv) Saw Mills.
" It is the interpretation of this notification which calls for consideration in the present appeal.
The appellant 's contention is that by this notification, the Act was applied as from November 21, 1947, to all industries except four specified therein; and of these, the third was mines.
It is urged on behalf of the appellant that when the notification provided for the application of the Act to .all industries except four which were excepted it was exempting the mining industry by the third item of exemption.
The nlining industry according to the appellant will include the head office, for as the High Court says, "it is not disputed that the Head Office is a part of integrated activity of the petitioner company which carries on the business of producing coal and its sale and supply to its various customers.
" The argument is that the head office at Nagpur being a part of integrated activity of carrying on the mining industry by the appellant, the head office was equally exempt from the application of the Act by the notification in question.
If that is so, no application under section 16 of the Act could be made by Bapat to the Assistant Commissioner of Labour.
It is also pointed out on behalf of the appellant that Bapat would have a remedy under the Central Act No. 14 of 1947 which came into force earlier than the Act from April 1, 1947, though the procedure for obtaining relief under that Act would be different namely, through a reference by the appropriate Government under section 10 of the Central Act No. 14 of 1947.
The High Court however held that what was exempted by the third item in the notification was not the head office of a mine but the mine itself and no more.
Consequently the employees at the head office of the appellant were governed by the Act.
This view of the High Court is being supported by the respondents before us, and it is urged that the notification uses the word " mines" and not the words "mining industry" in the exemption part and therefore what was exempted from the Act were merely the coal mines where mining operations were carried on and not the mining industry, which may include the head office also.
We are of the opinion that the contention raised on behalf of the appellant is correct, and what the notification exempted was the mining industry from the operation of the Act.
In this %connection we may refer to the following words in the notification 5 93 namely, "the said Act shall come into force on the 21st November, 1947 in a11 the industries except the following".
Grammatically the word "industries" must be understood as following the word"following" appearing in the above sentence.
Thus what the notification in effect said was that the said Act shall come into force on 21st November 1947 in all the industries except the following, industries.
It has however, been urged that if that was so, it was not necessary, for example, in the first item of examption to use the words "textile industry", and it would have been sufficient to use the word "textile".
All that we need say is that the notification is not a work of art and has to be read in its tenor without trying to find out why the word "industry" was used in the first item and why the same was not used in the third and fourth items, which deal with "Mines" and "Saw Mills" respectively.
Grammatically, however, this part of the notification clearly says that the Act would apply to all industries except the four industries specified therein for the purpose of exemption.
These four exemptions include the industry of mines.
We see no difference between the words "mining industry" and "industry of mines", for they mean the same thing, namely, the industry which is concerned with mines.
If therefore the notification exempted the industry of mines or the mining industry it cannot be said that it merely exempted that part of the said industry of mines or mining industry which consisted of raising coal at the colliery and did not include the head office thereof.
As we have already indicated, the High Court has said that "it is not disputed that the head office is a part of integrated activity of the petitioner company which carries on the business of producing coal and its sale and supply to its various customers".
Therefore, when the industry of mines or the mining industry was exempted from the operation of the Act, the exemption applied not only to that part of the industry which consisted of raising coal at the colliery but also to that part of it which consisted in the sale of coal and its supply to customers and would thus include the head office also.
As we read the notification we see no escape from the conclusion that what was exempted from the application of the Act was the industry of mines or the mining industry and that would include not only the colliery where the coal was raised but also the head office from where the coal was sold 'and distributed to the customers.
It now remains to refer to two cases on which reliance was placed by the High Court.
The first is Messrs. Godavari Sugar Mills Ltd. vs D. K. Worlikar(1).
In that case this Court held (1) ; 5 9 4 that the notification under challenge there did not apply to the head office of the Sugar Mills.
That decision turned on the actual words of the notification and is of no assistance to the respondents.
It was pointed out in that case that if the notification had merely used the words "sugar industry" it would have been possible to construe that expression in a broader sense having regard to the wide definition of the word "industry"; but the notification had deliberately adopted a different phraseology and had brought within its purview not the sugar industry as such but the manufacture of sugar and its by products.
The words of the notification in that case were "the said Act shall apply to the following industry, namely, the manufacture of sugar and its by products".
Therefore on the words of the notification in that case, the wide implication which might have arisen if the notification had merely stated that the Act applied to the sugar industry was cut down by the specific words in the notification, namely, manufacture of sugar and its by products, which would clearly apply only to a part of sugar industry which dealt with the manufacture of sugar and the by products and would not apply to the head office which did not deal with the actual manufacture but dealt with the consequent steps following on the manufacture viz., sale and distribution to customers.
In the present case the notification clearly applied to the industry of mines which in our opinion is nothing different from mining industry and must therefore take in the entire industry including the raising of coal from the colliery as .well as its distribution, sale and supply to the customers.
That case therefore is of no help to the respondents.
The next case to which reference is made is Messrs. Serajuddin and Company vs Their workmen(1).
In that case a dispute relating to the head office of a mining company was referred by the Government of West Bengal to the industrial tribunal and a question arose whether the Government of West Bengal was the appropriate government within the meaning of section 2 (a) (i) of the Central Act No. 14 of 1947.
It was held that the West Bengal Government was the appropriate government and the decision turned on the interpretation of section 2 (a) (i) of the said Act which defined "appropriate government".
The words which came in for interpretation were "in relation to an industrial dispute concerning a banking or an insurance company, a mine, an oil field, or a major port".
It was held that the word "mine" as used in section 2 (a) (i) of the Central Act No. 14 of 1947 referred to a mine as defined in the Mines Act and that a dispute with reference to the head office of a mine was not a dispute concerning the mine which (1) [1962] 3 Supp.
S.C.R. 934.
5 9 5 must mean a mine as defined in the Mines Act.
That case also is of no help to the respondents for here we are not concerned with the word "mine '; what we are concerned with is whether the exemption clause in the notification which exempts the industry of mines or the mining industry will take in the head office.
The words therefore in the present notification are different and the decision in that case is of no help.
We have no doubt that when the notification exempts the industry of mines or the mining industry which in our opinion mean the same thing, the exemption includes the he ad office also which must be treated as an integral part of the mining industry, for it deals with the subse quent steps taken to dispose of, in this case, the coal raised from the colliery.
Learned counsel for the appellant wished to argue that the head office carried on other activities besides the activity of selling coal raised from the colliery.
We have not allowed him to raise this point for this was not raised in the High Court.
We have already referred to the observation of the High Court that it was not disputed that the head office was a part of integrated activity of the appellant company which carried on the business of producing coal and its sale and supply to its various customers.
It was not even the case of the respondents in reply in the High Court that the head office carried on other activities besides the sale and distribution of the coal produced in the colliery.
In the view we have taken of the notification and its interpretation we are of opinion that the Assistant Commissioner of Labour had no jurisdiction under the Act to deal with the application of Bapat.
In this view of the matter the appeal must be allowed and the orders of the High Court, the State Industrial Court and the Assistant Commissioner of Labour are set aside.
We therefore direct the dismissal of the application under section 16 of the Act.
In the circumstances we pass no order as to costs.
Appeal allowed.
| The appellant company carried on the business of manufacturing textile goods at Indore and had offices at Indore and Bombay.
During its account years 1942 to 1947 it supplied goods to the Indian Stores Department, Government of India.
The purchase orders were placed by the latter with the appellant at Indore which was then in an Indian State.
On receipt of bills from the appellant the Government of India used to draw cheques on the Reserve Bank of India, Bombay, in favour of the appellant and used to send them by post to the appellant at Indore.
The appellant used to deposit the cheques with the Imperial Bank of India Indore for the purpose of realisation from the Reserve Bank of India.
In connection with the assessment years 1943 44 to 1948 49 the question that arose in income tax proceedings was whether the profits of the appellant a non resident in respect of the supplies were received by the appellant in British India and therefore taxable under section 4(1)(a) of the Indian Income tax Act, 1922.
The departmental authorities held that the payment was received by the appellant at Bom bay where the cheques were encashed but the Appellate Tribunal took the view that the payment was received at Indore.
In reference the High Court held on the basis of this Court 's decision in Commissioner of Income tax vs Kirloskar Bros. Ltd. which had meanwhile been delivered that the cheques were received by the assessee through its agent, the post office in British India and further held that the Revenue authorities were entitled to raise the contention for the first time in the High Court.
With certificate the appellant came to this Court.
HELD : (i) Whereas in the present case the question of law in issue between the parties and referred to the High Court is the broad question whether or not the assessee is liable to pay tax on the ground that the sale proceeds including the profits of the sale were received by the assessee in British India, the Revenue authorities may be permitted to argue for the first time at the hearing of the reference that on the facts found by the Tribunal, the post office was the agent of the assessee for the purpose of receiving the cheques representing the sale proceeds and the assessee received the sale proceeds in British India where the chequest were posted though this aspect of the question was not argued before the Tribunal and though the only point there argued was that the proceeds were received at Bombay where the cheques were encashed.
[655 H] Commissioner of Income tax vs M/s. Ogale Glass Works Ltd. , Zoraster & Co. vs Commissioner of Income tax, ; and Commissioner of Income tax, Bombay vs Scindia Steam Navigation Co. Ltd., ; , referred to.
The New Jahangir Vakil Mills Ltd. vs Commissioner of Income tax ; and Keshav Mills Co. Ltd. vs Commissioner of Income tax; , , distinguished.
652 (ii) If by an agreement, express or implied, between the creditor and the debtor or by request, express or implied, by the creditor, the debtor is authorised to pay the debt by a cheque and to send the cheque to the creditor by port, the post office is the agent of the creditor to receive the cheque and the creditor receives payment as soon as the cheque is posted to him.
[656 G] Commissioner of Income tax vs M/s. Ogale Glass Works Ltd., , Jagdish Mills Ltd. vs The Commissioner of Income tax, ; , Norman vs Ricketts, (1886) 3 Times Law Reports 182 and Thairlwall vs The Great Northern Railway, , relied on.
(iii) In the instant case cl.
9 of the terms and conditions of the contract read with the prescribed form of the bills and the instructions regarding payment showed that the parties had agreed that the assessee would submit to the Government of India, Department of Supply, New Delhi, bills in the prescribed form requesting payment of the price of the supplies by cheques together with signed receipts and the Government of India would pay the price by crossed cheques drawn in favour of the assessee.
Having regard to the fact that the assessee, was at Indore and the Supply Department of the Government of India was at Now Delhi, the parties must have intended that the Government would send the cheques to the assessee by post from New Delhi, and this inference was supported by the fact the cheques used to be sent to the assessee by post.
In the circumstances there was an implied agreement between the parties that the Government of India would send the cheques by post.
The Government of India was entitled to ignore the subsequent request of the.
assessee for cheques on an Indore bank and the assessee received payment of the price as and when the cheques on the Reserve Bank of India Bombay, were posted in British India in accordance with the contract (657 D; 658 Al Thairlwall vs The Great Northern Railway, [1910] 2 K.B. 509 and Commissioner of Income tax vs Patney & Co. , referred to.
On the above view the profits in respect of the sales were taxable under section 4(1) (a) of the Indian Income tax Act, 1922.
|
Criminal Appeal No. 415 of 1986.
From the Judgment and Order dated 16.5.
1984 of the Allahabad High Court in Crl.
Rev. No. 2330 of 1983.
R.N. Trivedi, Additional Advocate General (U.P.) Mrs. section Dikshit and C.B. Singh for the Appellant.
Ram Jethmalani, Rajinder Sachhar, and D.N. Mishra for the Respondents.
The Judgment of the Court was delivered by SEN, J.
This appeal by special leave is directed against the judgment and order of the High Court of Allahabad dated May 16, 1984 setting aside in its revisional jurisdiction an order of the Chief Judicial Magistrate, Gaziabad dated November 3, 1983 directing the issue of process against the respondents on a complaint filed by the appellant under section 44 of the Water (Prevention and Control of Pollu tion) Act, 1974.
The issue involved is whether the Chair man, ViceChairman, Managing Director and members of the Board of Directors of Messrs Modi Industries Limited, the Company owning the industrial unit called Messrs Modi Dis tillery could be proceeded against on a complaint against the said industrial unit.
A learned Single Judge (K.C. Agarwal, J.) following the decision of this Court in State (Delhi 801 Admn.) vs LK.
Nangia & Anr., ; interpreting a similar provision contained in sub section
(4) of section 17 of the had held that there was no sufficient ground against the respondents inasmuch as the allegations made in the complaint do not constitute an offence punishable under section 44 for the admitted contravention of sections 25(1) and 26 read with section 47 of the Act.
The question essentially turns upon the rule of construction to be adopted in section 47.
The facts of the case are these.
Messrs Modi Industries Limited is an existing company under the .
It is a large business organisation having diversified business activities.
Prior to the commencement of the Act it had established an industrial unit called Messrs Modi Dis tillery at Modi Nagar, Gaziabad engaged in the business of manufacture and sale of industrial alcohol.
During the process of manufacture of such industrial alcohol, the said industrial unit discharges its highly noxious and polluted trade effluents into the Kali River through the Kadrabad Drain which is a stream within the meaning of section 2(j) of the Act and thereby causes continuous pollution of the said stream without the consent of the Board and therefore it falls within the purview of section 26.
Under the provisions of section 26, as amended, it has been made mandatory for every existing industry to obtain the consent of the Board for discharging its trade effluent into a stream or well or sewer or on land.
The last date for submission of such application seeking the consent of the Board by an existing industry had been extended upto December 31, 1981.
In ac cordance with the procedure laid down under sections 25(1) and 26 of the Act, the Company was required to submit an applica tion for consent of the Board in the prescribed form along with the prescribed consent fee and the particulars.
Instead of the Company its industrial unit, namely, Messrs Modi Distillery on March 27, 1981 applied to the Board for grant of consent to discharge its trade effluents into the stream.
The aforesaid application was scrutinised by the Board and found incomplete in many respects.
The Board accordingly by its letter dated April 29, 1981 informed the said industrial unit with regard to the discrepancies and the particulars wanting.
There was no response from the respondents nor did they rectify the discrepancies pointed out or furnish the particulars required.
The Board accordingly by its letter dated July 30, 1981 refused to grant the consent prayed for in the public interest since the application was found incomplete in many respects and also because the said indus trial unit did not have proper arrangements for treatment of its highly polluted trade effluents.
Thereafter, the Board by its letter dated June 30, 1982 issued a notice under section 20 of the Act 802 directing the Company to furnish certain information regard ing the particulars and names of the Managing Director, Directors and other persons responsible for the conduct of the Company, but the respondents did not furnish the infor mation called for.
This was followed by two subsequent letters of the Board dated February 21, 1983 and June 9, 1983 drawing the attention of the respondents that they were deliberately violating the provisions of the Act and thereby rendering themselves liable to be punished under section 44 for contravention of the provisions of sections 25(1) and 26.
On October 21, 1983 the Board lodged a complaint against the respondents under section 44 of the Act in the Court of the Chief Judicial Magistrate, Gaziabad.
Unfortunately, the complaint was inartistically drafted.
It was averred in paragraph 2 that Messrs Modi Distillery i.e. the industrial unit was a company within the meaning of section 47 of the Act, that it had been knowingly and wilfully discharging its highly noxious and polluted trade effluents into the Kali River which is a stream within the meaning of section 2(j) of the Act through the Kadrabad Drain and thereby causing continuous pollution of the said stream.
There were eleven persons arrayed as ac cused.
Instead of launching a prosecution against Messrs Modi Industries Limited, the Board impleaded its industrial unit Messrs Modi Distillery as respondent No. 1 while re spondents nos. ' 2 11 were the Chairman, Vice Chairman, Managing Director and members of the Board of Directors of Messrs Modi Industries Limited i.e. the Company owning the industrial unit.
It appears that the respondents did not appear before the learned Chief Judicial Magistrate in response to the notice issued to them.
The learned Magistrate after record ing the statement of S.M. Pandey, Legal Assistant of the Board directed the issue of process to the respondents.
Aggrieved, respondents nos.
2, 3 and 4, namely, K.M. Modi, K.K. Modi and M.L. Modi, the Chairman, Vice Chairman and Managing Director respectively of Messrs Modi Industries Limited preferred a revision before the High Court under section 397 of the Code of Criminal Procedure, 1973.
Two of the other accused, namely, S.C. Trikha and Raghunath Rai, the nominated members of the Board of Directors of the Company also filed an application before the High Court under section 482 of the Code for quashing the proceedings.
As already stated, a learned Single Judge invoking the revisional jurisdiction of the High Court has quashed the proceedings on the ground that there could be no vicarious liability saddled on the Chairman, Vice Chairman, Managing Director and other members of the Board of Directors of the Company under section 47 of the Act unless there was a prosecution of the Company i.e. Messrs Modi Industries Limited.
He 803 held that the complaint suffers from the serious legal infirmity and in the circumstances, to allow the proceedings to continue would amount to an abuse of the process of the Court.
The question that arises in the appeal is whether the Chairman, Vice Chairman, Managing Director and members of the Board of Directors are liable to be proceeded against under section 47 of the Act in the absence of a prosecution of the Company owning the said industrial unit.
section 47 insofar as material reads as follows: "47.
Offences by companies (1) Where an offence under this Act has been committed by a company every person who at the time the offence was committed was in charge of, and was responsible to the company for the con duct, of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
Provided that nothing contained in this sub section shall render any such person liable to any punishment provided in this Act if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything con tained in subsection (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of or, is attributable to any neglet on the part of, any director.
manager, secretary or other officer of the company, such director, manag er, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
" On a plain reading of sub section
(1) of section 47 of the Act, where an offence has been committed by a company, every person who at the time of the commission of the offence was in charge of and responsible to ' the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
Proviso to sub section
(1) however engrafts an exception in the case of any such person if he were to prove that the offence was committed without his knowledge or that he exercised all due diligence to prevent the 804 commission of such offence.
It would be noticed that sub section
(1) of section 47 is much wider than sub s.(4) of section 17 of the which fell for consideration in I.K. Nangia 's case.
Furthermore, proviso to sub section
(1) shifts the burden on the delinquent officer or servant of the company responsible for the commission of the offence.
The burden is on him to prove that he did not know of the offence or connived in it or that he had exercised all due diligence to prevent the commission of such offence.
The non obstante clause in sub section
(2) expressly provides that notwithstanding anything contained in sub section
(1), where an offence under the Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or, is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence, and shall be liale to be proceeded against and punished accordingly.
On a combined reading of the provisions contained in sub sections
(1) and (2), we have no doubt whatever that the Chairman, Vice Chairman, Managing Director and members of the Board of Directors of Messrs Modi Industries Limited, the Company owning the industrial unit Messrs Modi Distill ery could be prosecuted as having been in charge of and responsible to the company, for the business of the indus trial unit Messrs Modi Distillery owned by it and could be deemed to be guilty of the offence with which they are charged.
The learned Single Judge has failed to bear in mind that this situation has been brought about by the industrial unit viz. Messrs Modi Distillery of Messrs Modi Industries Limited because in spite of more than one notice being issued by the Board, the unit of Messrs Modi Distillery deliberately failed to furnish the information called for regarding the particulars and names of the Managing Direc tor, Directors and other persons responsible for the conduct of the Company.
Having wilfully failed to furnish the requi site information to the Board, it is now not open to the Chairman, Vice Chairman, Managing Director and other members of the Board of Directors to seek the Court 's assistance to derive advantage from the lapse committed by their own industrial unit.
The learned Single Judge has focussed his attention only on the technical flaw in the complaint and has failed to comprehend that the flaw had occurred due to the recalcitrant attitude of Messrs Modi Distillery and furthermore the infirmity is one which could be easily removed by having the matter remitted to the Chief Judicial Magistrate with a direction to call upon the appellant to make the formal amendments to the averments contained in paragraph 2 of the comp 805 laint so as to make the controlling company of the industri al unit figure as the concerned accused in the complaint.
All that has to be done is the making of a formal applica tion for amendment by the appellant for leave to amend by substituting the name of Messrs Modi Industries Limited, the Company owning the industrial unit, in place of Messrs Modi Distillery.
Although as a pure proposition of law in the abstract the learned Single Judge 's view that there can be no vicarious liability of the Chairman, Vice Chairman, Managing Director and members of the Board of Directors under sub section
(1) or (2) of section 47 of the Act unless there was a prosecution against Messrs Modi Industries Limited, the Company owning the industrial trait, can be termed as cor rect, the objection raised by the petitioners before the High Court ought to have been viewed not in isolation but in the conspectus of facts and events and not in vacuum.
We have already pointed out that the technical flaw in the complaint is attributable to the failure of the industrial unit to furnish the requisite information called for by the Board.
Furthermore, the legal infirmity is of such a nature which could be easily cured.
Another circumstance which brings out the narrow perspective of the learned Single Judge is his failure to appreciate the fact that the aver ment in paragraph 2 has to be construed in the light of the averments contained in paragraphs 17, 18 and 19 which are to the effect that the Chairman, Vice Chairman, Managing Direc tor and members of the Board of Directors were also liable for the alleged offence committed by the Company.
It is regrettable that although Parliament enacted the to meet the urgent need for introducing a comprehensive legis lation with its established unitary agencies in the Centre and the States to provide for the prevention.
abatement and control of pollution of rivers and streams, for maintaining or restoring wholesomeness of water courses and for control ling the existing and new discharges of domestic and indus trial wastes, which is a matter of grave national concern, the manner in which some of the Boards are functioning leaves much to be desired.
This is an instance where due to the sheer negligence on the part of the legal advisors in drafting the complaint a large business house is allowed to escape the consequences of the breaches committed by it of the provisions of the Act with impunity, It was expected that the Board and its legal advisors should have drafted the complaint with greater circumspection not to leave any technical flaw which would invalidate the initiation of the prosecution allowing the respondents to escape the conse quences of the breaches committed by them of the provisions of the Act with impunity.
As already stated, prior to the commencement 806 of the Act the Company owned an industrial unit styled as Messrs Modi Distillery which was discharging its trade effluents into the Kali River through the Kadrabad Drain and therefore the matter fell within the ambit of section 26 of the Act.
section 26 provides that where immediately before the com mencement of the Act any person was discharging any sewage or trade effluent into a stream, the provisions of section 25 shall, so far as may be, apply to such person as they apply in relation to a person referred to in that section.
section 25(1) creates an absolute prohibition against bringing into use any new or altered outlet for the discharge of sewage or trade ' effluent into a stream without the consent of the Board.
On a combined reading of sections 25(1) and 26 it was mandatory for the Company viz.
Messrs Modi Industries Limit ed to make an application to the Board under sub section
(2) of section 25 read with section Z6 in the prescribed form containing the prescribed particulars for grant of consent for the dis charge of its trade effluents into the said stream, subject to such conditions as it may impose.
Along with the com plaint the appellant has placed on record several documents showing that the rejection of the application was in the public interest as it was incomplete in many respects.
These documents also reveal that the Company did not have proper arrangements for treatment of the highly polluted trade effluents discharged by it and although the appellant re peatedly by its letter required the Company to obtain the consent of the Board, the Company was intentionally and deliberately avoiding compliance of the requirements of sections 25(1) and 26 of the Act.
The contravention of these provi sions is an offence punishable under section 44.
The other ten persons arrayed by name as accused in the complaint are respondents nos.
2 11, the Chairman, Vice Chairman, Managing Director and members of the Board of Directors of Messrs Modi Industries Limited.
It cannot be doubted that in such capacity they were in charge of and responsible for the conduct of the business of the Company and were therefore deemed to be guilty of the said offence and liable to be proceeded against and punished under section 47 of the Act.
It would be a travesty of justice if the big business house of Messrs Modi Industries Limited is allowed to defeat the prosecution launched and avoid facing the trial on a techni cal flaw which is not incurable for their alleged deliberate and wilful breach of the provisions contained in sections 25(1) and 26 made punishable under section 44 read with section 47 of the Act.
Faced with the difficulty of refuting the gravamen of the offence set out in the complaint, Shri Ram Jethmalani, learned counsel appearing for the respondents drew our attention to the counteraffidavit of Virendra Prasad, Manag er (Personnel & Administration), Modi Distillery dated January 13, 1986 and the two supplementary 807 affidavits dated August 25, 1986 and November 17, 1986 tending to show that Messrs Modi Industries Limited, the company owning the industrial unit, have taken effective steps to set up an effluents treatment plant by entering into an agreement dated December 23, 1985 with Messrs Chemi cal Consultants & Engineers, Ahmadnagar who would set it up in collaboration with Sulzer Bros. Limited, Switzerland by employment of the technical knowhow which would be able to recover methane gas upto 70% and also bring down BOD reduc tion upto 90%.
Further, it is averred that the company sought and obtained the approval of the Board subject to a time schedule for erection and installation of the plant by the end of June 1987.
It is also averred that since the Government of India has turned down the application of the respondents for subsidy for installation of the said plant insofar as the year 1985 86 was concerned, they are trying other sources of finance and that in the meanwhile pending the installation and commissioning of the plant based on the Sulzer 's process are treating the effluents by alternative methods in order to reduce the extent of BOD discharge.
They are diluting the effluents by mixing fresh water to the extent of 13 to 15 times the amount of effluent discharged in order to reduce the extent of pollution.
In view of the subsequent events the learned counsel submits that this was a fit case for dropping the proceedings.
The averments made by the respondents in the various affidavits have been controverted by the affidavit in rejoinder sworn by Chandra Bhal Singh, Law Officer of the appellant Board showing that there is little or no progress in the matter of establish ment of the effluents treatment plant.
We need not enter into this controversy.
These are all matters to be dealt with by the learned Chief Judicial Magistrate.
The result therefore is that the appeal succeeds and is allowed.
The judgment and order passed by the High Court are set aside and that of the learned Chief Judicial Magistrate directing issue of process to the respondents are restored.
The learned Magistrate shall proceed with the trial as expeditiously as possible in accordance with law.
P.S.S. Appeal allowed.
| The respondent distillery, an industrial unit of M/s. Modi Industries Ltd., at Modi Nagar manufacturing industrial alcohol has been discharging its highly noxious and polluted trade effluents into the river through a local drain.
It applied to the Pollution Control Board under sections 25(1) and 26 of the Act on March 27, 1981 for consent of the Board to discharge its trade effluents into the stream.
The Board found the application incomplete in many respects, and called upon the respondents to rectify the discrepancies.
As there was no response from the respondents, the appellant Board refused to grant the consent prayed for in the public interest and thereafter issued notice under section 20 of the Act directing the Company to furnish certain information regard ing the particulars and names of the Managing Director, Directors and other persons responsible for the conduct of the Company.
This was followed by various reminders.
Finding no response from the respondents, the Board on October 21, 1983 lodged a complaint against the respondents under section 44 of the Act in the Court of the Chief Judicial Magistrate, Gaziabad.
Instead of launching a prosecution against M/s. Modi Industries Ltd., the Board impleaded the industrial unit as respondent No. 1 and the Chairman.
Vice Chairman, Managing Director and members of the Board of Directors of the Company as respondent Nos. 2 to 11.
The Judicial Magistrate directed the issue of process.
799 The respondents preferred a revision under section 397 of the Code of Criminal Procedure, 1973 before the High Court in which an application was filed under section 482 of the Code for quashing the proceedings.
The Single Judge of the High Court quashed the proceedings on the ground that there could be no vicarious liability saddled on the Chairman, Vice Chairman, Managing Director and other members of the Board of Direc tors of the Company under section 47 of the Act unless there was a prosecution of the Company.
Allowing the appeal, HELD: A combined reading of the provisions contained in subss.
(1) and (2) of section 47 of the makes it apparent that the officials of the Company owning the respondent industrial unit could be prosecuted as having been in charge of and responsible to the Company for the business of that unit and could be deemed to be guilty of the offence with which they were charged.
[804DE] The industrial unit owned by the Company was discharging its trade effluents into the river prior to the commencement of the Act.
It was, therefore, mandatory for the Company to make an application to the Board under section 25(2) read with section 26 of the Act for grant of consent for the discharge of its trade effluents into the stream.
The application made by the industrial unit having been found incomplete in many re spects was rejected by the Board in public interest.
There after the Company which did not have proper arrangements for treatment of the highly polluted trade effluents discharged by it, had been in spite of repeated letters from the Board intentionally and deliberately avoiding compliance with the requirements of sections 25(1) and 26 rendering themselves pun ishable under section 44 of the Act.
The Chairman.
ViceChairman, Managing Director and members of the Board of Directors of the Company in such capacity were incharge of and responsi ble for the conduct of the business of the Company and were, therefore, deemed to be guilty of the said offence and liable to be proceeded against and punished under section 47 of the Act.
[805H 806F] The vicarious liability of these officials of the Compa ny is to be viewed not in isolation but in the conspectus of facts and events and not in vacuum.
The technical flaw in the complaint lodged by the appellant Board had occurred due to the recalcitrant attitude of the industrial unit, which in spite of more than one notice being issued had deliber ately failed to furnish information called for regarding the particulars and 800 names of the Managing Director, Directors and other persons responsible for the conduct of the Company.
Having wilfully failed to furnish the requisite information to the Board, it is not open to the respondents 2 to 11 to seek the Court 's assistance to derive advantage from the lapse committed by their own industrial unit.
Furthermore, the legal infirmity is of such a nature which could be easily cured by having the matter remitted to the trial court with a direction to call upon the appellant to make the formal amendments to the averments in the complaint so as to make the controlling company of the industrial unit figure as the concerned accused.
[805BC, 804G, EF, H 805A] The Board and its legal advisors should have drafted the complaint with greater circumspection not to leave any technical flaw which would invalidate the initiation of the prosecution allowing a large business house to escape the consequences of the breaches committed by it of the provi sions of the Act with impunity.
[805GH]
|
: Special Leave Petition (Criminal) No. 1543 of 1984.
From the Judgment and order dated the 3rd day of May, 1984 of the Delhi High Court in Crl.
M(M) No. 421 of 1984 995 R.N. Poddar for the Petitioner.
Miss Rani Jethmalani for the Respondent.
The Judgment of the Court was delivered by B VENKATARAMIAH, J.
Four persons Maj.
General (Retd.) F.D. Larkins, Air Vice Marshal (Retd.) K.H. Larkins, Lt. Col.
(Retd.) Jasbir Singh and Jaspal Singh Gill alias Jassi Gill, the respondent herein, were accused of having committed offences punishable under sections 3, 5 and 9 of the Official Secrets Act, 1923 read with section 120 B of the Indian Penal Code and of them F.D. Larkins and Jasbir Singh were also accused of having committed the offence punishable under section 6 of the Official Secrets Act, 1923 in a complaint filed by the Deputy Commissioner of Police, Special Branch, Delhi with the authorisation of the Government of India before the Additional Chief Metropolitan Magistrate, Patiala House, New Delhi.
The prosecution case appears to rest inter alia on the following facts: On March 24, 1983, Group Captain Jasjit Singh informed the Air Vice Marshal (now Air Marshal) Shri section Raghavendran that for some days immediately prior to that date AVM (Retd.) K.H. Larkins then resident of Azad Apartments, Mehrauli Road, New Delhi, under whom he had served earlier was inducing him to pass on secret manuals of aircrafts used by the Indian Air Force for a consideration of Rs. 20,000/ per document.
AVM Raghavendran brought this to the notice of his superiors.
Thereafter further information was collected and the movements of AVM (Retd.) K.H. Larkins were kept under observation.
The links of the said K.H. Larkins and his brother Major General (Retd.) F.D. Larkins were discovered.
A First Information Report was registered at Police Station, Tughlak Road, New Delhi.
On November 11, 1983 raids were conducted at the residence of K.H. Larkins as well as that of F.D. Larkins.
Certain incriminating items are stated to have been recovered from the latter 's 996 house.
It is alleged that on interrogation after arrest F.D. Larkins and K.H. Larkins confessed that they had been passing on classified information relating to the defence of the country to a foreign agency.
It is further alleged that Major General (Retd).
F.D. Larkins stated that he had engaged Lt. Col. (Retd.) Jasbir Singh as his sub agent for procuring secret/restricted documents and manuals relating to armament.
On this disclosure the search of the house of Jasbir Singh was conducted on November 13 1983 and he was arrested and remanded to police custody.
It is stated that on interrogation he disclosed that he had been passing on secret/classified information to Major General (Retd.) F.D. Larkins and Jaspal Singh Gill, the respondent, for monetary consideration.
He appears to have further disclosed that many secret/restricted manuals and documents were unauthorisedly got issued to him from D.G.I. and EME libraries to which he gained access through the good offices of certain Army Officers and by impersonating himself as a serving officer when actually he was retired and that the information contained in these documents and manuals was passed on by him to Major General (Retd.) F.D. Larkins and Jaspal Singh Gill alias Jassi Gill resident of 82, Sunder Nagar, New Delhi, the respondent, who represented a private firm namely, M/s EMGEE International Pvt. Ltd, and with whom he, Lt. Col (Retd.) Jasbir Singh, was also working as consultant.
On the basis of the said disclosure made by the said Jasbir Singh the search of the house of Jaspal Singh Gill alias Jassi Gill, the respondent herein was conducted at 82, Sunder Nagar, New Delhi.
Some secret/restricted documents alongwith a Defence telephone directory connected with the Army are stated to have been recovered from his possession and he was arrested on November 19, 1983.
It is alleged that the respondent herein had obtained classified information on defence matters through the aforesaid Jasbir Singh for monetary consideration and had passed on the information to the U.S. Intelligence Operator.
During the search of the house of Jaspal Singh as many as 13 invitation cards from the U.S. Officials for cocktail and dinner parties are alleged to have been recovered showing the association of the respondent 997 with foreign agents as defined in section 4 of the Official Secrets Act.
It is alleged that the respondent was paying Rs. 1,000/ per month to the Jasbir Singh and Rs. 1,000/ per month to the wife of Jasbir Singh.
It is further alleged that the copy of the Defence telephone directory was a restricted document, the disclosure of the contents of which to unauthorised persons is prejudicial to the interest and security of the country.
All the accused persons including the respondent have been committed to the Court of Sessions for the various offences which are really of a serious nature.
During the investigation, the respondent made an application for bail before the Addl.
Sessions Judge, New Delhi and it was rejected in January, 1984.
Then again he made another application for bail before the Sessions Court.
Before the said application could be taken up, he made an application under section 482 of the Criminal Procedure Code before the High Court of Delhi for bail.
The learned Judge of the High Court who heard the bail application went into the merits of the case and after holding that the material before the Court was insufficient to sustain the conviction of the respondent proceeded to enlarge him on bail subject to his furnishing a personal bond in the sum of Rs. 5,000/ with one surety in the like amount.
It may be stated here that the very same learned Judge had dismissed earlier the bail application of Jasbir Singh who was the employee of the respondent.
Aggrieved by the order of the High Court enlarging the respondent on bail, the prosecution has filed this Special Leave Petition for revoking the said order of bail.
The offence punishable under section 3 of the Official Secrets Act, 1923 with which the respondent is charged relates to military affairs and it is punishable with imprisonment which may extend to fourteen years.
This Court in The State vs Captain Jagjit Singh has indicated that the Court should exercise a 998 greater degree of care in enlarging on bail an accused who is charged with the offence punishable under section 3 of the Official Secrets Act when it relates to military affairs.
I have also gone through the decisions of this Court in Gurcharan Singh & Ors.
vs State (Delhi Administration) and Gudikanti Narasimhulu & Ors.
vs Public Prosecutor, High Court of Andhra Pradesh which deal with the principles governing the grant of bail.
It may be mentioned here that in the last of the above cases, the accused had been acquitted by the trial court but convicted by the High Court on appeal.
On a consideration of the above three decisions, I am of the view that the Court before granting bail in cases involving non bailable offences particularly where the trial has not yet commenced should take into consideration various matters such as the nature and seriousness of the offence, the character of the evidence, circumstances which are peculiar to the accused, a reasonable possibility of the presence of the accused not being secured at the trial, reasonable apprehension of witnesses being tampered with, the larger interests of the public or the State and similar other considerations.
On going through the order passed by the High Court, I feel that its decision that the material collected by the prosecutions and the evidence to be adduced at the trial would not be sufficient to sustain a conviction appears to be a premature one in the circumstances of this case.
Since the trial is yet to begin, I do not propose to say anything more at this stage lest it should prejudice either the accused or the prosecution than observing that on a perusal of the complaint and the other material available in the case, it cannot reasonably be stated that the prosecution case against the respondent is such that it can be thrown out at the threshold.
It appears that a prima facie case is made out against the respondent.
The gravity of the offences is quite obvious.
They relate to the security of the State, Espionage and intelligence are utilised to pass on information regarding military plans, equipment, technical advances etc.
of one country to another.
Naturally passing on of such information from our country to a foreign country is bound to be most harmful to our country.
The 999 persons accused alongwith the respondent are admittedly ex military men well versed in military affairs who are capable of establishing bridges with the sensitive sections of the defence services.
The respondent is also alleged to be having some dealings with the defence department and Jasbir Singh is in the employment of the respondent.
The allegations made by the prosecution which no doubt have still to be established at the trial suggest that the respondent and the persons accused alongwith him are persons of easy conscience in so far as the interests and security of the country are concerned.
The current situation in the country is such that it can be easily be exploited by unscrupulous men to their own or to some foreign power 's advantage.
These aspects of the case do not appear to have been considered by the High Court.
It is seen that while dismissing the bail application of Jasbir Singh on April 24, 1984, the learned Judge of the High Court had relied on the decision of this Court in Captain Jagjit Singh 's case (supra), he has not even referred to that decision while granting bail to the respondent on May 3, 1984.
Some of the observations made by the High Court against the sustainability of the case of criminal conspiracy alleged by the prosecution at this stage were not called for.
The circumstances of this case are such that the question whether the case of criminal conspiracy had been made out or not should have been left to be decided by the trial court at the end of the trial on a consideration of the entire evidence adduced in the case.
In the circumstances, I am of the view that the High Court should not have enlarged the respondent on bail in the larger interests of the state.
It is urged that the respondent is a person who has undergone a cardiac operation and needs constant medical attention.
I am sure that the prison authorities will arrange for proper treatment of the respondent whenever the deed for it arises.
I am informed that in a criminal revision petition filed by one of the accused, the High Court has stayed the trial of the case The High Court is requested to dispose of the case early since the accused are all in judicial custody.
The order of bail passed by the High Court was suspended by this Court by an order made on June 4, 1984 and the respon 1000 dent was ordered to be re arrested and kept in judicial custody The respondent is now taken back into judicial custody.
In the result, the order of the High Court enlarging the respondent on bail is set aside and the respondent is directed to remain judicial custody until further orders to be passed by a competent court.
The trial court shall proceed to dispose of the case without feeling itself bound by any of the observations of the High Court.
| On being challenged, the Bombay High Court, following its earlier decision in Paritosh Bhupesh Kumarsheth and other vs Maharashtra State Board of Secondary and Higher Secondary Education, Pune and another, AIR 1981 Bombay 895, declared clauses (1) and (2) of Rule 37 of Goa, Daman and Diu Secondary and Higher Secondary Education Rules, 1975 insofar as they prohibit inspection and/or revaluation of answer books, as invalid.
Hence these appeals by special leave, Allowing the appeals.
^ HELD: The decision followed by the Bombay High Court has been overruled by this Court in Maharashtra State Board of Secondary and Higher Secondary Education and another vs Paritosh Bhupesh Kumarsheth and others ; The present case is fully covered by the dicta laid down in the said ruling.
Hence the judgment of the High Court is set aside and the validity of clauses(1) and (2) of Rule 37 is upheld.
[431F G] Maharashtra State Board of Secondary and Higher Secondary Education and another vs Paritosh Bhupesh, Kumarsheth and others, decided by Supreme Court ;
|
ivil Appeal No. 1924 of 1990.
From the Judgment and Order dated 6.8.1986 of the Kerala High Court in E.S.A. No. 15 of 1979.
543 K.K. Venugopa|, M.K. Sasidharan and P.K. Pillai for the Appellants.
T.S. Krishnamoorthy Iyer, P.S. Poti, section Balakrishnan, Deepak Nargoalkar, E.M.S. Anam, R.M. Keshwani, M.K.D. Nam boodiri and Irfan Ahmed for the Respondents.
The Judgment of the Court was delivered by section RATNAVEL PANDIAN, J.
Special leave granted.
The unsuccessful appellants herein have preferred this appeal against the judgment of the High Court of Kerala dated 6.8.1985 passed in E.S.A. (Execution Second Appeal) No. 15 of 1979 whereby the High Court dismissed the said appeal filed by the appellants.
The relevant facts giving rise to this appeal are necessary to be recapitulated and they are as follows: Othayath Gopalan Nambiar (since dead) and Othayath Lekshmy Amma (who is the first appellant herein) filed an Execution Application No. 556 of 1970 in Original Suit No. 817 of 1943 in the court of the Munsiff of Badagara under Section 13(B) of the Land Reforms Act, as amended by the Amending Act 35 of 1969 (hereinafter referred to as the 'Act ') for restoration of possession of the properties mentioned in the schedule of the application, which were sold in court auction for arrears of rent in pursuance of the decree made in O.S. No. 817 of 1943.1t seems that during the pendency of the proceedings before the Munsiff, Othayath Gopalan Nambiar died and thereafter the first appellant 's son claiming to be the karnavan of the tavazhi got himself impleaded as the third petitioner in the said Execution Application, who is figuring as the second appellant herein.
In order to decide the questions that arise for consid eration, certain salient and material facts may be recapitu lated.
The suit, O.S. 'No. 817 of 1943 was filed for recov ery of arrears of rent of Rs.815 for the Malayalam years 1116 to 1118, corresponding to English era 1941 to 1943.
There were 11 defendants of whom Othayath Gopalan Nambiar and the first appellant were the defendants 2 and 3.
A preliminary decree was passed on 26.5.1944 followed by the final decree on 29.11.
The decree holder assigned the decree to another member of his family, who in turn assigned it to one Kunhikannan.
The rights of Kunhikannan devolved on Respondents 2 to 4 in the Execution Application who are Respondents 4 to 6 in this appeal and who brought the 544 property to sale.
The sale took place on 26.11.
One Thekkayil Kanaran who was the first Respondent in the Execu tion Application, i.e. the third Respondent herein purchased the property in the Court auction held on 26.11.1962, which sale was confirmed on 14.8.
1964 and consequently obtained delivery of the disputed scheduled property extending to 8.70 acres of double crop wet land through court on 9.1.
1965 from the possession of the appellants.
exhibit C 3 is the delivery account and report submitted by the Amin.
The remaining extent of the property was in the possession of the sub tenants in respect of which there was resistence with which we are not concerned here.
After the delivery has been effected, Gopalan Nambiar and the first appellant herein trespassed into the suit property.
Therefore, the Court auction purchaser filed O.S. 6 of 1966 in the court of the Subordinate Judge of Badagara for recovery of possession.
The suit was decreed as per the judgment exhibit B 16 dated 27.7.1966.
exhibit B 15 is the decree.
Ex B 49 dated 25.8.1966 and exhibit B 50 dated 22.8.1966 are the respective certified copies of the delivery account submit ted by the Amin and the delivery warrant issued to Amin in O.S. No. 6 of 1966.
The auction purchaser, i.e. third re spondent in this appeal assigned portions of the property under sale deeds Exts.
A2 and A3 dated 5.12.1966 to the 5th and 6th respondents in the Execution Application, who are the first and second respondent in this appeal.
1t is stated that while the first respondent is stranger, the second respondent is none other than the wife of the fourth re spondent.
As we have pointed out earlier, this fourth re spondent is among the three respondents on whom the rights of Kunhikannan devolved.
While it is so, Act 9 of 1967 came into force.
So Gopa lan Nambiar and the first appellant filed Execution Applica tion No. 1711 of 1967 for restoration of possession under the said amended Act after making the necessary deposit.
While this E.A. was pending, Act 35 of 1969 tame into force (Kerala Land Reforms Amendment Act) repealing Act 9 of 1967.
So the appellants filed E.A. 556/70 under Section 13 B of the Act for restoration of possession with a prayer that earlier deposit made under Act 9 of 1967 be treated as a deposit under Act 35 of 1969 and also under took to pay the balance, if any, as would be found by the Court.
The third respondent (court auction purchaser) and his assignees Respondents 1 and 2 contended that the appellants have no interest in the properties and the delivery of the property had already been taken.
The appellants attacked the validity of exhibit A2 and A3 contending that the assignments in favour of Respondents 1 and 2 were made without consideration and bona fides and that auction 545 purchaser Thekkayil Kanaran, Respondent No. 3 was only a benamidar of the decree holder in the matter of the Court auction purchase.
This application (E.A. 556/70) was stoutly opposed by the respondents inter alia contending that the properties did not belong to the Tavazhi of the appellants and the appellants have no right to the suit properties and are not entitled to apply for restoration of possession.
According to the respondents, there is no valid deposit and after the delivery of the property has been effected, Gopa lan Nambiar trespassed into the properties and he was eject ed by recourse to a suit and thereafter the properties were assigned to Respondents 1 and 2 for proper consideration and bona fides and they are in possession of the properties on the strength of the said sale deeds.
The Trial Court held that the appellants were the tenants of the properties when they were dispossessed and the deposit made by the appel lants was sufficient and the Respondents 1 and 2 are not bona fide purchasers for consideration.
On the said finding it allowed E .A. 556/70 and set aside the sale.
Aggrieved by the order of the Trial Court, the Respond ents 1 and 2 filed A.S. 49/74 before the Sub Court, Badaga ra, which for deciding the appeal posed the following four points for its consideration, namely: 1.
Are the Petitioners entitled to maintain the application? 2.
Is the deposit sufficient? 3.
Are the appellants bona fide purchaser for consideration? 4.
Whether the court sale is liable to be set aside and the restoration of possession claimed allowable? If so, are the petitioners liable to pay anything by way of value of improvements? The learned Judge answered the first point "that the petitioners are competent to maintain the applica tion," and the second point holding " . . that the deposit when it was made is sufficient.
However the interest accrued till date of the present appli cation will be directed to be deposited in case the peti tioners are found entitled to restoration of possession.
" 546 Coming to the third point it has been held thus "The first respondent (third respondent in S.L.P.) had absolutely no necessity to execute any sham documents.
The fact that respondents 5 and 6 (Respondents 1 and 2 in the SLP) came into possession and exercised their rights under Exhibits A2 and A3 by payment of rent and revenue and pay ment of consideration spoken to by both the vendor and vendee are sufficient to hold that they are bona fide pur chasers for consideration.
" Under the fourth point, the relief claimed by the appellants was held to be rejected.
In the result, the order of the Trial Court was set aside and the appeal was allowed dis missing E.A. 556/70.
The learned Subordinate Judge has also expressed his opinion in his judgment that in summary proceedings under Section 13B of the Act, the plea of the appellants that the third respondent was a benamidar of the fourth respondent cannot be allowed to be raised in the light of Section 66 of the Civil Procedure Code.
On being dissatisfied with the judgment of the Subordi nate Judge, the appellants preferred E.S.A. No. 15/79.
The respondents filed their cross objections.
Though the High Court admitted the appeal on being satisfied that the appeal involves as many as 11 substantial questions of law, it disposed the appeal on a short ground that the documents and the evidence adduced by the respondents 1 and 2 (Govindan Nair and Ambrolil Ammalu) clearly show that the respondents 1 and 2 are bona fide purchasers of the properties in ques tion for consideration and the plea of benami put forth by the appellants has to be negatived.
The contentions in the cross objections were that for filing an application under Section 13(B)(1) of the Act, a deposit of the purchase money together with the interest at the rate of 6 per cent per annum in the court is a condition precedent and that the finding of the lower Appellate Court that the earlier depos it made under Act 9 of 1967 was sufficient and the interest accrued till the date of the Execution Application under Act 35 of 1969 would be directed to be deposited in case the appellants were found entitled to restoration of possession of the property is erroneous.
The High Court disposed the contentions in the main appeal observing thus: "It is not necessary for me to examine this question and finally adjudicate it, since I have upheld the decision of the 547 lower appellate Court on other grounds.
I only indicate that the respondents ' counsel thought to sustain the conclusion of the lower appellate court on other grounds as well.
" In the result, the High Court affirmed the decree of the lower Appellate Court and dismissed the second Appeal with costs.
So far as the cross objections are concerned, the High Court passed the following order: "There is no need to dispose of the cross objections on the merits.
It is ordered accordingly.
" Hence the appellants by this appeal are impunging the judg ment of the High Court.
Mr. K.K. Venugopal, Sr.
Counsel appearing on behalf of the appellants, Mr. T.S. Krishnamurthy lyer, Sr. Counsel and Mr. P.S. Poti, St. Counsel appearing on behalf of the first and second respondents respectively took us very meticulous ly and scrupulously through the judgments of all the three courts and put forth the case of their respective parties.
Having heard the learned counsel on either side for a considerable length of time, we are clearly of the view on a conspectus of the relevant Section 13(B) of the Act and on the factual matrix of the case that the result of the case would depend upon the decision of two substantial questions involved, they being (1) Whether respondents 1 and 2 are bona fide purchasers of the scheduled land in dispute for adequate consideration entitling to the benefit of the proviso to Section 13(B)(1)? (2) Whether the appellants are entitled to the benefit of subSection (1) of Section 13(B) of the Act? Before making a more detailed and searching analysis on different aspects of the case, it would be necessary for proper understanding of the issues involved to reproduce the relevant provisions of Section 13(B)(1) of the Act, on the pivotal of which both the questions revolve.
Section 13B: There is no requirement in any of the clauses 548 that an offer of readiness to comply with any order for deposit of costs must be expressed in any judgment, decree or order of court, where any holding has been sold in execu tion of any decree for arrears of rent, and the tenant has been dispossessed of the holding after the 1st day of April, 1964 and before the commencement of the Kerala Land Reforms (Amendment) Act, 1969, such sale shall stand set aside and such tenant shall be entitled to restoration of possession of the holding, subject to the provisions of this Section; Provided that nothing in this sub Section shall apply in any case where the holding has been sold to a bona fide purchas er for Consideration after the date of such dispossession and before the date of publication of the Kerala Land Re forms (Amendment) Bill, 1968 in the Gazette.
If the answer to the first question is in the affirma tive, then there is no need to consider the second question as it would be only academic.
We, therefore, shall now address ourselves in the first instance whether the concur rent finding of facts by both the Appellate Courts relating to the first question warrant interference.
Before the Trial Court whilst the appellants examined PWs 1 to 4 and filed Exhibits A 1 to A22, the respondents examined RWs 1 to 4 and marked Exhibits B. 1 to B .58.
Besides, exhibit X 1, X 2, X 3, X 5 and X 6 and C. 1 to C.4 were also exhibited.
The Respondents 4 to 6 admittedly are brothers.
Though at the initial stage, Mr. Krishnamurthy Iyer did not accept the relationship of the third Respondent with Respondents 4 to 6 on the ground of lack of evidence, subsequently no serious dispute was raised about the said relationship.
The Trial Court has proceeded on the ground that the Respondents 3 to 6 are brothers being the sons of Kunhikannan in whose favour the decree had been assigned.
However, it is admitted during the course of hearing of this appeal that the third Respondent is not a direct brother of Respondents 4 to 6, but son of the step mother of Respondents 4 to 6.
The second Respondent Ambrolil Ammalu is admittedly the wife of the fourth Respondent Krishnan.
The first Respondent Govindan Nair is a stranger.
The third Respondent, the Court auction purchaser sold the property extending 4.35 acres in favour of the first Respondent and the remaining half in favour of the second Respondent under sale deeds Exts.
A.2 and A.3 dated 549 5.12.
Consideration mentioned in each of the sale deeds Exts.
A.2 and A.3 is Rs.3,000.
Out of Rs.3,000 shown as consideration for A.2 a sum of Rs.2,500 is said to have been left with the first Respondent for payment of arrears of rent.
In exhibit A.3, it is recited that the third respondent is said to have already received Rs.2,000 on a promissory note from the second Respondent for meeting the expenses incurred by him for conducting O.S. No. 6/66.
The said sum of Rs.2,000 is stated to have been adjusted towards the consideration under exhibit A3.
The first Respondent has produced a receipt (exhibit B28) showing that out of the amount of Rs.2,500 left with him he had paid a sum of Rs. 100.
There is no other document evi dencing the discharge of the entire alleged arrears of rent out of Rs.2,400.
When the third Respondent was questioned about the promissory note on the strength of which he is stated to have borrowed a sum of Rs.2,000, he has stated that he had returned the promissory note.
This evidence as rightly pointed out by Mr. Venugopal is highly unacceptable because in usual practice whenever a debt, borrowed on a promissory note is discharged that promissory note is re turned to the borrower and never left with the lender.
Moreover, the evidence of the third Respondent is contra dicted by RW. 3, the son of the second Respondent.
According to RW.
3, when exhibit A.3 was executed, the promissory note was returned to the third Respondent.
According to Mr. Venugo pal, this contradictory version betwixt the evidence of the first Respondent and RW.
3 clearly shows that the recital regarding payment of consideration to the extent of Rs.2,000 in exhibit A.3 is not genuine and acceptable and that exhibit A.3 is not fully supported by consideration.
As per the recitals of consideration under Exhibits A.2 and A.3 the total cash consideration received by the third Respondent was only Rs. 1,500 i.e. Rs.500 from the first Respondent and Rs.1000 from the second Respondent.
It is vehemently urged on behalf of the appellants that the third Respondent after purchasing the property for Rs.815 in 1962 would not have parted with it after fighting several litigations for a cash considera tion of Rs.1,500 only.
The evidence of the third Respondent that he left a sum of Rs.2,500 with the first Respondent for discharging arrears of rent and earlier received a sum of Rs.2,000 from the second Respondent on a promissory note is not credit worthy in the absence of any supporting contempo rary documentary evidence.
His assertion that he paid the amount for the Court auction purchase in the year 1962 out of the money in his possession as well as from borrowings shows that he was a man of slender means.
When he was con fronted from whom he borrowed that amount, his answer was that he did not remember from whom and how much he borrowed.
The 550 Trial Court has rightly pointed out in paragraph 19 of its Order that the third Respondent did not leave any impression that he was conversant with the various pending litigations regarding the present property.
Mr. Venugopal drew out attention to another piece of evidence of RW3, deposing that his father was never consult ed with regard to exhibit A3 and assailed his evidence as in credible and bereft of truthfulness and trust worthiness.
Coming to the sale deed, exhibit A2 it is stated that the first Respondent is residing about 11 miles away from Palayed Amson where the property is situated.
He has no other property in Amson.
The reason given by him for purchasing this property which was already riddled with litigation is not at all convincing.
The first appellate Court while perfunctorily rejecting the reasoning of the Trial Court with regard to the consid eration part of exhibit A2 and A3 disposed of that contention in a summary manner holding: "The apparent inadequacy is no ground to think that there is no consideration . .
I don 't think that the recitals in Exhibits A2 and A3 can be overlooked for this or the other reasons stated by the learned Munsiff." Then relying on Exhibits B 17, B28, B31, B41 and B45 and other documents it concluded: "that the Respondents 1 and 2 came into possession of the properties and exercised their rights under Exhibits A2 and A3 by payment of rent and revenue and payment of considera tion spoken to by both the vendor and vendee and as such they are bona fide purchasers for consideration." The High Court accepting the reasons given by the sub Judge held thus: "Most of these documents are public records or registers kept in the respective village office and proceedings in courts.
There is no more of law in placing reliance on such documents.
The finding entered by the learned Subordinate Judge that respondents 5 and 6 are bona fide purchasers for consideration is based on substantial evidence.
It cannot be said to be arbitrary or unreasonable or perverse. ' ' 551 But both the Appellate Courts have conveniently ignored even the relationship of the parties which assumes much importance and significance in evaluating the evidence in the light of the facts and circumstances of the case for reaching a satisfactory conclusion and seem to have summari ly disposed of the case of the appellants.
The question is not the mere inadequacy of consideration as pointed by the lower appellate Court, but lack of evi dence in substantiating the recitals of both the documents.
The next contention advanced by Mr. Venugopal is that though the High Court has formulated as many as 11 substantial questions of law.
it has not dealt with any of them enumer ated as (a) to (e) and examined the question No. (f) in the proper perspective.
Further the important question No. (g) reading "rs not the admitted fact that the 6th respondent is the wife of the 2nd respondent prima facie proof that she is not a bona .fide purchaser for value" is not at all dealt with.
It may be noted in this connection that the 6th re spondent and the 2nd respondent referred to in that question are Ambrolil Ammalu (2nd respondent herein) and Krishnan (4th respondent herein).
As pointed out supra the High Court itself has expressed that it was inclined to dispose of the appeal 'on a short ground '.
The bone of contention of Mr. Krishnamurthy Iyer and Mr. Poti is that it is not open to the appellants to reagitate the matter and request this Court to disturb the concurrent finding of facts arrived at by both the appellate Courts which had rendered their findings on the proper evaluation of the evidence and there can be no justification to review or re appreciate the evidence to take a contrary view in the absence of any contemporaneous document in support of the plea of the appellants.
In addition to the above, Mr. Poti urged that the appellants have not properly and satisfacto rily discharged the onus of proof cast upon them and the concurrent findings based on voluminous documents, the copies of which are not annexed to the SLP for perusal of this Court, do not call for interference.
In reply to the above arguments, Mr. Venugopal has pointed out that none of the documents referred to in the judgments of the appellate Courts would either improve the case of the respondents or deny the claims of the appel lants.
Of the documents relied upon by the appellate Courts, exhibit B 17 and B31 are the true extracts showing payment of tax in the Village Officer Day Book.
exhibit B28 is a rent receipt dated 23.2.1969 issued by the receiver appointed in O.S. 1/64 on the file of the Sub Court (lower appellate Court).
B. 42 is a true extract 552 from the Foodgrains Cultivation Register and B.46 is a true extract from the Peringathor Village Account.
exhibit
B.41 to B.45 are the levy notices and revenue receipts for the years 1967, 1968.
1969 and 1973.
Exhibits B.55 to B.59 are copies of orders in M.C. No. 3/71.
As rightly pointed out by Mr. Venugopal, it is but natural that the receipt for the pay ment of tax, rent receipt, revenue receipt etc., are in the names of the persons in whose names the properties stand and therefore those documents cannot by themselves dispel the claim of the appellants.
Besides, urging with aH emphasis that Exhibits A2 and A3 are only sham and nominal documents, it has been incidentally urged by Mr. Venugopal that the transaction under these two sale deeds is benami in nature.
This argument was stoutly resisted by Mr. Krishnamurthy Iyer stating that in the teeth of Section 66 of the Code of Civil Procedure and in the absence of any proceedings to set aside the sale in favour of respondents 5 and 6 on the ground of fraud etc.
, the plea of benami transaction cannot be counte nanced.
He also cited the decision in Mithilesh Kutnari and Another vs Prem Behari Khare, ; But Mr. Venugopal explained his argument that he has not advanced that argument to set aside the sale deeds on the ground of benami transaction, but only for scrutinising the circum stances of the transaction in examining the validity of the sale deeds.
However, as the plea of benami transaction is not pressed into service, it need not detain us any more.
We shah now examine whether this Court would be justi fied in interfering with the concurrent finding of facts in exercise of its discretionary powers under Article 136 of the Constitution of India.
In a recent decision in Dipak Banerjee vs Lilabati Chakraborty, ; it has been observed thus: "That jurisdiction (under Article 136 of the Constitution of India) has to be exercised sparingly.
But, that cannot mean thai injustice must be perpetuated because it has been done two or three times in a case.
The burden of showing that a concurrent decision of two or more courts or tribunals is manifestly unjust lies on the appellant.
But once that burden is discharged, it is not only the right but the duty of the Supreme Court to remedy the injustice." No doubt, this discretionary power has to be exercised sparingly; Out when there are exceptional and special cir cumstances justifying the exercise of the discretionary powers and where manifest injustice or grave miscarriage of justice has resulted by overlooking or ignoring or 553 excluding material evidence resulting in unduly excessive hardships, this Court will be justified in stepping in and interfering with the concurrent finding of facts in the interest of justice and it is also the duty of this Court to remedy the injustice, so resulted.
Vide Basudev Hazra vs Meutiar Rahaman Mandal; , and Bhanu Kumar Shastri vs Mohan Lal Sukhadia and Others, at pages 385 and 386.
The present case, in our view, suffers from the infirmi ty of excluding, ignoring and overlooking the abundant materials and the evidence, which if considered in the proper perspective would have led to a conclusion contrary to the one taken by both the appellate Courts.
The relation ship of the parties inter se has been completely and conven iently ignored and excluded from consideration.
In fact, the High Court has not rendered any finding on question No. (g) which is one of the eleven substantial questions of law formulated in paragraph 3 of its judgment.
The lack of evidence in support of the recital in regard to the consid eration is completely overlooked.
Therefore, in view of the above exceptional and special circumstances appearing in this case, this Court will not be justified in refusing to exercise its discretionary powers merely on the ground that the conclusion of both the Courts is concurrent.
For the discussions made above, we are of the view that the conclusion arrived at by both the appellate Courts is only backed by assertions rather than by acceptable reason ing based on the proper evaluation of evidence and so we are unable to subscribe to the concurrent finding that the respondents 1 and 2 are bona fide purchasers of the proper ties in dispute for consideration.
On the other hand, we hold that the evidence and circumstances of the case coupled with the evidence on record do establish that the respond ents 1 and 2 are not bona fide purchasers for consideration.
In the result, we hold that the respondents 1 and 2 are not entitled to the benefit of the proviso to sub Section (1) of Section 13(B) of the Act and answer the first ques tion against the respondents and in favour of the appel lants.
We shall now pass on to the next question whether the appellants are entitled to the benefit of Section 13(B)(1) of the Act.
The Kerala Land Reforms Act of 1963 came into force on 1.4.1964.
Amended Act 9 of 1967 was a temporary enactment which 554 remained in force till 31.12.
Thereafter, Act 35 of 1969 came into force from, 1.1.1970 containing Section 13(B) which is substantially on the same terms as Section 6 of Act 9 of 1967 with a proviso superadded.
To invoke this benevo lent provision, the satisfaction of two primary conditions are sine qua non.
Those conditions are: (1) Any "holding" to which a tenant is entitled to resto ration of possession should have been sold in execution of any decree for arrears of rent.
(2) The tenant should have been dispossessed of the "holding" after the first day of April 1964 and before the commencement of the Kerala Land Reforms (Amendment) Act, 1969.
If these two essential conditions are fulfilled, then the sale in execution of any decree for arrears of rent shall stand set aside notwithstanding anything to the con trary contained in any law or in any judgment, decree or order of court and the tenant shall be entitled to restora tion of possession of such holding, but subject to the provisions of this Section 13B.
The only bar for the resto ration of possession under this Section 13(B)(1) is the sale of the holding to a bona fide purchaser for consideration after the date of such dispossession and before the date of publication of the Kerala Land Reforms (Amendment) Bill 1968 in the Gazette.
For invoking the benefit of sub Section (1) of section 13(B) the person entitled to restoration of possession of his holding should within a period of 6 months from the commencement of the Kerala Land Reforms (Amendment) Act, 1969 deposit the purchase money together with interest at the rate of 6 percent per annum in the court and apply to the court for setting aside the sale and for restoration of possession of his holding.
Once these legal formalities are satisfactorily complied with then the Court by holding a summary enquiry shall set aside the sale and restore the applicant to possession of his holding.
The explanation to that section says that the term 'holding ' includes a part of holding.
The expression "holding" is defined in Section 2(17) of the Act.
The language of Section 13(B) is plain, clear and unam biguous representing the real intention of the legislature as reflected not only from the clear words deployed but also from the very purpose of the vesting of rights on the dis placed tenants.
To construe the provisions of a statute especially of a benevolent provision like the one in ques tion, we have to take into consideration the dominant pur pose of the statute, the intention of the legislature and the policy underlying.
Vide 555 P. Rami Reddy & Others vs State of Andhra Pradesh & Others, ; ; Skandia Insurance Co. Ltd. vs Kokilaben Chandravadan & Others, [1987] 2 SCC 654 and M/s Doypack Systems Pvt. Ltd. vs Union of India & Others, ; Admittedly, the third respondent obtained delivery of the property in question through court on 29.1.1965 from the possession of the appellants, who were the tenants of the said property which was sold for arrears of rent and there after the appellants preferred a petition for restoration of possession of their holdings in Execution Application No. 1711/67 under Section 6 of Act 9 of 1967 after depositing the sale amount of Rs.815 and the interest of Rs.255.
Thus the appellants have satisfied the conditions for entitlement of the possession of the property.
While this proceeding was pending, Act 35 of 1969 came into force repealing Act 9 of 1967.
Therefore, the appellants filed the Execution Applica tion No. 566/70 in O.S. 817/43 praying that the present application should be treated as a proceeding in continua tion of the earlier Execution Application and the amount deposited already in the previous Execution Application should be treated as deposit for the present application with an undertaking to deposit the balance, if any.
Though it has been contended by the respondents that the appellants have failed to establish that they were tenants at the time of the dispossession, both the Trial Court as well as the first appellate Court have concurrently found that the appellants were holding the property as tenants and they were dispossessed.
Before the High Court, it was contended that at the time of dispossession of the holding, the appel lants were not tenants but only trespassers, that the dis possesion was only pursuant to the decree in O.S. No. 6/66 and that both the lower Courts have not applied their minds to these salient and vital facts.
The learned Judge of the High Court has answered this contention in the penultimate paragraph of his judgment observing thus: " This is a serious legal error.
It is not necessary for me to examine this question and finally adjudicate it, since I have upheld the decision of the lower appellate court on other grounds.
" Suffice to mention here that the High Court has not specifi cally dislodged the findings of the lower Courts that the appellants were tenants at the time of the dispossession.
However, we will deal with this question presently.
The main thrust of the argument of Mr. Krishnamurthy Iyer is 556 that the appellants are not entitled to restoration of the possession of their 'holding ' because of an intervening cause, that being, that the third respondent, got the pos session of the property which is now sought to be disturbed not in execution of the decree for arrears of rent, but by filing a suit subsequent to 'the court auction purchase.
That intervening cause is explained by the learned counsel 'stating that after the property was delivered over to the third respondent on 29.1.1965, Gopalan Nambiar (since dead) and the first appellant trespassed into the land which necessitated the third respondent to institute a suit O.S. No. 6/66 in the Sub Court of Badagara which was decreed on 27.7.
1966 as evidenced by the judgment (exhibit B16).
He con tinues to state that the third respondent, only in pursuance of the execution of this decree in O.S. 6/66 obtained pos session of the property on 23.8.
1966 and therefore Section 13(B)(1) in view of the said intervening cause cannot be availed of since the third respondent though 'got possession earlier by the auction purchase was dispossessed by the subsequent event of trespass by the appellants and got possession by instituting the suit O.S. 6/66.
One other argument of the learned ' counsel is that as the sales under Exhibits A2 and A3 are only subsequent to the decree in O.S. No. 6/66, these transactions cannot be brought into the dragnet of Section 13(B) and the said provision will have no application to the facts of the present case.
We are afraid, we cannot permit this inconceivable argument to be advanced.
Admittedly, the third respondent purchased the property in court auction sale in pursuance of the decree for arrears of rent in O.S. No. 817/43 and obtained the possession by dispossessing the tenants, namely, the appellants.
It was only thereafter there was trespass by the appellants.
There fore, the subsequent event of obtaining possession of the property in pursuance of the decree in O.S. No. 6/66 will not in any way alter the position that the appellants had been dispossessed in pursuance of the decree for arrears of rent.
The decree in O.S. No. 6/66 for obtaining possession from the trespassers does not confer any new right or title over the property in favour of the third respondent.
Mr. Venugopal countered this argument stating that this new plea should not be allowed to be raised because this plea was never taken both before the trial and the first appellate Courts.
The reply given by Mr. Krishnamurthy Iyer is that since it is a question of law, it is permissible to raise this question even at this stage.
As we have said earlier, even assuming that this plea could be raised, it has no substance in any way affecting the claim of the appellants for the reasons stated supra.
Mr. Poti after giving a brief note about the legislative history that Act 4 of 1961 was declared as void on 5.12.
1961 in respect of certain 557 provisions and that thereafter Act 1 of 1964 was enacted which came into force on 1.4.1964 repealing earlier Act 4 of 1961 advanced a hesitant argument that the application is liable to be dismissed as the entire amount has not been deposited in compliance with sub Section (2) of Section 13(B) which is a condition precedent to claim the restora tion of the possession of the property.
Admittedly the appellants filed an application in the year 1967 for resto ration of the possession of the property under Section 6 of Act.
9 of 1967 and during the pendency of that application, Act 35 of 1969 came into force.
The applicant who had al ready deposited the purchase amount together with interest has made the request to treat that application as the one in continuation of the later proceeding and undertook to pay the deficiency of the amount, if any.
The lower appellate Court in paragraph 6 of its judgment found that the deposit already made was sufficient and that the interest accrued thereafter would be directed to be deposited in case the appellants were found entitled to restoration of possession.
This finding of the first appellate Court concurring with the Trial Court has not been dislodged by the High Court.
It may not be out of place to mention that on account of cer tain divergent views expressed by Judges of the Kerala High Court on this point the question was referred to a Division Bench of that Court which drawing strength on the ratio laid down by this Court in State of Punjab vs Mohar Singh, ; observing: "The line of enquiry would be, not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them." and agreeing with the view expressed by Krishnamurthy Iyer, J (as he then was and who is now appearing before us for the first respondent in different capacity) in Civil Revision Petition Nos. 1090 and 109 1 of 1972 wherein this precise question came up for consideration held that the application filed under Section 6 of Act 9 of 1967 which was pending on the date of the commencement of the Act 35 of 1969 was liable to be continued and dealt with under the provisions of the earlier Act, untrammelled by the provisions of the later Act.
We approve the view taken in the above Parameswa ran Narnbudiri 's case and hold that the deposit made in the earlier application under Section 6 of Act 9 of 1967 which was pending on the date of commencement of Act 35 of 1969 was liable to be continued uneffected by the provisions of the later Act.
558 In Summation: We, for the aforementioned discussion, disagree with the findings of the High Court, set aside the impugned judgment and restore the judgment of the Trial Court holding that the sale of the 'holdings ' of the appellants was in execution of the decree in O.S. No. 817/43 for arrears of rent and the appellants who are tenants were dispossessed of the holdings after 1.4.64 and before the commencement of the Kerala Land Reforms (Amendment) Act, 1969 and the respondents 1 and 2 are not bona fide purchasers for consideration.
In view of our above conclusion the appellants are entitled to recover possession of the properties in dispute, but without preju dice to the rights, if any, of the respondents 7 to 10 who are the wife and children of Gopalan Nambiar and who have got themselves impleaded as parties to the present proceed ings.
The amount under deposit made by the appellants is permitted to be withdrawn by the respondents 1 to 3.
In the result, the appeal is allowed with costs.
S.B. Appeal al lowed.
| In its industrial policy, the State Government declared on 1.8.1961 that where power has to be generated by indus trialists themselves, exemption from electricity duty would be granted for a period of five years from the date of plant goes into production, and that the concession would be applicable only to new generating sets installed during the Third Plan period.
The Respondent indicated to the Government on 3.5.1955 that about 5000 K.W. of electricity would be required by it to run its paper plant and that it would by itself make arrangements for obtaining the necessary generating equip ment.
It also applied for import licence for the import of a production plant as also a power plant to run it.
The import licence was granted and the Respondent started negotiation with the foreign supplier.
Since the price had gone up it was rather impossible for the Respondent to import both the production plant and the power plant, and if the power plant was not purchased along with the production plant, it would make the project unsound.
Hence the Respondent was in two minds whether to have the power plant or not.
Meanwhile, the above said industrial policy was announced and the Respond ent on installation of the power plant was able to start its production w.e.f. 16.2.1965.
Thereafter to formalise the matter, the Respondent corre sponded 437 with the appellant for the grant of the requisite exemption, which was rejected, and the Respondent approached the High Court by way of a petition under Articles 226 and 227 of the Constitution of India.
The High Court held that the Peti tioner was entitled to invoke the doctrine of promissory estoppel in order to claim exemption from payment of elec tricity duty for a period of five years from 16.2.1965 in terms of the assurance of the State Government dated 1.8.1961.
Against this order of the High Court the State has come in appeal by Special Leave.
On behalf of the appellant State it was urged that there was no occasion to invoke the doctrine of promissory estop pel, since the Respondent had not in any manner acted on the assurance of the Government to its own prejudice but on its own it was taking steps to set up a generating plant much before the industrial policy was announced.
Dismissing the appeal, this Court, HELD: 1.
Whether the respondent was of one mind right from the beginning to set up a power plant, with or without the assurance of the State Government dated 1.8.1961, as asserted by the State, is neither borne out nor is the view of the High Court arrived at from the record.
On the con trary, the view taken is that the respondent 's indecision in that regard ended and it became decisive on the announcement of the assurance dated 1.8.1961.
Such view of the High Court was a possible view to be taken on the material placed before it and the inference drawn therefrom could be that the respondent had acted on the basis of the assurance.
[441E F] 2.
This Court ordinarily does not interfere with factual findings arrived at by the High Court and this case has not been shown to be an exception.
The view taken by the High Court was unexceptional warranting it to be left uninter ferred with.
[441F] 3.
Without commanding the State Government to issue such a Notification, the High Court has granted relief to the respondent to which there was no bar.
Accordingly no provi sion of Madhya Pradesh Electricity Duty Act, 1949 or any other law can be said to have been transgressed.
[442A]
|
Appeals Nos.
2200, 2200A and 2200B of 1968.
Appeals from the judgment and order dated November 30, 1967 of, the Allahabad High Court in Income tax Reference No. 366 of 1963.
M. C. Chagla and P. N. Tiwari, for the appellant (in all the appeals).
B. Sen, G. L. Sharnia and R. N. Sachthey, for the respondent (in all the appeals).
239 The, judgment of the Court was delivered by Hegde J.
In these appeals by certificate the question that falls for decision is whether oil the facts and in the circumstances of the case registration under section 26(A) of the Indian Income Tax Act, 1922 (to be hereinafter referred to as the act) was rightly refused to the appellant firm on the ground that the partnership in question violated the provisions of section 4 of the Indian Companies Act, 1913.
The authorities under the Act as well as the High Court of Allahabad have answered that question in the affirmative.
The assessee challenges that conclusion.
The above appeals relate to different assessment years of the same assessee, the relevant assessment years being 1952 53, 1953 54 and 1954 55.
In all these years the Income Tax Officer had refused to register the appellant firm under section 26A.
All the partnership deeds are, we are told, similar in terms.
We have before us the deed executed on July 7, 1950.
It shows that the firm consists of 18 partners.
Ex facie that deed does not show that any of the partners had joined the deed as representatives of their Hindu Undivided Families.
From the tenor of the document, they appear to be partners in their own right.
The Income Tax Officer, the Appellate Assistant Commissioner and the Tribunal have come to the conclusion that some of them had joined the partnership as Kartas of their respective Hindu Undivided Families.
All the authorities under the Act as well as the High Court have opined that the partnership in question is not lawful in view of section 4(3) of the Indian Companies Act, 1913.
The material portion of that provision reads (4).
(1). (2) No company, association or partnership consisting of more than twenty persons shall be formed for the purpose of carrying on any other business that has for its object the acquisition of gain by the company, association or partnership or by the individual members thereof, unless it is registered as a company under this Act, or is formed in pursuance of an Act of Parliament of the United Kingdom or some other Indian law or Royal Charter or Letters Patent.
(3) This section shall not apply to a joint family carrying on joint family trade or business and where two or more such joint families form a partnership, in computing the number of persons for the purpose of this section, minor members of such families shall be excluded.
240 (4) Every member of a company, association or partnership carrying on business in contravention of this section shall be personally liable for all liabilities incurred in such business.
(5). . . .
The Income Tax Officer, the Appellate Assistant Commissioner as well as the Tribunal were of the opinion that some partners of the assessee firm having entered into the partnership as representatives of their respective Hindu Undivided Families, the adult members of those families should be taken into consideration for determining whether or not the total number of partners exceeded twenty.
On that basis they have arrived at the conclusion that the firm has more than twenty partners and the same having not been registered as a company under the Companies Act, nor having formed 'in pursuance of an Act of Parliament of the United Kingdom or some other Indian law or Royal Charter or Letters Patent, it must be held to be an unlawful partnership.
When the question formulated earlier was referred to the High Court under section 66(1) of the Act, it was heard by Jagdish Sahai and Beg, JJ.
Jagdish Sahai J. was of the opinion that the partnership in question was not lawful.
Beg J. differed from him and answered the question in favour of the assessee.
In view of this difference of opinion, the matter was referred to Takru J.
He agreed with Jagdish Sahai J. By a majority the question referred to the High Court was answered in favour of the revenue.
Hence these appeals.
Mr. Chagla appearing on behalf of the assessee urged that no Hindu joint family as such can Join a partnership and it is now well settled that when a karta of Hindu Undivided Family joins a firm as a partner even if he contributes his share from out of the family funds, the other members of his family do not ipso facto 'become partners of that firm.
So far as the partnership is concerned, he is the only partner though he may be accountable to the members of his family as regards the profits earned.
According to the learned counsel, for the purpose of working out the rights and liabilities of the partners inter se one cannot go behind the partnership deed.
Proceeding further he urged that in considering whether a partnership should be registered under section 26A or not, the Income tax Officer has merely to see, whether the requirements of section 26A of the Act and the relevant rules are complied with or not.
He is not entitled to investigate into the question as to who are beneficially interested in the partnership.
According to him if the requirements of section 26A and the relevant rules are complied with, the Income tax Officer is bound to register the partnership.
The counsel urged that the second limb of section 4(3) of the Indian Companies Act, 1913, proceeds on the erroneous impression that 241 a joint Hindu family can enter into a partnership, which in law it cannot as it has no legal personality.
Mr. B. Sen, learned counsel for the department did not contest the position that when a karta or a member of a Hindu Joint family joins a partnership the other members of his family do not become partners ipso facto.
But according to him it is open to the department to go behind the partnership deed and find out whether the individual who has joined as a partner has joined in his own right or as a representative of any other body.
His contention was that in view of section 4(3) of the Indian Companies Act, 1913, once the Income tax Officer comes to the conclusion that one of the partners of a firm is a representative of a joint family, he must deem that the adult members of that family are also partners of that firm and on that 'basis find out whether the total number of partners exceed twenty.
If they exceed twenty he cannot register the partnership, as such a partnership contravenes section 4 (2) of the Indian Companies Act, 1913, Section 2 (6B) of the Act provides that the expression 'firm ', partner ' and 'partnership ' in the Act have the same meaning respectively as in the .
Section 4 of the Partnership Act, 1932 prescribes "Partnership" is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.
Persons who have entered into partnership with one another are called individually 'partners" and collectively "a firm" and the name under which their business is carried on is called the 'firm name '.
In view of the aforementioned provision only "persons" can join as partners.
Section 2(42) of the General Clauses Act says a "Person" shall include any company or association or body of individuals whether incorporation or not.
But this definition applies when there is nothing repugnant in the subject or context.
After examining the provisions of the Partnership Act, the Privy Council in SenaJi Kapurchand vs Pannaji Devichand(1) and this Court in Dulichand Laxminarayana vs Commissioner of Income Tax, Nagpur(2) , have held that an association of persons is not a person within the meaning of that expression in the Partnership Act, It is true that section 2(9) of the Act says that unless the context otherwise requires "person" includes Hindu Undivided Family, This definition cannot be imported into the Partnership Act, the provisions of which alone are relevant for finding as to who could join as partners.
It is only partnership constituted according to (1) A.I.R. 1930 P.C. 300.
(2) 242 the provisions of the Partnership Act that can be considered as partnerships under the Act.
The definition of 'person ' in the Act is intended for the purpose of levying income tax and for other cognate matters.
On the basis of certain observations of the Judicial Committee in Lala Lachman Das vs Commissioner of Income Tax(1), it Was contended on behalf of the department that a joint Hindu family can enter into a partnership.
Those observations have to be read in the context in which they were made.
The department in that case had requested the tribunal to refer the question "can there 'be a partnership within the meaning of section 2 sub section
6(B) of the Indian Income tax Act, 1922 between a Hindu Undivided Family as such on the one part and one of its undivided members in his indi vidual capacity on the other part.
" But that question was ultimately not referred as being unnecessary on the facts of the case.
But the following observations of the Judicial Committee in its judgment are relevant : "It is unnecessary to consider in this case the question relating to the validity of a partnership between a Hindu Undivided family as such of the one part and one of its undivided members in his individual capacity of the other.
With reference to the latter kind of partnership there seems to be some authority favouring the view that such a partnership cannot exist under the rules.
of Hindu law but their Lordships do not propose to deal with that question in this case.
" In that case the partnership was between the karta of a joint Hindu family and an undivided member of that family.
Hence the observations in the judgment that the Hindu Undivided family was a partner has really reference to the karta who was a partner as representing the family.
In Commissioner of Income tax,, West Bengal vs Kalu Babu Lal Chand(2), this Court observed that it is now well settled that Hindu Undivided Family cannot as such enter into a contract of partnership with another person or persons.
,Several other decisions have taken the same view.
No decision taking a contrary view was ' brought to our notice.
The concept of a Hindu Undivided Family joining a partnership presents considerable difficulty.
A Hindu Undivided Family is a fleeting body.
Its composition changes by births, deaths, marriages and divorces.
Such a partnership is likely to have a precarious existence.
The assumption in section 4(3) of the Companies ' Act, 1913 that a Hindu Joint family can be a partner in a partnership appears to be based on an erroneous view of the law.
(1) 74.
I.A. 277.
(2) 243 The next question is whether when a deed of partnership does not on the face of it show that any Hindu Undivided Family has joined the partnership, is it open to the Income tax Officer to behind the deed and find out for the purpose of registration under section 26A whether the ostensible partner is the representative of someone else.
The Judicial Committee in P. K. P. section Pichappa Chettiar and Ors.
vs Chokalingam Pillai and Ors.
(1) ruled that where a managing member of a joint family enters into a partnership with a stranger, the other members of the family do not ipso facto become partners in the business so as to clothe them with all the rights and obligations of a partner as defined by Contract Act.
In such a case the family as a unit does not become a partner but daily such of its members as in fact enter into contractual relationship with the stranger.
In Kshetra Mohan Sannyasi Charan Sadhukhan vs Commr. of Excess Profits Tax, West Bengal,(1) this Court laid down that a Hindu Undivided Family is included in the expression "person, as defined in the Indian Income tax Act but it is not a juristic person for all purposes; when two kartas of Hindu Undivided Families.
enter into a partnereship agreement, the partnership though popularly known as one between two Hindu Undivided Families in the eye of the law, it is a partnership between the two kartas and the other members of the families do not ipso facto become partners; there is, however, nothing to prevent the individual members of one Hindu Undivided Family from entering into a partnership with the individual members of another Hindu Undivided Family and in such a case it: is a partnership between the individual members and it is wholly inappropriate to describe such a partnership as one between two Hindu Undivided Families.
In Firm Bhagat Ram Mohan Lal vs Commissioner of Excess Profits Tax, Nagpur and anr.(3), this Court ruled that when the karta of a joint family enters ' into a partnership with the stranger, the members of the family do not ipso facto become partners in that firm.
They have no right to take part in its management or to sue for its dissolution.
The creditors of the firm would no doubt be entitled to proceed against the joint family assets including the shares of the non Partner co parceners for realisation of their debts.
But that is because under the Hindu law, the karta has.
the right when properly carrying on business to pledge the H credit of the joint family to the extent of its assets, and not because the junior members become partners in the business.
The liability (1) A.I.R. 1934, P.C. 192.
(3) (2)(1953) 244 of the latter arises by reason ' of their status as coparceners and not by reason of any contract of partnership by them.
In Commissioner of Income tax, Bombay City vs Nandlal Gandalal(1), this Court again observed that the position in Hindu law with 'regard to a coparcener, even when he is the karta entering into partnership with others in carrying on a business is well settled.
The partnership that is created is a contractual partnership and is governed by the provisions of the .
The partnership is not between the family and the other partners; it is a partnership between the _coparcener individually and his other partners.
The coparcener is undoubtedly accountable to the family for the income received, but the partnership is exclusively one between the contracting members, including the individual coparcener and the strangers.
On the death of the coparcener, the surviving members of the family cannot claim to continue as partners with the others or institute a suit for dissolution of partnership; nor can the stranger partners sue them as partners for the coparcener 's share of the loss.
Therefore, so far as the partnership is concerned, both under partnership law and under Hindu law, the control and management is in the hands of the individual coparcener who is the partner, and not in the family.
In Commissioner of Income tax, Madras vs Bagyalakshmi and Co. Udamalpet(2), this Court observed that contract of partnership has no concern with the obligation of the partners to others in respect of their shares of profit in the partnership.
it only regulates the rights and liabilities of the partners.
A partner may be the karta of a joint Hindu family, he may be a trustee, he may enter into sub partnership with others, he may under an agreement express or implied, be the representative of a group of persons; he may be a benamidar for another.
In all such cases he occupies a dual position qua the partnership, he functions in his personal capacity; qua the third parties in his representative capacity; third parties, whom one of the partner represents, cannot enforce their rights against the other partners nor can the other partners do so against the said third parties.
Their right is only to a share in the profits of their partner representative in accordance with law or in accordance with the terms of the agreement, as the case may be.
The law of partnership and Hindu law function in different fields.
A divided member or some of the divided members of the erstwhile joint family can certainly enter into a partnership, with third parties under some arrangement among the members of the divided family.
Their shares in the partnership depend on the terms of the partnership; the shares of the members of the divided (1) (1960) 40 I.T.R.1.
(2) ; 245 family in the interest of their representative in the partnership depend upon the terms of the partition deed.
From these decisions it follows that for the purpose of finding, out as to who are all partners of.
a firm, one has only to look to the partnership deed and not to go behind it.
Another contention urged by Mr. Chagla was that the scope of the enquiry I under section 26A is a limited one; if the application made for registration complies with the requirements of that section and the rules framed thereunder.
, then it is not open to the income tax Officer to refuse to register the firm.
Section 26A says : (1) Application may be made to the Income7tax officer on behalf of any firm, constituted under an instrument of partnership specifying the individual shares of the partners, for registration for the purposes, of this Act and of any other enactment for the time being in force relating to the Income tax or super tax.
(2) The application shall be made by such person or persons, and at such times and shall contain such particulars and shall be in such form, and be verified in such manner, as may be prescribed and it shall be dealt with by the Income tax Officer in such manner as may be prescribed.
" The conditions of registration prescribed in this section and the relevant rules are : (1) on behalf of the firm, an application ,should be made to the Income tax Officer by such person and at such times and containing such particulars, being in such form and verified in such manner as are prescribed by the rules;, (2) the firm should be constituted under an instrument of partnership; (3) the instrument must specify the individual shares of the part ners and (4) the partnership must be valid and genuine and must actually exist in the terms specified in the instrument.
If all the above conditions are fulfilled, the Income tax Officer is bound to register the firm unless the assessee has contravened section 23(4) of the Act.
In Commissioner of Income Tax, Madras vs Sivakashi Match Exporting Co. (1) this Court held that the combined effect of section 26A and the rules made thereunder was that the Income tax Officer could not reject an application made by a firm if it gave the necessary particulars prescribed by the rules and if there was a firm in existence as shown in the instrument of partnership.
A firm is said to be not in existence if it was a bogus and not a (1) , Sup.
Cl/70 2 246 genuine one or if in law the constitution of the partnership was void.
The jurisdiction if the Income tax Officer was, therefore, confined to ascertaining two facts namely (1) whether the application for registration was in conformity with the rules framed under the Act and (2) whether the firm shown in the document presented for registration was a bogus one or had no legal existence.
Further the discretion conferred on the Income tax Officer under section 26A was a judicial one and he could not refuse to register a firm on mere speculation.
He had to base his conclusion on relevant evidence.
Therein this Court further held that there was no prohibition under the Partnership Act against a partner or partners of other firms combining together to form a separate partnership to carry on a different business.
The fact that such a partner entered into sub partnership with others in respect of his share did not detract from the validity of the partnership; nor was the manner in which he dealt with his share of the profits of any relevance to the question of the validity of the partnership.
In Commissioner of Income Tax Gujarat vs A. Abdul Rahim and Co. (1), this Court ruled that registration of a partnership deed under s.26A of the Act could not 'be refused on the ground that one of the partners was a benamidar for someone else.
Therein this Court observed that it is a settled law that if a partnership is a 'genuine and valid one, the Income tax Officer has no power to reject its registration if the other provisions of s.26A and the rules framed thereunder are complied with.
When a firm makes an application under s.26A for registration, the Income tax Officer can reject the same if he comes to the conclusion that the partnership is not genuine or the instrument of partnership does not specify correctly the individual share of the partners.
But once he comes to the conclusion that the partnership is genuine and a valid one, he cannot refuse registration on the ground that one of the partners is a benamidar of another.
If the partnership is genuine and legal, the share given to the benamidar will be the correct specification of his individual share in the partnership.
The beneficial interest in the income pertaining to the share of the said benamidar may have relevance to the matter of assessment but none in regard to the question of registration.
His beami character does not affect the benaamidar 's capacity as partner or his relationship with the other members of the partnership.
If a partner is only a benamidar for, another, it can only mean that he is accountable to the real owner for the profits earned by him from and out of the partnership.
Therefore a benamidar is a mere trustee of the real owner and he has no beneficial interest in the property or the business of the real owner.
But, in law, just as in the case of a trustee, he can also enter into a partnership with (1) 247 others.
The benamidar of a partner, qua the other partners, has separate And real existence; he is governed by the terms of the partnership deed, his rights and liabilities are governed by the terms of the contract and by the provisions of the partnership Act; his liability to third parties for the acts of the partnership is coequal with that of the other partners; the other partners have no concern with the real owner; they can only look to him for enforcing their rights or discharging their obligations under the partnership deed.
Any internal arrangement between him and ,another is not governed by the terms of the partnership; that arrangement operates only on the profits accruing to the benamidar; it is outside the partnership arrangement.
If a benamidar possesses the legal character to enter into a partnership with another, the fact that he is accountable for his profits to, and has the right to be indemnified for his losses by a third party or even by one of the partners does not discharge him of the said character.
As mentioned earlier, the persons who are shown in the part nership deed with which we are concerned in these appeals as partners, appeared to have joined the same in their individual capacity.
There is nothing in the partnership deed to indicate that they have joined the partnership as kartas of their respective families.
It was not open to the Income tax Officer to go behind the deed and find out, for the purposes of registration under section 26A whether the partners mentioned in the deed have joined the partnership in their own right or as representing others.
Hence the partnership must be held to have been validly formed as law did not at the relevant time prohibit any one, otherwise competent to contract from entering into a contract of partnership even though, the beneficial interest in his share may vest in others.
The application made for registration complies with the requirements of section 26A and the rules framed thereunder.
Therefore the Income tax Officer was bound to register the partnership.
For the reasons mentioned above, we allow these appeals, set aside the order made by the High Court and answer the question referred to the High Court in the negative and in favour of the assessee.
The department shall pay the costs of the assessee in this Court as well as in the High Court.
One hearing fee.
R.K.P.S. Appeals allowed.
| A firm consisted of 18 partners.
The partnership deed did not show that any of the partners joined the deed as representatives of their Hindu Undivided Families.
The firm applied for registration under section 26A of the Income Tax Act, 1922.
The income tax Officer, the Appellate Assistant Commissioner and the Tribunal were of the opinion that some partners of the firm having entered into the partnership as representatives of their respective Hindu undivided families, in view of section 4(3) of the Companies Act, 1913, the adult members of these families should be taken into consideration for determining whether or not the total number of partners exceeded twenty.
On that basis they arrived at the conclusion that the firm had more than 20 partners and the same having not been registered as a company under the Companies Act, the partnership was un lawful.
The High Court answered a reference made to it in favour of the revenue.
In the appeal to this Court it was contended; (i) Section 4(3) of the Companies Act, 1913 proceeded on the erroneous impression that a joint Hindu Family can enter into a partnership which in law it cannot as it has no legal personality; (ii) it was not open to the Income Tax Officer to go behind the deed for the purpose of registration under section 26A and (iii) if the application, for registration complied with the requirements of that section and the rules made thereunder, it was not open to the Income Tax Officer to refuse to register.
Allowing the appeal, HELD : (i) It is only partnership constituted according to the provisions of the partnership Act that can be considered as partnership under the Act.
Under the Partnership Act only "persons" can join as partners.
An association of persons is not a person within the meaning of that expression in the Partnership Act.
The definition of "Person" in the Income Tax Act including within the definition Hindu Undivided Family is intended for levying income tax and other cognate matters and cannot be imported into the Partnership Act, the provisions of which alone are relevant for finding as to who could join as partners.
A Hindu undivided family cannot as such enter into a contact of Partnership with another person or persons.
The concept of a Hindu undivided family joining a partnership presents considerable difficulty.
It is a fleeting body and such a partnership is likely to have a precarious.
existence.
Therefore, the assumption in section 4(3) of the Companies Act, 1913, that a Hindu Joint Family can be a partner in a partnership appear& to be based on an erroneous view of the law.
[241 H 242 G H] 238 Senaji Kapurchand V. Pannaji Devichand, A I.R. 1930 P.C. 300, Dulichand Laxminarayana vs Commissioner of income tax Nagpur, and Commissioner of Income tax West Bengal vs Kalu Babu Lal Chand, , referred to.
Lala Lachman Das vs Commissioner of Income Tax, 74 I.A. 277, distinguished '.
(ii) For the purpose of finding out as to who are all partners of a firm, one has only to look to, the partnership deed and not to go behind it.
It is well settled that when a co parcener, even when he is the Karta, enters into partnership with others the partnership that is created is a contractual partnership; that partnership is not between the family and the other partners, it is a partnership between the coparcener individually and his other partners.
[244 B C] P. K. P. section Pichappa Chettiar vs Chokalingam Pillai.
A.I.R. 1934 P.C. 192, Kshetra Mohan Sannyasi Charan Sadhukhan vs Commr.
of Excess Profits Tax, West Bengal, , Firm Bhagat Ram Mohan Lal vs Commissioner of Excess Profits Tax, Nagpur and And.
and Commissioner of Income tax, Bombay City vs Nandlal Gandalal, , referred to.
(iii) The Income tax Officer has no, power to reject an application for registration under section 26.A if the provisions of the section and the rules framed thereunder are complied with.
The jurisdiction of the Income tax Officer is confined to ascertaining two facts, namely, (1) whether the application for registration is in conformity with the rules framed under the Act and (2) whether the firm shown in the document %,as a bogus one or had no legal existence.
It is not open to the Income tax Officer to go behind the deed and find out for the purpose of registration whether the, partners mentioned in the deed have joined the partnership in their own right or as representing others.
In the present cast the application made for registration complies with the requirements of the section and the rules framed thereunder.
Hence the partnership must be held to have been validly formed as law did not at the relevant time prohibit anyone, otherwise competent to contract from entering into a contract of partnership even though the beneficial interest in his share may vest in others.
[246 A B, 247 E F] Commissioner of Income tax, Madras vs Sivakashi Match Exporting Co. and Commissioner of Income Tax Gujarat vs ,I. Abdul Rahim and Co., , referred to.
|
minal Appeal No. 738 of 1992.
From the Judgment and Order dated 16.11.1992 of the Bombay High Court in Crl.
A. No. 148 of 1989.
A.N. Mulla, Ms. Shefali Khanna and J.M. Khanna for the Appellant.
S.B. Bhasme, S.M. Jadhav and A.S. Bhasme for the Respondents.
The Judgment of the Court was delivered by YOGESHWAR DAYAL, J.
This is an appeal by the four accused persons against the judgment of the Bombay High Court dated 16th November.
Appellant No. 1 who was accused No. 1 was tried for the offence of having 880 committed the murder of his daughter in law Sangita, wife of appellant No. 2 who was accused No.2, during the night between 14th September, 1984 and 15th September, 1984 at the residential house of the appellants at Murtizapur with common intention and also for having treated her with cruelty on account of dowry amount.
In the alternative the appellants were also charged for the offence of having abetted the deceased Sangita in commission of suicide by subjecting her to cruelty.
Appellant no.3, who was accused No.3, is the wife of accused No.1 and appellant No.4, who was accused No. 4.
is their daughter.
Appellants 1 to 4 are hereinafter called accused Nos. 1 to 4.
The story of the prosecution was as follows: The accused run a printing press at their residence.
Marriage of accused No. 2 was settled with the 5th daughter of Madan lal (PW. 8).
Few days prior to the settlement of the marriage.
marriage of her elder sister was also settled.
As such marriages of both the daughters i.e. Sangita and Hemlata were celebrated at Paratwada on 28th April, 1994.
Talk over the marriage had taken place about a month prior to the marriage and the same was finalised after about 2 or 3 days of such talks.
At the time of finalisation, accused No. 1 demanded Rs. 20,000 by way of hard cash as dowry, besides other articles, add he himself had given such demands in writing vide Ext.
Though agreed, Madan Lal, father of the deceased could not give Rs. 20,000 at the time of marriage.
He also could not give the gold agreed, though he assured to comply with the demands later on getting the crops.
After the marriage, on account of the month of Shrawan, and as per custom, Sangita resided with her parents.
It was during her stay after the marriage that she was found disturbed and sullen.
Though she herself did not give out the reason therefore, but on insistence by the father to know the reason she told him that accused No. 1 had an evil eve on her and that other members of the family used to beat and ill treat her because of the failure on the part of Madan Lai to pay the dowry amount.
Though Madan lal assured that he would come down to Murtizapur and pursued the accused, but he could not visit Murtizapur.
After the month of Shrawan, Sangita returned to Murtizapur but not communication was made about her safe return by the accused persons to her father.
The accused persons had a telephone connection and Madan Lal (PW.8), two three days prior to the date of the incident contacted accused No. 1 on telephone.
Accused No. 1 talked angrily with Madan Lal.
Madan Lal then requested accused No. 1 to call Sangita on telephone.
Sangita came on phone and in answer to his query she broke down and Stated weeping and told Madan lal as to why he did not send Ganesh Chaturthi Neg ', 'Neg ' means a customary offer that the father of the bride has to pay on an auspicious day.
It varies according to financial capacity of the father.
He told 881 Sangita that he had committed it mistake and assured that he would be sending it immediately.
On the next day lie had got drawn a draft of Rs. 101/ on State Bank of India.
74 A is the said draft.
It was thereafter when Madan Lai was on a visit to Amravati that Madan Lal received a message about Sangita having got burnt on 15th September, 1984.
During the night between 14th and 15th September.
1984 at about midnight the accused found Sangita not in her bed and smell of burning.
They found that in the rear side open space Sangita was burning and lying down.
According to the defence the doors were closed from inside and there was no access to the said open space.
Accused No. 1 informed the police about the occurrence that he had seen through the window opening on the )pen space.
Accused No. 1 at about 3.45 a.m. on 15th September, 1994 submitted it report (Ext.82) to the police wherein he had stated that about 2. 10 a.m. in the night Sangita was found to be burnt and died in the bath room.
Mundheh.
the investigating Officer gave instructions to the accused persons not to disturb the situation.
Initially on the report of the accused, accidental death was registered.
PW9 when reached the spot on 15th September.
1984 at about 10.00 a.m. he made spot Panchnama vide ext.63.
He also found a postcard.
half burnt, (Ext. 62) by the side of the dead body.
He thereafter drew inquest panchnama (Ext.64).
PW. 1 Bhanudas acted as a panch.
PW.9 having convinced that it was a case of murder, lodged it report on behalf of the State registering the offence punishable under Section 302 read with Section 34 of the Indian Penal Code.
Dr. Lande, PW.3, on 15th September, 1994 at about 5.00 p.m. conducted the post mortem.
The Additional Sessions Judge on the basis of the material filed with the challan.
on 30th September, 1994 trained a charge under Sections 302.499 A and 201 read with Section 34 of the Indian Penal code and thereafter recorded the evidence of PWs.
1 to 9.
Thereafter by an order dated 22nd August, 1988 the trial court framed an additional charge for the offence punishable under Section 306 read with Section 34 of the Indian Penal Code.
The accused persons challenged the framing of the additional charge before the High Court but the challenge was defeated.
The accused persons were accordantly tried.
Their defence through out was a total denial.
It appears that during arguments the Prosecutor did not think it proper to press for the diffence punishable under Section 302 read with Section 34 of the Indian penal Code.
According to the Prosecutor the only case made out was for the offences punishable under Sections 306, 498 A read with Section 34 of the Indian Penal Code.
The trial court endorsed the view of the Public Prosecutor and did not 882 discuss the relevant evidence it all on the charge of Section 302 and recorded a finding of acquittal in that behalf.
He also held that the charge of Section 201 also did not survive.
The learned trial Judge also held that the prosecution hits not been able it) prove that the accused persons with their common intention treated Sangita with cruelty or thereby abetted her to commit suicide.
He accordingly acquired all the accused persons for the offence punishable under Section 306 read with Section 34 of the Indian Penal Code.
The State filed all appeal against their order of acquittal and the High Court on appeal castigated the trial judge for having gone merely oil the statement of the public Prosecutor without applying his own mind on the evidence.
The High Court examined the evidence afresh.
The High Court posed a question is to whether the nature of death of Sangita was suicidal or homicidal and ultimately gave a finding that it was a case of homicidal death and found all the accused guilty under Section 302 read With Section 34 and Section 201 read with Section 34.
The accused were also find guilty under Sections 498 A read with Section 34.
For the offence under Section 302 read with Section 34 all of them were sentenced to rigorous imprisonment `for life and different fines.
For the offence under Section 201 read with Section 34 all the accused persons were sentenced to rigorous imprisonment for three years and each of them was fined Rs.1,000/ .
For the offence under Section 498 A read with Section 34 all of them were sentenced to one year rigorous imprisonment and a fine of Rs.2,000.
Learned counsel for the defence, however, submitted before the High Court that the charge under Section 302 read with Section 34 did not survive tit view of the concession made by the Prosecutor and also in view of the framing of the additional charge under Section 306 read with Section 34.
It was also submitted that the framing of the additional charge negated the theory of murder in pith and substance.
The High Court, however negatived this submission and on consideration of the evidence convicted all the accused persons as stated above.
Body of Sangita suffered 100% burn injuries and smell of kerosene was even noticed in the spot panchanama.
The description 1005 burn does not really fully 883 convey the condition of the body.
Asper the inquest report the dead body was lying on its back in the open court yard at the back side of the house of the accused.
Both the legs were partly stiffen.
Both the hands were partly bent and lying at side.
Hairs on the head burnt and even fleshy portion is also burnt at some places.
There was slight hair at some portion of head.
Complete body was burnt and skin on it also peeled up.
Face had became red and black.
Eyes were closed and burnt.
Nose was burnt and blood was cozing from the nose and mouth.
Tongue was slightly protruding out.
Brassier of the left side was totally burnt and right side was partly burnt.
Ash of burnt cloth was visible on stomach.
A partly burnt small piece of the border of saree was lying there.
Some pieces of saree, burnt and sticking each other, were lying on the stomach.
Skin on palm of both hands was peeled up and was appearing reddish.
Skin on the complete body was burnt and peeled up.
On observing the body by turning its upside down, the complete body was burnt from back side.
On observing the private parts of the deceased through Pancha No.3 it was stated that private parts were burnt and there was no injury and to ascertain the actual cause of death, the dead body was sent to the Civil Surgeon, Murtizapur for post mortem.
According to Dr. Lande, who conducted the postmortem, on opening of trachea black particles were found.
He recorded that probable cause of death was 100% burn with bum shock with asphysix.
On the basis of medical evidence the High Court again felt the necessity to ascertain whether the act of pouring kerosene oil was voluntarily by the victim or the act of a third person.
The High Court felt that the trial court has not even discussed the medical evidence or the inquest report and hastily reached the conclusion that it was a case of suicidal death.
According to the High Court the entire approach of the trial court was thoroughly unsatisfactory and grossly erroneous.
After going through the evidence the High Court gave the following findings: That the deceased could not control her emotional out burst even during the presence of her father in law while talking on telephone.
The deceased was a young girl of 20 years.
A determination to suffer extreme pain in silence could not be a matter of speculation.
"In third degree injuries, as per Dr. Lande, the victim suffers extreme pain.
Such injuries will make the person to give out cries and shouts for help." The shouting and crying of the deceased was not only obvious but inevitable.
Undisputedly, none had heard the cries or shouts of the deceased while she was in flames.
This circumstance alone does not support the probability of suicidal death.
884 The trial court has wrongly read the contents of letter Ext.
62 and its interpretation is highly illegal.
Undisputedly Sangita returned from Paratwada after "Shrawani Mass" just a week before the incident, probably by 7th September, 1984.
She was subjected ' to insinuation and accused used to refer her as "awara", "loafer".
"badmash", She wanted to convey this to her father through post card (Ext.62) which seemingly not delivered.
By this letter she requested her father not to visit Murtizapur.
This letter never reached post off ice and the message could not be passed to Madan Lai, PW. 8.
Before accomplishing her design to convey this message, she could not bring an end to her life.
Sangita could not simply think of committing suicide while in possession of Ext.62.
Sangita at the time of incident, as per the post mortem report.
was having, a pregnancy of 3 4 months and this is also not in tune with the act of commission of suicide.
The Sessions Judge omitted to discuss the complete evidence of Dr. Lande and the post mortem report Ext.50.
As per post mortem report the eye ball and tongue of the deceased were protruding.
Dozing of the blood was found from the nose and mouth.
In case of death due to burning such injuries cannot be sustained.
Sangita was assaulted before she was set on fire.
There might be a definite attempt to cause death by strangulation before pouring kerosene oil on her person.
Relying of the evidence of PW.1, Shivraj, a neighbour who heard a shriek of ' woman as a result of strangulation coming from the house of the accused.
Taking into account tile medical evidence read with the testimony of PW.1, Shivraj, Sangita met with tile homicidal death.
A ball of cloth half burnt was also found by the side of the body.
The ball was used for gagging her mouth as a precautionary measure to handicap her from raising cries or shouts.
PW.5, Bhanudas, had also noticed dragging marks in the court yard and the deceased after assault was dragged and kept at the spot.
While in flames Sangita did not make any movement.
She was completely motionless.
The latching of doors of the compound was not accepted as an act of the deceased.
Latching of doors and pouring of kerosene after assault was a farcical venture skilfully and conveniently made to bring colour of suicide to the incident.
885 The High Court then posed the question as to who is responsible for homicidal death of Sangita.
It was held that it could not be an act of an individual It was joint venture.
There is no direct evidence.
Undisputedly the payment of Rs.20,000/ was not made nor the tither items mentioned in Ext.
73 were given till the date of incident.
On her second visit, the deceased had disclosed to her father, Madan Lal.
that the members of in laws ' family had beaten and ill treated her for the reason of non fulfillment of dowry and other articles.
A reading of the letter indicates that the accused persons had very serious grievance against Sangita and her parents for non fulfillment of dowry demands.
Recovery of handkerchief at the instance of accused No. 1 in pursuance of a disclosure statement and the seizure thereof vide Ext.69 from a drawer of the table of the office.
The handkerchief was smelling, kerosene oil.
It was concealed at a place which was not normally or ordinarily used for keeping the handkerchief.
This handkerchief was used at the time of the incident.
None of the accused persons made any attempt to reach the spot even though they noticed the death of Sangita.
They merely allowed the body to be burnt.
Accused persons had quoted exact time of death in Ext.82 which means that they were mentally alert and conscious of the happening in the house.
The refusal to disclose the death of Sangita to the chowkidar of the locality, PW.2, Rahadursingh.
The meeting with chowkidar Bahadursingh was falsely denied in the statement under Section 313 of the Code of Criminal Procedure.
Homicidal death occurred by Sangita while she was in their custody.
The incident with its gravity and extent cannot in any manner go unnoticed.
As such the accused persons were duty bound to offer plausible explanation.
Their action was concerted.
well thought out.
well planned.
With the aforesaid findings all the accused persons were found guilty by the High Court and the appellants have come up in appeal before this Court.
This court on application of appellant Nos. 3 and 4 i.e. another in law and sister in law of the deceased, admitted them to be on hail.
Apart from the inferences noticed by the High Court there are certain other features in the post mortem report Ext.
15 which may also be noticed at this state.
It is stated in paragraph 13 of the post mortem report that the whole (if skin of face 886 was burnt and Covered at places with black soot.
Eye ball slightly protruding Tongue was protruding from mouth.
Blood stained discharge from nose and mouth.
In paragraph 17 it is noticed heirs of the scalp, eye lashes, both ears, eyes, whole neck.
whole chest.
whole abdomen suffer from burns.
Buttock and pubic hairs also burnt.
Black soot was present over burnt area of face, chest, abdomen.
In paragraph 19 it is stated Brain & Meninges congested.
In paragraph 20 it is stated Larynx.
Trachea and Bronchi congested, on opening, troches.
black particles seen inside human.
Right lung left lung congested.
Right ventricle of the heart was full whereas left was empty.
In paragraph 21 it is stated liver and gall bladder congested.
pancreas and suprarenals congested.
spleen congested, kidneys congested and bladder empty, i.e. parenchymatous organs show intense venous congestion.
Dr. K.S. Narayan Reddy, M.D. D.C.P., M.I.A.F.M., F.I.M.S.A.,F.A.F.Sc., Professor of Forensic Medicine, Osmania Medical College Hyderabad in his well known treatise THE ESSENTIALS OL FFORENSIC MEDICINE AND TOXICOLOGY.
Sixth Education at page 255 gives descriptions of internal as well as external symptoms of manual strangulation.
At page 255 while dealing with signs of asphyxia.
the learned author observes : "The face may be livid, blotchy and swollen, the eyes wide open, bulging and suffused, the pupils dialated, the tongue swollen, dark cloured and protruded.
Petechial hemorrhages are common into the skin of the eyelids, face, forehead, behind the cars and scalp.
Bloody froth may escape front the mouth and nostrils and there may he bleeding from the nose and cars.
The hands are usually clenched.
The genital organs may be congested and there may be discharge of urine, faeces and seminal fluid.
" While internal injuries described little later included as under "The larynx.
trachea and bronchi are congested and contain frothy.
often blood stained mucus.
The lungs are markedly congested and show ecchymoses and larger subaerial hemorrhages.
Dark fluid blood exudes on section.
Silvery looking spots under the pleural surface due to rupture of the air cells which disappear on pricking.
are seen in more than 505 cases.
The parenchymatous organs show intense venous congestion and in young persons ecchymoses are usually seen on the heart and kidneys.
The brain is contested and shows petechial hemorrhages.
The right side of the heart is full of dark fluid blood and the left empty.
Both the cavities are full if the heart stopped during diastole.
" Whereas in burn injuries the learned author at pages 237 238 observes.
"the 887 brain is usually shrunken, firm and yellow to light brown due to cooking.
The dura matter is leathery." (dura matter is meninges of the brain).
If the death has occoured from suffocation.
aspirated blackish coal particles are seen in the nose, mouth and whole of the respiratory track.
Their presence is proof that the victim was alive %,.hen tile fire occurred.
The pleurae are contested or inflamed.
The lungs are usually congested.
may be strunken and rarely anemic.
Visceral congestion is marked in many cases.
The heart is usually filled with clotted blood. 'The adarme;s (glands above kidneys) may he enlarged and congested.
Some of these symptoms or internal and external injuries are common in case of strangulation and burn like face is swollen and distorted, the tongue protruded.
the lungs are usually congested visceral congestions is marked in many cases.
What is to he noticed in the present case is that there are hardly "any cries" as per the defence also by the deceased.
This is not possible even in case of suicide.
Even if the burns ,ire inflicted with suicidal intent tile victim is bound to cry out of pain.
Admittedly there was no cries and, therefore, it was not a Case of suicidal burn but the deceased was put in a condition where she could not cry and yet get burnt by third party.
As is clear from the aforesaid commentary of Dr. K.S. Narayan Reddy that if it was a case of merely burns the blood of the heart would have got clotted.
Even the postmortem report does not say that asphvsix was due to burn.
Coupled with all the internal injuries which occur in the case of strangulation.
are present in this case.
As pointed out by the High Court there is no direct evidence to connect the appellants with the offence of murder and the prosecution entirely rests its case only on circumstantial evidence.
There is a series of decisions of this Court propounding the cardinal principles to be followed in cases in which the evidence is of circumstantial nature.
It is not necessary to repapitulate all those decisions except stating the essential ingredients as noticed by Pandian, J. in the case reported as The State of Uttar Pradesh vs Dr. Ravindra Prakesh J. in the case 2 SC 114 at 121, to prove quilt of an accused person by circumstantial evidence.
They are: (1) The circumstance from which tile conclusion is drawn should be fully proved; (2) the circumstances should he conclusive in nature; 888 (3)all the facts so established should he consistent only with the hypothesis of guilt and inconsistent with innocence: (4)the circumstances should.
to a moral certainty, exclude the possibility of guilt of any person other than the accused.
" Now let us examine the impelling circunistances attending the case and examine whether tile cumulative effect of those circumstances negatives tile innocence of tile appellants and serves a definite pointer towards their guilt and unerringly leads to the conclusion that with all human probability the offence was committed by the appellants and none else.
There is no doubt that when the incident occurred there was no outsider its the house.
The circumstances which ire establislied its having closely linked up with one another may be noticed 1) The motive for the occurrence.
2) The place where the tragic incident occurred was in possession and occupation of the appellants.
3) The occurrence had happened in the wee hours when body else would have had ingress at the place where the incident allegedly occurred.
4) The appellants admit their presence.
The positive features, which occurred, had it been it pure case of burning, there would he evidence of vomiting.
6) The positive opinion of the doctor that the death was due to asphysix as well apart from 100% burns.
7) The deceased was carrying fetus of 3 4 months 8) The extensive use of kerosene as seen from the burn shows that the deceased was practically 889 drenched as sort of a bath with kerosene. 9) Total absence of any shout or cries except one which was heard by way o f strangulation by PW.
1. 10) Blood in heart was not found clotted.
Right ventricle heart was full of blood but left ventricle wits empty.
11) Besides total burning of neck was to destroy evidence of attempted strangulation.
12) In burn brain is usually shrunken and firm whereas in strangulation it is congested.
As noticed by Pandian, J. in the aforesaid decision, opinion of Taylor in Medical Jurisprudence is quoted below.
It reads thus: "Not uncommonly the victim who inhales smoke also vomits and inhales some vomit, presumably due to bouts of coughing, and plugs of regur gitated stomach contents mixed with soot may be found in the smaller bronchi, in the depths of the lungs.
" By the time a person could take a bath of kerosene she is likely to get fainted and would not be in a position thereafter to burn herself.
A total burning, of the face and the neck shows that even at portions where she was not wearing any clothes were not burnt.
It could only be possible if she had poured kerosene on her head and face also.
It is not understood as to how the unposted post card found near the dead body was not burnt when the whole body had got burnt.
It in fact indicates that the planting of the post card was to show that it was a case of suicidal death.
In passes all human probabilities that the appellants have satisfied themselves by watching through the window the burning of daughter in law without any due and cry or without and serious attempt to save her.
We are thus satisfied that it was a case of murder and not suicidal death.
So far as the accomplicity of appellants 1 and 2 are concerned, there is no doubt.
But 890 it is not necessary if appellant Nos. 3 4 i.e. mother in law and sister in law of the deceased have also participated in the murder of the deceased.
For the aforesaid reasons we dismiss the appeal on behalf of appellant.
Nos. 1 and 2 but give benefit of doubt to appellant Nos. 3 and 4 and accept the appeal on their behalf.
They are accordingly acquitted.
The convictions and sentences of appellant Nos. 1 and 2 are upheld.
U. R. Appeal dismissed.
| A subsidiary company of the appellant holding company (C.A. No. 2866 of 1993) diverted to the appellant rupees ten crores received by it by way of chit subscriptions.
It failed to pay the subscribers the prize money.
When some of the subscribers initiated winding up proceedings against the subsidiary company the appellant appeared before the High Court and undertook the liability of the subsidiary company to an extent of a sum of Rs 10.40 Crores to the subscribers.
The High Court approved the scheme of compromise and arrangement under section 391 of the and directed the winding up order to be held in abeyance on the condition that the appellant holding company would pay off the amount or Rs. 10.40 Crores to the subscribers, within five years.
It also restricted alienation (of any property by the holding company.
Without obtaining prior permission (of the Court.
Even ten %,Cars after the order of the High Court, more than one third of the subscribers remained unpaid.
Meanwhile the appellant company took steps to sell 20.79 acres of land to pay the Creditors.
The appellant in C.A.No. 2863 65 (if 1973 made an offer where as the respondent creditors ' association made a counter offer.
The High Court accepted the (offer of Creditors ' association.
Hence the appeals by special leave.
Disposing of the appeals, this Court gave the following 904 Directions : 1.
The holding company shall deposit with the official Receiver fir Assignee concerned a sum equivalent to the deposited sum on which the High Court had directed sale deed to be executed in favour of the creditors association together with 25% interest minus the interest, if any earned by the deposit, made, calculated (in the deposited amount, from the date of deposit till 31st.
July, 1993, within a period of three months.
Out of the amount mentioned in condition (1) above, a sum equivalent to the amount deposited by creditors Association, together with interest at 25% thereon from the date of deposit upto 31st July, 1993 shall be refunded to the creditors association in lieu of their claim for the disputed land being given up.
The balance amount shall remain for the benefit of general body of creditors of the subsidiary company.
Tile holding company shall pay through the receiver the entire outstanding debts payable to the subscribers who were members of the creditors association on the date when their claim applications were decided by the High Court, together with interest thereon at 12 per cent from the date of decision till 31st July, 1993.
In case the above terms and conditions are complied with, within the period allowed then the disputed land offered for sale by the holding company and purchased by creditors ' associations shall stand released in holding company 's favour.
If such deposits are not made, the sale in favour of creditors company shall stand confirmed 5.
In view of the offer made by the appellant in Appeals No. 2863 65 of 1993, the land on its release shall be sold, for a price not less titan five lakhs per acre.
The amount so realised shall also be deposited of the holding company with the receiver for distribution among general body of creditors of the subsidiary, company.
The receiver shall further take steps to see that the holding company fulfils its obligations and pays the entire balance within a period of one year from 31st August, 1993.
In case of failure to clear the dues of all tile subscribers it shall he open to an%.
unpaid subscriber to approach the High Court for recalling the order passed by the High Court for in 1983 direction the winding up to be plot in abeyance, as well as to the steps to get the amount realised front assets of 905 the holding company.
If such an application is made it shall be disposed of by the High Court expeditiously in accordance with law after hearing parties concerned.
|
onstrued.
One should not concentrate too much on one rule and pay too little atten tion on the other, for that would lead astray and result in hardship, such construction should be avoided.
[955C D] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 30373038 of 1984 From the Judgment and Order dated 12.12.
1983 of the Bombay 950 High Court in W.P. No. 1189 of 1980.
S.K. Dholakia, A.S. Bhasme and A.M. Khanwilkar for the Appellant.
N.B. Shetya, S.B. Bhasme, section Ramachandran, R. Ramachan dran, Maknand Adkar and Mrs. M. Karanjawala for the Respond ents.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
These two appeals by special leave are by the State of Maharashtra.
They are directed against the judgment of the High Court of Bombay dated 12th January, 1983 by which the High Court issued the following two directives to the State Government: "(1) To recast the Revised/Final Sen iority List dated 20.12.
1982 vis a vis the persons shown in the category of 'Late Pass ing ' and assign them seniority strictly in accordance with Rule 2 and the other Govern ment orders referred to in Paragraph 96 of the judgment; and (2) The seniority in the Superintend ent 's cadre so fixed should also be considered as seniority for further promotions.
" The background to these directives is, in outline, this: Respondents 1 to 8 are Assistant Secretaries/Section Officers/ Superintendents in different departments of the Government of Maharashtra.
The State Government prescribed departmental examinations as a condition precedent for promotion to the cadre of Superintendents.
The examination was required to be conducted every year, and the officials have to pass within the stipulated period.
Those who could not pass within the time frame would lose their seniority but they will be promoted as and when they qualify them selves.
The Government for some reason or the other could not hold the examinations every year.
Particularly in 1968, 1969 & 1970, the Government did not hold the examinations.
The Government, however, did not pass any order extending the period prescribed for passing the examinations, nor promoted the seniors subject to their passing the examina tion.
The juniors who qualified themselves were promoted overlooking the case of seniors and seniors were only pro moted upon their passing the examination.
In the cadre of Superinten 951 dents, however, the Government revised the seniority list so as to reflect the rankings in the lower cadre irrespective of the date of promotion.
The validity of the revision of seniority was challenged before the High Court.
The High Court conceded the power to the Government to relax the rules relating to passing of the examination in case of hardship, but refused to recognise the power of the Govern ment to give seniority to those who could not pass the examination within the time schedule.
The High Court was of opinion that without specific orders of the Government relaxing the conditions of the rules, the persons could not be given seniority for 'Late Passing '.
There are also other reasons given by the High Court which we will presently consider.
But before that, it is important that we should have a chronology of the relevant rules and resolutions of the Government.
It is as follows: On 22nd August, 1951, the Government made a resolution prescribing departmental examination for the members of the Upper Division of the Subordinate Secretariat Service, and further directing that only those persons who pass the examination should be promoted as Superintendents.
The accompanying rules (The 1951 Rules) thereunder provided the procedure for passing the examination as well as the conse quences of failure to pass the examination.
On 24th August, 1955, the Government framed rules (The 1955 Rules) under the proviso to Article 309 of the Constitution specifically providing power to dispense with, or relax, the requirements of the operation of any rule regulating the conditions of service of Government servants; or of any class thereof if it causes undue hardships in any particular case.
On 15th January, 1962, the Government issued a circular purporting to restrict the scope of the rule permitting relaxation only in respect of travelling allowance rules, leave rules, etc.
The circular also clarified that the 1955 Rules could not be invoked for conferring benefit on an individual by relaxing the conditions relating to recruitment, promotion, grant of extension of service or re employment.
On 28th December, 1961, the Government made the revised rules in supersession of the 1951 Rules.
They were brought into force with effect from 1st January, 1962 (the 1962 Rules).
They were made appl icable to all persons recruited to the Upper Division of the Subordinate Secretariate Service on or after that date and also to those who have been in service prior to 1st Jan uary, 1962 unless they had already passed the examination under the 1951 Rules.
The rules 1 to 5 are as follows: "1.
Every member of the Upper Divi sion of the Subordinate Secretariat Service will be required to pass within 952 nine years from the date of his entry in the Upper Division, a departmental examination for promotion to the posts of Superintendents according to the prescribed syllabus.
For being eligible to appear for the examination a candidate must have passed the Post Recruit ment Training Examination for Junior Assistant and must have also completed not less than five years ' continuous service in the Upper Division.
(2) Subject to Rule 1, a candidate will be allowed to appear for the examination in three chances which must be availed of within a period of four years.
This period of 4 years will not be extended for any reasons irrespective of the fact whether a candidate has availed himself of 3 chances or not during the period.
Similarly no candidate will be allowed to take during this period more than 3 chances.
A candidate who does not pass the examination at the end of 9 years service in the Upper Division, will lose his seniority to all those candidates who pass the examination before he passes it.
(3) No persons shall be appointed to the post of Superintendent unless he has passed the Superintendents ' Examination.
Provided that this rule shall not apply to short term vacancies not exceeding two months.
(4) Subject to the condition of loss of seniority laid down in rule 2, a candidate will be allowed to take the examina tion in any number of chances after the com pletion of 9 years ' service.
(5) The examination will be held once a year.
XXX XXX XXX XXX " On December 28, 1970, proviso to above rule 3 has been added.
The said proviso reads: "Provided that if the Superintendent 's Examination is not held in any year, a person who has completed 9 years service and who has not exhausted all the permissible chances, may be promoted to the post of Superintendent, provided further that he is otherwise suitable for promo tion, subject to the clear condition that he will have to pass 953 the examination at the earliest opportunity whenever it is held." "It is further clarified that promo tions to the posts of Superintendents should, in view of the above amendments, be given only after ensuring that there are no persons who have passed the Superintendents Examination earlier for being promoted to the posts of Superintendents.
" We may incidentally refer to the subsequent rules made by the Government, although it is not applicable to the present case.
On June 6, 1977, the Government framed the rules called "The Maharashtra Government Subordinate Service Rules, 1977".
Rule 7 of the rules provides that if, for any reason, the examination is not held in any particular year, that year shall be excluded in computing the period speci fied under the rules.
This is, indeed, the true reflection of the underlying concept of purpose of the earlier rules.
Against this backdrop, we may now consider whether the Government was justified in re arranging the seniority by giving benefit to persons in the category of "Late Passing".
We are not concerned herein about the seniority of persons in whose favour the Government has made individual orders extending the period for passing the examination.
We will consider such cases a little later.
For the present, we may examine the rights of those "Late Passing" where the Government has not made any specific order relaxing the conditions for passing the examination.
Under the 195 1 Rules, the candidate could appear for the examination after two years of his entering into the cadre.
He has three chances and he must pass within 6 years of his joining service.
Under the 1962 Rules the scheme provided was slightly different.
Under that scheme, candidate was allowed to take the examination only after completing five years service in the cadre.
He had three chances for taking the examination and that must be availed of within four years.
That means he must pass the examination within the 9 years ' service.
Under both the Rules, the Government was required to hold the examination every year, but no examination was held in 1968, 1969 & 1970.
This is not in dispute.
For a proper appreciation of the question raised, we must first try to understand the hardship resulted by not holding the examination in 1968, 1969 & 1970.
It is as follows: The candidates recruited in 1960 have lost one chance in 1968.
Those recruited in 1961 are deprived of two chances in 1968 and 1969.
The candidates recruited in 1962 are 954 denied of three chances in 1968, 1969 & 1970 and those of the year 1963 have lost two chances in 1969 and 1970.
The last batch to lose one chance in 1970 is of the year 1964.
The aforesaid Rules expressly provided power to the Government to grant more chances for passing the examination in any individual case or in class of cases.
Under the 1955 Rules, the Government preserved power to dispense with, or relax the requirements of any rule regulating "the condi tions of service of government servants; or of any class thereof".
In the exercise of this power, the Government could dispense or relax the operation of any rule, if it causes undue hardships in any particular case.
It is need less to state that this power includes the power to relax the conditions prescribed for promotion since promotion is a condition of service.
There is no restriction as to the exercise of the power or discretion.
The High Court, howev er, has observed that the scope of this power has been constrained by the circular dated 15th January, 1962.
The circular states that the 1955 Rules permitting relaxation cannot be utilised to relax the rules which regulate condi tions of service.
It further states that the scope of the Rules should be limited only to matters relating to travel ling allowance, leave, etc.
But this appears to be an exer cise in vain.
The circular is an executive instruction whereas the 1955 Rules are statutory since framed under the proviso to Article 309 of the Constitution.
The Government could not have restricted the operation of the statutory rules by issuing the executive instruction.
The executive instruction may supplement but not supplant the statutory rules.
The High Court was in error in ignoring this well accepted principle.
When we turn to the 1962 Rules with the amendments made in 1970, it becomes more clear about the power of the Gov ernment to relax the conditions for passing the examination.
The proviso dated 28th December, 1970 to rule 3 specifically provides that if the examination is not held in any year, a person Could be promoted to the cadre of Superintendent if he has completed nine years ' service.
The only condition is that he should not have exhausted all the permissible chances.
The promotion, made should be subject to the condi tion that he will have to pass the examination at the earli est opportunity whenever it is held.
The benefit of this proviso was evidently not extended to any of the persons falling into the category of "Late Passing".
Counsel for the contesting respondents however, urged that the proviso does not entitle the candidate to get his legitimate seniority if 955 he does not pass the examination at the end of nine years ' service.
He depended upon rule 2 of the 1962 Rules which states that the candidate who does not pass the examination within 9 years ' service will lose his seniority to all those candidates who pass the examination earlier.
He also argued that the proviso is only to rule 3 and not to rule 2 and the Government has no power to restore the seniority of a person who has lost it by the operation of rule 2.
This is a question of construction of the rules which form part of the scheme prescribing a condition for promo tion.
We do not have to reflect upon the rules of interpre tation since they are well settled.
They are now like the habits of driving which have become ingrained.
They come to our assistance by instinct.
We are to use the different rules meticulously to give effect to the scheme as we use the clutch, brake and accelerator for smooth driving.
These rules are to be harmoniously construed.
We should not con centrate too much on one rule and pay too little attention on the other.
That would lead us astray and result in hard ship.
We must avoid such construction.
Rule 2 of the 1962 Rules no doubt states that a candidate who does not pass the examination at the end of nine years ' service will lose his seniority.
But this rule cannot be read in isolation as the High Court did.
It has to be read along with the other rules since it is a part of the scheme provided for promotion.
Rule 5 requires the Government to hold the examination every year.
This rule is the basis of the entire scheme and the effect of other rules depends upon holding the examination.
If examination is not held in any year, the rule 2 cannot operate to the prejudice of a person who has not exhausted all his chances.
The person who has not exhausted the avail able chances to appear in the examination cannot be denied of his seniority.
It would be unjust, unreasonable and arbitrary to penalise a person for the default of the Gov ernment to hold the examination every year.
That does not also appear to be the intent or purpose of the 1962 Rules.
If the examination is not held in any year, the person who has not exhausted all the permissible chances has a right to have his case considered for promotion even if he has completed 9 years ' service.
The Government instead of promoting such persons in their turn made them to wait till they passed the examination.
They are the persons falling into the category of "Late Passing".
To remove the hardship caused to them the Government wisely restored their legiti mate seniority in the promotional cadre.
There is, in our opinion, nothing improper or illegal in this action and indeed, it is in harmony with the object of the 1962 Rules.
956 This takes us to the question whether the Government was justified in individual cases to relax the period for pass ing the examination.
It is said that the number of persons failing into this category are not more than five.
In the rejoinder filed on behalf of the Government, it is stated that the Government made some orders extending the period for individuals to pass the examination on administrative grounds or on some genuine hardships.
It is also stated that such orders were made upon recommendations by the respective departments and those persons passed the examination within the period extended.
There is no reason to doubt the cor rectness of these statements made in the rejoinder.
The power to relax the conditions of the rules to avoid undue hardship in any case or class of cases cannot now be gain said.
It would be, therefore, futile for the respondents to make any grievance.
In the result and for the reasons stated, we allow these appeals and in reversal of the judgment of the High Court, we dismiss the writ petitions filed by the contesting re spondents.
In the circumstances of the case, however, we make no order as to costs.
Y.L. Appeals allowed.
| The appellant company applied for a requisite central excise licence for manufacture of goods falling under Tariff Item 68 and for the purpose of such goods L 4 licence was also furnished and also the requisite ground plans of the factory in which the various goods were manufactured.
The excise authorities granted L 4 licence.
The appellant claimed benefit of exemption of Notification No. 89/79 CE dated March 1, 1979.
The classification list submitted by the appellant was approved by the Assistant Collector by his letter dated May 25, 1979.
For the period April 1, 1979 to June 30, 1979 the appellant filed his RT 12 for assessment which was also finally assessed without any protest or objection.
As the appellant claimed that his goods were wholly exempted by virtue of notification No. 89/79 CE dated March 1, 1979, the appellant wrote to the Superintendent asking for dispensation from filing RT 12 every month.
The Superintendent informed the appellant that it need not file RT 12, but should inform the excise authorities monthly by means of a simple letter the total clearance effected in the month in question.
Thereafter, the appellant submitted classification list in 1980, 1981 and 1982 and claimed benefit of exemption under notification No. 105/80 CE dated June 19, 1980.
The Assistant Collector approved the classification list.
The Central Excise Officer attached to the preventive branch visited the factory in July 1982 and examined the products manufactured by the appellant.
In January 1983, a show cause notice was issued to the appellant asking it to show cause as why excise duty should not be demanded under Tariff Item 52 in respect of the piece of nuts manu 871 factured and removed by the appellant during the period April 1, 1981 to July 19, 1982 without payment of appropri ate excise duty thereon, and also to show cause why penalty should not be imposed for failure to obtain the requisite L 4 licence under Tariff Item 52 and to show cause why the material seized on August 26, 1982 should not be confiscat ed.
The appellant showed cause and drew the attention of the authorities to the fact that the goods in question were not nuts but end products or connectors for lubricating purposes and as such were integral parts of Diesel Engine Pipes failing under Tariff item 68.
The Collector of Central Excise passed orders on July 16, 1984 holding that fittings were nuts classifiable under Tariff Item 52, and that appropriate duty on the clearance effected by the appellant during the period April 1, 1981 to July 19, 1982 should be paid and the seized goods were liable to confiscation but in lieu thereof a redemption fine of Rs.4,000 could be paid.
The Collector also imposed a penalty of Rs. 1 lakh.
The appellant went up in appeal before the Tribunal, which partly allowed the appeal and partly upheld the order of the Collector.
With regard to classification of the different fittings was concerned, it was held that the classification should have been as nuts under Tariff Item 52 of the Central Excise Tariff.
It further held that the appellant was guilty of suppression and therefore rejected the submission of the appellant that the show cause notice was barred by time.
It, however, reduced the amount of Penalty imposed by the Collector from Rs. 1 lakh to Rs.50,000.
The appellant appealed to this Court by special leave.
In the appeal to this Court, on the question whether the goods manufactured by the appellant were end products or connectors for lubricating purposes and as such were inte gral parts of the Diesel Engine Pipes failing under Tariff Item 68 as claimed by the appellant or nuts classifiable under Tariff Item 52.
Dismissing the appeal, HELD: 1.
The Tribunal was right in classifying the goods under Tariff Item 52 of the Central Excise Tariff and in upholding the demand of the duty for a period beyond six months as contemplated by section 11 A of the Act.
The Tribunal duly gave benefit of the exemption notification in respect of the goods which had been exported.
[878F] 872 2(a) The Tribunal was right in upholding the demand of duty for a period beyond six months as contemplated by section 11 A of the Act.
[878F] 2(b) Whether there was any fraud, collusion, wilful mis statement, or suppression of fact, for the department to be justified to claim duty beyond a period of six months under the proviso to section 11 A of the Act is a question of fact.
[878B] 2(c) The appellant.
was both buying and selling these nuts and as such there was no conceivable reason why these nuts were described as end fittings in the declaration to the Department.
In the declaration it was so described.
[878C D] 2(d) The fact that the officers of the Department visit ed the factory of the appellant and they should have been aware of the production of the goods in question, was no reason for the appellant not to truly and properly describe these goods.
[878D E] 2(e) Not only did the appellant, as found by the Tribu nal, not described these goods properly, but also gave a misleading description.
[878E] 3.
The Tribunal on appraisement of all the materials, held that these were nuts manufactured by the appellant.
Such finding cannot be said to be wrong or perverse.
It was arrived at after giving opportunity to both the parties and considering all relevant materials.
There is no cogent ground to sustain any challenge to the findings of the Tribunal.
The Tribunal has considered all the relevant evidence, and not ignored any relevant piece of evidence.
It had applied the correct principle of law applicable to the determination of the question.
It has also applied the test of commercial identity of the goods and examined the matter from the angle of the conduct of the appellant.
These find ings of the Tribunal cannot be assailed in appeal under section 35L of the Act.
[875E; 877B C] 4.
The Tribunal having come to the conclusion that there was deliberate suppression or wrong statement, it follows automatically that the Tribunal was justified in upholding the imposition of penalty.
The quantum of penalty was a matter which the Tribunal was free to fix as it thought fit, as the justice of the case demanded.
Nothing has been shown that the conclusion was bad.
[878G H; 879A] 873
|
minal Appeal No. 207 of 1966.
Appeal from the judgment and order dated August 10, 1966 of the Patna High Court in Criminal Appeal No. 14 of 1964.
K.R. Chaudhuri, for the appellant.
D. Goburdhun, for the respondent.
The Judgment of the Court was delivered by Ramaswami, J.
The question involved in this appeal is whether the appellant Akhtar Alam was a "public servant" within the meaning of section 5 (2) of the Prevention of Corruption Act (Act 11 of 1947 ) and section 21 of the Indian Penal Code.
On or about December 11, 1962, the appellant was charged in the Court of the Special Judge of Patna for an offence.
under section 5(2), read with section 5(1) of the Prevention of Corruption Act and section 161 of the Indian Penal Code.
The case of the prosecution was that on July 8, 1961, the appellant committed these offences by obtaining a sum of Rs. 180/ for Sri A.D. Singh, Executive Engineer (Electrical) from Ramprit Singh, P.W. 2 by resorting to corrupt and illegal means or by otherwise abusing his position as public servant.
It is said that on the morning of July 6, 1961, the Electrical Executive Engineer, Sri A.D. Singh, accompanied by his Head Clerk, the appellant paid a visit to Janta Oil Mills situated at Fatuhas.
Ramprit Singh, P.W. 2 was the lessee of the Mills.
The Executive Engineer met P.W. 2 in the mill premises and told him that the outer seal of the meter, technically called the body seal, was in a tampered condition.
P.W. 2 maintained that the seal was not tampered but on a threat by the Executive Engineer, P.W. 2 was compelled to give a written statement that 684 the outer seal was tampered with.
Thereafter the Executive Engineer cut the inner seal, technically known as the loop seal, of the meter and fixed two fresh seals on the meter, one in the terminal 'and the other in the body of the meter.
The Executive Engineer and the appellant thereafter left the mill premises.
At about 10 a.m. on the same day the appellant had gone again to the mill premises and told P.W. 6, Basudeo Singh, the Munshi of the proprietor that P.W. 2 the lessee 'and P.W. 9, Bishna Prasad Yadav, the proprietor of the mill should meet him at his office at Patna within two days and get the matter settled, otherwise they would be put to a big loss.
Thereafter, P.W. 2 went to the office of the Anti Corruption Department at Patna and handed over a petition to P.W. 11 Girjanandan Sinha expressing his apprehension that the Executive Engineer or his Head Clerk, the appellant would demand some bribe from him.
It is alleged that on July 8, 1961 a trap was laid and under the direction of the Deputy Superintendent of Police, P.W. 7 a raiding was organised.
Ramprit, P.W. 2 along with other witnesses proceeded to the 'appellant 's office.
After some conversation the appellant demanded money and P.W. 2 Ramprit gave him eighteen ten rupee currency notes, the serial numbers of which had been previously noted down by the Magistrate, P.W. 20.
P.W. 16, Raghuraj was also present at the time.
After the 'appellant had received money, the Deputy Superintendent of Police, P.W. 7 and other members of the raiding party arrived inside.
The appellant thereafter dropped the bundle of currency notes on the floor below the table and made an attempt to get away but he was taken under arrest .and after his person was searched the currency notes were found lying on the floor near the seat.
The Deputy Superintendent of Police, P.W. 7 picked up the currency notes and upon comparison he found them to bear the same serial numbers which had been noted down in the statement, exhibit 2.
The Deputy Superintendent of Police then lodged the First Information Report, exhibit 11 .at the Gardanibagh police station.
On the basis of that report investigation was made by Deputy Superintendent of Police Sri Ramlakhan Prasad, P.W. 19 and subsequently by Inspector Shahidhar Putt, P.W. 17 under the orders of the Sub Divisional Magistrate.
After concluding the investigation the police submitted a chargesheet against the appellant.
The appellant denied the charges and pleaded that the entire case had been fabricated against him by Raghuraj, P.W. 16 The Special Judge, however, accepted the prosecution case as true and convicted the appellant under section 5 (2) read with section 5(1 )(d) of the Prevention of Corruption Act and sentenced him to undergo rigorous imprisonment for five years.
The appellant was ' also convicted and sentenced to undergo rigorous imprisonment for two years under section 161 of the Indian Penal Code.
The appellant took the matter in appeal to the Patna High Court which dismissed the appeal and affirmed the judgment of the Special Judge.
685 This appeal is brought by special leave from the judgment of the Patna High Court dated August 10, 1966 in Criminal Appeal No. 134 of 1964.
On behalf of the appellant Mr. K.R. Chaudhury did not challenge the findings of the High Court on questions of fact but the argument was put forward that upon the findings recorded by the High Court the appellant could not be convicted of the charges because he was not a "public servant" within the language of section 5(2) of the Prevention of Corruption Act or section 21 of the Indian Penal Code.
Section 5(1)(d) of the Prevention of Corruption Act states: "5.
(1)A public servant is said to commit the offence of criminal misconduct in the discharge of duty, (d) if he, by corrupt or illegal means or by otherwise abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage.
" Section 5(2) is to the following effect: "(2) Any public servant who commits criminal misconduct in the discharge of his duty shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to seven years and shall also be liable to fine: Provided that the Court may, for any special reasons recorded in writing, impose a sentence of imprisonment of less than one year.
" Section 2 provides as follows: "For the purposes of this Act, 'public servant ' means a public servant as defined in section 21 of the Indian Penal Code.
" By section 2 of the Criminal Law (Amendment) Act, 1958 (Act 11 of 1958) el. 12 was inserted in section 21 of the Indian Penal Code and Explanation 4 was added thereto.
Section 2 was to the following effect: "2.
In section 21 of the Indian Penal Code, (a) after clause Eleventh, the following clause shall be inserted, namely : Twelfth.
Every officer in the service or pay of a local authority or of a corporation engaged in any trade or industry which is established by a Central, |Sup.
4Sup C.I./69 11 686 Provincial or State Act or of a Government company as defined in section 617 of the .
(b) after Explanation 3, the following Explanation shall be inserted, namely : Explanation 4.
The expression corporation engaged in any trade or industry ' includes a banking, insurance or financial corporation, a river valley corporation and a corporation for supplying power, light or water to the public. ' The scope of cl.
(12) of section 21 of the Indian Penal Code was enlarged by section 2 of the Anti Corruption Laws (Amendment) Act, 1964 (Act 40 of 1964).
By section 2 of the amendment Act of 1964, cl.
(12) was substituted by 'a new clause in the following terms: "Twelfth.
Every person (a) in the service or pay of the Government or remunerated by fees or commission for the performance of any public duty by the Government; (b) in the service or pay of a local authority a corporation established by or under a Central, Provincial or State Act or a Government Company as defined in section ' 617 of the .
" By the amending Act Explanation 4 of section 21, Indian Penal Code was also omitted.
In the present case, however, we are not concerned with the amendment effected by Act 40 of 1964 because the occurrence took place before the coming into force of this amending Act but after the enactment of the Criminal Law (Amendment) Act, 1958 (Act 11 of 1958) which came into force on February 27, 1958.
It is not disputed in this case that the appellant was not a Government servant but he was the servant of the State Electricity Board constituted under the provisions of the (Act 54 of 1948).
The State Electricity Board so constituted is not a department of the State Government.
It is a body corporate having the power to appoint the Secretary and such other officers and servants as may be required to enable the Board to carry out the functions of the Board.
Section 5( 1 ) of the Act states: "5.
(1 ) The State Government shall, as soon as may be after the issue of the notification under subsection (4) of section 1, constitute by notification in the Official Gazette a State Electricity Board under such name as shall be specified in the notification.
" 687 Section 12 provides for incorporation of the Board and reads as follows: "12.
The Board shall be a body corporate by the name notified under sub section ( 1 ) of section 5, having perpetual succession and a common seal with power to acquire and hold property both movable and immovable, and shall by the said name sue and be sued.
" Section 15 is to the following effect: "The Board may appoint a Secretary and such other officers and servants as may be required to enable the Board to carry out its functions under this Act: Provided that the appointment of the Secretary shall be subject to the ,approval of the State Government.
" Section 81 enacts: "81.
All members, officers and servants of the Board shall be deemed, when acting or purporting to act in pursuance of any of the provisions of this Act, to be public servants within the meaning of section 21 of the Indian Penal Code.
" On a plain reading of section 81, the officers and servants of the Board are deemed to be public servants only when acting or purporting to act in pursuance of any of the provisions of the .
So far as the receiving of a bribe is concerned, it cannot be brought within the scope of acting or purporting to act in pursuance of any of the provisions of the .
Therefore, the appellant while taking the bribe, cannot be deemed to be a public servant within the meaning of section 21, Indian Penal Code in view of the language of section 81 of the .
The question whether sanction of the Government was required under section 197 of the Criminal Procedure Code where any public servant is accused of an offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty came up for consideration by the Judicial Committee in cases under sections 161 and 409 of the Indian Penal Code against public servants.
In Gill vs The King(1), it was held by the Judicial Committee that prosecution for taking a bribe under section 161, Indian Penal Code did not require sanction under section 197 because taking of a bribe was not acting or purporting to act in the discharge of the official duty of a public servant.
Again in Hori Ram Singh vs The Crown(2), the Federal Court held that sanction was required for prosecution of a public servant for an (1) 75 I.A, 41.
(2) 688 offence under section 477 A as his official capacity was involved in the very act complained of as amounting to a crime; but that no sanction was required for a charge under section 409, because the official capacity is material only in connection with the entrustment and does not necessarily enter into the later 'act of misappropriation or conversion which is the act complained of This view of the Federal Court was approved by the Judicial Committee in Gill 's case(1).
The same view has been expressed by this Court in State of Maharashtra vs Jagatsing Charansingh(2) in which it was held that only when an officer or servant of a corporation was acting or purporting to act in pursuance of any of the provisions of the Transport Corporation Act, 1950 (Act 64 of 1950) or of any other law that he could be said to be a public servant within section 43 of that Act.
Therefore a person taking a bribe could not be said to be a public servant within the meaning of section 21, Indian Penal Code in view of the language of s.43 of the Transport Corporation Act.
Applying a similar line of reasoning to the present case, we are of opinion that the appellant cannot be deemed to be a public servant within the meaning of section 81 of the because he was not acting or purporting to act in pursuance of any of the provisions of that Act.
We pass on to consider the alternative question raised on behalf of the respondent, namely, whether the appellant was a public servant within the meaning of the twelfth clause in section 21, Indian Penal Code as it stood after the Criminal Law (Amendment) Act, 1958 (Act 11 of 1958).
Under this clause the words "public servant" include 'every officer in the service or pay of a local authority or of a corporation engaged in any trade or industry which is established by a Central, Provincial or State Act or of a Government company as defined in section 617 of the '.
In view of Explanation 4 the expression 'corporation engaged in any trade or industry ' includes a banking, insurance 'or financial corporation, a river valley corporation and a corporation for supplying power, light Or water to the public.
It is not disputed in the present case that the appellant was in the service of the State Electricity Board which falls within the language of Explanation 4.
But it was contended for the appellant that its was performing only routine clerical duties and cannot be treated as an officer within the meaning of cl.
(12) to section 21, Indian Penal Code.
The question to be considered therefore is whether as Head Clerk employed under the State Electricity Board and attached to the office of the Executive Engineer, the appellant could be said to be an officer within the meaning of el.
(12) of section 21, Indian Penal Code.
In Reg.
vs Ramajirao Jivbaji(3) it was held by West, J. that the word 'officer ' meant some person employed to exercise to some extent and in certain circumstances a delegated function (1)751.A. 41 (2) [1964]4S.C.R. 299.
(3) 12 Born.
H.C.R. 1.
689 of Government.
He was either himself armed with some authority or representative character or his duties were immediately auxiliary to those of some one who was so armed.
In the course of his judgment, West J. observed as follows: "Seeking the help of English law, we find, in Bacon 's Abridgement at Vol.
6, page 2, the article headed `of the nature of an officer, and the several kinds of officers, ' commencing thus: 'It is said that the word 'officium ' principally implies 'a duty, and, in the next place, the charge of such duty; and that it is a rule where one man bath to do with another 's affairs against his will, and without his leave, that this is an office, 'and he who is in it is an officer. ' And the next paragraph goes on to say: 'There is a difference between 'an office and an employment, every office being an employment; but there are employments which do not come under the denomination of offices; such as ,an agreement to make hay, herd a flock, & c.; which differ widely from that of steward of a manor, ' &c.
The first of these paragraphs implies that an officer is one to whom is delegated.
by the supreme authority, some portion of its regulating and coercitive powers, or who is appointed to repre sent the State in its relations to individual subjects.
This is the central idea; and applying it to the clause which we have to construe, we think that the word 'officer ' there means some person employed to exercise, to some extent, and in certain circumstances, a delegated function of Government.
He is either himself ,armed with some authority or representative character, or his duties are immediately auxiliary to those of some one who is so The decision in Reg.
vs Ramajirao Jivbaji(1) was considered by the Calcutta High Court in Nazamuddin vs Queen Empress(a).
The petitioner in that case was a peon attached to the office of the Superintendent of the Salt Department in the district of Mozafferpur and he had been convicted under section 161 Indian Penal Code.
The contention urged on behalf of the petitioner was that he did not fall within the terms of the last portion of cl.
(9) of section 21, Indian Penal Code.
The contention was rejected and the learned Judges observed at page 346 of the Report 'as follows: "The Learned Judges in that case had to consider whether a lessee from Government was on the conditions of his lease a public servant, and, in doing so, they considered generally the meaning of the term 'officer '.
(1) 12 Born.
H.C.R. 1 (2) I.L.R.:28.Cal.
690 It was there held that an officer means 'some person employed to exercise, to some extent and in certain circumstances, a delegated function of Government.
He is either armed with some authority or representative character, or his duties are immediately auxiliary to those of some person who is so armed. ' The meaning which we are asked to put on those words seems to us to be too narrow as applied to the present case.
The peon who has been convicted as a public servant is in service and pay of the Government and he is attached to the office of the Superintendent of the Salt Department.
The exact nature of his duties is not stated, because this objection was not taken at the trial, but we must take it that, from the nature of his appointment, it was his duty to carry out the orders of his official superior, who undoubtedly is a public servant, and in that capacity to assist the Superintendent in the performance of the public duties of his office.
In that sense he would be an officer of Government, although he might not possibly exercise 'any delegated function of the Government '.
Still his duties would be 'immediately auxiliary to those of the Superintendent who is so armed. ' We think that an 'officer in the service or pay of Government ' within the terms of section 21, Penal Code is one who is appointed to some office for the performance of some public duty.
In this sense the peon would come within section 2 1, el. 9".
In Emperor vs Karam Chand Gobind Ram(1), it was held by the Lahore High Court that a Head Clerk in the Supply Depot at Sialkot whose duty was to put up bills to his officer, vas a public officer within the meaning of section 21, cl.
(9) of the Indian Penal Code.
It was pointed out that even if 'a Head Clerk cannot be said to be employed to exercise to some extent, and in certain circumstances, a delegated function of Government, his duties were "immediately 'auxiliary to the Head of the Office or other officer empowered with official responsibility of accepting and passing his work".
In G. A. Monterio vs The State of Ajmer(2), it was held by this Court that a person, who was a Class Iii servant and was employed as a metal examiner known as Chaser in the Railway Carriage Workshops and was working under the Works Manager who was an officer of the Government and the duties which he performed were immediately auxiliary to those of the Works Manager who was an officer in the service or pay of the Government and was therefore a public servant within the meaning of section 21 (9), Indian Penal Code and section 2, Prevention of Corruption Act.
(1) A.I.R. 1943 Lab.
(2) A.I.R. 1957 section 13.
691 The true test, therefore, in order to determine whether the appellant is ,an officer of the Corporation within the meaning of 21, cl.
(12), Indian Penal Code, is: (1) whether he is in the service or pay of the Corporation, and (2) whether he is himself other armed with some authority or representative character by the Corporation; or whether his duties are immediately auxiliary to those of some one who is .armed with such authority or representative character; In the present case, the High Court has found that the appellant was a person performing duties immediately auxiliary to those of the Executive Engineer who was the lead of the office.
The very designation "Head Clerk" denotes that there are other Clerks attached to the office who occupy subordinate positions in relation to the Head Clerk and the duties of he Head Clerk from the nature of things are bound to be immediately auxiliary to the Head of the office.
Upon the facts found in the present case we are of the opinion hat the appellant was an officer in the service or pay of the Corporation as defined in section 21, cl.
(12), Indian Penal Code and therefore a 'public servant ' within the meaning of that section 'and also of section 2 of the prevention of Corruption Act.
For the reasons expressed we affirm the judgment of the High Court dated August 10, 1966 in Criminal Appeal No. 134 of 1964 and dismiss this appeal.
| The first respondent wrote letters to his wife who is the daughter c the appellant.
The letters contained defamatory imputations concerning the appellant.
The letters were handed over to the appellant and he filed a complaint for defamation against the first respondent.
The Magistrate held that a communication between spouses of a matter de (amatory of another did not amount to publication and that no evidence could be given of it under section 122 of the Evidence Act, 1872, against the first respondent, and discharged him.
The Court of Session set aside the order but the High Court restored it.
While the appeal against the order of discharge was pending in this Court a decree of nullity of marriage was passed against the first respondent on the ground of his impotency.
HELD: If the appellant sought to support his case only upon the evidence of the wife of the first respondent, 8. 122 of the Evidence Act would be a bar.
Further a marriage with a person important at the time of marriage and at the time of institution of proceedings for nullity is under the Indian Divorce Act not ab initio void; it is valid till the decree of nullity is pronounced.
Therefore, if the defamation case were to proceed and 'the wife ' should appear as a witness to give evidence about the communication made to her by her husband (the first respondent), the communication could not be deposed to unless the first respondent consented because, if the marriage was subsisting at the time when the communication was made the bar prescribed by section 122 would operate.
But the letters were in appellant 's possession and were available for being tendered in evidence, and he could prove the letters in any other manner.
Therefore, the accused (first respondent) should not have been discharged.
[696 H; 697 A C; 698 A B] Rumping vs Director of Public Prosecutions, applied.
|
ivil Appeal No. 220 of 1987.
From the Judgment and Order dated 22.5.1986 of the Patna High Court in Civil Writ Jurisdiction Case No. 19 15 of 1986.
Soli J. Sorabjee and Ranjit Kumar for the Appellants.
Sharma and S.K. Jain for the Respondents.
The Judgment of the Court was delivered by K.N. SAIKIA, J.
This appeal by special leave is from the Judgment of the High Court of Judicature at Patna dated May 22, 1986 in Civil Writ Jurisdiction Case No. 19 15 of 1986 quashig the bills issued by the appellants demanding minimum guaranteed charges from the respondents.
The appellants Bihar State Electricity Board, Patna, hereinafter referred to .as 'the Board ', entered into an agreement with the respondent M/s.
Green Rubber Industries, a partnership firm, hereinafter referred to as 'the firm ', on the latter 's application dated 26th July, 1978, for supplying the electricity of 60 KVA and on 13.4.
1981 gave electricity connection.
The firm later applied that it 277 may be given 45 KVA instead of 60 KVA and it deposited the requisite sum of Rs.2700 and a fresh agreement was executed on May 2, 1981.
On May 29, 1981 the firm was given fresh connection of 45KVA.
According to the firm it requested the Board on 19.6.
1981 to cut off the connection.
The firm received the bills for minimum guaranteed charges for the months of June, July, August and September, 1981, though according to it no electricity was consumed by it during that period.
According to the Board on failure to pay the bills, the supply was disconnected on 28th September, 1981.
The firm ultimately received a demand notice in October, 1981 for the minimum guaranteed charges from June, 1981 to August, 1981 amounting to Rs.22,95 1.50p.
The firm having not paid the amount, the Board sent a requisition to the Certificate Officer who sent a notice to the firm on July 6, 1984.
Rejecting the contention of the firm that it was not liable to pay, the Certificate Officer proceeded to pass an order for attachment of the firm 's property wherefore the firm filed a writ petition in the High Court of Judicature at Patna under Article 226 and 227 of the Constitution of India for quashing the bills as well as the certificate proceedings.
Before the High Court the Board contended that the firm was liable to pay the minimum guaranteed charges in terms of the agreement, the disconnection itself having been in terms thereof.
The High Court took the view that the Board itself having effected the disconnection it was not entitled to any charges for the period after September, 1981 and it was not open to the Board to contend that under clause 9 of the agreement it was not open to either party to terminate the agreement of minimum guaranteed charges before the expiry of two years from the date of the agreement.
In that view of the matter, the High Court quashed the bills as well as the certificate proceedings, but allowed the charges for the months of July, August and September, 1981 to be adjusted against the security money.
Mr. Soli J. Sorabjee, the learned counsel for the appel lants, submits, inter alia, that the firm under the agree ment was liable to pay the minimum guaranteed charges irre spective of whether energy was consumed or not during the period of the agreement and that disconnection of the supply on failure of the firm to pay the energy bills would not affect the obligation; and that the High Court fell into error in holding that the Board itself having disconnected the energy supply line it could not claim minimum guaranteed charges thereafter.
278 None appears for the respondents despite notice in the regular as well as substituted manner of service.
The question to be decided is whether despite the fact that the supply line was disconnected on September 28, 1981, the firm was still liable to pay the minimum guaranteed charges under the agreement.
The answer depends on the agreement itself and the relevant provi sions of law.
Clause 4 of the agreement says: "The Consumer shall pay to the Board for the energy so supplied and registered or taken to have been supplied as aforesaid at the appropriate rates applicable to the Con sumer according to the tariffs framed by the Board and enforced from time to time, the present ly enforced tariffs being indicated in the Schedule to this agreement for easy reference.
Such reference is subject to provisions of clause 15 appearing here inafter.
Provided that notwithstanding any thing said above but subject to the provisions of clause 13 hereinafter, the Consumer shall have to pay minimum charges as specified in the above said tariffs framed by the Board and enforced from time to time irrespective of whether energy to that extent has been con sumed or not.
(Such minimum charges are re ferred to as "the minimum guaranteed charges" in other places in this agreement.) That part of minimum guaranteed charges as is not billed monthly, the assess ment for the same will be generally made at the end of the year commencing from the 1st April, and ending with the 31st March of the following year which is the financial year of the Board.
In case any agreement is entered into in between this period the above said part of the minimum guaranteed charges will be proportionate to the period for which the Consumer is connected.
Any bill on account of the minimum guaranteed consumption for the year or part thereof will be submitted by the end of June in each year.
" From a perusal of the above clause it would be clear that the minimum guaranteed charges would be payable by the consumer irrespective of whether energy to that extent has been consumed or not.
Indeed, there would be no need for such a provision if the charges were to 279 depend only on the energy actually consumed.
Clause 5 of the agreement is to the following effect: "(a) Readings of meter shall be taken by the Board once in each month or such other inter vals or times as the Board shall deem expedi ent and the Board 's meter reader shall have access to the consumer 's premises at all reasonable time for the purpose of taking such readings.
The Board shall within reasonable time deliver to the Consumer the bill for energy consumed during the month in accordance with the readings of the meters and subject to the minimum guaranteed charges.
The consumer shall pay the amount under the bill so deliv ered within the due date specified therein as per terms of the tariffs framed by the Board and enforced from time to time.
(b) If the consumer fails to pay the amount of any bill due under this agreement within the due date specified in the bill referred to in clause 5(a) above, he shall pay a surcharge at the rate given in the tariffs framed by the Board and enforced from time to time.
If the amount of such a bill remains unpaid after the due date specified in the bill, the Board may discontinue the supply after giving the Con sumer not less than 7 clear days ' notice.
The service will be reconnected only on receipt of full payment for all obligations outstanding up to the date of reconnection and charges for the work of disconnection and reconnection of service. ' ' On a perusal of this clause there arises no doubt that if the amount of a bill submitted according to law remains unpaid after the due date specified in the bill, the Board may discontinue the supply after giving the consumer not less than 7 clear days ' notice.
There is no dispute about notice in this case.
Clauses 8 and 9 of the agreement deal with its duration and termination.
Clause 8 of the agreement says: "The agreement shall be ordinarily enforced for a period of not less than two years in the first instance (except in exceptional cases in which written consent of the Board will 280 be taken) from the date of commencement of supply, i.e. . . and thereafter shall continue from year to year until the agreement is determined as hereinafter provided.
Note: In case where the date of commence ment of supply is a date subsequent to that of the execution of this agreement, the Board is given power to fill in the date in the blank space.
provided for the same in this clause with prior intimation to the Consumer.
The Consumer can produce his copy of the agreement to have such date filled in by the Board.
" Clause 9 Provides: "(a) The consumers shall not be at liberty to determine this agreement before the expiration of two years from the date of commencement of supply of energy.
The consumer may determine this agreement with effect from any date after the said period of giving to the Board not less than one calendar month 's previous notice in writing in that behalf and upon the expira tion of the period of such notice this agree ment shall cease and determine without preju dice to any right which may then have accrued to the Board hereunder, provided always that the consumer may at any time with the previous consent of the Board transfer or assign this agreement to any other person and upon sub scription of such transfer this agreement shall be binding on the transferee and the Board and take effect in all respects as if the transferee had originally been a party hereto in place of the consumer who shall henceforth be discharged from all liability under or in respect thereof.
(b) In case the consumer 's supply is discon nected by the Board in exercise of its powers under this agreement and/ or law and consumer does not apply for reconnection in accordance with law within the remainder period of the above given compulsorily availing of supply or that of notice whichever be longer, he will be deemed to have given a notice on the date of disconnection in terms of the aforesaid clause 9(a) for the determination of the agreement and on expiry of the above said remainder period of compulsorily availing of supply or notice whichever is longer, this agreement shall cease and determine in the same way as above.
" 281 Thus it is seen that the consumer cannot determine the agreement before expiry of two years and there is nothing to show in this case that he did so after expiry thereof with previous notice.
In fact the supply was disconnected by the Board for default.
What would be its effect on the agree ment? It is seen that in case of disconnection of the supply by the Board in exercise of its powers under the agreement it would be open for the consumer to apply for reconnection in accordance with the law within the remainder period of the above given compulsorily availing of supply or that of notice whichever is longer, he will be deemed to have given a notice on the date of disconnection in terms of aforesaid clause 9(a) for determination of the agreement and on expiry of the remainder period of compulsorily availing of supply or notice, whichever is longer, the agreement shall cease and determine.
It is therefore clear that in the instant case the disconnection on the default of the cosumer having ' been effected on 28.9.1981 and the consumer having not applied for reconnection, it would be deemed to have given a notice on the date of disconnection in terms of clause 9(a) for the determination of the agreement and the agreement must be taken to have ceased and determined either at the end of the notice or at the end of the period of compulsori ly availing of supply i.e. two years of the agreement which ever was longer.
The (fresh) agreement having been executed on May 4, 1981 it would expire on May 1, 1983.
The discon nection having been effected on September 28, 1981 the period of deemed notice of seven days expired before the period of compulsorily availing of supply under the agree ment expired and hence the agreement must be deemed to have determined only on May 1, 1983.
During this period the consumer 's liability to pay the minimum guaranteed charges must be held to have continued.
Mr. Soli J. Sorabjee submits, and we think rightly, that the High Court overlooked this important stipulation in the agreement which was binding on both the parties.
However, as the respondents are not before us, it is necessary to con sider the reasonability of the stipulation as to minimum guaranteed charges as argued by the learned counsel for the appellant Board.
Was there any power of the Board to enter into the agreement? If so, to what extent? The , hereinafter called 'the Act '.
provides the law relating to the supply and use of electrical energy.
As defined in section 2(11) of the Act "State Electricity Board" in relation to any State means the State Electricity Board, if any consituted for the 282 State under section 5 of the (54 of 1948) and includes any Board which functions in that State under sections 6 and 7 of the said Act.
The appellant the Bihar State Electricity Board is a Board.
As defined in section 2(h) "licensee" means any person licensed under to supply energy.
The appellant Board is such a licensee under this provision.
As defined in section 2(c) "consumer" means any person who is supplied with energy by a licensee or the Government or by any other person engaged in the business of supplying energy to the public under this Act or any other law for the time being in force, and in cludes any person whose premises are for the time being connected for the purpose of receiving energy with the works of a licensee, the Government or such other person, as the case may be.
There is no doubt that the respondent was consumer.
The , hereinafter called the 'Supply Act ', is an Act to provide for the realisation of the production and supply of electricity, and generally for taking measures conducive to electrical development and for all matters incidental thereto.
Under sub section (1) of section 23 of the Act, a licen see shall not, in making any agreement for the supply of energy, show any undue preference to any person.
Thus, this section envisages making of an agreement by the licensee with the consumer for the supply of energy.
The instant agreement has, therefore, to be held as one envisaged by this provision.
Was the stipulation to pay minimum guaran teed charges, irrespective of whether energy was consumed or not, reasonable and valid? What is the consideration when less or no energy is consumed? Section 49 of the Supply Act makes provision for the sale of electricity by the Board to persons other than licensees.
Under subsection (1), subject to the provisions of the Supply Act and the Regulations, if any, made in this behalf, the Board may supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit and may for the purpose of such supply frame uniform tariff.
Under sub section (2) thereof nothing m sub sections (1) and (2) shall derogate from the power of the Board if it considers it necessary or expedient to fix different tariffs for the supply of electricity to any person not being a licensee, having regard to the geographi cal position of any area, the nature of the supply and purpose for which supply is required and any other relevant factors.
Sub section (2) enumerates the factors to be consi derd by the Board in fixing the uniform tariffs.
283 It is seen that the rule of charging minimum guaranteed charges has been in vogue since long.
In the London Electric Supply Corporation (Limited) vs Priddis, , the agreement between the appellant company and the consumer to supply electricity in clause 4 provided that the "consumer shall have the option at or after the expiration of five years from the date of installation" of purchasing the installation at a price.
7 said: "The consumer shall until purchase as aforesaid pay quarterly to the supply company for the use of the installation 3/4d.
per Board of Trade Unit for every unit of electrical energy supplied to the said premises and the minimum payment in any year shall be Is.
for each eight candle power lamp or its equivalent installed.
" During the period from Mid summer to Michaelmas, 1900, the defendant did not use any electricity supplied by the plaintiff, and the question was whether under the agree ment the defendant was bound to pay the minimum payment provided for by cl. 7, even though in fact he had used none of the plaintiff 's electricity during the quarter.
The Lord Chief Justice in giving judgment said that "it was suffi ciently clear that the installation was put in on the terms that the customer should have the right to purchase the installation after five years, and during that five years the customer should be liable to pay minimum rent whether the current was de facto used or not.
The minimum rent had no reference to the amount of current used, and it was, therefore, clear that the mere fact that the defendant had not taken any current or a small current did not affect the case.
" Channel.
J. concurring said that the "meaning of the clause was that the minimum rent did not merely cover the actual use but the right to use the current.
The customer had to pay for the right to use the current, although he did not in fact use it." In Saila Bala vs Darjeeling Municipality, AIR 1936 Calcutta 265, it was held by a learned single Judge that the minimum charge was not really a charge which had for its basis the consumption of electric energy.
It was really based on the principle that every consumer 's installation involved the licensee in certain amount of capital expendi ture in plant and mains on which he was to have a reasonable return.
He could get a return when the energy was actually consumed, in the shape of payments of energy consumed.
When no such energy was consumed by the consumer, or a very small amount was consumed in a longer period, the licensee was allowed to charge minimum charges by his licence, but those minimum charges were really interest on his capital outlay incurred for the particular consumer.
Natesan, J. in Natesa Chettiar vs The Madras State Electric ity 284 Board, , answering the question whether the provision for the minimum guarantee was just a stipulation by way of penalty or pre determined damages for breach on the part of the consumer or something else, held the view that the minimum fixed was only consideration for keeping the energy available to the consumer at his end; it was not a penalty for not consuming a stated quantity of energy but was a concession shown up to the amount fixed, energy at a specified rates could be consumed free, consump tion beyond only had to be paid for.
The statutory basis for the terms in the agreement providing for minimum annual charge was found in section 22 of the Act and section 48 of the Supply Act.
Section 22 deals with obligation on licensee to supply energy.
The proviso to the section says: "No person shall be entitled to demand, or to continue to receive, from a licensee a supply of energy for any premises having a separate supply unless he has agreed with the licensee to pay to him such minimum annual sum as will give him a reasonable return on the capital expenditure, and will cover other standing charges incurred by him in order to meet the possible maximum demand for those premises, the sum payable to be determined in case of difference or dispute by arbitration." Section 48 of the Supply Act empowers the licensee to carry out arrangement under that Act.
In Watkins Mayor & Co. vs Jullundhur Electric Supply Co., AIR 1955 Punj. 133 (136), it was observed that the whole scheme of the Act seems to show that the provision made in any contract for a minimum charge was really to provide for a fair return on the outlay of the licensee, and it was for this reason that the law allowed the contract of this kind to be entered into.
Clause XI A of the schedule to the Act, as it then stood, provided: "A licensee may charge a consumer a minimum charge for energy of such amount and determine in such manner as may be specified by his licence, and such minimum charge shall be payable notwithstanding that no energy has been used by the consumer during the period for which such minimum charge is made." The Court accordingly held that there was nothing illegal in the insertion of the term for payment of a minimum charge in the agreement for 285 supply of energy and held that it had not been made out that it was an unreasonable levy.
A Division Bench of Allahabad High Court, in Hari Shan kar & Ors.
vs U.P. State Electricity Board & Anr., AIR 1974 Allahabad 70, held that when the electrical supply was being made on the footing that the consumer would pay the minimum guaranteed charges that charge was one of the terms and conditions for supply and fixation of that would be included in the fixation rates ;or the supply of electricity.
Simi larly in M/s. Bhagwan Industries Pvt.
Ltd. Lucknow vs U.P. State Electricity Board, Lucknow, AIR 1979 Allahabad 249, a Division Bench held that an agreement for supply of elec tricity with the Board empowered it to revise the rates and that imposition of minimum consumption guarantee charge imposed by new tariff schedule under section 49 of the Supply Act was valid.
A Division Bench of the Andhra Pradesh High Court in Md. Abdul,Gaffar vs Andhra Pradesh Electricity Board, , also held that fixation of monthly minimum charges based on connected load and revisional rates for electrical consumption by non domestic consumers in accordance with the factors in section 49(2) was neither ultra vires nor arbitrary.
The High Court in the case at hand relied on Rajeshwar Singh vs State of Bihar, AIR 1983 Patna 194, wherein it was held that when the disconnection of electric energy was effected by the Board then it could not ask for the minimum guaranteed charges.
That decision must be confined to the facts of that case only.
It is true that the agreement is in a standard form of contract.
The standard clauses of this contract have been settled over the years and have been widely adopted because experience shows that they facilitate the supply of electric energy.
Lord Diplock has observed: "If fairness or reasona bleness were relevant to their enforceability the fact that they are widely used by parties whose bargaining power is fairly matched would raise a strong presumption that their terms are fair and reasonable." Schroder Music Co. Ltd. vs Macaulay, 16 (624).
In such contracts a standard form enables the supplier to say: "If you want these goods or services at all, these are the only terms on which they are available.
Take it or leave it.
" It is a type of contract on which the conditions are fixed by one of the parties in advance and are open to acceptance by anyone.
The contract, which frequently contains many conditions is presented for acceptance and is not open to discussion.
It is settled law that a person who signs a 286 document which contains contractual terms is normally bound by them even though he has not read them, even though he is ignorant of the precise legal effect.
In view of clause 4 having formed one of the stipulations in the contract along with others it cannot be said to be nudurn pactum and the maxim nudum pactum ex quo non oritur actio does not apply.
Considered by the test of reasonableness it cannot be said to be unreasonable inasmuch as the supply of electricity to a consumer involves incurring of overhead installation expenses by the Board which do not vary with the quantity of electricity consumed and the installation has to be contin ued irrespective of whether the energy is consumed or not until the agreement comes to an end.
Every contract is to be considered with reference to its object and the whole of its terms and accordingly the whole context must be considered in endeavouring to collect the intention of the parties, even though the immediate object of enquiry is the meaning of an isolated clause.
This agreement with the stipulation of minimum guaranteed charges cannot be held to be ultra vires on the ground that it is incompatible with the statu tory duty.
Differences between this contractual element and the statutory duty have to be observed.
A supply agreement to a consumer makes his relation with the Board mainly contractual, where the basis of supply is held to be statu tory rather than contractual.
In cases where such agreements are made the terms are supposed to have been negotiated between the consumer and the Board, and unless specifically assigned, the agreement normally would have affected the consumer with whom it is made, as was held in Northern Ontario Power Co. Ltd. vs La Roche Mines Ltd., For the foregoing reasons we have no hesitation in holding that the agreement was reasonable and valid and it was not determined with the disconnection of supply to the respondent firm by the Board on 28th September, 1981 but only accordingly to the stipulations in clause 9(b) of the agreement as discussed above.
The liability to pay the minimum guaranteed charges, therefore, continued till the determination of the contract.
The Board was, therefore, entitled to submit the bills and make the demand on that account, and recover the same according to law.
In the result, the impugned judgment is set aside and the appeal is allowed.
No order as to costs.
Y. Lal Appeal al lowed.
| This is a land lord 's appeal.
By an agreement in writing between the parties, the second floor of the premises bear ing No. 19/10, Rajinder Nagar, New Delhi was let out to the Respondent for a limited period of three years w.e.f.
June 8, 1980, with the permission of the Rent Controller obtained under section 21 of the Act.
The Respondent tenat having failed to deliver vacant possession of the premises in question, after the expiry of the stipulated period, the appellant moved an application before the Rent Controller for execution of his order by delivery of possession of the premises to him.
The Respondent tenant filed an objection to the said application to which the appellant replied duly.
The Rent Controller rejected the appellant 's application taking the view that the permission granted under section 21 of the Act was invalid and thus the tenant could not be evicted on the expiry of 3 years.
The Rent Controller there by upheld the tenant 's objection that the landlord 's son being aged only 19 or 20 years, on the date of the expiry of the period of limited tenancy while the minimum age pre scribed by law for marriage being 21 years the ground that the premises were needed for the son 's marriage was not tenable.
The Rent Controller accordingly held that creation of limited tenancy amounted to fraud and misrepresantation by the landlord which rendered the permission invalid.
The appellant 's appeal to the Tribunal as also to the High Court having failed, he has filed this appeal after obtaining Special Leave.
The Tribunal and the High Court affirmed the view of the Rent Controller treating the grant of permission by the Controller to be mechanical and without application of mind.
Allowing the appeal, this Court, HELD: The object of enquiring into the validity of the Control 300 ler 's permission under section 21 is only to ensure that essentials of a limited tenancy existed and the same was genuine; and it is not meant to permit raising of frivolous pleas which would frustrate the very object of its enact ment.
This view protects the honest tenants and only curbs the frivolous and vexatious pleas.
[310H; 311A] Controller 's permission when granted to create a limited tenancy under sec.
21 of the Act is presumed to be valid unless declared otherwise.
It is, therefore, for the person assailing its validity to get such a declaration from a proper forum in a proper proceedings.
Unless this is done, the order remains enforceable.
The duty is clearly on the tenant himself to raise the pleas of invalidity and unless the order is declared invalid at his instance, its enforce ability cannot be doubted.
[31lB C] All that has to be seen is whether the period of limited tenancy was indicated by the landlord with reference to a foreseeable future event and the estimate of time of its occurrence was not unreasonable.
[312B] When the period of limited tenancy is stated on the basis of a future event the happening of which is reasonably certain at that time though the precise date of the future event cannot be predicted with precision, the landlord 's estimate of the period after which the event is expected to happen, unless unreasonable must be accepted for this pur pose as genuine.
This would satisfy the test of a genuine limited tenancy if there be no other factor indicating it to be a mere pretence adopted by the landlord.
[312C D] The enquiry contemplated under section 21 in this behalf is not the same as that for determining existence of ground of bona fide need of the landlord for an order of eviction under section 14 of the Act, and section 14 is expressly superseded by section 21.
The scope of enquiry is limited only to the existence of the jurisdictional facts at the time of grant of the permission when its validity is chal lenged subsequently.
[312F] The absence of existence of any jurisdictional fact not having been proved by the respondent tenant even after objecting to recovery of possession on expiry of the period of limited tenancy, there was no ground to refuse restora tion of possession to the landlord.
[313C] S.B. Naronah vs Prem Kumari Khanna, ; ; V.S. Rahi & Anr.
vs Smt.
Ram Chambeli, ; ; Smt.
Dhanwanti vs D.D. Gupta, [1986] 3 SCC 1; Inder Mohan Lal vs 301 Ramesh Khanna; , ; S.K. Lata vs R.C. Chhiba & Anr,, ; and J.R. Vohra vs India Export Hlouse (P) Ltd. & Anr.
, ; , referred to.
|
on (Civil) No. 577 of 1988.
(Under Article 32 of the Constitution of India).
S.R. Bhat and R. Venkataramani for the Petitioner Dr. B.S. Chauhan for the Respondents and Shobha Dikshit for he State of U.P.
The Judgment of the Court was delivered by 741 SABYASACHI MUKHARJI, CJ.
A letter written to this Court was treated as a writ petition under Article 32 of the Constitution of India.
The letter written by Chhetriya Pardushan Mukti Sangharsh Samiti.
Sarnath, alleged environ mental pollution in the area.
It was also alleged therein that the Jhunjhunwala Oil Mills and a refinery plant are located in the green belt area, touching three villages and the Sarnath temple of international fame.
The smoke and dust emitted from the chimneys of the Mills and the effluents discharged from these plants were alleged to be causing environmental pollution in the thickly populated area and were proving a great health hazard.
It was further stated that the people were finding it difficult to eat and sleep due to smoke and foul smell and the highly polluted water.
It was further alleged that the lands in the area had become waste, affecting crops and the orchards damages.
Diseases like TB, jaundice and other ailments were stated to be spreading in an epidemic form.
The growth of children was affected.
It was further alleged that the schools, nursing homes, leprosy homes and hospitals situated on the one kilometer long belt touching the oil Mills and the plant were adversely affected.
It was stated that licences had been issued to one richman Dina Nath for these industrial units thereby risking the lives of thousands of people without enforcing any safety measure either to cure the effluents discharged from the plants or to check the smoke and the foul smell emitted from the chimneys.
The whole area was expected to be ruined due to any explosion or gas leak age.
In that background, the petitioner prayed for necessary directions to check the pollution, and also enclosed a printed leaflet alleging real practices and corruption on the part of the proprietor of these industrial units apart from polluting the atmosphere.
As mentioned hereinbefore, the complaint was made by the said Samiti stated to be a social organisation about envi ronmental pollution and ecological imbalance being caused by the two plants and thereby exposing the population to health hazards and life risk which was, therefore, considered to be a matter of great public importance.
It is necessary to recognise the danger in order to strike a balance between the quality of life to be preserved and the economic devel opment to be encouraged.
Dealing with this aspect in M.C. Mehta vs Union of India & Ors., , it has been stated that whenever applications for licences to establish new industries are made in future, such applica tions should be refused unless adequate provision has been made for the treatment of trade effluents flowing out of the factories.
So, this letter was treated as a writ petition and notice was issued, 742 counter affidavits was filed on behalf of respondent No. 3 being the proprietor of Jhunjhunwala Oil Mills.
Reference was made to the decision of this Court in Bandhua Mukti Morcha vs Union of India & Ors., ; wherein this Court underlined the importance of satisfactory verifi cation of allegations.
The Court was asked to be ever vigi lant against abuse of its process and there was need for appropriate verification.
There is a statute for controlling pollution.
It is wellsettled that if there is a statute prescribing a judicial procedure governing a particular case, the court must follow such procedure.
It is not open to the court to by pass the statute and evolve a different procedure at variance with it.
It is further asserted on behalf of the respondents that between the petitioner Sita Ram Pandey and respondent No. 3, there was a long rivalry.
According to respondent No. 3, the petitioner is an anti social element and his only aim was to extract money from the people like respondent No. 3 as in the present case.
It has further been stated that there has been criminal proceeding against the petitioner and several items have been marked in the affidavit in opposition.
The particulars make out a rather disgraceful state of affairs.
It has been alleged that Mr. Sita Ram Pandey for the last so many years was blackmailing the people, and a case u/s 500 of the I.P.C being Case No. 121/88 was filed.
It has been further averred that respondent No. 3 has complied with the provisions of the Air (Prevention and Control of Pollution) Act, 1981 and of the water (Prevention & Control of Pollution) Act, 1974 and there is no complaint of any kind from any person, body or authority.
The correspondence, in this connection, has been set out.
It further appears that as early as 1980, the petitioner had made various complaints to the A.D.M. (Supply), Distt.
Varanasi, alleging that respondent No. 3 was accused of smuggling of coal and diesel blackmailing.
It was dismissed.
It further appears that there was no complaint from anybody apart from the present petitioner by any authority as to the non compliance of any statute by respondent No. 3.
The orders passed by the Pollution Control Board which had been annexed, also indicate that there are no instance of viola tion of the said Acts.
Time was sought on behalf of respondents for filing a rejoinder which, unfortunately, has not been filed, and no satisfactory explanation has been given therefore.
Certain letters alleged to have been written on behalf of the peti tioners were sought to be placed before us in the Court today.
743 Having considered the facts, circumstances, nature of the allegations and the long history of enemit and animosi ty, we are of the opinion that prima facie the provisions of the relevant Act, namely, the Air Pollution Control Act have been complied with and there is no conduct which is at tributable to respondent No. 3 herein leading to pollution of air or ecological imbalances calling for interference by this Court.
Article 32 is a great and salutary safeguard for preser vation of fundamental rights of the citizens.
Every citizen has a fundamental right to have the enjoyment of quality of life and living as contemplated by Article 21 of the Consti tution of India.
Anything which endangers or impairs by conduct of anybody either in violation or in derogation of laws, that quality of life and living by the people is entitled to be taken recourse of Article 32 of the Constitu tion.
But this can only be done by any person interested genuinely in the protection of the society on behalf of the society or community.
This weapon as a safeguard must be utilised and invoked by the Court with great deal of circum spection and caution.
Where it appears that this is only a cloak to "feed fact ancient grudge" and enemity, this should not only be refused but strongly discouraged.
While it is the duty of this Court to enforce fundamental rights, it is also the duty of this Court to ensure that this weapon under Article 32 should not be misused or permitted to be misused creating a bottleneck in the superior Court preventing other genuine violation of fundamental rights being considered by the Court.
That would be an act or a conduct which will defeat the very purpose of preservation of fundamental rights.
Having regard to the ugly rivalry here, we have no doubt that between the contestants, the Court was misled and we must, therefore, proceed with caution.
There was no funda mental right violation or could be violative if the allega tions of the so called champions on behalf of the society are scrutinised.
We must protect the society from the so called 'protectors '.
This application is legally devoid of any merit or principles of public interest and public pro tection.
This application certainly creates bottlenecks in courts, which is an abuse of process of this Court.
We have, therefore, no hesitation in dismissing this application with the observations made herein.
G.N. Petition dis missed.
| The Petitioner, representing a Social Organisation, has written a letter alleging environment pollution in some villages and the adjoining Sarnath Temple.
The letter was treated as Writ Petition under Article 32 of the Constitu tion of India.
It was alleged that the smoke and dust emit ted from the Chimneys of Respondent No. 3, viz., an oil Mill and a refinery plant in the area, and the effluents dis charged by the plants has been causing serious environmental pollution in the thickly populated area, leading to epidemic diseases.
It was further alleged that even the flora was badly affected by pollution.
Petitioner prayed for direc tions to check the pollution.
On behalf of Respondent No. 3, it was contended that it had complied with the provisions of Air (Prevention and Control of Pollution) Act, 1981 and the and there was no com plaint whatsoever.
It was further stated that the petitioner was an anti social element and his only aim was to blackmail and extract money from people like Respondent No. 3, and that a criminal case has already been filed against him, for such activities.
Dismissing the writ petition, HELD: 1.
Article 32 is a great and salutary safeguard for preservation of fundamental rights of the citizens.
Every citizen has a fundamental right to have the enjoyment of quality of life and living as contemplated by Article 21 of the Constitution of India.
Anything which 740 endangers or impairs by conduct of anybody either in viola tion or in derogation of laws, that quality of life and living by the people is entitled to be taken recourse of Article 32 of the Constitution.
But this can only be done by any person interested genuinely in the protection of the society on behalf of the society or community.
This weapon as a safeguard must be utilised and invoked by the Court with great deal of circumspection and caution.
Where it appears that this is only a cloak to "feed fat ancient grudge" and enemity, this should not only be refused but strongly discouraged.
While it is the duty of this Court to enforce fundamental rights, it is also the duty of this Court to ensure that this weapon under Article 32 should not be misused or permitted to be misused creating a bottleneck in the superior Court preventing other genuine violation of fundamental rights being considered by the Court.
That would be an act or a conduct which will defeat the very purpose of preservation of fundamental rights.
[743B E] Bandhu Mukti Morchay.
Union of lndia & Ors.; , , referred to.
This petition is legally devoid of any merit or principles of public interest and public protection.
There was no fundamental right violation or could be violative if the allegations of the so called champions on behalf of the society are scrutinised.
[743G] 2.2.
Prima facie the provisions of the relevant Act, namely, the Air Pollution Control Act have been complied with and there is no conduct which is attributable to re spondent No. 3 herein leading to pollution of air or ecolog ical imbalances calling for interference by this Court.
The orders passed by the Pollution Control Board also indicate that there were no instances of any violation.
There was no complaint from anybody apart from the petitioner, or any authority as to the non compliance of any statute by Re spondent No. 3.
[743A B; 742G]
|
Appeal No. 80 of 1962.
Appeal from the judgment and decree dated December 19, 1957, of the Madras High Court in C.M. Appeal No. 303 of 1956.
A. V. Viswanatha Sastri, V. Ratnam and R. Ganapathy Iyer, for the appellant.
G.S. Pathak and R. Thiagarajan, for the respondent.
July 24, 1964.
The Judgment of the Court was delivered by SUBBA RAO, J.
This appeal by certificate raises the question whether a decree obtained in a suit to enforce a debt incurred after the Madras Agriculturists Relief Act, 1938 (Act 4 of 1938), hereinafter called the Parent Act.
came into force could be scaled down under section 13 of the Parent Act.
The facts are as follows: On February 15, 1964, the appellant and 4 others executed a mortgage deed in favour of Kaverlal Chordia for a sum of Rs. 2,00,000 payable after three years with interest at 9 per cent.
per annum.
On January 24, 1946, the mortgagee assigned the said mortgage 308 in favour of the respondent.
Certain payments towards principal and interest were made thereunder.
On February 28, 1950, the assignee mortgagee i.e., the respondent, filed a suit, O.S. No. 55 of 1950, in the Court of the Subordinate Judge, Nilgiris, Ootacamund, for the recovery of Rs. 1,98,487 8 0, made up of Rs. 1,50,000 for the balance of the principal and Rs. 48,487 8 0 for interest due on tile mortgage.
The suit ended in a compromise dated December 21, 1950, under which a decree was passed for Rs. 1,50,000 on account of principal, with interest and further interest at 9 per cent.
per annum and costs, subject to some concessions being shown in the event of payments, being made in certain specified instalments.
Thereafter, certain payments were made towards the decree.
In due course the respondent filed I.A. No. 382 of 1953 for the passing of a final decree.
On June 24, 1955, the appellant filed O.P. No. 24 of 1955 for scaling down the debt.
The respondent, inter alia, contended in his objections filed against the said application that as the debt sought to be scaled down was incurred subsequent to March 22, 1938, which is the date of the commencement of the Parent Act.
the decree could not be scaled down under section 19(2) of the Parent Act.
The learned Subordinate Judge overruled the objection and held by his order dated August 10, 1956.
that the decree was liable to be scaled down in terms of section 13 of the Parent Act.
He accordingly scaled down the decree debt.
On appeal, a Division Bench of the Madras High Court held that as the statutory right to have the interest scaled down was not put forward before the consent decree was passed, the decree could not be scaled down at the stage of the final decree proceedings.
It further held that section 19(2) of the Parent Act only applied to debts payable at the commencement of the &aid Act and therefore, the application for scaling down the decree was not maintainable.
In the result it set aside the order of the Subordinate Judge and dismissed the petition for scaling down the debt.
Hence the present appeal.
Mr. A. V. Viswanatha Sastri, learned counsel for the appellant, did not press the appellant 's claim under section 19(2) of the Parent Act, but put it under section 13 of the said Act.
309 He took us through the relevant provisions of the Parent Act, which according to him disclose the legislative policy undermining the sacrosanctity of decrees and pressed on us to hold, on a scrutiny of the provisions of section 13 of the Parent Act in the light of the said policy, that the decree made in respect of a debt incurred after the Parent Act came into force was liable to be scaled down thereunder.
Mr. Pathak, learned counsel for the respondent, makes a distinction between the substantive and procedural pro visions and contends that the Parent Act does not make any provision for scaling down decrees made in respect of debts incurred after the said Act came into force.
The general scheme of the Parent Act gathered therefrom may be briefly stated thus.
The main object of the Parent Act was to give relief to agriculturists.
"Debt" has been defined in section 3 (iii) of the Parent Act as any liability in cash or kind, whether secured or unsecured, due from an agriculturist, whether payable under a decree or order of a civil or revenue court or otherwise.
This definition is rather com prehensive; it takes in secured, unsecured and decree debts due from an agriculturist.
Section 7 of the Parent Act declares that a debt so defined has to be scaled down in the manner prescribed by the said Act.
Section 8 provides the mode of scaling down debts incurred before, 1932 and section 9, the debts incurred after 1932 but before March 22, 1938; and section 13 deals with the scaling down of debts incurred after the commencement of the Parent Act.
The relief granted under the said Act varies with the date of the debt depending upon whether it falls under one or other of the said three periods.
While sections 7, 8, 9 and 13 give the principles for scaling down a debt, section 19 provides the machinery for scaling down.
Section 19 of the Parent Act.
as amended in 1948, reads: "(1) Where before the commencement of this Act a court has passed a decree for the repayment of a debt, it shall, on the application of any judgment debtor who is an agriculturist. apply the provisions of this Act to such decree 310 and shall, notwithstanding anything contained in the Code of Civil Procedure, 1908, amena the decree accordingly or enter satisfaction.
as the case may be: (2) The provisions of subsection (1).
shall also apply to cases where, after the commencement of this Act, a Court has passed a decree for the repayment of a debt payable at such commencement.
It may be mentioned that the second clause was inserted by the Amending Act of 1948.
Before the amendment there was a conflict of view on the question whether section 19(1) could be invoked in amending a decree passed after the commencement of the Parent Act in respect of a debt incurred before the said Act.
Sub section (2) made the position clear and declared that it could be done.
The position, therefore, is that in the case of debts other than decree debts, the scaling down process will have to be resorted to in an appropriate proceeding taken in respect of the debt and in the case of decrees in respect of debts incurred before the Parent Act whether made before or after the said Act, by filing an application under section 19(1) or (2) of the Board Act, as the case may be But section 19 on its express terms does not permit the filing of an application for amending a decree by scaling down a debt incurred after the Parent Act came into force.
Doubtless, as Mr. Viswanatha Sastri contents, the Parent Act, to some extent, undermines the sanctity of decrees, but that is to implement the policy of the Legislature to give relief to agriculturists over burdened with debts.
But a Court, particularly in the case of an expropriatory measure like the Act, cannot rely upon the supposed policy of the Legislature and extend the scope of the relief given to agiculturists by analogy.
The scope of the relief shall necessarily be confined to that given by the Act expressly or by necessary implication.
A fair reading of sub sections (1) and (2) of section 19 of the Parent Act disclose beyond any reasonable doubt that the Legislature does not provide thereunder any machinery for reopening a decree made in respect of a debt incurred after the Act came into force.
311 Realizing this difficulty ' Mr. Viswanatha Sastri relied upon the provisions of section 13 itself and contends that the said section provides, in the case of debts incurred after the Parent Act came into force, both for the substantive relief as well as for the machinery to give the said relief.
The said section reads: "In any proceeding for recovery of a debt, the Court shall scale down all interest due on any debt incurred by an agriculturist after the commencement of this Act, so as not to exceed a sum calculated at 6 1/4 per cent.
per annum, simple interest. . . " The Government by notification reduced the rates of interest to 5 1/2 per cent per annum with effect from July 29, 1947.
Let us scrutinize the provisions of the section in the light of the arguments advanced.
Learned counsel asks us to read the words "decree debt" instead of "debt" in section 13 of the Parent Act, for "debt" is defined to take in a decree debt, and by so reading, he contends, in any proceeding, which, according to him, includes, a final decree application, the court shall scale down all interest in the manner prescribed thereunder.
It is further argued that final decree proceedings are only proceedings in a suit and, therefore, the word "recovery" in the sub section is appropriate in the context of a decree debt.
This argument, if accepted, disturbs the entire scheme of the Parent Act.
Section 13 is one of the group of sections viz., sections 8, 9 and 13, dealing with the principles of scaling down in a proceeding for the recovery of a debt.
But where a decree is to be amended, the Act has taken care to provide expressly for the amendment of the decree.
If the Legislature intended to provide for the amendment of decrees even in cases falling 'under section 13, it would have added another appropriate clause in section 19.
The absence of any such clause indicates an intention that in cases of debts comprehended by section 13, the Legislature gives only a limited relief expressly thereunder.
It is said, so far as the reopening of decrees after the Parent Act came into force is concerned, whether in respect of 312 debts incurred before or after the said Act, there cannot possibly be a justification for a difference in the manner of their treatment.
A plausible reason can be discerned for this legislative distinction between debts incurred before the Act and those incurred after the Act; for, in the former when the debts were incurred the Act was not in existence and, as the debtors could not have anticipated the provisions of the Act, they were given the summary remedy, but the agriculturists who incurred debts after the Parent Act with open eyes were denied the same; while in the former, they were allowed to reopen decrees made in respect of the said debts before or after the Act, in the latter they could claim relief only in an appropriate proceeding before the decree was made and that too was confined to the limited relief in regard to the rate of interest provided thereunder.
The difference in the treatment of the two categories of decrees was brought about by sub section (2) of section 19 added by a later amendment.
Whatever may be the reason for the difference, we cannot extend the scope of section 13 by analogy or by stretching the meaning of the words "proceeding" and "recovery".
Reliance is placed upon section 13 A of the Parent Act which reads: "Where a debt is incurred by a reason who would be an agriculturist as defined in section 3(ii) but for the operation of proviso (B) or proviso (C) to that section the rate of interest applicable to the debt shall be the rate applicable to it under the law custom, contract or decree of Court under which the debt arises or the rate applicable to an agriculturist under section 13, whichever rate 'is less." On the basis of this section a contention is raised that sections 13 and 13A relate to the same subject matter with the difference that while section 13 applies to agriculturists who incurred debts after the Parent Act came into force, section 13A applies to persons who would be agriculturists but for the provisos (B) and (C) of section 1 (ii) in respect of debts in curred after the Act, and as a fair reading of section 13 A indi cates that it applies to decrees made in regard to debts in 313 curred after the Act, it must be interpreted reasonably that section 13 also applies to such decrees.
Mr. Pathak, learned ,counsel for the respondent, on the other hand, contends that section 13 A only applies to pre Act debts, as section 7 which declares the scheme of scaling down of debts applies only to pre Act debts and the only exception to it is section 13 A. Be that as it may, we cannot construe section 13 with the aid of section 13 A which was introduced by the Amending Act 23 of 1948.
This appeal does not call for an interpretation of section 13 A of the Act and we shall not express any opinion thereon.
The legal position may be briefly stated thus.
Section 7, 8, 9 and 13 form a group of sections providing the principles of scaling down of debts incurred by agricul turists under different situations.
A debt can be scaled down in an appropriate proceeding taken in respect of the same.
But in the case of debts that have ripened into decrees, section 19(1) and (2) prescribe a special procedure for reopening the decree only in respect of debts incurred before the Parent Act.
The Parent Act does not provide for the reopening of decrees made in respect of debts incurred after it came into force, and for understandable reasons the relief in respect of such decrees is specifically confined only to a concession in the rate of interest.
For the foregoing reasons, we hold that the order of the High Court is correct .
In the result, the appeal fails and is dismissed with costs.
| The respondent, who was the assignee mortgagee of a mortgage deed executed on February 15, 1945 by the appellant for a certain sum payable with interest, filed a suit for the recovery of the sum with Interest.
The suit ended in a compromise under which a decree was passed and certain payments were made towards the decree.
In due course the respondent moved for the passing of a final decree.
The appellant applied for scaling down of the debt under the Madras Agriculturists Relief Act.
The respondent, inter alia, contended in his objections filed against this application that as the debt sought to be scaled down was incurred subsequent to the date of commencement of the Act, the decree could not be scaled down under section 19(2) of the 307 Act.
The Subordinate Judge overruled the objection and held that the debt was liable to be scaled down in terms of section 13 of the Act.
On appeal, the High Court held that as the statutory right to have the interest scaled down was not put forward before the consent decree was passed, the decree could not be scaled down at the stage of the final decree R proceedings.
It further held that section 19(2) of the Act only applied to debts payable at the commencement of the Act and, therefore, the application for scaling down the decree was not maintainable.
On appeal by certificate, Held: Sections 7, 8, 9 and 13 form a group of sections providing the principles of scaling down of debts incurred by agriculturists under different situations.
A debt can be scaled down in an appropriate proceeding taken in respect of the same.
But in case of debts that have ripened into decrees, section 19(1) and (2) prescribe a special procedure for reopening the decree only in respect of debts incurred before the Act.
The Madras Agriculturists Relief Act does not provide for the reopening of decrees made in respect of debts incurred after it came into force, and for understandable reasons the relief in respect of such decrees is specifically confined only to a concession in the rate of interest.
|
Appeal No. 959 of 1964.
Appeal by special leave from the judgment and decree dated March 16, 1963 of the Madhya Pradesh High Court in Second Appeal No. 86 of 1962.
section V. Gupte, Solicitor General, Rameshwar Nath, section N. Andley P. L. Vohra and Mahinder Narain, for the appellant.
A. K. Sen and R. Gopalakrishnan, for respondent No. 1.
The Judgment of the Court was delivered by Wanchoo, J.
This is an appeal by special leave against the judgment of the Madhya Pradesh High Court and arises in the following circumstances.
The appellant brought a suit for redemption of certain mortgaged property.
A preliminary decree was passed in the suit on February 3, 1954.
It specified the amount due as principal and the amount due as interest upto a certain date.
It also provided that future interest was to be paid at three per cent per annum on a certain sum from that date till the date of realisation.
Parties were to bear their own costs.
Further the decree provided for payment of the amount due on or before July 15, 1964 or within such time as might be extended.
It also provided that if payment was made within the time limited under O.XXXIV r. 7(1)(c) of the Code of Civil Procedure, final decree would be passed.
In the alternative it was provided that if the deposit was not made, the respondent would be entitled to apply for passing of a final decree praying that the right of the appellant to redeem the mortgaged property be debarred.
There were appeals by both parties from this preliminary decree to the High Court.
In the meantime the appellant had prayed for extension of time and the trial court had extended time for making payment upto August 15, 1954.
About the same time, the appellant applied to the High Court praying that the order requiring him to deposit the decretal amount by August 15, 1954 be stayed till the disposal of the appeal by the High Court.
On this application, the High Court passed an order on July 26, 1954.
This order provided that if the appellant gave an undertaking to pay nine per cent per annum interest instead of three per cent per annum during the period of stay, the order of the trial court directing the appellant to deposit the decretal amount by August 15, 1954 would be stayed.
Thereupon the appellant gave an undertaking to the trial court on August 7, 1954 that he would pay nine per cent per annum simple interest instead of three per cent per annum during the period 111 of stay.
In consequence the order of stay passed by the High Court came into force and no deposit was made by August 15, 1954.
On October 16, 1958, the High Court dismissed both the appeals and the preliminary decree stood confirmed.
On March 20, 1959, the appellant applied to the trial court for permission to deposit the sum of Rs. 42,204/5/ .
On March 27, 1959, the trial court permitter the appellant to deposit the amount but made it clear that this did not amount to, any extension of time for making the deposit, and the question whether the deposit was made within time would be decided after hearing both parties.
Notice was also issued to the respondent on the same date.
On March 28, 1959, the appellant deposited the amount.
On April 8, 1959 the respondent appeared and objected that the amount due was not Rs. 42,204/5/ but Rs. 46,882/6/6 and therefore the deposit was short by a sum over Rs. 4,000/ .
Thereupon the appellant deposited a further sum of Rs. 4,590/ on April 9,1959 and prayed for a final decree in his favour.
The trial court held on April 18, 1959 that the deposit was made beyond time and therefore directed that a final decree for foreclosure in favour of the respondent be drawn up.
The appellant then went in appeal to the District Judge.
The Additional District Judge who heard the appeal rejected the memorandum of appeal as insufficiently stamped The appellant then filed a revision before the High Court.
The High Court allowed the revision on July 22, 1961 and remanded the appeal to the Additional District Judge for decision on the merits.
On March 23, 1962, the Additional District Judge allowed the appeal holding on the basis of O.XXXIV, r. 8 that as the amount had been paid before the final decree was passed, it was within time.
Consequently the Additional District Judge ordered that a final decree be drawn up in favour of the appellant.
It may be noticed that it was also contended before the Additional District Judge that the amount deposited was short by Rs. 88/ 1/ .
The Additional District Judge pointed out that this was not made a ground of attack in the trial court.
In any case be held that the amount which had to be deposited was as required by the preliminary decree and that the same had certainly been deposited.
We may add that it is not in dispute between the ' parties that if the amount to be deposited is to be in accordance with the preliminary decree, the appellant has deposited that amount, rather more.
The shortage has occurred because for the period of stay the High Court had ordered the payment of an extra six per cent per annum interest and it is with respect to that interest that the shortage has occurred.
The respondent then went in second appeal to the High Court.
The High Court agreed with the Additional District Judge.
and held that in view of O.XXXIV r. 8(1) the deposit made on April 9, 1959 before the final decree was passed on April 18, 1959 was within time, even though the money might have been deposited 112 after the time fixed under O.XXXIV r.7.
But the High Court also took the view that the mortgagor appellant had to deposit the entire amount due on the date of the deposit and as there was a shortage of Rs. 88/1/ , the entire amount had not been deposited and in consequence no final decree could be passed in favour of the appellant.
In the result the High Court set aside the order of the Additional District Judge and restored the order of the trial court passing a decree for foreclosure in favour of the respondent.
Thereupon the appellant obtained special leave from this Court, and that is how the matter has come before us.
The only question raised on behalf of the appellant is that he had deposited the amount which was strictly due under the preliminary decree and something more.
The shortage was only on account of the sum due as a result of the stay order passed by the High Court by which he was required to pay six per cent per annum more as interest for the duration of the stay.
It is urged that this amount could not be taken into account in considering the question whether the appellant bad deposited ' the entire amount due under the preliminary decree.
We are of opinion that there_ is force in this contention and the appeal must succeed.
Under O.XXXIV, r. 8(1) the mortgagor can deposit all amounts due under O.XXXIV r. 7(1) before the final decree debarring him from all rights to redeem is passed.
Order XXXIV r. 7(1) lays down what a preliminary decree should contain and we are in the present case concerned with cls.
(b) and (c) thereof.
In this case the preliminary decree had declared the amount due upto a certain date towards principal and interest and had also provide for three per cent per annum interest on a certain sum from that date and had directed as required by cl.
(c) of O. XXXIV r. 7(1) that if the mortgagor plaintiff paid in court the amount found before a certain date a final decree in his favour would be passed.
The preliminary decree also laid down that if payment was not made within the time fixed a final decree for foreclosure in favour of the defendant mortgagee would be passed.
Now under O.XXXIV r. 7(1)(c)(i) and (ii) what the appellant had to deposit was the amount found under the preliminary decree and also "the amount adjudged due in respect of subsequent costs, charges, expenses and interests" It is not in dispute, as we have already indicated that the appellant paid the amount found due under the preliminary decree and also the subsequent interest as provided in the decree.
Only there was a shortage in the extra amount he had undertaken to pay as extra interest at the rate of six per cent per ' annum for the period of stay.
The question is whether this amount can be said to be within the words "the amount adjudged due in respect of subsequent costs, charges, expenses and interests".
We are of opinion that this extra amount which was to be paid on account of the undertaking of the appellant for the purpose of stay cannot come within the words "in respect of subsequent costs, charges, 113 expenses and interests".
It is not in dispute that the High Court dismissed the appeal of the appellant in 1958 and confirmed the preliminary decree and that the amount due on account of the undertaking to pay extra interest at the rate of six per cent per annum for the period of stay was not included by the High Court in the preliminary decree.
This amount arose out of an independent order of stay and though the appellant was bound to pay it in view of his undertaking, it was not made a part of the amount due under the preliminary decree.
Nor can it be said that it was due in respect of subsequent costs, charges, expenses and interests.
Besides, such subsequent costs, charges, expenses and interests have to be adjudged before the mortgagor is asked to deposit the amount and it is not in dispute that no adjudgement as to any subsequent costs, charges, expenses and interests was made.
So in order that a final decree may be passed in favour of the appellant, he had to carry out the terms of the preliminary decree and it is not in dispute that he had carried out the terms of that decree, and he had to pay nothing account of subsequent charges, costs, expenses and interests, for nothing was adjudged in respect of these.
Nor as we have said already can the amount due as extra, interest on the basis of the undertaking given by the appellant for the period of stay be considered to be of the nature of subsequent costs, charges, expenses and interests mentioned in O.XXXIV r. 7(1)(c)(i) and (ii).
It is however urged that on this view there would be no way to enforce the appellant 's undertaking to pay extra interest for the period of stay.
We do not think so.
It would in our opinion be in order for the court to insist before it passed the final decree that the appellant honours his undertaking.
But that is not to say that this amount due under an independent order of the High Court in connection with stay became part of the amount due under the preliminary decree or could be considered to be "subsequent costs.
charges, expenses and interests".
We may add that the shortage in question was made good by the appellant soon after the order of the Additional District Judge and long before the judgment of the High Court.
As we have come to the conclusion that this amount due on account of the undertaking given by the appellant in the matter of stay cannot be taken to be part of the amount due under the preliminary decree, it must be held that the appellant was entitled to a final decree in his favour.
We therefore allow the appeal, set aside the order of the High Court and restore the order of the Additional District Judge.
The respondent will be entitled to withdraw the amount deposited by the appellant including the amount deposited on April 21, 1962 on the conditions in that order.
In the circumstances however we pass no order as to costs throughout.
Appeal allowed.
| Where a fresh document is executed for the amount remaining due on account of principal and interest under a loan ad vanced prior document, and a suit is brought for recovery of the amount due under the later document with interest due thereunder, "the amount of loan mentioned in, or evidenced by, such document" for the purposes of section 7 of the Bihar Money Lenders Regulations and Transactions) Act, 1939, is the amount mentioned, or evidenced by, the later document and not that mentioned in the original document which was renewed; and the court can pass a decree for an amount of interest for the period preceding the institution of the suit, which together with any amount realised as interest after the date of the later document, is not greater than the amount of loan mentioned in the later document.
The maximum amount that can be so decreed is not the amount which together with the interest realised from the date of the original loan does not exceed the original loan.
Singheswar Singh and Other 's vs Nadni Prasad Singh and Others (A.I.R. 1940 Pat.
65), Lal Singh vs Ramnarain Ram and Others (,A.I.R 1942 Pat 138), Madho Prasad Singh vs Mu kutdheri Singh and Others , Deo Nandan Prosad vs Ram Prasad (I.L.R 23 Pat. 618), Ram Nandan Prasad Narain Singh vs Kulpati Shri Mahanth Goshwami Madhwanand Ramji ([1940] F.C.R. 1), Surendra Prasad Narain Singh vs Sri Gajadhar Prasad Sahu Trust Estate and Others ([1940] F.C.R. 39) referred to.
|
Civil Appeal No. 852 of 1968.
Appeal by Special Leave from the Judgment and Order dated the 9th August, 1967 of the Punjab & Haryana High Court in L.P. A. No. 199/67.
Naunit Lal and R. N. Sachthey for the Appellants.
Madan Bhatia for Respondent.
The Judgment of the Court was delivered by GUPTA, J.
The respondent Jiwan Singh who is a displaced person from Pakistan was allotted 55.80 standard acres of land in village Neza Dali Kalan in Sirsa Tehsil of Hissar District in lieu of the land left by 211 him in Pakistan.
The second appellant, Collector Surplus Area, Sirsa, in determining the surplus area under the Punjab Security of Land Tenures Act, 1953 (hereinafter referred to as the Act) left only 100 ordinary acres with the respondent as his permissible area and declared the rest of the land measuring 78.57 ordinary acres, equivalent to 25.99 standard acres, as surplus.
Permissible Area as defined in sec.
2(3) of the Act is as follows: "Permissible area" in relation to a land owner or a tenant, means thirty standard acres and where such thirty standard acres on being converted into ordinary acres exceed sixty acres, such sixty acres: Provided that (i) no area under an orchard at the commencement of this Act, shall be taken into account in computing the permissible area: (ii) for a displaced person (a) who has been allotted land in excess of fifty standard acres, the permissible area shall be fifty standard acres or one hundred ordinary acres, as the case may be.
(b) who has been allotted land in excess of thirty standard acres, but less than fifty standard acres, the permissible area shall be equal to his allotted area.
(c) who has been allotted land less than thirty standard acres, the permissible area shall be thirty standard acres, including any other land or part thereof, if any, that he owns in addition.
" There is an explanation to this definition which is not relevant for the present purpose.
Surplus Area would be the area in excess of the permissible area.
According to the respondent the surplus area in his case cannot exceed 5.80 standard acres in view of the proviso (ii) (a) to sec.
2(3), and being aggrieved by the order of the Collector preferred an appeal to the Commissioner.
The Commissioner remanded the case to the Collector for a fresh determination of the respondent 's surplus area observing that in the case of a displaced person if the allotment was in standard acres, 50 standard acres would be the permissible area and if the allotment was in ordinary acres the permissible area would be 100 ordinary acres.
On remand the Collector upheld his own previous order and the appeal taken by the respondent from this order was dismissed by the Commissioner.
The respondent filed a revision petition before the Financial Commissioner, Punjab, who also upheld the order of the Collector and dismissed the petition.
The respondent thereafter filed a writ petition in Punjab and Haryana High Court which was allowed.
The learned Judge who heard the writ petition held following a full Bench decision of the same High Court, Khan Chand vs State of Punjab, (1) that it was "not legitimate for the authority to treat as surplus 212 area anything more than 5.80 standard acres of the petitioner 's land".
The Letters Patent appeal preferred against the decision of the learned single Judge by the State of Haryana and the Collector Surplus Area, Sirsa, was dismissed.
The correctness of the High Court 's decision is challenged before us in this appeal by special leave.
The case turns on the true meaning of proviso (ii) (a) to sec.
Counsel for the appellants submits that this provision means that the permissible area in the case of displaced persons who were allotted land in excess of 50 standard acres can be determined either in terms of standard acres or in terms of ordinary acres, as the authority concerned chooses.
Counsel contends that the words "as the case may be" refer to the discretion of the authority in this matter.
We do not find it possible to accept this contention.
There is no specific provision in the Act giving a discretion to the Collector or any other authority under the Act to determine the permissible area for a displaced person was in standard acres or in ordinary acres.
On a plain reading proviso (ii) (a) seems to indicate that where the land allotted to a displaced person was in standard acres and its area exceeded 50 standard acres, the permissible area would be 50 standard acres, and where the land was allotted not in standard acres the permissible area would be 100 ordinary acres.
The nature of the original allotment whether it was in standard acres or in ordinary acres seems to be the determining factor.
The Full Bench decision of the Punjab and Haryana High Court, Khan Chand vs State of Punjab (supra), on which the Judgment under appeal relies, reads proviso (ii) (a) to mean: "For a displaced person who has been allotted land in excess of 50 standard acres or in excess of 100 ordinary acres the permissible area shall be 50 standard acres or 100 ordinary acres, as the case may be.
" We agree that this is the correct meaning to be given to this provisions; it is only construed this way that the words "as the case may be" acquire a significance, otherwise they would be mere surplusage.
Clauses (b) and (c) of proviso (ii) lend assurance to this construction.
Clauses (b) deals with the case of a displaced person who has been allotted land in excess of thirty standard acres but less than fifty standard acres and provides that the permissible and in his case shall be equal to his allotted area.
Clause (c) fixes the permissible area for a displaced person who has been allotted land less than thirty standard acres providing that it shall be thirty standard acres including any other land or part thereof, if any, that he owns in addition.
Clauses (b) and (c) both deal with cases where the original allotment was in standard acres, and there is nothing in either of them sanctioning the conversion of the permissible area in standard acres into ordinary acres, though perhaps any other land which a displaced person whose case in covered by clause (c) might own in addition to the 30 standard acres allotted to him may be in ordinary acres requiring conversion of such land into standard acres to determine the permissible area in standard acres in his case as provided in clause (c).
But this does not mean that the permissible area in cases covered by clauses (b) and (c) can also be fixed 213 in ordinary acres.
Proviso (ii) to sec.
2(3) appears to group displaced persons into two categories, those who were allotted land in standard acres and those whose allotment was in ordinary acres.
Clause (a) deals with both these categories and limits the permissible area of those who were allotted land in standard acres at 50 standard acres and those who were allotted land in ordinary acres at 100 ordinary acres; clauses (b) and (c) deal only with those who were allotted land in standard acres.
Those whose allotment was in ordinary acres, their permissible area is fixed at 100 such acres, but those who were allotted land in standard acres, in their case the permissible area varies as provided in clauses (a), (b) and (c) though the measure in each case would be in standard acres.
This appears to be the scheme.
In defining "Permissible area" sec.
2(3) of the Act provides differently for land owners and tenants covered by the substantive part of the definition, and displaced persons mentioned in proviso (ii), and also makes a distinction between displaced persons inter se as provided in the different clauses of the proviso.
In the course of argument questions were raised about the logical basis for such differentiation, but the policy of the Act being clear we have to interpret the provision as we find it; if there is any anomaly in the policy itself, it is for the legislature to remove that defect.
In this case the land allotted to the respondent being admittedly 55.80 standard acres, the permissible area for him would be 50 standard acres under clause (a) and that being so, the High Court was right in holding that it was not legitimate for the authority to treat as surplus area anything more than 5.80 standard acres.
The appeal is accordingly dismissed but in the circumstances of the case without any order as to costs.
S.R. Appeal dismissed.
| The appellant 's tender for mining rights for mica was accepted in 1951.
The appellant deposited the premium demanded and took possession of the land.
The lease was for a period of twenty years but no lease was executed.
In 1967, the State Government directed that the appellant should vacate the land within a month from the date of the receipt of their order.
The appellant challenged the order under article 226.
but the High Court dismissed the petition.
Allowing the appeal to this Court, ^ HELD: (1) In view of the facts, that the period of the purported lease had already expired, and no proper lease had been executed, there was no question of issuing a writ for granting the lease, or the appellant exercising an option to renew the lease.
[224H] (2) The appellant, however, was entitled to a refund of the illegally realised premium deducting the sum received on account of compensation for the unexpired period.
The State Government was under a legal obligation to act in accordance with the statutory rules applicable, namely, the Mineral Concession Rules, 1949, made in exercise of the power conferred under section 5 of the Mines and Minerals (Regulation and Development) Act, 1948 when granting a lease.
It could not impose terms and conditions according to its own whims ignoring or disregarding statutory rules which are binding on it, and could not exercise a power unknown to the rules.
There is no provision in the rules authorising the realisation of premium.
Rule 41, providing for conditions of the lease, specifically mentions royalty, dead rent and surface rent but not premium.
Under r. 41(3) a mining lease may contain any other special conditions subject to the prior approval of the Central Government; but no such prior approval was given in the present case, for the realisation of the premium.
[225A F]
|
Civil Appeal No. 2386 of 1984.
Appeal by Special leave from the Judgment and Order dated the 2nd March, 1983 of the Delhi High Court in Writ Petition No. 314 of 1983.
Miss Mamta Sarin for the Appellant.
Pawan Kumar Jain and K. K. Gupta, for Respondent No. 2.
J. Appellant Rajinder Kumar Kindra was inducted as a peon by M/s Raymond Woolen Mills Ltd. ( 'employer ' for short).
In 1972 he was promoted as a salesman and at the relevant time he was serving at the Raymond 's retail showroom in Karol Bagh, New Delhi.
One Shri R.S. Negi was the Manager cum Cashier of the Karol Bagh Show room of the employer under whom the appellant was working.
He was served with a charge sheet dated December 11, 1975 which reads as under: "That you, Shri Rajinder Kindra, is hereby informed that you, while working as a salesman at Raymonds ' Retail Show room, 2397/1, Hardhian Singh Road, New Delhi 5 870 have misappropriated cash and funds from the amounts of Raymonds ' Woolen Mills Ltd., to the extent of Rs. 32,196/88 or a part thereof during the period 10.6.75 to 17.10.75 by manipulating false accounts, submitted bogus cheques into the Mills Account or by taking cash from the chest of the Retail Depot along with Shri R.S. Negi, Manager cum Cashier of Raymonds ' Retail Show room, 2397/1, Hardhian Singh Road, Karol Bagh, New Delhi.
That you Shri Rajinder Kumar Kindra while acting as a salesman aided, abetted, connived and conspired with the Manager cum Cashier Shri R.S. Negi of the said show room and issued various cheques in the amount of Rs. 15,027/75 from your cheque book with the ulterior motive and design to defraud the Company of the said amount by submitting these bogus cheques into the Mills ' Account and thereby causing unlawful gain to yourself and causing unlawful loss to the Company in collusion with Manager cum Cashier Shri R.S. Negi.
That you Shri Rajinder Kumar Kindra has willfuly/ negligently permitted the user of the cheques in order to defraud the company of the amount of Rs. 15,027/75 in conspiracy with Shri R.S. Negi and you have been habitually negligent and willfully disobedient in the performance of your duties as salesman.
" One Shri V.K. Soni was appointed as Enquiry Officer to enquire into the aforementioned charges.
In the course of enquiry, the appellant denied the charges levelled against him.
He stated that the cash used to remain with Manager cum Cashier Shri R.S. Negi and it is for him to explain about some cheques drawn and the statement of account submitted by him.
He denied himself having issued any cheque.
He denied that he was negligent in performance of his duty.
The employer examined Shri O.D. Sharma, Shri G.L. Kapur, Shri V.K. Malhotra and Shri Nandan Singh as witnesses for the management.
The appellant gave evidence on his behalf and he was cross examined on behalf of the employer.
He also examined one Shri A.K. Godbole as his witness.
The Enquiry Officer Shri V.K. Soni submitted his report dated June 22, 1976.
In the report, he Inter alia held that the appellant had been guilty of gross negligence and misconduct in the 871 discharge of his duties and he was 'actively responsible for committing the fraud on the Company with Shri R.S. Negi to the extent of Rs. 15027.75 and all the charges as contained in the charge sheet against the appellant were held proved.
The employer accepted the report and dismissed the appellant from service with effect from August 25, 1916.
The appellant raised an industrial dispute inter alia contending that the findings of the enquiry officer were perverse and there was no evidence in respect of either the charge of negligence or embezzlement of funds and that the dismissal from service was wholly unjustified.
The employer and the appellant by a written agreement agreed to refer the existing industrial dispute arising out of the dismissal from service of the appellant to an arbitrator, as provided by Sec. 10 (A) (1) of the (Act for short).
The first respondent Delhi Administration pursuant to aforementioned written agreement referred the following dispute to Shri G. C. Jain, Presiding Officer of the Labour Court, Delhi who was selected by the parties to be the arbitrator.
It reads as under: "(1) Whether the services of Shri R.K. Kindra were terminated illegally and unjustifiably ? (2) Whether the enquiry proceedings were initiated by the principles of natural justice and equity ? (3) To what relief if any, is the worker entitled ?" The employer contended before the arbitrator that the enquiry held by him is fair and just and full opportunity was afforded to the appellant to participate in the enquiry, to cross examine witnesses produced by the management and to lead his evidence.
It was further contended that the conclusions reached by the enquiry officer and findings recorded by him are borne out by the evidence and permissible inferences drawn from the evidence and they are such that any reasonable person would reach on the evidence the conclusion of guilt of the appellant.
It was submitted that the arbitrator cannot sit in appeal over the findings of the enquiry officer.
It was further contended that at any rate there is satisfactory evidence to show that the appellant negligently kept his cheque book in relation to his private banking account in such a manner as to be accessible to any one to misuse the same and this was done intentionally, so as to facilitate the commission of fraud 872 presumably by Manager cum Cashier Shri R.S. Negi.
In the ultimate analyses this was the only misconduct attributed to the present appellant.
The arbitrator held that none of the witnesses of the employer has stated that the appellant misappropriated any amount of the Company or he had manipulated false accounts or had submitted bogus cheques in the account of the employer or had taken away any amount from the chest of the retail depot or had abetted, aided, conspired or connived with Shri R.S. Negi or issued any cheque to defraud the Company.
Thus the employer failed to lead any evidence before the arbitrator to impute any misconduct to the appellant as alleged in the charge sheet.
The arbitrator concluded that there was no evidence in support of charge No. 1 and 2 and there was no evidence to prove Charge No. 3.
The conclusion reached by the arbitrator may be extracted: "In conclusion, I hold that the findings of the Inquiry Officer were based on no legal evidence and were, therefore, perverse.
The enquiry is, therefore, vitiated.
I hold accordingly.
" On these findings nothing remains save and except the consequential order that the dismissal from service of the appellant must be quashed and set aside and the appellant be reinstated in service with all consequential benefits unless of course the employer had sought an opportunity to lead evidence before the arbitrator to substantiate the charges.
No such opportunity was sought and therefore as held by this court in Shanker Chakraborte vs Britannia Biscuits Co. Ltd., nothing further was required to be done and the award reinstating the appellant should have followed.
Unfortunately making of this consequential order was postponed.
The finding of the arbitrator is dated May 24, 1976.
It appears that soon thereafter Shri G.C. Jain arbitrator was elevated as a Judge of the Delhi High Court and he consequently before taking his oath did not make the final order which was merely a formal part of his duties.
That unfortunately led to a second reference.
This time reference was made under Sec.
10 (A) (1) to Shri N.L. Kakkar, retired Additional District and Sessions Judge, Delhi as an arbitrator.
The same three points were referred to Shri Kakkar for his decision.
Shri Kakkar after narrating the evidence that was led before the enquiry officer summed up his findings as under: 873 (a) "That the services of Shri R.K. Kindra, were not terminate illegally or unjustifiably but on account of charges having been successfully proved against him, especially the third charges that is with regard to willfully/negligently permit the user of cheques in order to defraud the company in conspiracy with Shri R.S. Negi and negligence in the performance of his duties as a salesman.
(b) That the enquiry proceedings were not vitiated by the principles of natural justice and equity as full opportunity was given to the workman and no prejudice was caused to him by any act of the management, although he was given full opportunity to lead his evidence and to cross examine the witnesses of the management and particularly there was no enmity between the work man and the enquiry officer and the dismissal as such was not wrongful.
(c) That the workman is not entitled to any relief, and is not entitled to reinstatement with back wages and continuity of service since he has been gainfully employed with Shri Tara Chand at his coal depot ever since his dismissal.
The reference by way of award is answered accordingly.
" The appellant filed a writ petition under article 226 in the High Court of Delhi questioning the correctness, validity and the legality of the award made by Shri Kakkar.
A Division Bench of the High Court dismissed the matter in limine, observing that the matter depends upon assessment of evidence and the Court cannot reappraise the same under article 226 of the Constitution.
Hence this appeal by special leave.
Let it be made absolutely clear at the outset that the only misconduct imputed to the appellant was that he was negligent in keeping his cheque book in relation to his own private account in such a manner that it enabled Shri R.S. Negi, Manager cum Cashier of the Branch in which the appellant was a salesman at the relevant time to misuse the cheque forms and thereby defraud the employer.
Mr. P.K. Jain learned counsel for employer specifically 874 conceded that the only misconduct alleged against the appellant consists of his negligence in keeping his own cheque book by which he could operate his own private account in such manner as to enable someone so minded to misuse the cheque forms.
He was repeatedly asked what law, rule, regulation or a standing order, if there be any, which requires an employee to keep his own private cheque book under lock and key or safe custody so that no one except himself can have access to it and we waited for the answer in vain.
It was conceded that the appellant is not guilty of any embezzlement or misappropriation of funds of the employer though a grandiose albeit flamboyant charge was framed that he misappropriated cash and funds from the accounts of the employer to the extent of Rs. 32,196.88 p. or part thereof during the period June 10, 1975 to October 10, 1975 by manipulating false accounts, submitting bogus cheques into the employer 's account or by taking cash from the chest of the branch alongwith Shri R.S. Negi, Manager cum Cashier of the Branch.
There is not a tittle of evidence in support of the allegation of misappropriation or embezzlement of funds or manipulation of accounts by the appellant.
This was in terms conceded.
The allegation, to be specific, of the employer is that Shri R.S. Negi, Manager cum Cashier misused the cheque forms from the cheque book of the appellant in respect of his private account and embezzled funds of the employer.
It was not the case of the employer that applicant drew cheques or embezzled cash from the chest.
Another allegation was that the appellant abetted, aided, connived at or conspired with Manager cum Cashier Shri R.S. Negi, in charge of the branch and issued various cheques in the amount of Rs. 15,027.75 p. drawn on forms of cheques contained in the cheque book of the appellant issued to him for operating his own private account with ulterior motive of defrauding the employer by submitting bogus cheques into the account of the employer and thereby caused wrongful gain to himself and wrongful loss to the employer, in collusion with Shri R.S. Negi.
Again it was conceded that there is absolutely not an iota of evidence which could indicate that the appellant issued any a cheques himself or that he aided or abetted someone to issue the r bogus cheques.
These were the allegations in charges Nos. 1 and 2 and the finding by Mr. Kakkar that they are proved can be styled as perverse on the admission of the employer himself because not a single witness in the course of domestic enquiry so stated.
Mr. Jain, learned counsel for the respondent could not point out one single sentence of evidence in support of these two charges.
875 Mr. P.K. Jain urged that the third charge which was to the effect that the appellant permitted the use of the cheques from the cheque book issued to him by the Bank in which he was maintaining his own private account to defraud the employer to the tune of Rs. 15,027.75 p. in conspiracy with Shri R.S. Negi and that he was negligent and was guilty of wilful disobedience ill performance of his duties as a salesman was substantiated.
It is a composite charge.
The first limb of the charge refers to negligence in handling his private cheque book so that in conspiracy with Shri R.S. Negi cheque forms contained in the cheque book issued to the appellant for operating his private account were used by Shri R.S. Negi to defraud the employer.
Rejecting the language improperly used the charge is that the appellant kept his private cheque book unattended or not in safe custody so that Mr. R.S. Negi misused the cheque forms from this cheque book.
In support of this allegation, the evidence is that the appellant did not keep his cheque book under lock and key or in safe custody so that no one else except himself will have access to the same We have not been able to understand apart from appreciating this charge.
When a cheque book is issued to a holder of an account by the Bank, there is no law which requires him to keep his cheque book in safe custody.
He may keep it in any manner and if in the process some one misuses the cheque and withdraws money from the account of the holder, the bank will be able to disown its liability pleading negligence of the holder of the account.
A man can keep his cheque book anywhere he likes and even if it is not in safe custody he does so at his own peril.
In the event of misuse as a result of negligent handling of the cheque book, the Bank will be able to disown its liability if someone by misuse of the forms of cheques withdraws any amount from the account in respect of which the cheque book is issued.
That is not the case here.
The accusation is that the appellant kept his cheque book in such a manner as to be accessible to any one and that some one unscrupulously removed the forms of cheques from the cheque book of the appellant and used them to withdraw money from the appellant 's account but from the employer 's account.
Some one so minded to forge cheque and to withdraw money from some one 's account may use anybody 's cheque book.
In such a situation, the owner of the cheque book unless he has participated in the conspiracy in any manner for facilitating withdrawal of the amount cannot be attributed any misconduct for keeping his cheque book unattended or not in safe custody.
There fore first limb of the charge No. 3 can be rejected as per se untenable without anything more.
876 The second limb of the third charge is that the appellant was negligent and guilty of wilful disobedience in performance of his duties as a salesman.
Not a single witness has spoken of any negligence on the part of the appellant in performance of his duties.
There is not the remotest suggestion in the evidence to that effect.
Not a single witness has spoken about any wilful disobedience in performance of duty.
Some flamboyant charges appears to have been cooked up by the employer without any regard for truth or without any regard for responsibility ill making such heinous allegation and levelling serious accusation without an iota of evidence in support of it We repeatedly asked Mr. P.K. Jain, learned counsel for the employer to show from the evidence led before the inquiry officer which order of the employer was disobeyed much less unwilfully by the appellant, as also acts of omission and commission in performance of duty to spell out negligence.
The only reply we received was that the appellant kept his cheque book unattended.
Keeping one 's own cheque book unattended is no part of performance of duties of the employee and there was no order by the employer how appellant should handle his private cheque book.
Let is be made distinctly clear that this Court in this appeal is not re appreciating evidence.
Mr. G.C. Jain, the first Arbitrator who completed a major part of the enquiry in the reference made to him under sec.
10 (A) (1) after meticulously examining the evidence led on behalf of the employer in the enquiry proceedings concluded as under: "22.
I have carefully examined this entire evidence.
None of the witnesses has stated that Shri Kindra had misappropriated any amount of the Company or he had manipulated false accounts, or had submitted bogus cheques in the mills account and had taken away any amount from the chest of the retail depot or had abetted, aided conspired or connived with Shri R.S. Negi or issued any cheque to defraud the company.
What PW 1 to PW 3 said is that Shri Negi used five cheques from the cheque book of this workman to defraud the company.
There is no evidence to show any fraud on the part of Shri Kindra or to connect him with misappropriation by Shri Negi.
The mere fact that his cheques were used is not sufficient to hold that he had entered into conspiracy with Shri Negi or that he wilfully or negligently permitted the use of the cheques in order to defraud the company to the amount of Rs. 877 15,027.75 p.
Or part thereof Management 's own witness have stated that these cheques were utilised either with the connivance of Shri R.K. Kindra or because of his negligence in respect of the same.
None of them has stated with certainty that Shri Kindra was a party to this misappropriation.
No doubt the evidence shows that he was not very careful in keeping his cheque book under lock and key.
But this circumstance is not sufficient to hold that he had entered into any conspiracy with Shri R.S. Negi or was a party to the misappropriation.
Thus there was no evidence in support of charge No. 1 and 2.
There is no evidence that Shri Kindra wilfully permitted the user of his cheque book.
There is no evidence that his negligence in keeping the cheque book in a drawer without a lock was with a view to defraud the company.
There is no evidence that he was habitually negligent or willfully disobedient in the discharge of his duties.
The manner of keeping his personal cheque book was not a part of his duties as salesman.
Thus there was no evidence to prove charge No. 3 as well." He further concluded in paragraph 23 of his award that the findings of the enquiry officer were based on no legal evidence and were therefore perverse and the enquiry was vitiated.
The employer never sought an opportunity to lead evidence before arbitrator to substantiate the charges.
In fact on the conclusion recorded by Mr. G.C. Jain he should have made a consequential order of setting aside the order of dismissal and directing reinstatement with back wages but he unnecessarily procrastinated and then before he could attend to the remainder of the work, he was elevated to the bench of the Delhi High Court leaving the appellant to face the music of a fresh enquiry and a complete sommer sault by the new arbitrator.
A fresh reference was made to Sh.
N.L. Kakkar, Mr. P.K. Jain, learned counsel for the employer/contended that this Court is only concerned with the award of Mr. Kakkar and the findings recorded by Mr. G.C. Jain are not relevant.
We have serious reservations about this submission, but it is not necessary in this case to decide that point.
We would now confine ourselves to the award of Shri Kakkar.
In Paragraph 1 to 5, the history of the dispute and the charges 878 framed against the appellant have been set out by Mr. Kakkar.
Paragraph 6 deals with what the enquiry officer did.
Paragraph 7 reproduces the contentions on behalf of the appellant.
Paragraph 8 summarises the contentions on behalf of the employer.
Paragraphs 9, 10 and 11 deal with the manner in which the enquiry was held.
Paragraph 12 refers to the written arguments submitted on behalf of the employer.
In the concluding paragraph 13, Mr. Kakkar states that the circumstances of the case and the evidence produced by the parties before the enquiry officer as well as in the present proceedings and on the consideration of the documents filed and proved, it is held as therein stated.
He then recorded his ipse dixit not discussing the evidence or the total absence of it.
It may be pointed out that in the course of the enquiry held against the appellant by Mr. U.K. Soni, enquiry officer, the employer had examined 4 witnesses namely Shri O.D. Sharma, Shri G.L. Kapur, Shri V.K. Malhotra and Shri Nandan Singh.
No witness was examined before Shri G.C. Jain and the employer relied upon the report of the enquiry officer and the evidence of the four witnesses recorded by the enquiry officer.
When the matter came up before Mr. Kakkar, the employer had not examined any witness but had submitted the report of the enquiry officer and the evidence of the aforementioned witnesses.
Therefore when it was contended before the arbitrator that even accepting the evidence of the four witnesses, as if unchallenged, no reasonable man could ever come to the conclusion that the misconduct imputed to the appellant in charges No. 1, 2 and 3 could be said to be proved, it was incumbent upon him to examine the evidence.
We invited Mr. P.K. Jain to point out to us which evidence is being relied upon in support of the charge of embezzlement and the charge relating to alleged misappropriation of funds.
He could not lay his hand on any piece of evidence.
Conceding that there is no evidence in support of the charge of embezzlement and misappropriation of funds simultaneously conceding that charges No. 1 and 2 are not proved, he repeatedly emphasised that the only conducts of which appellant is guilty is that the appellant had so deliberately left his cheque book unattended as to be accessible to anyone who may misuse it and this constitutes negligence in performance of duty.
Even at the cost of the repetition, we must point out that keeping one 's private cheque book in any manner is no par.
Of the performance of the duty of the employee.
To say the least the charge apart from being frivolous is ludicrous and could not have even framed.
Even if the allegation in the charge is left unquestioned it does not constitute misconduct.
The employer could not have framed such charges without any evidence in support of them yet 879 Mr. Kakkar holds them proved.
Therefore Mr. Kakkar accepted the findings of the enquiry officer which were per se perverse.
Not only Mr. Kakkar did not apply his mind to the submission of the appellant that the findings were perverse but he merely recorded his ipse dixit without any manner analysing or examining or applying his mind to the evidence only to find out whether there was any evidence to substantiate the charge and whether any reasonable man would arrive at the conclusion which the enquiry officer had reached.
The award of Mr. Kakkar, apart from the fact that it is based on no legal evidence suffers from the additional infirmity of total non application of mind.
Any finding of misconduct based on total absence of evidence must fail.
Mr. Jain contended that once Mr. Kakkar came to the conclusion that the appellant was given full opportunity to participate in the domestic enquiry neither High Court under article 226 nor this Court under article 136 can sit in appeal over the findings of the enquiry officer and reappraise the evidence.
We have not at all attempted to re appreciate the evidence though in exercise of the jurisdiction conferred by sec.
11 A of the both arbitrator and this court can reappraise the evidence led in the domestic enquiry and satisfy itself whether the evidence led by the employer established misconduct against the workman.
It is too late in the day to contend that the arbitrator has only the power to decided whether the conclusions reached by the enquiry officer were plausible one deducible from the evidence led in the enquiry and not to re appreciate the evidence itself and to reach the conclusion whether the misconduct alleged against the workman has been established or not.
This court in Workmen of M/s Firestone Tyre Rubber Company of India (P) Ltd. vs Management & Others, held that since the introduction of sec.
11 A in the , the Industrial tribunal is now equipped with the powers to reappraise the evidence in the domestic enquiry and satisfy itself whether the said evidence relied upon by the employer establishes the misconduct alleged against the workman.
It is equally well settled that the arbitrator appointed under Sec.
10 A is comprehended in sec.
This court in Gujarat Steel Tubes Ltd. vs Gujarat Steel Tubes Mazdoor Sabha, held that an arbitrator appointed under sec.
10 A of the is comprehended in sec.
11 A and the arbitratal reference apart from sec.
11 A is plenery in scope.
Therefore it would be within the jurisdiction 880 both of the arbitrator as well as this court to re appreciate the evidence though it is not necessary to do so in this case.
It is thus well settled that where the findings of misconduct are based on no legal evidence and the conclusion is one to which no reasonable man would come, the arbitrator appointed under sec.
10 A or this court in appeal under article 136 can reject such findings as perverse.
Holding that the findings are perverse does not constitute reappraisal of evidence, though we would have been perfectly justified in exercise of Powers conferred by sec.
11 A to do so.
It is equally well settled that where a quasi judicial tribunal or arbitrator records findings based on no legal evidence and the findings are either his ipse dixit or based on conjectures and surmises, the enquiry suffers from the additional infirmity of non application of mind and stands vitiated.
The industrial tribunal or the arbitrator or a quasi judicial authority can reject not only such findings but also the conclusion based on no legal evidence or if it is merely based on surmises and conjectures unrelated to evidence on the ground that they disclose total non application of mind.
Viewed from either angle, the conclusion of the enquiry officer as well as of the arbitrator Mr. Kakkar are wholly perverse and hence unsustainable.
The High Court, in our opinion, was in clearly error in declining to examine the contention that the findings were perverse on the short, specious and wholly untenable ground that the matter depends on appraisal of evidence.
Between appraisal of evidence and total lack of evidence there is an appreciable difference which could never be lost sight of and the High Court ought not to have short circuited the writ petition.
If there is absolutely no evidence in support or the only allegation of misconduct namely negligence in not keeping one 's private cheque book in safe custody, the conclusion is not only not a plausible one but it is wholly perverse and we are in complete agreement with findings recorded Mr. G.C. Jain that the findings of enquiry officer were perverse and the enquiry was wholly vitiated.
Where the order of dismissal is sought to be sustained on a finding in the domestic enquiry which is shown to be perverse and the enquiry is vitiated as suffering from non application of mind the only course open to us is to set it aside and consequently relief of reinstatement must be granted and nothing was pointed to us why we should not grant the same.
881 It was next contended on behalf of the appellant that reinstatement with full back wages be awarded to him.
Mr. P.K. Jain, learned counsel for the employer countered urging that there is evidence to show that the appellant was gainfully employed since the termination of service and therefore he was not entitled to back wages.
In support of this submission Mr. Jain pointed out that the appellant in his cross examination has admitted that during his forced absence from employment since the date of termination of his service, he was maintaining his family by helping his father in law Tara Chand who owns a coal depot, and that he and the members of his family lived with his father in law and that he had no alternative source of maintenance.
If this is gainful employment, the employer can contend that the dismissed employee in order to keep his body and soul, together had taken to begging and that would as well be a gainful employment.
The gross perversity with which the employer had approached this case has left us stunned.
If the employer after an utterly unsustainable termination order of service wants to deny back wages on the ground that the appellant and the members of his family were staying with the father in law of the appellant as there was no alternative source of maintenance and during this period appellant was helping his father in law Tara Chand who had a coal depot, it cannot be said that the appellant was gainfully employed.
This was the only evidence in support of the submission that during his forced absence from service he was gainfully employed.
This cannot be said to be gainful employment E so as to reject the claim for back wages.
There is no evidence on the record to show that the appellant was gainfully employed during the period of his absence from service.
Therefore, the appellant would be entitled to full back wages and all consequential benefits.
Accordingly, the appeal is allowed and the award of the arbitrator Shri Kakkar is set aside and the appellant is re instated in service with full back wages and consequential benefits to which he would have been entitled had he not been unlawfully thrown out from service, and the costs of this appeal quantified at Rs. 3,000.
The back wages payable to the appellant and the costs awarded herein shall be paid to him within 2 months from today.
The appellant shall be physically reinstated in service within a week from today.
The appellant shall be entitled to all the consequential benefits f his continuous service.
H.S.K. Appeal allowed.
| The appellant was employed in the service of the former Indian State of Hyderabad prior to the coming into force of the Constitution of India.
On the coming into force of the Constitution of India, the said State became a part of the territory of India as a Part State and the Appellant continued in the service of that State, till he retired from service on January 21, 1956.
The appellant claimed that he was entitled to be paid the salary of a High Court Judge from October 1, 1947 and also claimed that he was entitled to receive a pension of Rs. 1,000 a month in the Government of India currency being the maximum pension admissible under the rules.
Both the aforesaid claims were negatived by the Government.
The Appellant thereupon filed a writ petition in the High Court against the Respondent State of Andhra Pradesh, which was the principal successor State to the erstwhile State, which was contested under Regulation 6 of the Hyderabad Civil Service Regulations which were applicable in the case of the Appellant and that claim to pension was to be regulated by the rules in force at the time when the Government servant retired from the service of the Government.
Under clause (b) of Regulation 313, the maximum pension ordinarily admissible for superior service to which the Appellant belonged was to be Osmania Sikka Rs. 1,000 a month.
The Hyderabad Civil Service Regulations were replaced with effect from October 1, 1954 by the Hyderabad Civil Services Rules and under clause (b) of Rule 299 (which later became clause (b) of sub rule (1) of Rule 299) the maximum pension ordinarily admissible for superior service was to be Rs. 1,000 a month, 931 During the pendency of the writ petition, the Government by a Notification dated February 3,1971 amended clause (b) of sub rule (1) of Rule 299, with retrospective effect from October 1, 1954.
The expression 'Rs. 1,000 a month in the said clause (b) was substituted by the expression 'Rs 857.15 a month".
This amendment was made in exercise of the powers conferred by the proviso to Article 309 read with Article 313 of the Constitution of India.
The Single Judge who heard the Appellant 's writ petition rejected the claim made by the Appellant with respect to salary on the ground that the said claim had been negatived by the Government as far back as 1955 and merely by making representations to the Government he could not keep the said claim alive.
He however held that in view of the judgment of this Court in Deokinandan Prasad vs State of Bihar and Others [1971] Supp.
S.C.R 634 the right to receive pension was property and was a fundamental right and that it had accrued to the Appellant on the date when he retired and could not be affected by a rule made subsequently under the proviso to Article 309, and allowed the writ petition to the extent that the Appellant was entitled to get his future pension at the rate of Rs. 1,000 a month in the Government of India currency from the date of filing of the said writ petition and arrears of pension at the same rate for a period of three years prior to the filing of the said writ petition.
The Respondent State filed a Letters Patent Appeal, and the Division Bench held that this Court in Deokinandan Prasad 's case did not hold that a pensioner was entitled to any pension that he demanded but all that was done in the said case was to direct the State to consider properly the claim of the pensioner for payment of pension according to law, and relying upon its earlier decisions in State of Andhra Pradesh vs Ahmed Hussain Khan and State of Andhra Pradesh vs section Gopalan upholding the validity of the amendment made in clause (b) of Rule 299 (1) by the Notification dated February 3, 1971, allowed the appeal and dismissed the writ petition of the appellant.
Allowing the Appeal to this Court, ^ HELD: The relevance placed by the Division Bench upon its earlier decision in the two writ appeals (Ahmed Hussain Khan and section Gopalan) was misconceived.
The two appeals arose out of separate writ petitions filed by two Government servants who had joined the service of the former Indian State of Hyderabad and retired after the States Reorganization Act, 1956 had come into force.
This Court allowed the two Appeals and reversed the said judgment of the Division Bench, held that the letter dated April 28, 1973 from the Joint Secretary to the Government of India, Cabinet Secretariat did not amount to a previous approval granted by the Central Government to the amendment made by the Notification dated February 3, 1971 to clause (b) of Rule 299 (1) and that, the Notification was invalid and inoperative so far as it concerned persons referred to in sub sections (1) and (2) of Section 115 of the States Reorganization Act, 1956.
[936D G] In the instant case, the Appellant had retired prior to the appointed day, November 1, 1956.
He therefore did not fall under either sub section (1) or 932 sub section (2) of section 115 and the proviso to sub section (7) of that section had no application to him.
The amendment to the Rules, so far as he was concerned, did not, therefore, require any previous approval of the Central Government even though thereby the conditions of the service were being varied to his disadvantage.
[937F G] 2.
Pension being a fundamental right, it could only be taken away or curtailed in the manner provided in the Constitution, [938E] In the instant case, the fundamental right to receive pension according to the rules in force accrued to the Appellant when he retired from service.
By making a retrospective amendment to the said Rule 299 (1) (b) more than fifteen years after that right had accrued to him, what was done was to take away the Appellant 's right to receive pension according to the rules in force at the date of his retirement or in any event to curtail and abridge that right.
To that extent, the said amendment was void.
[938H; 939A] 3.
The Appellant was entitled to succeed in view of the judgment of this Court in Deokinandan Prasad 's case.
The Division Bench of the High Court has misunderstood the ratio of that decision.
It was held in that case that pension is not a bounty payable at the sweet will and pleasure of the Government but is a right vesting in a Government servant and was property under clause (1) of Article 31 of the Constitution and the State had no power to with hold the same by a mere executive order.
It was also held that this right was also property under sub clause (f) of clause (1) of Article 19 of the Constitution and was not saved by clause (5) of that Article, and that this right of the Government servant to receive pension could not be curtailed or taken away, by the State by an executive order.
[937H; 938A D] 4.
The fact that sub clause (f) of clause (1) of Article 19 and Article 31 have been omitted from the Constitution by the Constitution (Forty fourth Amendment Act,) 1978 with effect from June 20, 1979 was immaterial because on the date when the said Notification was issued, these provisions were part of the Constitution.
[939B C] 5, The Supreme Court reversed and set aside the Judgment of the Division Bench of the Andhra Pradesh High Court and restored the order passed by the Single Judge of that High Court.
The Supreme Court directed the State of Andhra Pradesh to pay to the Appellant the amounts due to him according to the Judgment of the Single Judge of the High Court within one month and pay to him pension in future at the rate of Rs. 1000 per month in the Government of India currency.
[939D E]
|
ppeal No. 150 of 1964.
Appeal from the judgment and order dated March 22, 1960, of the Assam High Court in Income tax Reference No. 7 of 1959.
N.D. Karkhanis and R.N. Sachthey, for the appellant.
Sampat Ayyangar and J.P. Goyal, for the respondent.
The Judgment of the Court was delivered by Subba Rao, J.
By a registered lease deed dated March 31, 1950, the assessee company, respondent herein, leased out two tea estates named "Panbari Tea Estate" and "Barchola Tea Estate", along with machinery and buildings owned and held by it, in Darrang, in the State of Assam, to a firm named Messrs. Hiralal Ramdas for a period of ten years commencing from January 1, 1950.
The lease was executed in consideration of a sum of Rs. 2,25,000/as and by way of premium and an annual rent of Rs. 54,000/ to be paid by the lessee to the lessor.
The premium was made payable as follows: Rs. 45,000/ to be paid in one lump sum at the time of the execution of the lease deed ' and the balance of Rs. 1,80,000/in 16 half yearly instalments of Rs. 11,250/ on or before January 31 and July 31 of each year.
The annual rent of Rs. 54,000/ was payable as follows: Rs. 1,000/ per month to be paid on or before the last day of each month, making in all Rs. 12,000/ per year, and the balance of Rs. 42,000/ on or before December 31 of each year.
On February 25, 1957, for the assessment year 1952 53, the Income tax Officer made the assessment treating the instalment of Rs. 11,250/ paid towards the premium in the relevant accounting year as a revenue receipt of the assessee.
On appeal, the Appellate Assistant Commissioner confirmed the order of the Income tax Officer.
On further appeal, the Income tax Appellate Tribunal also held that the premium was really the rent payable under the lease deed and, therefore, it was chargeable to income tax.
At the instance of the assessee, the Tribunal referred the following question to the High Court under section 66(1) of the Income tax Act, 1922, herein after called the Act: "Whether on the facts and in the circumstances of the case and upon the construction of the terms of the lease, dated 31st March 1950, the sum of Rs. 11,250/ received by the assessee during the year of account is revenue or capital receipt".
813 The High Court held that the said sum of Rs. 11,250/ received by the assessee during the year of account was a capital receipt and answered the question accordingly.
On a certificate issued by the High Court, this appeal has been filed by the Revenue in his Court.
The short question that arises in this appeal is whether the amount described as premium in the lease deed is really rent and, therefore, a revenue receipt.
Before we look at the lease deed it will be convenient to notice briefly the law pertaining to the concept of premium, which is also described as salami.
The distinction between premium and rent was brought out by the Judicial Committee in Raja Bahadur Kamakshya Narain Singh of Ramgarh vs Commissioner of Income tax, Bihar & Orissa (1) thus: "It (salami) is a single payment made for the acquisition of the right of the lessee to enjoy the benefits granted to them by the lease.
That general right may properly be regarded as a capital asset, and the money paid to purchase it may properly be held to be a payment on capital account.
But the royalties are ' on a different footing It is true that in that case the leases were granted for 999 years; but, though it was one of the circumstances, it was not a decisive factor ,in the Judicial Committee coming to the conclusion that the salami paid under the leases was a capital asset.
This Court in Member for the Board of Agriculture Income tax, Assam vs Sindhurani Chaudhurani (2) defined "salami" as follows: "The indicia of salami are (1) its single non recurring character and (2) payment prior to the creation of the tenancy.
It is the consideration paid by the tenant for being let into possession and can be neither rent nor revenue but is a capital receipt in the hands of the landlord.
" It is true that in that case the payment was paid in a single lump sum, but that was not a conclusive test, for salami can be paid in a single payment or by instalments.
The real test is whether the said amount paid in a lump sum or in instalments is the consideration paid by the tenant for being let into possession.
This Court again in Chintamani Saran Nath Sah Deo vs Commissioner of Income tax, Bihar & Orissa(1) considered all the relevant decisions on the subject in the context of licences granted to the assessee to (1) , 519.
(2) 814 prospect for bauxite in some cases for 6 months and in others for a year or two and observed: "The definition of salami was a general one, in that it was a consideration paid by a tenant for being let into possession for the purpose of creating a new tenancy.
" Applying that test this Court held in that case that under the said licences there was a grant of a right to a portion of the capital of the licensor in the shape of a general right to the capital asset.
In view of these three decisions it is not necessary to multiply citations.
Under section 105 of the Transfer of Property Act, a lease of immovable property is a transfer of a right to enjoy the property made for a certain time, express or implied or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.
The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share service or other thing to be so rendered is called the rent.
The section, therefore, brings out the distinction between a price paid for a transfer of a right to enjoy the property and the rent to be paid periodically to the lessor.
When the interest of the lessor is parted with for a price, the price paid is premium or salami.
But the periodical payments made for the continuous enjoyment of the benefits under the lease are in the nature of rent.
The former is a capital income and the latter a revenue receipt.
There may be circumstances where the parties may camouflage the real nature of transaction by using clever phraseology.
In some cases, the so called premium is in fact advance rent and in others rent is deferred price.
It is not the form but the substance of the transaction that matters.
The nomenclature used may not be decisive or conclusive but it helps the Court, having regard to the other circumstances, to ascertain the intention of the parties.
Bearing the said principles in mind let us scrutinize the lease deed dated March 31, 1950.
Under that document interest in two large tea estates comprising 320 acres and 305 acres respectively under tea, along with the bungalows, factory buildings, houses, godowns, cooly lines and other erections and structures, was parted by the lessor to the lessee for a period of 10 years; and during that period the lessee could enjoy the said tea estates in the manner prescribed in the document.
Under the document, therefore, there was a transfer of substantive interest of the lessor in the estates to the lessee and a conferment of a right on the lessee to use the said estates by exploiting the same.
Under cl. 4 of the lease deed for the transfer of the right a premium of Rs. 2,25,000/ had to be 815 paid to the lessor and for using the estates the lessee had to pay.
an annual rent of Rs. 54,000/ .
Both the premium and the rent were payable in instalments in the manner provided in the document.
The parties were businessmen presumably well versed in the working of tea estates.
They must be assumed to have known the difference between the two expressions "premium" and "rent"; and they had designedly used those two expressions to connote two different payments.
The annual rent fixed was a considerable sum of Rs. 54,000/ and the premium, when spread over 10 years, would work out to Rs. 22,500/ a year.
There is no reason, therefore, to assume that the parties camouflaged their real intention and fixed a part of the rent in the shape of premium.
The mere fact that the premium was made payable in instalments cannot obviously be decisive of the question, for that might have been to accommodate the lessee.
Nor is cl. 8 of the lease deed, on which strong reliance is placed by the learned counsel for the Revenue, a pointer to the contrary.
It reads: "(1) If any of the aforesaid instalments towards the premium or annual rent shall remain unpaid for two months after becoming payable (whether formally demanded or not) or if the lessee shall make default in payment to the Lessor any other sum or any part thereof in due dates or in observing or performing any of the covenants, conditions or stipulations hereinbefore contained and on the part of the Lessee to be paid, observed and performed or if the Lessee 's firm is dissolved except for reconstruction or if any of the partners of the Lessee is adjudicated insolvent then and in any such cases it shall be lawful for the Lessor immediately or at any time or times thereafter upon the demised Tea EStates and premises or any part thereof in the name of the whole to re enter and thereupon this demise shall absolutely determine but without prejudice to the rights of the Lessor to damages or compensation in respect of any breach of Lessee covenants herein contained and all other rights and remedies including the right to recover the balance of the instalment unpaid premium or rent payable in that particular year.
" The argument is that in the case of default contemplated in this clause it shall be lawful for the lessor to re enter and in that event in terms of cl. 8 he will be entitled only to recover the balance of the instalment of unpaid premium and not the entire balance of the premium.
This construction, though it appears to be plausible at first sight, really ignores the main terms of the lease.
The default clause is pressed into service to destroy the main term of the lease.
Under el. 1 of the lease deed the sum of Rs. 2,25,000/ is the consideration by way of premium to be paid by the lessee to the lessor.
Under cl. 4 thereof the said entire premium has to be 816 paid in instalments; under cl. 8 the lessor has the option to terminate the lease and re enter the premises in the circumstances mentioned therein without prejudice to all his rights under the document.
One of his rights is to recover the premium in instalments.
The fact that one of the rights saved is his right to recover the balance of the instalment of unpaid premium cannot possibly deprive him of all his _other rights which are also expressly saved thereunder.
The drafting of the clause is not artistic and is rather confused; but in the context of the other clauses it cannot be so construed as to override.
or come into conflict with, the main terms of the lease deed.
Thirdly, it was contended that the income the lessor was getting under the lease after 1950, i.e., after the execution of the lease deed, viz., the total of the instalments of premium and rent, was not higher than the profits he was getting before the lease and that was an indication that what was rent really was split up into premium and rent for ulterior purposes.
This argument is based upon the following data collected from the published accounts of the assessee company: Year ended Profit Deprecia Net Divided tion Profit (tax free) (1) (2) (3) (4) (5) Rs. Rs. Rs. % 31st March 1947 . 60,186 8,665 51,521 9 31st March 1948 . 33,118 7,872 23,246 9 31st March 1949 . 31,581 7,475 24,106 6 31st March 1950 . 47,734 17,868 29,866 12 31st March 1951 . 71,888 17,726 54,162 6 31st March 1952 . 33,213 15,527 17,686 6 31st March 1953 . 69,550 15,410 54,140 6 In the accounts of the year to 31st March 1952 there are the following three items of expenditure: Rs. Transit charges . . 10,605 Legal Expenses . . 7,518 Gratuity to Managing Director . 10,000 28,123 Before comparing the figures given for the two periods, i.e., the period before March 1950 and the period thereafter, it is necessary to add back the said three items of expenditure totalling 817 Rs. 28,123/ to the net profit of the year ended with 31st March, 1952; if they were added, instead of Rs. 17,585/ , the profit would be Rs. 45,809/ .
A comparative study of the said figures discloses a higher return in the second period than during the earlier period.
But an attempt is made to show that the figures of the later period include other items and if they are deducted the net profit would be comparable with that in the earlier period, but there is no agreed data for this attempt and it is not possible on the material placed before us to scrutinize the figures.
In the absence of the relevant material it is not possible to accept the argument built upon the said figures.
The result is that there is no material placed before us, either direct or circumstantial, to displace the description given in the lease deed to the said amounts as premium and to hold that they are not in fact premium but only rent.
Indeed, the circumstances mentioned supra confirm the said description.
In the result we hold that the High Court has given a correct answer to the question submitted to it by the Income tax Appellate Tribunal.
The appeal is dismissed with costs.
Appeal dismissed.
| The appellant was convicted for under under section 302 Indian Penal Code.
The prosecution relied on amongst other materials, a letter.
The letter contained a confession and was addressed to the Sub Inspector.
The appellant wrote the letter with the intention that it should be received by the Sub Inspector, kept it near the dead body and left the house after locking it.
The lock was broken open and the letter was recovered by the Sub Inspector.
In appeal to this Court the admissibility of this letter was challenged.
HELD: (Per Curium) There was sufficient material on the record, apart from this letter, establishing the guilt of the appellant.
Per Sarkar, C.J. and Mudholkar, J: The letter was admissible in evidence.
No doubt, the letter contained a confession and was addressed to a police officer.
That could not make it a confession made to the Police officer which is within the bar created by section 25 of the Evidence Act.
The Police Officer was not nearby when the letter was written or knew that it was being written.
In such circumstances quite obviously the letter would not have been a confession to the police officer if the words "Sub Inspector" had not been written.
Nor it can become one in similar circumstances only because the words "Sub Inspector" has been written there.
It would still have not been a confession made to a police officer for the simple reason that it was not so made from any point of view.
[267 H 268 B] Per Bachawat J., The letter was inadmissible in evidence and was a confession made to a police officer.
[268 D E] A confession to a police officer was within the bar of section 25, though it was not made in his presence.
A confessional letter written to a Police officer and sent to him by post, messenger or otherwise is not outside the ban of section 2,5 because the police officer was ignorant of the letter at the moment when it was being written.
[268 G].
R. V. Hurribole, Cal. 207, approved.
|
Civil Appeal No. 1737 (NCE) of 1981.
106 Appeal by Special leave from the Judgment and Order dated the 29th June, 1981 of the Madras High Court in Election Petition No. 3 of 1980.
R.K. Garg, V.J. Francis for the Appellant.
Dr. Y.S. Chitale, K. Rajendra Choudhary and section Srinivasan for Respondents.
A.V. Rangam and Mrs, Sarla Chandra for Respondent No. 5.
The following Judgment of the Court was delivered by BALAKRISHNA ERADI, J.
At the conclusion of the hearing of this appeal arising out of an election petition filed under Sections 80 to 83, 98, 100(1) (d) (iii) and (iv) and Section 101 of the Representation of People Act, 1951 we passed the following order announcing the decision arrived at by us: "The appeal is dismissed with no order as to costs.
All interim orders passed by this Court are vacated.
Reasons will follow.
" We now proceed to state the reasons in support of the aforesaid conclusion.
In the General Elections to the Tamil Nadu Assembly held in May 1980, the Appellant had contested for the Ilayangudi Assembly Constituency seat, and the 1st Respondent was a rival candidate sponsored by the Communist Party of India.
Respondents 2, 3 and 4 had also stood for election in the same constituency as independent candidates.
The polling took place on the 28th of May 1980.
The counting of votes was commenced at 10.000 a.m. on the 1st of June 1980 and at 5.00 p.m. after the postal ballot votes were also counted, the result of the election was announced by the Returning Officer, declaring that the appellant was duly elected on the ground that he had secured the highest number of votes among the contesting candidates.
According to the results of the counting as announced, the appellant had secured 34, 437 votes and the 1st respondent had polled 34, 381 votes.
The other three candidates secured only a very small number of votes and had forfeited their deposits.
Thus, it was only by a 107 narrow margin of 56 votes that the appellant was declared to have won the election.
The validity of the election was challenged by the 1st respondent by filing the election petition before the High Court of Madras praying for an order for the scrutiny and recounting of all the ballot papers cast in the election to the Ilayangudi Assembly Constituency held on 28.5.80 and for a declaration that the election of the appellant to that constituency was void and that the 1st respondent had been duly elected in respect of that constituency.
The main grounds urged in support of the prayer for setting aside the election of the appellant were three fold, viz., (1) improper rejection by the Returning Officer of valid votes cast in favour of the 1st respondent; (2) improper reception of invalid votes cast in favour of the appellant; and (3) improper treatment of valid votes cast in favour of the first respondent and the 3rd respondent as votes cast in favour of the appellant.
A further ground was also taken in the petition that the procedure adopted by the Returning Officer in the counting of votes and the declaration of the result of the election was not in accordance with the provisions of the Representation of the People Act (hereinafter called the Act), the rules and the instructions issued in that regard.
After a detailed discussion of the evidence adduced in the case the learned single Judge of the High Court, who tried the election petition, found that there was no basis for the allegation made in the petition that the procedure adopted by the Returning Officer in the counting of votes was not in accordance with the relevant provisions of the Act, the rules and the instructions.
It was further found by the learned Judge that the averment made in the petition that valid votes cast in favour of the 1st respondent and the 3rd respondent had been improperly treated as votes polled in favour of the appellant was devoid of factual foundation.
However, on the issue relating to the question whether there had been improper rejection of valid votes cast in favour of the 1st respondent herein (petitioner in the election petition), the learned Judge found that it was clearly established by the evidence that the Returning Officer had erroneously and illegally rejected as invalid ballot papers in which the marking had been done either on the demarcation line at the bottom of the 1st respondent 's column the first respondent 's name was printed on the ballot paper as the last name immediately beneath the said name was the demarcation line at the bottom or partially on the demarcation 108 line and partially in the column of the 1st respondent.
The difference in votes between the appellant and the 1st respondent being only 56, the learned Judge held that there should be a rescrutiny of the rejected votes and a recount in the light of such scrutiny should be undertaken.
The total number of votes rejected on different counts was 751.
The 1st respondent deposed in his evidence that there were as many as about 300 votes cast in his favour in which the marking was partially on the demarcation line and partially in the column where his name was printed and they had all been rejected.
The Returning Officer, in his testimony, as RW 2, admitted that he had treated such ballot papers as invalid but asserted that the total number of ballot papers rejected on the said ground was only 127.
The learned single Judge was of opinion that even if the version of RW 2 regarding the number of ballot papers rejected on the aforesaid ground was to be accepted as correct, the Returning Officer had committed a manifest illegality while counting the votes and the declaration of the result made on the basis of such defective counting had to set aside.
Accordingly, the High Court directed a re scrutiny and a recount of all the rejected votes to be carried out in the premises of the High Court.
The learned Judge appointed one of Assistant Registrars of the High Court was Presiding Officer to supervise the recounting.
The Chief Electoral Officer was directed to cause the production of all the rejected votes in respect of the Ilayangudi Assembly constituency at the election held on 28.5.1980.
A direction was also issued to the Returning Officer 5th respondent to render all necessary assistance to enable the re scrutiny and recounting to be properly carried out by the Assistant Registrar as presiding officer.
It is against the said decision of the High Court that this appeal by special leave has been preferred.
The Returning Officer, in the testimony given by him as RW2, has admitted in categorical terms that he had rejected as invalid ballot papers where the marking was partially in the column of the candidate and partially in the shaded area and also those where the marking was partially in the candidate 's column and partially on the dividing line in the bottom.
His explanation was that in doing so he had strictly followed the instructions constrained in the booklet P3, entitled "Instructions to counting staff" issued in Tamil language by the Chief Electoral Officer of Tamil Nadu in connection with the elections to the Tamil Nadu Legislative Assembly, 1980.
Rule 39(2) (b) of the Conduct of Election Rules 1961 requires an elector to make a mark on the ballot paper with the instrument 109 supplied for the purpose "on or near the symbol of the candidate for whom he intends to vote".
Rule 56(2) directs the Returning Officer to reject a ballot paper "(a). . . . or (b) if it bears no mark at all to indicate the vote, or it bears a mark else where than on or near the symbol of one of the candidates on the face of the ballot paper or, it bears a mark made otherwise than with the instrument supplied for the purpose, or (c). . . . , or (d) if the mark indicating the vote thereon is placed in such a manner as to make it doubtful to which candidate the vote has been given.
" The essence of the principle incorporated in the rule is that so long as the ballot paper bears a mark made with the instrument supplied for the purpose, the ballot paper shall not be rejected as invalid, if it is reasonably possible to gather a definite indication from the marking as to the identity of the candidate in favour of whom the vote had been given.
In this context it is necessary to remember that nearly 90% of the electorate in this country consists of illiterate and uneducated rural folk totally unacquainted with the intricacies of the rules and technicalities of procedure pertaining to elections.
Even if the best of endeavour is made to 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 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 that 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 gratifying to note that the Election Commission has manifested due awareness of this stark reality while issuing instructions to the Returning Officers regarding the principles to be adopted for rejection of ballot papers in the "Handbook for Returning Officers" published by the Commission in 1982.
At page 90 of the book, the Returning Officers have been instructed to reject a ballot paper only (i) when there is no mark at all on the front or the mark is made otherwise than with the instrument supplied for the purpose; (ii) when the mark is in blank area, that is to say, at the back or entirely in the shaded area; or 110 (iii)when there are marks against two or more candidates; (iv) When there is any writing or mark by which the voter can be identified; or (v) when the ballot paper is mutilated beyond recognition; or (vi) when the ballot paper is not genuine or it is spurious.
The Election Commission has also issued a "Handbook for candidates" for election to the House of the People, Legislative Assemblies of States and Union Territories, etc.
At page 78 of the book, it is specifically stated that the Returning Officer will not reject any ballot paper simply because the mark is only partially within the column of one candidate and the rest of the mark is in the blank area.
It has also clarified that a ballot paper shall not be rejected merely on the ground that the mark indicating and vote is indistinct or made more than once, if the intention that the vote is for a particular candidate clearly appears from the way the paper is marked.
The matter has been further clarified in a pamphlet issued by the Election Commission of India in 1982 entitled" A Pamphlet showing illustrative cases of valid and invalid postal and ordinary ballot papers".
The illustration at page 17 of the pamphlet depicts a case where the mark affixed on the ballot paper is partially in the column of the candidate No. 1, the rest of it being in the shaded area and it is clearly directed that in such cases the ballot paper should be treated as containing a valid vote in favour of Candidate No. 1.
The Chief Electoral Officer of Tamil Nadu had issued a similar pamphlet containing instructions in Tamil to the counting staff purporting to be in terms identical with those contained in the Handbook and the pamphlet issued by the Election Commission of India, exhibit
P3 marked in this case is the pamphlet so issued in Tamil by the Chief Officer, Tamil Nadu.
exhibit
P3 contains illustrative cases of valid and invalid postal and ordinary ballot papers and in publishing it, the obvious intention was to have the illustrations on indentical lines as those found in corresponding pamphlet issued by the Election Commission of India.
Unfortunately, however, in the illustration of invalid ballot papers appearing at page 40 of the Book (Ex.P3), the major portion of the marking is in the shaded area and a small portion of the mark is in the column of the candidate.
Apparently what was intended to be printed was an illustration 111 showing a a ballot paper in which the whole of the marking was in the shaded area only without any portion of it being in the column of the candidate.
The illustration as printed in the pamphlet obviously conveys the erroneous impression that a ballot paper where the marking is partly in the column of the candidate and partly in the shaded area is to be rejected by the Returning Officer as invalid.
This is directly contrary to the intendment of the relevant rule and also the express wording of the instructions issued by the Election Commission.
In the case before us, the Returning officer was obviously misled by the aforesaid illustration contained in the pamphlet, exhibit
P.3 and that was the sole reason why he was rejected as invalid the ballot papers where the marking was contained partly in the column of the first respondent and partly on the demarcating line or shaded area.
Had the Returning Officer taken the trouble to study the instructions contained the "Handbook for the candidates" and the "Handbook for the Returning Officers" it should have been apparent to him that the illustration aforementioned contained in exhibit P3 did not correctly reflect the position laid down in the rules and instructions.
It follows that the High Court was perfectly right in holding that the counting and declaration of the results in the instant case were vitiated by serious illegality and in directing a re scrutiny and recounting of all the rejected votes.
The appeal is, therefore, devoid of merits.
Before we part with the case, we consider it necessary to observe that in order to avoid a recurrence of such unfortunate instances illegal rejection of votes on the basis of the misleading illustration contained in the pamphlet, exhibit P3, it is essential that immediate action should be taken by the Chief Electoral Officer, Tamil Nadu, to withdraw the said pamphlet from circulation and to substitute it by issuing a fresh pamphlet containing illustration correctly reflecting the legal position under relevant rules and instructions relating to the scrutiny, acceptance of rejection of ballot papers.
The Registrar will forward copies of this judgment to the Election Commission of India and to the Chief Electoral Officer, Tamil Nadu, for necessary early action being taken in the light of our foregoing observations, S.R. Appeal dismissed.
| Bye law 29 of the Bihar Co operative Society Rules, 1959 provided that the management of a Co operative Bank shall vest in the Board of Directors, and that the first Board of Directors shall be nominated by the Registrar for a period not exceeding one year at a time and not exceeding three Co operative years in the aggregate, and that the Registrar could modify the nomination if and when required.
The Registrar, Cooperative Societies in exercise of the power conferred by the aforesaid bye law nominated a Committee of Management of 17 members to the first Board of Directors of the District Co operative Bank.
The Committee was directed to get the election of the Board of Directors completed within six months of the date of their nomination.
The appellant who was a political person was nominated to be the Secretary of the first Board.
The appellant got the period of the first Board of Directors extended from time to time and the election of the Board postponed without any lawful justification.
Between October 1981 and November 1983 at the instance of the appellant, the Chief Minister gave directions to the Minister (Co operation), that the Registrar be asked to extend the term of the Board, and the Registrar 647 in turn extended the term with the direction that the Committee of Management should call a general meeting and get the Board of Directors elected.
When the Chief Minister demitted office, the third respondent, who was the Minister for Industries issued a direction to the Commissioner of the Co operative Department, marked as 'unofficial '.
It was stated therein that if the Committee was reconstituted the Board shall legally consist of seven members only.
For this purpose seven names were sent If the Committee was superseded it was to consist of fifteen members.
On a separate sheet the Minister indicated the first set of seven names and second set of eight names.
In compliance with the Minister 's directive the Registrar by his impugned order in supersession of all earlier orders reconstituted the first Board of Directors with immediate effect and directed that the tenure of the office of the reconstituted Board shall be for the remainder of the term i.e. till November 30, 1983.
Being aggrieved, the appellant assailed the order by a writ petition in the High Court, which was dismissed.
On appeal to this Court, it was contended on behalf of the appellant that the Registrar had no power to reconstitute the Board under bye law 29 and that in any event the Minister could not issue any direction to the Registrar as to the reconstitution of the Board.
The respondents, however, contended that the Chief Minister had illegally usurped the statutory functions of the Registrar and passed several orders and that the Minister was justified in issuing the requisite orders.
Allowing the appeal, ^ HELD: 1.
Neither the Chief Minister nor the Minister for Cooperation or Industries had the power to arrogate to himself the statutory functions of the Registrar under bye law 9.
Under the Cabinet system of Government, the Chief Minister occupies a position of pre eminence and he virtually carries on the governance of the State.
The Chief Minister may call for any information which is available to the Minister in charge of any department and may issue necessary directions for carrying on the general administration of the State Government.
Presumably, the Chief Minister dealt with the question as if it were an executive function of the State Government and thereby exceeded his powers in usurping the statutory functions of the Registrar under bye law 29 in extending the term of the first Board of Directors from time to time.
[655 A, 654 C D] 2.
The executive power of the State vested in the Governor under article 154(1) connotes the residual or governmental functions that remain after the legislative and judicial functions are taken away.
The executive power includes acts necessary for the carrying on or supervision of the general administration of the State including both a decision as to action and the carrying out of the decision.
Some of the functions exercised under "executive powers" may 648 include powers such as the supervisory jurisdiction of the State Government under section 65A of the Act.
The action of the Chief Minister cannot however be supported by the terms of section 65A of the Act inasmuch as there was no proceeding pending before the Registrar in relation to any of the matters specified in section 65A of the Act nor had the Registrar passed any order in respect thereto.
[654 E G] For the same reasons, it must be held that the Minister for Industries also exceeded his own authority in directing the manner in which the new Board of Directors was to be constituted by the Registrar under bye law 29 by forwarding a list of 7 names to be nominated by him in the reconstituted Board and a further list of 8 names indicating that if the Committee of Management was superseded under another provision, it should consist of those 15 persons.
[655 C D] 3.
Under bye law 29, the Registrar had the power to reconstitute the first Board of Directors or to curtail the extended term.
Proviso to bye law 29 lays down that the first Board of Directors shall be nominated by the Registrar for a period not exceeding one year at a time and not exceeding three cooperative years in the aggregate.
It however does not entail the consequence that when the term of the first Board of Directors is extended from time to time, it must necessarily extend to three cooperative years.
That apart, the extended term of the first Board of Directors was to enure "till further orders" and therefore the Registrar had reserved to himself the right to curtail the extended term by reconstituting the Board, at any time.
[655E 656A] Upon this view, the Court directed (i) the Registrar, Cooperative Societies, to take over the District Central Cooperative Bank and exercise all the powers and perform all the duties vested in the Committee of Management which under the Bihar & Orissa Cooperative Societies Act, 1935 and the Bihar Cooperative Societies Rules, 1959 and the bye laws thereunder are vested in the Committee of Management.
And (ii) the Registrar, either himself or through an Officer in the Cooperative Department designated by him, shall call a general meeting of the Society and require the society to elect a new Board of Directors.[656 C D]
|
ivil Appeal No. 1118 of 1981 etc.
From the Judgment and Order dated 17.11.1980 of the Andhra Pradesh High Court in W.P. No. 5468 of 1979.
A. Subba Rao for the Appellants.
Dr. Y.S. Chitate and T.V.S.N. Chari for the Respondents.
The Judgment of the Court was delivered by THAKKAR, J.
In a batch of Writ Petitions and T.R.C. cases before the High Court the question raised in substance was formulated as under: "The question, therefore, that arises in both these cases, is whether the amount collected by the seller from the buyer which comprises of the two components the actual sale price and the sale tax is a part of the "turnover" and comes within the expression "any other sum charged by the dealer whatever be the description, name or object thereof" occurring in the definition in Section 2 (s)1 of the Act.
In the former case it is shown expressly as sales tax and in the latter case it is shown in the form of debit notes.
But in both the cases it is collected by the seller from the buyer at the time of the sale or rather as a condition of sale.
" 1. Section 2(s) of the Andhra Pradesh General Sales Tax Act 1957 "turnover" means the total amount set out in the bill of sale or if there is no bill of sale, the total amount charged as the consideration for the sale or purchase for the sale or purchase of goods whether such consideration be cash, deferred payment or any other thing of value including any sums charged by the dealer for anything done in respect of goods sold at the time or before the delivery to the goods and any other sums charged by the dealer, whatever, be the description, name, object thereof: Provided that in the case of a sale by a person whether by himself or through an agent of agricultural or horticultural produce grown by himself or grown on any land in which he has an interest whether as owner, usufructuary mortgage, tenant or otherwise the amount of the consideration relating to such sale shall be excluded from his turnover when such produce is sold in the form in which it was produced, with out being subjected to any physical chemical or other proc ess for being made fit for consumption save mere cleaning grading or sorting.
X X X X X X X X X X X X" 950 The High Court repulsed the plea of the assessees that the amount of sales tax so collected from the buyers was not includible in the turnover for the purposes of computing the sales tax liability of the assessees.
The concerned asses sees have approached this Court by way of the present group of appeals by Special Leave.
Sales tax is levied under the authority of Section 5 and Section 5 A on the 'turnover ' of a dealer.
The expression 'turnover ' has been defined by Section 2(s) inter alia to include the total amount set out in the bill of sale or the total amount charged as consideration for the sale or pur chase of goods whether such sales includes any other sum charged by the dealer whatever be the description, name or object thereof.
Whether or not sales tax collected by the dealers from the buyers would fail under the inclusive part of aforesaid definition is the question raised in these appeals.
It has arisen in the context of two categories of cases, namely: (i) wherein the sales tax has been separately set out in the bill of sale and is collected by the seller at the time of sale immediately after or at the time of delivery of the goods.
(ii) wherein the sales tax is not mentioned in the bill at all but simultaneously collected with the delivery of the goods separately under debit notes whereby the exact amount of sales tax due is collected from the purchaser by the seller but the said amount is kept in the suspense account.
The submissions which were unsuccessfully urged before the High Court and are reiterated before us on behalf of the assessees are: 1.
That where the amount is collected specifically as 'tax ', it cannot be deemed to be a part of the consideration for the sale of the goods and as such it cannot form part of the turnover within the meaning of Section 2(s) of the Act.
Inasmuch as the Act does not prohibit the dealer to pass on the sales tax component of the sale price to the purchaser, the dealer should be deemed to be an agent of the Government for collecting the sales tax amount.
In repelling the aforesaid contentions, strong reliance was placed by the High Court on its full bench decision in Government of Andhra Pradesh vs East India Commercial Compa ny Ltd., [1957] 8 STC 114 951 wherein an cartier decision of a Division Bench State of Andhra Pradesh vs Bujranga Jute Mills Ltd., [1955] 6 STC 376 to the effect that sales tax collected by the dealer from the buyers cannot be included in his turnover and is not liable to be taxed again was over ruled.
It may incidentally be mentioned that the aforesaid full bench judgment of the High Court was noted with approval by this Court in M/s George Oakes (P) Ltd. vs State of Madras., [1961] 12 S.T.C. 476.
Some salient features require to be underscored in order to test the merits of these submissions: (1) There is no provision in the Act which imposes a legal obligation on the vendor of the goods to recover sales tax on the goods sold to the vendee.
For instance the vendor is not prohibited from selling the goods without recovering the sales tax from the vendee.
The seller may not charge or recover the sales tax from the buyer.
He will not be violat ing any provision of the Act or incurring any penal conse quence by doing so.
In other words the collection of the sales tax from the buyer is a matter of his choice.
He may or may not do so.
If he does not do so he does not expose himself to any penal consequence or legal liability.
(2) There is no legal obligation imposed by the Act on the buyer of the goods to pay sales tax at the time of the purchase of the goods.
If the vendor does not insist on such payment and if the buyer does not pay the tax he does not violate any provision of the law or incur any legal liabili ty.
(3) There is no provision in the Act which casts any legal duty on the vendor to mention in the bill or the voucher issued to the buyer that sales tax has been recov ered from the buyer.
Nor is there any obligation on him to show that sales tax is included in the price charged or to specify the amount of sales tax separately in the bill or voucher.
(4) Nothing in the Act requires the dealer to set apart the amount recovered from the vendee by way of sales tax.
He is neither bound to keep a separate account of the amount so recovered nor to keep it in a separate cash box.
He can treat it as his own money, keep it in his own cash box, and use it as if it were his own property.
If the amount is stolen or is misappropriated by his employee it is he who loses his own money and it is not the Revenue which has to bear the loss.
952 (5) His liability to pay sales tax is analogous to his liability to pay the Municipal taxes or the Income tax etc.
The liability is to pay from his own property and not from any property earmarked for that purpose from out of the collection of tax made from the buyers.
(6) The dealer is no doubt required to deposit along with salestax return periodically the amount of tax due on the sales effected by him.
But that is merely a convenient mode of discharging his liability at the intervals as en joined by Act.
It is neither linked nor dependent on recov ery if any made by him from the buyer (which he may or may not make).
(7) The dealer is not paid any remuneration or reward for collecting the sales tax.
If he was acting as an Agent, the State would be obliged to pay him some remuneration or reward for the State cannot oblige him to work as its agent gratis.
It would amount to forced labour if it were other wise.
The aforesaid factors, viewed cumulatively, make it evident that a dealer who sells the goods does not act as an agent for the State in collecting the sales tax from the persons to whom he sells the goods.
If he was acting as an Agent he would be required to take reasonable care of the sale proceeds as a bailee.
He would also be required to set apart the same without intermingling with his own money, for, he cannot use the monies belonging to the State for his own private purposes.
If the intention of the legislature was to make him an agent, the legislature would have imposed penal liability on the vendor if he were not to collect the taxes.
He would be obliged to maintain separate accounts of the collection made by him as also to treat the collections as the collections made by the agent on behalf of the prin cipal.
It is therefore futile to contend that the sales tax component of the sale price charged by the vendor to the vendee is collected by him as an agent of the State Govern ment.
Even if therefore the bill or the voucher issued to the purchaser indicates the amount of sales tax separately what is collected by the vendor from the vendee is not tax but is merely a part of the sale price charged by the vendor to the vendee.
So far as the statute is concerned it does not cast any obligation on the purchaser of the goods to pay any tax and therefore what is collected by the vendor from the vendee by way of consideration for passing the property in the goods to the vendee is the price charged by him and not tax collected by him from the purchaser.
The amount of money which goes from the pocket of the vendee to the pocket of the vendor as a 953 condition or consideration for passing of the property in the goods is thus the sale price and not the tax.
It is the amount, but for the payment of which, the vendor would not transmit his title to the goods in favour of the vendee, and not any amount paid by the vendee towards any tax liability incurred by him on making the purchase of the goods.
It is no doubt true that a dealer as a prudent businessman would pass on the burden in ' the context of the sales tax liabili ty to the buyer.
But then he would be doing so in order that he may not make a loss on the transaction.
Inasmuch as no businessman Carries on business with a view to incur loss, that he would take into account this factor at the time of collecting the sale price from the vendee stands to reason.
That however does not mean that he is collecting the tax from the purchaser (for which in fact he has no authority in law under the Act).
Just as a businessman would take into account the expenses that he would have to incur for the running of the business such as rent, salary, and other establishment charges, just as he would keep a reasonable profit margin in the context of the investment made by him, he would also take into account the factor that he would have to pay sales tax on the turnover having regard to the statutory liability imposed on him by the Act.
That however does not mean that what he is charging from the vendee is the tax and not a part of the sale price.
So also it would not mean that he has been acting as an agent for Revenue.
Nothing would turn on whether the bill or voucher issued to the vendee is so made out to show that the sales tax is charged separately.
If he does so he would be doing so only for the sake of his accounting purposes and convenience.
The consideration obtained by him from the vendee would in the eye of law be the sale price regardless of what nomenclature is given to a part of the price charged by him.
Thus there is no substance whatever in the contention that the sales tax component included in the sale price is not includible in making the aggregate for the purpose of the turnover, it being a tax recovered from the purchaser and not the price of the goods charged to the vendee.
What is more, in George Oakes (Pvt.) Ltd. vs State of Madras, [1961] 12 STC 476 this Court had an occasion to consider a similar challenge made in the context of the constitutional validity of Section 8 B of Madras General Sales Tax Act 1939 wherein this Court has repelled this very argument in no unclear terms: ' 'Obviously.
it is not the name the legislature accords to a payment by a purchaser to a seller, who is a dealer as 954 defined by the Act, that determines the question of the legislative competence.
No doubt section 8 B called the payment as amount (collected) by way of tax.
It is equally true that the statutory liability to pay the sales tax is laid on the dealer.
What is taxable is not each transaction of sale but the total turnover of the dealer, computed in accordance with the provisions of the Act and the Rules.
But it is well recognised that whatever be the form of the statutory provisions, the ultimate economic incidence of the tax is on the consumer, the purchaser.
It was that well settled principle that was re stated in Bengal Immunity Co. Ltd. vs State of Bihar.
Even if the registered dealer col lects the amount by way of tax under the authority of sec tion 8 B of the Act, the payment is by the purchaser on the occasion of the sale by the dealer.
Vis a vis the dealer it is in reality part of the price the purchaser has to pay the seller for purchasing the goods.
" Reliance was placed by the appellants on McDowel & Company vs Commercial Tax Officer ; in sup port of the plea that the amount collected from the buyers if kept apart cannot be included in computing the turnover of the dealer.
In our opinion, this submission is clearly misconceived.
In McDowel 's case this Court was dealing with the question as regards the includibility of excise duty and countervailing duty in the aggregate turnover of the dealer.
This court has taken that view inasmuch as the excise duties and countervailing duties were paid directly by the purchas ers to the excise authorities before removing the same from the distilleries or the bonded warehouses and accordingly the same were not includible in the turnover of the dealers.
Since the amount was not charged or paid by the dealers but by the manufacturers, this Court upheld the contention of the assessees (vide paragraph 12 of the judgment).
This decision can be of no avail to the appellants because in the present case the amount in question is charged or recovered by the sellers from the buyers whether it is mentioned as Sales tax or not.
The principle laid down in McDowel 's case cannot be applied to the factsituation in the present case.
In fact in McDowel 's case the full Bench decision of the Andhra Pradesh High Court Govt.
of Andhra Pradesh vs East India Commercial C. Ltd., AIR 1967 Andhra Pradesh 83 has been noted with approval in paragraph 17 of the judgment.
It was further argued by learned counsel for the appellants draw 955 ing inspiration from Anand Swarup Mahesh Kumar vs The Com missioner of Sales Tax; , that the matter requires reconsideration in the light of the observations made therein.
We are unable to accede to this submission.
In Anand Swarup Mahesh Kumar 's case this Court was concerned with the market fee ' collected by a dealer from the purchas er for being passed on to the market committee under U.P. Act No. XXV of 1964.
It was an amount which the statute authorised the dealer to collect from the purchaser sepa rately and directly under the authority of Section 17 (iii) (b)(1) of the said Act and to pass it on or make it over to the Market Committee.
It is evident that it was an amount collected by the dealer underthe statutory authority as an agent of the Market Committee for being passed on to the Management Committee and therefore could not be treated as a component of the sale price of the goods which were sold to the purchaser.
It was in this context that this Court came to the conclusion that the Market fee so collected could not be included in the turnover as is evident from the pertinent passage: "From the observations made in the decisions referred to above, it follows that where a dealer is authorised by law to pass to any tax payabIe by him on the transaction of sale to the purchaser, such tax does not form part of the consid eration for purposes of levy of tax on sales or purchases but where there is no statutory provision authorising the dealer to pass on the tax to the purchaser, such tax does form part of the consideration when he includes it in the price and realizes the same from the purchaser.
The essen tial factor which distinguishes the former class of cases from the latter class is the existence of a statutory provi sion authorising a dealer to recover the tax payable on the transaction of sale from the purchaser.
It is on account of the above distinction that this Court held in Joint Commer cial Officer, Division II, Madras 1 vs Spencer & Co. (1975 Supp SCR 439) that the sales tax which a seller 'of foreign liquor was liable to pay under Section 21 A of the Madras Prohibition Act, 1937 did not form part of the turnover on which sales tax could be levied under the Madras General Sales Tax Act, 1959 because the seller was entitled to recover the sales tax payable by him from the purchaser.
The relevant part of Section 21 A of the Madras Prohibition Act, 1937 referred to above read thus: 21 A.
Every person or institution which sells foreign 956 liquor shall collect from the purchaser and pay over to the government at such intervals and in such manner as may be prescribed, a sales tax calculated at the rate of eight annas in the rupee, or at such the other rate as may be notified by the government from time to time, on the price of the liquor so sold.
" It will thus be seen that this Court has again reaf firmed the position that the includibility must turn on the question as to whether or not the tax is recoverable from the purchasers under a statutory obligation.
This decision cannot therefore be of any avail to the appellants inasmuch as there is no such statutory provision in the Act with which we are concerned.
Lastly it was argued that in the second category of cases where the sales tax was not included in the bill and was kept in the suspense account by the seller, it could not be included in the total turnover.
This fallacious argument was rightly negatived by the High Court for the obvious reason that the amount includible in the turnover on the true interpretation of the relevant provisions cannot become excludible merely by reason of the accountancy device adopt ed by the assessee concerned.
There is no substance in any of the contentions urged on behalf of the appellants.
The view taken by the High Court is unexceptionable.
The appeals fail and are dismissed.
The interim orders shall stand vacated.
The appellants assessees will be liable to pay the amount due as sales tax along with interest thereon @ 12% as per the condition imposed by this Court at the time of granting the interim stay.
The sales tax authorities may recover the amount due by encashing Bank Guarantee as also by effecting recovery in accordance with law.
S.R. Appeals dismissed.
| The point in controversy in this appeal was whether SS. 207 and 207A inserted into the Code of Criminal Procedure by the amending Act 26 of 1955, violated the provision of article 14 of the Constitution and were, therefore, invalid in law.
The appellants were committed for trial to the Court of Session by the inquiring 397 Magistrate in a proceeding instituted against them on a Police report and he followed the procedure laid down in section 207A of the Code as required by section 207 Of the Code.
The appellants moved the High Court for quashing the order of commitment on the ground that the provisions of section 207A introduced discrimination as against accused persons against whom proceedings were ' instituted on Police report and were unconstitutional in character.
The High Court held against them.
The contention was reiterated in this Court and it was sought to be made out that the provisions Of section 207A of the Code, in comparison and contrast to other provisions of Ch.
XVIII of the Code, prescribed a less advantageous procedure for the accused persons in a proceeding started on Police report than the procedure prescribed for other cases in the succeeding sections of the chapter.
Held, that sections 207 and 207A of the Code were not discriminatory and did not contravene article 14 of the Constitution and their constitutional validity was beyond question.
Although there can be no doubt that the impugned sections introduced substantial difference in the procedure relating to commitment proceedings applicable to the two classes of cases, they did not in any way affect the procedure at the trial, and the true test of the constitutional validity of the classification they made, was whether it was reasonable and pertinent to the object the Legislature had in view, namely, a speedy trial of offences with the least possible delay.
So judged there could be no doubt that the Legislature in prescribing the two different procedures at the commitment stage, one for proceedings instituted on Police report and the other for those that were not, had acted on a consideration that was reasonable and connected with the object it had in view.
Budhan Choudhry vs The State of Bihar, ; , applied.
Matajog Dobey vs H. C. Bhari, ; , Chiranjit Lal Chowdhuri vs The Union of India, ; , The State of Bombay vs F. N. Balsara, ; , The State of West Bengal vs Anwar Ali Sarkar, ; , Kathi Raning Rawat vs The State of Saurashtra, (1952) S.C.R. 435, Lachmandas Kewalram Ahuja vs The State of Bombay, ; , Qasim Razvi vs The State of Hyderabad, ; , Habeeb Mohamad vs The State of Hyderabad, ; and The State of Punjab vs Ajaib Singh; , , referred to.
|
vil Appeal No. 11 (N) of 1969.
From the Judgment and Order dated 22/23.8.
1968 of the Bombay High Court in S.C.A. No. 1418 of 1964.
V.N. Ganpule for the Appellant in C.A. No. 2211 of 1969.
S.B. Bhasme, P.C. Kapur, V.N. Ganpule and S.K. Agnihotri for the Appellants in C.A. No. 1191 of 1970.
Nemo for the Respondents in C.A. No. 2211 of 1969.
Vinod Bobde, D.N. Mishra and Ms. Sunita for the Respond ents in C.A. No. 1191 of 1970.
Mrs. Urmila Sirur, for the Intervener.
The Judgment of the Court was delivered by BHAGWATI, CJ.
The only question which arises in these appeals is whether sub section 1(b) of section 88B is uncon stitutional and void as offending Article 26 of the Consti tution.
The constitutional validity of sub section 1(b) of section 88B is assailed on the ground that by reason of condition (i) in the proviso to this sub section, sections 32 to 32 R of the Bombay Tenancy and Agricultural Lands Act 1948 (hereinafter referred to as the 'Tenancy Act ') are made applicable to lands which are the properties of a Trust for an institution for public religious worship, if such Trust is not registered or deemed to be registered under the Bombay Public Trust Act, 1950 and the applicability of sections 32 to 32R of the Tenancy Act to such lands contra venes the right of the institution to own and acquire move able and immovable property under Article 26 of the Consti tution.
The High 869 Court negatived this challenge urged on behalf of the peti tioners.
We are also of the view that this challenge must fail.
It is not necessary to go into any detailed reasons for the purpose of holding that sub section 1(b) of section 88B does not offend Article 26 of the Constitution on ac count of condition (i) in the proviso to that sub section.
This condition provides that in order that the lands belong ing to a Trust for an institution for public religious worship should be entitled to exemption from the operation of sections 32 to 32R of the Tenancy Act, the Trust must be registered or deemed to be registered under the Bombay Public Trust Act, 1950.
This condition does not in any way militate against the exception which is made in the main part of sub section 1(b) of section 88B in favour of lands belonging to a Trust for an institution for public religious worship.
It merely introduces a requirement that the Trust must be registered or deemed to be registered under the Bombay Public Trust Act, 1950 and this requirement is intro duced in order to ensure that the Trust is really and truly a trust which falls within the language of sub section 1(b) of section 88B, namely, that it is genuinely a trust for an institution for public religious worship.
If the Trust is registered or deemed to be registered under the Bombay Public Trust Act, 1950, that would afford incontrovertible proof of the fact that it is a trust for a charitable or religious purpose.
This condition does not, therefore, in any way detract from the exemption granted under sub section 1(b) of section 88B.
So also, condition (ii) introduced in the proviso does not detract from the exemption, since all that it requires is that the entire income of the lands belonging to a trust for an institution for public religious worship must be appropriated for the purposes of such Trust.
If lands be longing to a trust for an institution for public religious worship are to be eligible for exemption under sub section 1(b) of section 88B, it would be quite legitimate for the legislature to insist that the entire income of such lands must be appropriated for the purposes of such Trust.
That would ensure that the trust is a genuine Trust for public religious worship and is not merely a facade for carrying out some other purpose.
We are, therefore, of the view that sub section 1(b) of section 88B does not offend against Article 26 of the Con stitution by reason of the introduction of conditions (i) and (ii) in the proviso to that subsection.
These appeals must fail on this short ground.
They are accordingly dis missed but without any order as to costs.
S.R. Appeals dis missed.
| The respondent was charged under sections 279, 337, 304 A IPC and Sections 89(a) and 89(b) of the Motor Vehicles Act for having driven an Express Bus in a rash and negligent manner hitting a bullock cart as a result of which one of the persons traveling in the cart sustained fatal injuries and the other person sustained simple injuries.
After the accident the respondent failed to secure medical assistance to the injured person and also failed to report the accident to the police authorities.
The respondent pleaded guilty to all the charges and was convicted and sentenced to pay a total fine of Rs. 345 under all the five charges.
In the appeal preferred by the State for enhancement of sentence, the High Court declined to interfere with the sentence.
Allowing the appeal of the State, HELD: (1) The Magistrate in utter disregard to the nature of offences, particularly the one under Section 304 A IPC and the sentences provided for them under the ' IPC and the Motor Vehicles Act, imposed 'flea bite ' sentences on the respondent.
This should have spurred the High Court to not only pass appropriate strictures against the Magistrate but also to set right the matter by enhancing the sentence at least for the conviction under Section 304 A IPC in exercise of its powers under Section 377 Cr.
P.C. [1106G H] 1104 (2) The High Court has failed to comprehend that the respondent has been let off with a total fine of Rs. 345 for his convictions under all the five charges.
The reasons given by the High Court are really nonexistent as well as irrelevant ones.
Here was a case where the respondent had not only driven his bus in a reckless manner and caused the death of one person and injuries to another but he had also attempted to escape prosecution by failing to report the accident to the police authorities.
[1107A B] (3) Consideration of undue sympathy will not only lead to miscarriage of justice but will also undermine the effi cacy of the criminal judicial system.
The imposition of a sentence of fine of Rs. 250 on the driver in such a case and that too without any extenuating or mitigating circumstances is bound to shock the conscience of any one and will unmis takably leave the impression that the trial was a mockery of justice.
[1107C E] (4) The ends of justice would be met by enhancing the sentence for the most serious of the charges namely under Section 304 A IPC to six months R.I. and fine of Rs.1000 in default to undergo R.I. for two months.
[1107.E F]
|
Civil Appeal No. 1436 of 1975.
Appeal by special leave from the Judgment and order dated 10 3 1975 of the Rajasthan High Court in D. B. Civil Writ Petition No. 384 of 1968.
Ahmed Bux, Beni Madhav Sharma, M/s. V.J. Francis & R.A. Gupta, Advocates for the appellants.
S.M. Jain & Sushil Kumar Jain, Advocates for respondent No. 1.
The Judgment of the Court was delivered by JASWANT SINGH,J.
This appeal by special leave is directed against the judgment dated March 10, 1975 of the High Court of Rajasthan at Jodhpur passed in Civil Writ Petition No. 384 of 1968.
The facts leading to this appeal are: On July 1, 1961, Kishori Lal, the appellant herein, brought a suit in the court of the Assistant Collector, Baran, against Birdhi Lal, respondent No. 1, for possession of land comprised in khasra Nos. 513, 669 and 678 situate in village Balakhera of Anta Tehsil of Kota District under sections 180 and 183 of the Rajasthan Tenancy Act, 1955 (hereinafter referred to as the Act).
By his judgment dated December 24, 1962, the 589 Assistant Collector dismissed the suit.
The appellant thereupon preferred an appeal to the Revenue Appellate Authority who allowed the same by his judgment dated November 9, 1963, and reversing the judgment of the Assistant Collector decreed the suit holding that Birdhi Lal was a trespasser.
Aggrieved by the judgment and decree of the Revenue Appellate Authority, Birdhi Lal took the matter in further appeal to the Board of Revenue, Rajasthan, but remained unsuccessful as the members of the Board affirmed the view taken by the Revenue Appellate Authority.
Dissatisfied with the decisions of the Revenue Appellate Authority and the Board of Revenue, Rajasthan, Birdhi Lal approached the High Court of Rajasthan by means of a petition under Article 226 of the Constitution.
The High Court by its aforesaid judgment and order dated March 10, 1975, allowed the petition and held that Birdhi Lal being a tenant within the meaning of section 5(43) of the Act and not a trespasser as conceived by section 5(44) of the Act, was not liable to be ejected from the land.
Dissatisfied with this judgment, Kishori Lal has come up this Court.
The learned counsel for the appellant has, while supporting the appeal, vehemently tried to press upon us that as the High Court has exercised appellate jurisdiction and substituted its own opinion for the opinion of the Revenue authorities contrary to the well established principles of law, the impugned judgment cannot be sustained.
Elaborating his submission, the learned counsel has submitted that since both the Revenue Appellate Authority and the Board of Revenue had concurrently held that Birdhi Lal was a trespasser and there was no error apparent on the face of the record, the High Court was not justified in interfering with the aforesaid decisions of the Revenue Appellate Authority and the Board of Revenue.
The contention advanced on behalf of the appellant is, in our opinion, wholly untenable.
The expression 'trespasser ' is defined in section 5(44) of the Act as follows: "5(44).
Trespasser shall mean a person who takes or retains possession of land without authority or who prevents another person from occupying land duly let out to him".
The above definition makes it clear that in order to be able to succeed in his suit, Kishori Lal had to show that Birdhi Lal had taken or retained possession of the land without authority or that he had prevented him from occupying the land duly let out to him.
In the instant case, there was no allegation by the appellant in his plaint that he was prevented by Birdhi Lal from occupying the land which had been let out to him.
The only point that we are, therefore, left to determine is whether Birdhi Lal took possession or retained possession of the land without authority.
The material on the record does not at all establish any of these elements.
On the other hand, as rightly pointed out by the High Court, the Parcha lagan, Exhibit A 3 and Pantinama, Exhibit A 4 clearly show that the land in question had been let out by the appellant to Birdhi Lal on payment of rent.
As the essential conditions for holding Birdhi Lal to be a trespasser were manifestly not satisfied in the present case, the High 590 Court was perfectly right in rectifying the error of law apparent on the face of the record and quashing the judgments of the Appellate Revenue Authority and the Board of Revenue.
It was next urged that even if the respondent Birdhi Lal is held to be a tenant by reason of the Pantinama (exhibit A 4), he was liable to be ejected as the appellant Kishori Lal had framed his suit alternatively under section 180 of the Act.
Reference to section 180 of the Act shows that it applies only to suits for "ejectment of Khudkasht or Ghair Khatedar tenants or sub tenants".
Khudkasht is defined in section 5, sub section 23 as land "cultivated personally by an estate holder".
It also includes "land recorded as Khudkasht, sir, havala, niji jot, gharkhed in settlement records" at the commencement of the Act as well as "land allotted after such commencement as Khudkasht under any law".
Similarly, the components of rights to sub tenancy and gair khatedari tenancies are also determined by the provisions of the Act.
The High Court had recorded the finding, on this part of the case: "It may be mentioned at the outset that although the suit was raised by respondent Kishori Lal under sections 180 and 183 of the Act as aforesaid, his claim was not upheld under section 180 so that the suit was decreed as one under section 183".
In other words, findings of the Revenue Courts as well as the High Court repel the alternative case sought to be made out before us.
It required necessary averments and proof of facts which were absent in the case.
It was, therefore, a completely hopeless plea which we cannot entertain at this stage.
For the foregoing reasons, we do not find any merit in this appeal which is hereby dismissed with costs.
M.R. Appeal dismissed.
| The appellants are permanent servants of the Punjab State Co operative Land Mortgage Bank and were working as Assistants since the year 1968.
The grievance of the appellants is that the contesting respondents were directly recruited to the higher post of Inspecting officers, Junior Accountants and Accountants in violation of Service Rules.
What the appellants call Service Rules is nothing but a contract arrived at as a result of the collective bargaining with the management.
The writ petition filed by the appellants was dismissed by the learned single Judge as well as the Division Bench of High Court on the ground that no writ petition was maintainable against a Cooperative Society under Article 226 of the Constitution.
On appeal by special leave the appellants contended: (1) The co operative Bank in question is "other authority" within the meaning of Article 12 of the Constitution and, therefore, falls with in the definition of State.
(2) The Co operative Bank is a public authority.
(3) Co operative Societies registered under the Co operative Societies Act are subject to the jurisdiction of High Courts under Article 226 of the Constitution, since this provision is widely worded writs may be issued for any purpose against any person.
Respondents contended: (1) that the Co operative Bank is not other authority or a public authority and no writ can lie against it.
(2) The appellants are trying to enforce the contractual obligation for which no writ can lie.
Dismissing the appeal, ^ HELD: (1) The Court did not decide the question whether a Co operative Society is other authority or public authority because it is clear from a close perusal of the writ petition that essentially the appellants are seeking merely to ensure an agreement entered into between the employees and the Co operative Bank.
At its best, the writ petition seeks enforcement of a binding contract but the neat and necessary repellant is that the remedy of article 226 is unavailable to enforce a contract qua contract.
We are aware of the wide amplitude of Article 226 and its potent use to correct manifest injustice but cannot agree that contractual obligations in the ordinary course without even statutory complexion can be enforced under Article 226.
[683F H, 684 D]
|
Appeals Nos. 134 to 137 of 1959.
Appeals by special leave from the judgment and order dated September 20,1957, of the Bombay High Court in Income Tax Reference No. 14 of 1957.
R. J. Kolah, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the appellants.
K. N. Rajagopal Sastri and D. Gupta, for the respondent.
January 3.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
This judgment governs the disposal of Civil Appeals Nos.
134 to 137 of 1959.
They have been filed by four assessees with special leave, and arise out of similar facts, and it is not necessary to refer to more than one case to consider the point in question.
The assessment year under consideration is 1952 53, and the previous year, the Calendar year, 1951.
In that year, Mr. Tulsidas Kilachand, one of the four appellants, made a declaration of trust in favour of his wife, a portion of which may be quoted here: ". . . 1, Tulsidas Kilachand hereby de clare that I hold 244 shares of Kesar Corporation Ltd. and 120 shares of Kilachand Devchand & Co., Ltd upon trust to pay the income thereof to my wife Vimla for a period of seven years from the date hereof or her death (whichever event may be earlier) and I hereby declare that this trust shall not be revocable." In the year of account, a sum of Rs. 30,404 was received as dividend income on those shares, and the assessee contended that this income, after being grossed up, was not liable to be included in his total income, in view of the third proviso to section 16(1)(c) of the Indian Income tax Act.
The Income tax Officer did not accept this contention, and though the assessment order is not before us, we gather from the statement of the case that the reason he gave was that the income had accrued to or had arisen in the hands of 353 Mr. Tulsidas Kilachand and had been paid by him to his wife.
The Income tax Officer held that the words of the proviso "income arising to any person by virtue of a settlement or disposition" did not apply to this income.
On appeal, the Appellate Assistant Commissioner held that the case was governed by section 16(3)(b), and need not be considered under the third proviso.
to section 16(1)(c) of the Act.
It appears to have been conceded before him that if the former provision applied, the proviso would not save the income from being assessed in the hands of Mr. Tulsidas Kilachand.
The appeal was dismissed.
In the appeal before the Tribunal, Mr. Tulsidas Kilachand again relied upon the third proviso to section 16(1)(c), and contended that the case was riot governed by section 16(3)(b) and that the dividend income could not be included in his assessment.
The Tribunal came to the conclusion that the case was covered either by section 16(3)(a)(iii) or by section 16(3)(b), and that the income from the shares was, therefore, liable to be included in the income of Mr. Tulsidas Kilachand.
The Tribunal, however, raised and referred the following question under section 66(1) of the Act to the High Court of Bombay: "Whether on a true construction of the deed of declaration of trust dated 5th March , 1951, the net dividend income of Rs. 30,404 on 120 shares of Kilachand Devchand & Co., Ltd. and 244 shares of Kesar Corporation Ltd. held under trust by the assessee for the benefit of his wife was income liable to be included in the total income of the assessee? The High Court came to the conclusion that, though section 16(1)(c) was not satisfied in view of the third proviso, section 16(3)(b) was applicable to the case, and answered the question in the affirmative.
In the appeal before us, the case for the Department was based both on section 16(3)(a)(iii) and section 16(3)(b), while the appellants contended that this disposition fell within the third proviso to section 16(1)(c).
The relevant provisions are: 45 354 " 16.
Exemptions and exclusions in determining the total income. (1) In computing the total income of an assessee. . . . . . . . . (c) all income arising to any person by virtue of a settlement or disposition whether revocable or not, and whether effected before or after the commencement of the Indian Income tax (Amendment) Act, 1939 (7 of 1939), from assets remaining the property of the settlor or disponer, shall be deemed to be income of the settlor or disponer, and all income arising to any person by virtue of a revocable transfer of assets shall be deemed to be income of the transferor: Provided. . . . . . . . .
Provided further. . . . . . . .
Provided further that this clause shall not apply to any income arising to any person by virtue of a settlement or disposition which is not revocable for a period exceeding six years or during the lifetime of the person and from which income the settlor or disponer derives no direct or indirect benefit but that the settlor shall be liable to be assessed on the said income as and when the power to revoke arises to him.
(2). . . . . . . . (omitted) (3).
In computing the total income of any individual for the purpose of assessment, there shall be included (a) so much of the income of a wife or minor child of such individual as arises directly or indirectly (i). . . . . . . . . (ii). . . . . . . . . . (iii) from assets transferred directly or indirectly to the wife by the husband otherwise than for adequate consideration or in connection with an agreement to live apart; or (b). so much of the income of any person or association of persons as arises from assets transferred otherwise than for adequate consideration to the person or 355 association by such individual for the benefit of his wife or a minor child or both.
" The object of framing section 16 can almost be taken from the observations of Lord Macmillan in Chamberlain vs Inland Revenue Commissioners (1), where he stated as follows: "This legislation . (is) designed to overtake and circumvent a growing tendency on the part of taxpayers to endeavour to avoid or reduce tax liability by means of settlements.
Stated quite generally, the method consisted in the disposal by the taxpayer of part of his property in such a way that the income should no longer be receivable by him, while at the same time he retained certain powers over, or interests in, the property or its income.
The legislature 's counter was to declare that the income of which the taxpayer had thus sought to disembarrass himself should, notwithstanding, be treated as still his income and taxed in his hands accordingly.
" These observations apply also to the section under consideration, and the Indian provision is enacted with the same intent and for the same purpose.
Section 16 thus lays down certain exemptions and exclusions in determining the total income of an assessee.
Some of the provisions lay down the conditions for inclusion of certain income, while others lay down the conditions for exclusion of other income.
We are concerned with the income accruing in case of settlements and the conditions under which income of a wife is treated as the income of the settlor or disponer or as the income of the husband.
We have to see if the pro visions for exclusion or inclusion apply to this case.
Section 16(1)(c) provides that income from assets remaining the property of the settlor or disponer or arising to any person by virtue of a revocable transfer of assets shall be deemed to be the income of the transferor.
What cl.
(c) means was decided by this Court in Provat Kumar Mitter vs Commissioner of Income tax (2).
There, Provat Kumar Mitter had assigned the dividends only, and had not transferred the relevant shares.
It was held by this Court that this (1) , 329.
(2) 356 was a case of application of one 's own income and not assignment of the source from which the income was derived, which alone saved the income from tax, subject, however, to provisions like section 16(1)(c) and section 16(3).
The deed in favour of the wife in that case gave only a right to the dividends, and not being a transfer of an existing property of the assessee, section 16(1)(c) and the third proviso were not attracted.
That case thus has no application to the facts of the present case, where the disposition is differently made.
The disposition here is for a period of seven years or the life of the settle ' whichever is shorter.
During that period or the life of the settlee, Mr. Tulsidas Kilachand has bound himself upon trust to pay the dividends to his wife and not to revoke the settlement.
The intention is obviously to put this case within the third proviso to section 16(1)(c), because cl.
(c) does not apply to any income arising to any other person provided the disponer derives no direct or indirect benefit, even though the assets remain his property.
If it were only a question of the application of the proviso, this disposition would be exempt.
But by the deed of trust, the settlor holds the shares in trust; the shares do not remain the property of the settlor.
Section 16(1)(c) has, therefore, no application, and the proviso is not attracted.
The section goes on to deal with other situations and to provide for them specially.
Sub section (3) provides specially for assets transferred to the wife or minor child.
Income from assets transferred to the wife is still to be included in the total income of the husband, (a) if the assets have been transferred directly or indirectly to the wife by the husband otherwise than for adequate consideration [vide sub section
(3)(a)(iii)], or (b) so much of the income of any person or association of persons as arises from assets transferred otherwise than for adequate consideration to the person or association by such individual for the benefit of his wife [vide sub section
(3)(b)].
The first question is whether there can be said to be transfer of assets to the wife or to 'any person ' for the benefit of the wife.
The second question is whether there was adequate consideration for the transfer, if 357 there was one The contention of the assessee is that there was no transfer of any assets at all.
It is contended that the ownership of shares involves a bundle of rights, and that they are, generally speaking, (a) right to vote, (b) right to participate in the distribution of assets on dissolution, and (c) right to participate in the profits, e. g., dividends which might be Hi, .declared.
It is pointed out that none of these rights was transferred to the wife, because transfer of assets connotes a creation of a right in the assets in praesenti.
It is urged that there was no transfer of assets either to the wife or to any person for the benefit of the wife but merely a creation of a trust in respect of the shares, the dividends from which were payable to the wife, and that thus section 16(3)(a)(iii) or section 16(3)(b) was not applicable.
It is lastly contended that even if it be held that there was such a transfer, it was for adequate consideration, being for love and affection, which is a good consideration.
The contention that there was no transfer at all in this case is not sound.
The shares were previously held by Mr. Tulsidas Kilachand for himself.
After the declaration of trust by him, they were held by him not in his personal capacity but as a trustee.
No doubt, under sections 5 and 6 of the Indian Trusts Act if the declarer of the trust is himself the trustee also, there is no need that he must transfer the property to himself as trustee; but the law implies that such a transfer has been made by him, and no overt act except a declaration of trust is necessary.
The capacity of the declarer of trust and his capacity as trustee are different, and after the declaration of trust, he holds the assets as a trustee.
Under the Transfer of Property Act, there can be a transfer by a person to himself or to himself and another person or persons.
In our opinion, there was, in this case, a transfer by Mr. Tulsidas Kilachand to himself as a trustee, though there was no formal transfer.
The assessee also stresses the words "any person or association of persons" in section 16(3)(b), and contends that such a person must be other than the husband, who transfers.
The word "any person" is wide 358 enough to include the husband, when he transfers property to himself in another capacity.
The change of capacity makes him answer the description "any person".
This deed must be regarded as involving a transfer by the husband to a trustee, and even though the husband is the same individual, in his capacity as a trustee he must be regarded as a person distinct from the transferor.
In our opinion, section 16(3)(b) covers the case.
It remains to consider whether there was adequate consideration for the transfer.
Reliance has been placed only upon love and affection.
The words "adequate consideration" denote Consideration other than mere love and affection, which, in the case of a wife, may be presumed.
When the law insists that there should be "adequate consideration" and not good consideration", it excludes mere love and affection.
They may be good consideration to support a contract; but adequate consideration to avoid tax is quite a different thing.
To insist on the other meaning is really to say that consideration must only be looked for, when love and affection cease to exist.
In our opinion, this case falls within the special rules concerning wife and minor child, laid down in section 16(3)(b) and not within the third proviso to section 16(1)(c).
It must thus be held that there was a transfer of the assets to the husband trustee for the benefit of the wife, The answer given by the High Court was thus correct.
The appeals fail, and are dismissed with costs.
One hearing fee.
Appeals dismissed.
| The respondent, holding the substantive rank of a Head Constable in the Madras Police Service, was promoted to officiate as a probationary Sub Inspector and, on the completion of the period of probation, placed in the category of approved probationers for confirmation when substantive vacancies arose.
Instead of being confirmed he was, for administrative reasons, reverted to his substantive post as the number of vacancies in the post of Sub Inspectors was not sufficient to include him.
Having failed to obtain redress from the Government, he moved the High Court under article 226 of the Constitution.
Annexure 1 of r. 3 of the service rules provided that the percentage of promotions from the rank of Head Constable to that of Sub Inspector was to be "upto not more than 30% of the cadre", but provided no limitation for direct recruitment, r. 4 provided that no vacancy shall be filled by the appointment of a person who had not yet commenced his probation when an approved probationer or a probationer was available; cl.
(a) of r. 5 provided that, for want of vacancy, the probationers were to be discharged first in order of juniority and thereafter the approved probationers in order of juniority and cl.
(b) provided that this order of discharge might be departed from in cases involving, among others, exceptional administrative inconvenience.
The Single judge, who heard the matter, held that there was a violation of r. 3 of the Service Rules and directed the State not to give effect to the order of reversion if by virtue of his seniority he could be included within the 30% prescribed for rank promotees by that rule.
The Division Bench, on appeal, disagreed with the trial judge as to the scope of r. 3 but dismissed the appeal holding that the rule as to juniority prescribed by r. 5 of the service rules had not been strictly observed.
The State filed an appeal on a certificate granted by the High Court.
Held, that the words "upto and not more than 30% Of the cadre" in the Annexure 1 to r. 3, construed in the context of the provision relating to direct recruits which prescribes no limitation, clearly fix 30 as the maximum percentage of promotions 46 from the rank of Head Constables to the post of Sub Inspectors and leave the appointing authorities free to adopt any other percentage below that figure.
There could, therefore, be no infraction of the rule if the percentage of rank promotees was less than 30% of the total number of the Sub Inspectors on ' the date of the reversion in question.
Rule 4, which regulates the right of probationers and approved probationers to confirmation, applies only to the stage prior to confirmation when the integration of the rank promotees and the direct recruits takes place so as to form a united service and the proportion prescribed by r. 3 has effect.
That rule has to be separately applied to the two classes and, consequently, there was no violation of that rule in appointing direct recruits to substantive posts in preference to the respondent.
Under r. 5(a) the juniority for purposes of reversion has, on the same reasoning, to be determined separately for the direct recruits and the rank promotees who constitute separate classes.
Even otherwise, the impugned order could be sustained under r. 5(b) in view of the case of administrative inconvenience made by the Government and accepted by the Courts below.
|
Civil Appeal No. 381 of 1965.
Appeal by special leave from the judgment and decree dated May 2, 1961 of the Allahabad High Court in Execution First Appeal No.10 of 1954.
Naunit Lal, for the appellant.
V.A. Seyid Muhammad and S.P. Nayar, for the respondents.
The Judgment of the Court was delivered by Grover, J.
This is an appeal by special leave from a judgment of the Allahabad High Court confirming the order of the District Judge dismissing an Execution Application filed by the appellant.
On June 16, 1948 the appellant entered into an agreement with Aziz Ahmed Khan respondent No. I for the sale of certain properties comprising houses and plots in the town of Bareilley.
The sale consideration of Rs. 1,45,000/ was stated have been already paid by the appellant to the vendor.
Subsequently disputes arose between the vendor and the appellant regarding the completion of the sale.
These disputes were refered to the arbitration of Shri R.R. Agarwal who gave an award on August 30, 1949 which was made a rule of the court on November 30, 1949.
A decree on the basis of the award was granted in favour of the appellant.
Sometimes after November 22, 1949 the vendor Aziz Ahmed Khan left India for Pakistan.
On December 7, 1950 the appellant moved the Deputy Custodian (Judicial) Meerut Circle for confirmation of the transfer under section 38 of the Administration of Evacuee Property Ordinance, 1949, (Ordinance No. 27 of 1949), or under section 40 of the (Act 31 of 1950).
On 9th May 1951 the Deputy Custodian accorded confirmation.
The Additional Custodian, however, took suo motu action in exercise of his revisional jurisdiction and set aside the order passed by the Deputy Custodian.
On April 4,.
1952 the appellant filed an application for execution of the decree passed on the basis of the award.
On May 10, 1952 objections were filed on behalf of the Custodian to the execution.
The District Judge held that the award made on August 30, 1949 could not have the effect of transferring the properties as the approval of the Collector had not been obtained under the notification dated July 29, 1949 which had been 798 issued under section 26 of U.P. Administration of Evacuee Property Ordinance No. 1 of 1949 and that on the date of the decree the transfer of properties could not be effected unless confirmed by the Custodian.
It was further held by him that no interest by way of charge in favour of the appellant had been created on the properties in dispute.
He was further of the view that section 17(1) of the Central Act of 1950 created a bar to execution of the decree.
The Execution application was consequently dismissed.
The appellant filed an appeal to the High Court which was dismissed.
When the appeal came up for hearing before this Court on February 22, 1968 it was.
considered expedient to have further findings on certain points.
The following questions were therefore framed and remitted to the High Court for that 'purpose.
(1) the date on which Aziz Ahmed Khan migrated to Pakistan.
(2) whether the properties of Aziz Ahmed Khan vested in the Custodian of Evacuee Property under U.P. Ordinance 1 of 1949 or Central Ordinance 12 of 1949 as made applicable to the State of U.P. by U.P. Ordinance 20 of 1949 or under the Central Ordinance 27 of 1949 or under Central Act of 1950.
The High Court remitted these matters to the District Judge.
His finding on the first question was that Aziz Ahmed Khan had migrated to Pakistan on some date after November 22, 1949.
On the second question he found that Aziz Ahmed Khan 's properties did not vest in the Custodian of Evacuee Property under any of the Ordinances or under the Central Act 31 of 1950.
Certain additional evidence was produced before the High Court.
The High Court expressed agreement with the conclusions of the District Judge on both the points.
It may be mentioned that on certain subsidiary points the.
learned District Judge had .also found that it had not been proved that a valid declaration under section 7(1) of the Central Ordinance 27 of 1949 or of the corresponding provision in the Central Act 31 of 1950 was made for declaring Aziz Ahmed Khan an evacuee.
In the opinion of the learned Judge such a declaration was necessary if his properties were to be declared evacuee properties.
In view of the findings which have been returned by the High Court on the points referred, it has been contended on behalf of the appellant that there could be no bar to the execution of the decree which was based on the award.
It is 799 pointed out that on the conclusions at which the High Court has now arrived the properties of Aziz Ahmed Khan were never declared to be evacuee properties either under the Central Ordinance 27 of 1949 or the Central Act 31 of 1950, and they could not vest in the Custodian unless they had been so declared after appropriate proceedings.
It is urged that the decree in favour of the appellant was of the nature of a decree passed in a suit for specific performance.
The court could and should have executed d conveyance in favour of the appellant since Aziz Ahmed Khan was no longer available or was refusing to do so and the confirmation of the Custodian could be obtained before the registration was effected.
According to the counsel for the appellant the Additional Custodian had declined to confirm the transfer at the previous stage because there was no deed of sale or transfer.
Counsel for the respondent has drawn attention to a decision of this Court in Azimunissa & Others vs The Deputy Custodian Evacuee Properties, District Deoria & Ors.(1) in which the effect of the declaration of U.P. Ordinance l of 1949 to be invalid by the courts came up for the consideration, as also of the subsequent evacuee legislation namely, Central Ordinance 27 of 1949, Central Act 31 of 1950 and the Administration of Evacuee Property (Amendment) Act, 1960.
It appears to have been held in that case that the property which had vested under the U.P. Ordinance 1 of 1949 continued to vest in the Custodian notwithstanding the ,fact that the High Court of Allahabad in Azimunnissa & Ors.
vs Assistant Custodian(2) held the vesting to be invalid.
This was the result of the introduction of section 8(2 A) in the Central Act of 1931 by the Central Amendment Act I of 960.
In the present case, however, Aziz Ahmed Khan migrated to Pakistan after November 22, 1949.
At that point of time it was Central Ordinance 27 of 1949 which was in force.
It appears highly doubtful that the respondent could take advantage of the.
provisions of automatic vesting contained in U.P. Ordinance 1 of 1949.
There is, however, a serious hurdle in the way of the appel lant even when the provisions of Central Ordinance 27 of 1949 or the Central Act 31 of 1950 are taken into consideration.
Section 38(1) of that Ordinance provided that no transfer of any right or interest in any property after the 14th day of August 1947 by or on behalf of an evacuee or by or on behalf of a person who had become an evacuee after the date of ' the transfer shall be effective so as to confer any rights or remedies on the parties to such transfer unless it was confirmed by the Custodian.
The provision of section 40 of the Central Act (1) ; (2) A.I.R. 1957 All.
LI5SupCI/69 7 800 31 of 1950 were similar though there was a certain change in the language.
Sub section (1) of that section was in the following terms : "No transfer made after the 14th day of August, 1947, but before the 7th day of May 1954, by or on behalf of any person in any manner whatsoever of any property belonging to him shall be effective so as to confer any rights or remedies in respect of the transfer on the parties thereto or any person claiming under them or either of them, if, at any time after the transfer, the transferor becomes an evacuee within the meaning of section 2 or the property of the transferor is declared or notified to be evacuee property within the meaning of this Act, unless the transfer is confirmed by the Custodian in accordance with the provisions of this Act".
Under both these enactments transfer of property was ineffective unless confirmed by the Custodian even if it was made by a person who became an evacuee.
after the date of the transfer.
It was not necessary that the property should have been declared or notified to be evacuee property before the aforesaid provisions were attracted.
Under section 40(1) of the Act, the transfer was to be ineffective in both eventualities; (1) if the transferor became an evacuee within the meaning of section 2 after the transfer or (2) if the transferor 's property had been declared or notified to.
be evacuee property.
It is abundantly clear that if Aziz Ahmed Khan became an evacuee even after the transfer.
section 38(1) of the Ordinance and section 40(1) of the Act became applicable.
One of the meanings of the word "evacuee" as .given in the definition in section 2(d) of the Ordinance and of the Act was : Section 2(d)(i) "evacuee" means any person, who, on account of the setting up of the Dominions of India and Pakistan or on account of civil disturbances or the fear o.f such disturbances leaves or has, on or after the 1st day of March, 1947, left any place in a Province for any place outside the territories now forming part of India," Aziz Ahmed Khan became an evacuee within the meaning of the above definition.
It was necessary, therefore, for the appellant to have obtained the confirmation of the Custodian in respect of the transfer which had been made by Aziz Ahmed Khan in his favour of the properties in question.
The Additional Custodian declined to confirm the transfer and thus the condition precedent for the transfer to become effective remained 801 unsatisfied.
It is significant that even in the award which formed the basis of the decree it had been provided "the second party (Aziz Ahmed Khan) is hereby directed to execute the necessary documents in respect of the transfer by him of the properties referred to above within one month from the date of the receipt of the confirmation or approval according to law failing which the first party will, at his option, get the same executed and registered through court on the basis of this award which would be made a rule of the court.
Therefore according to the award the confirmation or approval of the Custodian had to be obtained before the transfer documents were to be executed and completed in accordance with law.
It was incumbent on the appellant to obtain the confirmation order before he could ask for any further steps to be taken by the courts in the matter of execution and registration of the transfer deed.
Under section 39 of the Central Ordinance 27 of 1949 no document could be registered of the nature mentioned in section 38 unless the Custodian had confirmed the transfer.
Similar provisions were contained in section 40 of the Central Act 31 of 1950.
The prayer in the Execution Application that the court might grant assistance "by execution of sale deed under the enabling para 5 of the Decree" could not be entertained or acceded to by the Executing Court.
There is one matter, however, on which we would like to express no view and leave it open to the appellant to take such steps as he may be advised.
Para 6 of the award which became part of the decree was as follows : "The claim of the first party for this transfer and exchange consideration is Rs. 1,50,000/ (one lac fifty thousand) on account of all principal money and interest and other expenses calculated to date against the second party Sri Aziz Ahmed Khan, which the second party will pay with interest at 12 per cent per annum in case the transaction and transfer of the properties referred to above in favour of the first part Sri Sardana is not confirmed or approved in any way and for any other reasons whatsoever.
Sri Sardana will force the payments against the properties referred to above.
and these properties are hereby charged with this claim and Sri Sardana will have his remedies to enforce the payment of the above claim against all other properties of the second party and also against his person.
" The High Court in the judgment under appeal dealt with this question as if the charge was on the evacuee property.
On the reasoning which has been pressed before us about the necessity 802 Of a declaration under the provisions of Central Ordinance 27 of 1949 or Central Act 31 of 1950 this part of the judgment does not appear to be correct.
We would, however, refrain from expressing any final opinion as in fairness to both sides this question should be left for being decided, if taken, in appropriate proceedings including proceedings before the Executing Court.
With the above observations the appeal is dismissed but in view of the entire circumstances we make no order as to costs.
Y.P. Appeal dismissed.
| The appellant, a dealer in pulses in Vijayawada in Madras State made certain sales outside the State during the assessment year 1949 50.
The appellant claimed exemption from sales tax of sales effected outside the State during the year but the Deputy Commercial Tax Officer disallowed the claim.
A first appeal and a revision petition to the Board of Revenue were unsuccessful.
The appellant thereafter brought a suit for the recovery of tax collected from him with interest contending that part of sales effected outside the State could not be taxed under article 285(1)(a) of the Constitution.
The Trial Court held that the assessment to tax of the sales during the period from April 1, 1949 to January 25, 1950 ' could not be impeached but the sales from January 26 to March 31 outside the State were not liable to sales tax; as there was a single order of assessment 'for the whole year, the entire assessment was illegal.
In appeal to the High Court, and upon a direction from that Court, the Trial Court gave a finding that deliveries of the goods were not made for purposes of consumption within the delivery State only.
The High Court.
therefore.
allowed the appeal holding that the appellant could not claim the benefit under Article 286(1)(a) in the absence of evidence as to how the whole sales disposed of the goods after obtaining delivery and therefore the entire turn over for the year 1949 50 would be assessable to tax.
In the appeal to this Court, it was contended inter alia (i) that the High Court was in error in holding that the burden of proof was on the appellant to show that there was not only delivery of goods for consumption within the delivery States but there was actual consumption of goods in those States: (ii) the assessment must be treated as an indivisible one and if a part of the assessment was illegal, the entire assessment must be deemed to be infected and treated as invalid.
HELD: Allowing the appeal, (i) The part of the turnover which related to sales from January 26, 1960 to March 31.
1960 was not liable to sales tax and the levy of sales tax from the appellant to this extent was illegal.
It was rightly contended that the appellant did not carry the burden of showing that there was not only delivery of goods for consumption within the States but that the goods were actually consumed in those States.
[749 C] India Copper Corporation Ltd. vs The State of Bihar, 12 S.T.C. 56 relied upon.
744 (ii) In the present case though there was a single order of assessment for the period from April 1, 1949 to March 31, 1950, the assessment could be split up and dissected and the items of sales separated and taxed for different periods.
It was possible to ascertain the turnover of the appellant for the pre Constitution and post Constitution periods from the figures furnished in the plaint by the appellant himself.
It was, therefore.
open to the Court in these circumstances to sever the illegal part of the assessment and give a declaration with regard to the illegal part alone instead of1 declaring the entire assessment void.
[752 B] Case law referred to.
|
Appeal No. 512 of 1964.
Appeal from the judgment and decree dated December 23, 1960 of the Allahabad High Court in Income tax Misc.
Case No. 475 of 1954.
A. V. Viswanatha Sastri, 4.
Ganapathy lyer, R. H. Dhebar and R.N. Sachthey, for the appellant.
section T. Desai, and J. P. Goyal, for the respondent.
The Judgment of the Court was delivered by Shah, J.
Under an agreement dated January 2, 1931, Lab Manmohan Das hereinafter called 'the assessee was appointed Treasurer of the Allahabad Bank Ltd. in respect of certain Branches, Sub Agencies and Pay Offices.
The assessee was assessed to income tax as representing his Hindu undivided family, and the income received by the assessee under the terms of the agreement with the Allahabad Bank, was treated as income of the Hindu undivided family.
In the previous year corresponding to the assessment year 1950 51 the assessee in performing his duties as a Treasurer suffered a net loss of Rs. 38,027.
For the assessment year 1951 52, the profit and loss account of the assesses showed Rs. 73,815 as receipts, against which were debited outgoings amounting to Rs. 39,370 which included Rs. 20,000 being the loss suffered by the assessee as Treasurer of the Patna Branch of the Allahabad Bank arising from misappropriation by an Assistant Cashier.
The Income tax Officer refused to allow the loss suffered in the previous year to be set off against the net profit of Rs. 34,445 and brought that amount of profit to tax as remuneration received by the assessee as Treasurer of the Allahabad Bank.
The order of the Income tax Officer was conflrmed in appeal by the Appellate Assistant Commissioner.
The 5 33 Income tax Appellate Tribunal held that the remuneration received by the assessee as Treasurer of the Allahabad Bank was income arising from pursuit of a profession or vocation within the meaning of section 10 of the Act and the loss suffered during the preceding year was liable to be set off against the assessee 's income from that source in the year under consideration.
At the instance of the Commissioner of Income tax, U.P., the following questions were referred to the High Court of Allahabad under section 66(1) of the Income tax Act, 1922: "(1) Whether on a true interpretation of the deed of agreement dated 2nd January, 1931, appointing the assessee as Treasurer of the Allahabad Bank Limited, income earned by the assessee from his activities as such Treasurer fell to be computed under Section 10 of the Act or Section 7 or Section 12 of the Income tax Act ? If the answer to this question is that such income is liable to be computed under Section 10 of the Act, (2)Whether the assessee could claim a set off of the loss suffered by him in the preceding year 1950 51 against his profits in the year under consideration, i.e., 1951 52 having failed to prefer an appeal against the refusal by the Income tax Officer making the assessment for the year 1950 51 to allow the assessee to carry forward the loss under Section 24(2) of the Act ?" The High Court held that the remuneration received by the from the Allahabad Bank was income liable to be taxed under section 10 of the Income tax Act, and that the assessee could claim to set off the loss computed in the assessment year 1950 51 against the profit in the subsequent year.
With certificate granted by the High Court, this appeal has been preferred by the Commissioner of Income tax.
The second question presents little difficulty.
In making his order of assessment for the year 1950 51 the Income tax Officer declared that the loss computed in that year could not be carried forward to the next year under section 24(2) of the Income tax Act, as it was not a business loss '.
The Income tax Officer has under section 24(3) to notify to the assessee the amount of loss as computed by him, if it is established in the course of assessment of the total income that the assessee has suffered loss of profits.
Section 24(2) confers a statutory right (subject to certain conditions which are not material) upon the assessee who sustains a loss of profits in any year in any business, profession or vocation to carry forward L3Sup.
Cl/66 4 5 34 the loss as is not set off under sub section (1) to the following year, and to set it off against his profits and gains, if any, from ',the same business, profession or vocation for that year.
Whether the loss of profits or gains in any year may be carried forward to the following year and set off against the profits and against the same business, profession or vocation under section 24(2) has to be determined by the Income tax Officer who deals with,the assessment of the subsequent year.
It is for the Income tax Officer dealing with the assessment in the subsequent year to determine whether the loss of the previous year may be set off against the profits of that year.
A decision recorded by the Income tax Officer who computes the loss in the previous year under section 24(3) that the loss cannot be set off against the income of the subsequent year is not binding on the assessee.
The answer to the first question depends upon the true interpretation of the terms of the agreement between the Allahabad Bank and the assessee ' If under the terms of the agreement it is found that the assessee was carrying on a business, profession or vocation, the assessee would be entitled to carry forward the loss suffered therein and set it off against the profits in the subsequent year of the same business, profession or vocation under section 24(2).
If the remuneration was received by the assessee as a servant of the Bank, and on that account has to be computed under section 7 of the Act, the right to set off the loss cannot be claimed under section 24(2).
The fact that the assessee held an office is however not decisive of the question whether remuneration earned by him was as a servant of the.
Allahabad Bank.
Receipt of remuneration for holding an office does not necessarily give rise to a relationship of master and servant between the holder of the office and the person who pays the remuneration.
The agreement is between the Allahabad Bank Ltd., and Lala Manmohan Das called in the agreement "Treasurer", and the expression Treasurer includes "his heirs and representatives".; By cl. 2 it is recited that the Treasurer is appointed for the Bank 's Branches and Sub Agencies and Pay Offices mentioned therein and such other offices in other parts of India for which he may be appointed, and that the Treasurer has agreed to provide security to the Bank for the discharge and performance of his duties and obligations to the Bank.
The agreement I then proceeds to set out the conditions of the agreement, the following of which are relevant: (1) "The Treasurer shall serve, the Bank as Treasurer for its Branches,, Sub Agencies and: Pay 535 Offices until, this agreement is determined as hereinafter provided." (2)"The remuneration of the.
Treasurer shall be a monthly allowance for each of the Branches, SubAgencies and Pay Offices the total of such monthly allowance to be Rs. 2,250 (Rupees two thousand two hundred and fifty) plus Rs. 350 (Rupees three hundred fifty) for travelling expenses.
" (3)"The duties, liabilities and responsibilities of the Treasurer to the Bank shall be such as either by custom or contract usually devolve on a Treasurer in the service of the Bank including the duties, liabilities and responsibilities hereinafter mentioned and the Treasurer shall faithfully discharge his duties and duly perform his obligations to the Bank." (4)"The Treasurer shall with the approval of the Bank appoint at adequate salaries to be paid by the Bank all the Indian staff as may be con sidered sufficient by the Bank for the business of the Cash Department of the Bank 's Branches, Sub Agencies and Pay Offices .
and shall dismiss any person or persons so appointed whom he shall be reasonably directed by the Bank to dismiss and shall with like approval appoint another or others in the place of person or persons so dismissed.
The Treasurer shall be deemed to have appointed the present staff of the Cash Department of the Branches, Sub Agencies and Pay Offices aforesaid.
Provided always that the Bank shall accept any proposal of the Treasurer for transfer, suspension or dismissal of any member of the Cash staff in the Bank." (5) "The Treasurer shall be responsible to the Bank for the work and conduct of every person to be appointed or employed on his staff and shall make good to the Bank any loss or damage sustained or incurred by the Bank from any embezzlement, theft, fraud, misappropriation, misconduct, mistake, omission, negligent act or default of any such person or persons." (6)"The Treasurer shall keep under his care and supervision or that of his staff the moneys, cash bullion, securities, cheques, notes, hundies, drafts, orders and 536 other documents or property which may from time to time be entrusted to him at the Branches, Sub Agencies and Pay Offices. . and shall whenever so required to do so transmit from one place to another place under such guard as may be provided by the Bank all such money, documents or properties and shall be responsible for the care and proper custody of the same while in transit.
Thai the Bank shall for the efficient working of its Cash Department provide proper iron safes and a strong room in each of the said Branches, Sub Agencies and Pay Offices and the Treasurer shall be responsible to the Bank for any loss occasioned to the Bank through the negligence, malfeasance or misfeasance of any of his servants or agents by the payment or delivery of any money, document or property aforesaid to a wrong person whether owing to forgery, mistake, fraud or otherwise.
" (7)"The Treasurer shall be responsible for the correctness and genuineness of all hundies, cheques, drafts, securities, vouchers, documents, writing and signature in an Indian language or character which the Treasurer or any of his staff may accept and certify as genuine and correct and shall make good to the Bank any loss or damage from any forged instrument or signature on a document as dealt with and shall also be liable for any loss occasioned to the Bank by receipt of any bad or base money coin or bullion or any forged or fraudulently altered currency note." (9)"The Treasurer shall not nor shall any substitute or any one of the staff of the Treasurer publish or divulgeany of the business affairs or transactions of the Bank or any of its constituents." (10) "The Treasurer 's employment. . may be determined at any time by either party giving to the other three calendar months written notice to that effect, and in case of the Treasurer 's death, this agreement as regards the Treasurer 's liabilities and obligations for the staff and other persons shall remain in force so as to bind his heirs, representatives and estate for any loss then accrued or accruing claim of the Bank hereunder but also for any future claim of the Bank in respect of any subsequent transaction or occurrence unless and 5 37 A until determined by his heirs or representatives giving like notice to the Bank.
" The agreement contains certain peculiar covenants : for instance, the expression "Treasure" includes the heirs and representatives and except where the content may justify a contrary implication, the rights, obligations and liabilities of the Treasurer would apparently be enforceable by or be enforced against the heirs and legal representatives of the assessee.
The Treasurer is entitled under the terms of cl.
(4) to transfer, suspend and dismiss any member of the staff in the cash department of the Bank and his recommendation in that behalf has to be accepted by the Bank.
The Treasurer has if reasonably directed by the Bank, but not otherwise, to dismiss any member of the Indian staff appointed by him, and to appoint another in the place of the person so dismissed.
The staff in the Cash department is referred in cls.
(5), (6) & (7) as the Treasurer 's staff.
Under cl.
(4) all the staff originally in the employment of the Bank at the date of the agreement and 3 the staff subsequently appointed were to be paid by the Bank, but the Treasurer was to stand responsible for any loss or damage which may be sustained not only for embezzlement, theft, fraud, misappropriation, misconduct, but even for mistake, omission, negligent act or de fault of any member of the staff.
The Treasurer has by the agreement undertaken to keep the moneys, cash, bullion, securities, cheques, notes, hundies, drafts, orders, and other documents or property under his care and supervision through his staff, and is liable to protect the property of the Bank in his custody, and has to make good any loss occasioned to the Bank by the negligence, malfeasance or misfeasance of any of "his servants or agents" even though not belonging to the Cash Department.
The Treasurer is responsible for the "correctness and genuineness" of all hundies, cheques, drafts, securities, vouchers, documents, writing and signature in an Indian language and he is responsible for any loss or damage from any forged instrument or signature on a document dealt with by his staff, and also for any loss arising from receipt, of any bad or base money coin or bullion or any forged or fraudulently altered currency note.
It may be noticed that the liability imposed under that covenant is for the acts of the staff appointed by him or deemed to have been appointed by him within the meaning of cl.
(4), and also for loss arising from the receipt of any bad or base money coin or bullion or any forged or fraudulently altered currency note by any person employed by the Bank.
The agreement also contemplates that the Treasurer may appoint any substitute to carry on the work of the Bank.
The Treasurer is under the agreement 538 responsible for the acts of the Indian staff at the Branches, SubAgencies and Pay.
Offices as far apart as Calcutta, Lahore, Lucknow, Patna, Amritsar, Benaras and Secunderabad.
On a fair reading of the terms of the agreement it appears that the Treasurer had to provide the staff for the cash section : he had power to suspend, transfer or dismiss any member of the staff or to appoint another person in his place: he had to perform the duties, liabilities and responsibilities which by custom or contract usually devolve upon a Treasurer and the duties specified in the agreement, and he was responsible for all acts of the staff so appointed which result in loss or damage to the Bank.
The Treasurer was also responsible for the protection of the property of the Bank and was also responsible for receipt of any bad or base money coin or bullion or any forged or fraudulently altered currency note.
Personal attendance by the Treasurer and supervision over the staff in the cash section in all the Branches and Pay Offices being in the very nature of things impossible, it was open to the Treasurer to appoint his own agents to supervise the work of the cash section.
An office of Treasurer was undoubtedly created by the agree ment.
It is recited in cl.
(1) that the Treasurer shall serve the Bank and in cl.
(3) that the duties, liabilities and responsibilities I of the Treasurer shall be such as by custom or contract usually devolve on a Treasurer in the service of the Bank.
For performing these duties there is a fixed remuneration which is paid to the Treasurer, beside the travelling expenses.
But the use of the expressions "serve.
, the Bank" and "in the service of the Bank" have to be read in the setting of the other covenants.
By them I selves they are not decisive of the ' intention of the parties to the agreement.
The office of the Treasurer can be determined only by notice on either side of a duration of three months, and even on the death of the assessee, the Treasurer 's obligations accrued or accruing during his life time, and future claims in respect of any transactions, even subsequent to his death, remain enforceable.
Express reference to liability of the Treasurer for future claims for subsequent transactions clearly indicates that the agreement does not come to an end by the death of the assessee : it is determined only by notice of three months ' duration.
Liability for transactions subsequent to the death of the person for the time being acting as Treasurer remaining enforceable, it is reasonable to infer that the right to receive remuneration would tenure to the person who would step into the office of the Treasurer.
539 The office of Treasurer is therefore to be held by the assessee, and After his death by, his heirs and legal representatives.
It is unnecessary to consider whether the agreement would be determined by any supervening disability of the Treasurer, which may render the contract impossible of performance.
But the Treasurer holds the office not as a servant of the Bank.
The Treasurer has unquestionably undertaken very onerous responsibilities.
There is however no covenant which authorises the Bank to control the Treasurer in the due performance of duties undertaken by him under the terms of the agreement.
Business of the Bank has undoubtedly to be carried on in the manner normally done by the Banks, and the duties, liabilities and responsibilities of the Treasurer are to be such as "either by custom or contract usually devolve on a Treasurer".
The Bank pays the Indian staff in the Cash Department, but the control is of the assessee.
He has control over the staff appointed by him or deemed to be appointed by him: he has therefore the power to initiate proposals for transfer, suspension or dismissal of any member of the cash staff.
This Court in Dharangadhara Chemical Works Ltd. vs State of Saurashtra(1) observed "The principles according to which the relationship as between employer and employee or master and servant has got to be determined are well settled.
The test which is uniformly applied in order to determine the relationship is the existence of a right of control in res pect of the manner in which the work is to be done.
A distinction is also drawn between a contract for service and a contract of service and that distinction is put in this, .,way.: "In the one case the master can order or require what is to be done while in the other case he cannot only order or require what is to be done but how itself it shall be done"." After referring to a large number of cases the Court observed P. 160 "The nature or extent of control which is requisite to establish the relationship of employer and employee must necessarily vary from business to business and is by its very nature incapable of precise definition.
it is not necessary for holding that a person is an employee, that the employer should be proved to have exercised control over his work, that the test of control (1)[1957] S.C.R., 152, 157.
54 0 was not One of universal application and that there were many contracts in which the master could not control the manner in which the work was done.
The correct method of approach, therefore, would be to consider whether having regard to the nature of the work there was due control and supervision by the employer or.
to use the words of Fletcher Moulton, L.J., at page 549 in Simons vs Health Laundry Company [(1910)1 K.B. 543] ".
it is impossible to lay down any rule of law distinguishing the one from the other.
It is a question of fact to be decided by all the circumstances of the case.
The greater the amount of direct control exercised over the person rendering the services by the person contracting for them the stronger the grounds for holding it to be a contract of service, and similarly the greater the degree of independence of such control the greater the probability that the services rendered are of the nature of professional services and that the contract is not one of service".
" Under the contract the Treasurer had to procure due performance of the duties of the Cash Department by employees under his supervision and that he was to be responsible for all acts done by them and to make good the loss which may result from any embezzlement, theft, fraud, misappropriation, mistake, misconduct, omission, negligent act or default of any such person.
In carrying out his duties under the contract apparently he was not to be controlled or supervised by the Bank.
The contract was therefore ,one for service and the Treasurer could not be called a servant of the Bank.
But Mr. Sastri on behalf of the Revenue contended relying upon Shivnandan Sharma vs The Punjab National Bank Ltd.(1) and Piyare Lal Adishawar Lal vs Commissioner of Income tax, Delhi(2), that under the contracts substantially similar to the contract in this case, Treasurers were held merely to be servants of the Banks, business whereof they attended.
It is true that in each of these cases this Court in interpreting a contract in which a Treasurer was appointed to supervise the Cash Department of a Bank, held that the Treasurer was a servant of the Bank, and not an independent contractor.
But unless the terms of the contracts (1) [1955]1 S.C.R. 1427.
(2) ; 541 and the circumstances in which they are made are identical, interpretation of one contract cannot be regarded as a guide for determining the intention of parties to another contract.
In Shivnandan Sharma 's case(1) the position of a Treasurer of a Bank fell to be determined somewhat indirectly.
Shivnandan a head cashier in one of the branches of the Punjab National Bank appointed by the Treasurer who was in charge of the Cash Department of the Bank under an agreement between the Bank and the Treasurer, was dismissed from the service by the Bank.
In a reference made to the Industrial Tribunal of certain industrial disputes including one for reinstatement of Shivnandan, it was held by this Court that under the terms of the agreement between the Treasurer and the Bank, the Treasurer was the servant of the Bank and not an independent contractor.
In coining to that conclusion the Court was substantially guided by the covenants which reposed the direction and control over Shivnandan and of the ministerial staff in charge of the Cash Department in the Bank.
The covenants of the agreement between the Treasurer and the Bank disclosed that the Treasurer had agreed to serve the Bank and to obey and observe all lawful orders and instructions of the Bank and to carry out such duties and to discharge such responsibilities as usually devolve upon a Treasurer in the employment of the Bank and in consideration thereof to receive remuneration mentioned in the Schedule.
The Treasurer and his nominees were bound as expressly stipulated to obey all the orders, rules, and regulations prescribed by the Bank with regard to the discharge of their duties by the cashiers as well as with regard to the amount of balance they were allowed to keep with them.
The Bank was also given power in case of gross negligence or misconduct or of any fraud, misappropriation or embezzlement by the Treasurer or any of the nominees in the discharge of their duties to dispense with the services of the Treasurer forthwith.
The Treasurer was not to engage any person as his assistant or, peon about whose character, conduct or reliability the manager of the Board of Directors of the Bank may have any objection.
Shivnandan was a nominee of the Treasurer, but from the terms of his employment it appeared that he was working directly under the control and supervision of the Punjab National Bank.
This Court held that the Treasurer 's relation to the Bank was that of a servant to the master, and the ministerial staff of the Cash Department appointed by him were also the employees in the Cash Department.
It is difficult to regard the agreement in Shivnandan Sharma 's case(1) as even substantially similar to (1) [1955]1 S.C.R. 1427.
542 the agreement in the present case between the Allahabad Bank and the Treasurer, so as to make the interpretation of the agreement a guide or a precedent in the interpretation of the agreement before us.
In Piyare Lal Adishwar Lal 's case(1), one Sheel Chandra was appointed Treasurer of the Central Bank for various branches on a monthly salary.
Under the agreement between Sheel Chandra and the Bank, Sheel Chandra had to engage and employ all subordinate staff.
He had the power to control, dismiss and change the staff at his pleasure, but he could not engage or transfer any member of the staff except with the approval of the Bank and he had to dismiss any such member if so required by the managing director of the Bank or Agent of the office.
The Treasurer was responsible for the acts and omissions of his representatives ' whom he was entitled to appoint at the various branches with the approval of the Bank, and he had agreed to indemnify the Bank against any loss arising from any neglect or omission on their part.
But the Treasurer and his staff were under the direct control of the Bank.
The agreement which was terminable by three calendar months ' notice in writing by either side, could in the event of any breach of any condition of the agreement by the Treasurer be terminated by the Bank forthwith.
Having regard to the nature of his work and the control and supervision of the Bank over the Treasurer, it was held that the Treasurer was a servant of the Bank and the emoluments received by the Treasurer were in the nature of salary and assessable under section 7 of the Income tax Act and not profits and gains of business under section 10.
Some of the covenants of the contract between the Central Bank and the Treasurer are similar to the agreement under consideration in this appeal, but in Piyarelal Adishwar Lars case(1) this Court founded its conclusion upon the existence of control and supervision of the Bank over the Treasurer and upon the power vested in the Bank to summarily dismiss the Treasurer in case of breach of any of the conditions of the agreement.
In the present case there is no covenant which either expressly or impliedly confers upon the Bank such control and supervision over the work done by the Treasurer, and the agreement is not liable to summary determination.
His duties, liabilities and responsibilities are to be such as either by custom or contract usually devolve upon the Treasurers and those which are specified in the agreement.
It is true that under cl.
(d) he has to transmit from one place to another place whenever so required, under such guard (1) [1960]1 S.C.R. 669.
543 as may be provided by the Bank, all such money, cash, bullion, securities, cheques, notes, hundies, drafts, orders and other documents, but that does not put the Treasurer under the general supervision of the Bank.
On a careful consideration of the covenants, we are of the view that the Treasurer was not a servant of the Allahabad Bank under the terms of the agreement dated January 2, 1931, and the remuneration received by him was not "salaries" within the meaning of section 7 of the Income tax Act.
But that is not sufficient to conclude the matter in favour of the assessee.
The benefit of section 24(2) of the Indian Income tax Act may be availed of by the assessee only if the loss sought to be set off was suffered under the head "Profits and gains .
in any business, profession or vocation".
It is difficult to regard the occupation of the Treasurer under the agreement as a profession, for a profession involves occupation requiring purely intellectual or manual skill, and the work of the Treasurer under the contract cannot be so regarded.
Occupation of a Treasurer is not one of the recognized professions, nor can it be said that it partakes of the character of a business or trade.
In performing his duties under the agreement the assessee exercised his skill and judgment in making proper appointments and made arrangements for supervising the work done by the 'Staff in the Cash Department of the Bank 's Branches.
The remuneration received by him was for due per formance of the duties and also for the guarantee against loss arising to the.
Bank out of the acts or omissions of the Cash and other staff of the Bank.
Taking into consideration the nature of the duties performed, and the obligations undertaken, together with the right to remuneration subject to compensation for loss arising to the Bank from his own acts and omissions or of the servants introduced by him into the business of the Bank, the assessee may be regarded as following a vocation.
The remuneration must therefore be computed under section IO of the Income tax Act and loss of profit suffered in that vocation in any year may be carried forward to the next year and be set off against the profit of the succeeding year.
The appeal therefore fails and is dismissed with costs.
Appeal dismissed.
| For the assessment years 1948 49, 1949 50 and 1950 51, the appellant was assessed on the basis of returns filed for the turnover of each relevant previous year.
For the assessment year 1951 52, the appellant, purporting to make an election under r. 39(1) of the U.P. Sales Tax Rules, filed returns of his turnover of the assessment year instead of the previous year.
The Judge (Revision) Sales Tax held that without the sanction of the Sales Tax Commissioner under r. 39(2), the appellant was not entitled to do so, and the High Court also, on a reference, held against the appellant.
In appeal to this Court, HELD : The answer of the High Court should have been in favour of the appellant.
[610 HI Under r. 39(1), the dealer makes a choice that he will be assessed in respect of the turnover not of the previous year, which is the normal position under section 7, but in respect of the turnover of the assessment year.
Rule 39(2), requiring the sanction of the Sales Tax Commissioner covers only the, case where such election has been made under r. 39(1), that is, where the election has been made by a dealer to be assessed in respect of the turnover of the assessment year, and the dealer wishes to exercise a fresh option.
Even assuming that, when a dealer submits a return in respect of the previous year under r. 40 be is treated to have elected within that rule, yet, there is no provision like r. 39 (2) which debars him from exercising the option under r. 39(1).
In the absence of an express provision like r. 39(2), general principles cannot debar an assessee from exercising a statutory right given to him.
[611 A E]
|
Civil Appeal No. 2891 (NT) of 1977.
Appeal by Certificate from the Judgment and Order dated 15.10.1975 of the Gujarat High Court O.J. Appeal No. 2 of 1975.
B. Datta, P.H. Parekh and J.P. Pathak for the Appellant.
Dushyant Dave, Anip Sachthey and Ashish Verma for the Respondent.
The Judgment of the Court was delivered by PUNCHHI, J.
What is the ambit of the State 's claim to priority in relation to revenues, taxes, cesses and rates, due from a company in liquidation, is the question which stands posed in this appeal by certificate, granted by the High Court of Gujarat, in O.J. Appeal No. 2 of 1975.
The question arises on the frame of section 530(1)(a) of the , as it stood at the relevant time, which is set out below: "In winding up, there shall be paid in priority to all other debts all revenues, taxes, cesses and rates due from the company to the Central or a State Government to a local authority at the relevant date as defined in clause (c) of 530 sub section (8), and having become due and payable within the twelve months next before that date.
And sub section (8)(c) of section 530 says: "The expression 'the relevant date ' means (i) in the case of a company ordered to be wound up compulsorily, the date of appointment (or first appointment) of a provisional liquidator, or if no such appointment was made the date of the winding up order, unless in either case the company had commenced to be wound up voluntarily before that date; and (ii) in any case where sub clause (i) does not apply, the date of the passing of the resolution for the voluntary winding up of the company.
" The appellant company was ordered to be wound up by an order of Court made on June 26, 1967.
The liquidator after obtaining directions of the Court invited the creditors of the company to prove their debts or claims and simultaneously to establish any title they may have to priority under section 530.
Pursuant to this invitation the Sales Tax Officer, Petlad submitted a comprehensive claim in the sum of Rs. 70945.60 as the amount of sales tax plus penalty payable by the company and claimed priority for the whole amount.
The liquidator rejected the claim for priority in its entirety, but admitted claim to the tune of Rs.42143.63 payable as debt paripassu with other unsecured creditors of the company.
The Sales Tax Officer took the matter in appeal before the Company Judge under Rule 164 of the Companies (Court) Rules, 1959 which was heard by D. A. Desai, J. (as he was in the Gujarat High Court).
It was urged on behalf of the Sales Tax Officer that out of the admitted claim in the amount of Rs.42,143.83, the liquidator was in error in not granting priority in payment of debt of Rs.22,280.96 consisting of Rs.11,064.46 being sales tax payable by the company for the period from April 1, 1957 to December 31, 1965, under the Bombay Sales Tax Act and balance of Rs. 11,216.50 being the amount of sales tax payable under the Central Sales Tax Act for the period from July 1, 1957 to December 31, 1965, because the assessment order was made in respect of the aforementioned claim within a period of 12 months next before the relevant date and the notice of demand which made the tax payable was also issued within a period of 12 months next 531 before the relevant date.
It was urged that apart from any other consideration the petitioner is entitled to a priority in payment for the amount of Rs.22,280.96 as the claim was of sales tax which was due on the relevant date and which became due and payable within 12 months next before the relevant date.
It was conceded that balance of the admitted claim in the amount of Rs. 19,862.87 being the amount of sales tax due and payable under the Bombay Sales Tax Act for the period from January 1, 1966 to June 26, 1967, would not be entitled to priority in payment.
It was also conceded that the claim for an amount of Rs. 196.42 had been rightly rejected.
It would appeal that from the claim admitted as payable by the liquidator to the extent of Rs. 42,143.83 priority in payment was claimed for the amount of Rs.22,280.96 on the submission that the claim represented the claim for tax payable to the State Government as it was due on the relevant date and had become due and payable within 12 months next before the relevant date, and therefore, it was entitled to a priority in payment as envisaged by section 530(1)(a) of the .
The learned Judge on interpretation of section 530(1)(a) took the view that the word 'due ' implies or conveys meanings in juxtaposition in which it is used in the two parts of the same clause.
The word 'due ' in the first part of the clause must mean 'outstanding at the relevant date '.
When it occurs in the expression 'having become due ' in the later part of the clause, it means that the event which brought the debt into existence occurred and also it became payable, meaning thereby that its payment could have been enforced against the company within the twelve months before the relevant date, that is, the date of the order of winding up.
Three specific conditions are prescribed in the clause and all the three must co exist and be satisfied in respect of any particular debt for which priority is claimed.
The three conditions are: (i) Debt of the kind mentioned in the clause must be outstanding on the relevant date; (ii) The debt must have become due, in the sense that it must have been incurred at any time within the twelve months next before the relevant date; and (iii) The debt must have payable at any time within the twelve months next before the relevant date.
To conclude, the learned Judge observed that the tax becomes due 532 when taxing event occurrs and not when assessment orders passed and that the claim for priority was rightly negatived by the liquidator because even though amount for which priority was claimed was the amount of tax arrears that became payable at the time of making assessment orders after giving credit for what was paid alongwith return, yet it was due for a period much prior to 12 months next before the relevant date and even if it had become payable on the assessment order being made and demand notice being issued, as both the conditions did not co exist and were not satisfied, claim for priority had been rightly nagatived by the official liquidator requiring no interference in his order.
The appeal on that score was rejected but was allowed to the extent of a small amount of Rs.1225.36 being the amount of penalty under the Bombay Sales Tax Act and the Central Sales Tax Act upto the relevant date and the liquidator was directed to admit the said claim over and above the claim admitted by him.
The judgment of the D.R. Desai, J. is reported as Sales Tax Officer, Petlad vs Rajratha Naranbhai Mills Co. Ltd. & Another, [1974] Vol.
An intra Court Appeal was preferred by the Sales Tax Officer, Petlad in the High Court.
In the meantime in another case of Baroda Board & Paper Mills Ltd., a company in liquidation, the Income Tax Officer filed Company Application No. 2 of 1973 before the Company Judge claiming priority in respect of certain dues.
The Company Judge, B. K. Mehta, J. was engaged to determine the same question.
His attention was invited to the decision of D.A. Desai, J. in the instant case.
D.K. Mehta, J. was unable to agree with the conclusion reached by D.A. Desai, J. and hence the matter was referred to a Division Bench to have the entire question decided along with O.J. Appeal No. 2 of 1975.
The division bench of the High Court differed from the view of D.A. Desai, J. by holding that the only meaning that could be assigned to the word 'due ' occuring in the section is 'it must be presently due ' and the words 'due and payable ' mean the same thing, namely, that it must be presently payable.
On this understanding it was held that all revenues, taxes, cesses and rates due from the company to the Central or State Government or to a local authority must be presently payable, that is, that the liability could be enforced as at the relevant date and, secondly, it must have so become presently payable within twelve months immediately preceding the relevant date.
Further regarding sales tax it was held that it becomes due and payable when the tax has been assessed and a notice of demand for payment of that tax is served 533 upon the assessee or the dealer concerned and it is in this sense that the word has to be interpreted.
Taking that view the appeal of the Sales Tax Officer was allowed inasmuch as the sales tax due under the Bombay Sales Tax Act and the Central Sales Tax Act in respect of which the assessment orders were passed within the period of twelve months immediately preceding June 26, 1967 were held to have priority.
The balance amount as dues was directed to rank as ordinary debts without any priority, since the relevant orders were passed after the date of the winding up order.
The claim of the Sales Tax Officer to the recovery of penalty in liquidation proceedings was negatived because the demand was held to be without application of mind as to whether there was reasonable cause for the official liquidator for not paying the amount.
O. J. Appeal No. 2 of 1975 was allowed to this extent.
The Judgment of the High Court is reported as Baroda Board & Paper Mills Ltd. (in Liquidation) vs Income Tax Officer etc., [1976] Vol.
Clash of interpretation of section 530(1)(a) is the cause in this appeal.
We have gone through both the judgments afore referred to very carefully and minutely and have heard learned counsel on the conflicting decisions.
There are wide ranging discussions in the interpretative process relating to the word 'due ' occuring in the earlier part of the provision and the words 'due and payable ' in the later part, and whether they are different expression meant to convey differently or they mean the same thing.
With due respect to the High Court, we feel that relevant and important considerations and material though available, which could go to interpret the section purposively was over looked, and at this juncture we wish to put it to use.
Section 530 of the is the same as section 230 of the Indian Companies Act, 1913.
The old section 230(1)(a) of the Indian Companies Act, 1913 was analogous to Section 261 of the English Companies Act laying down that there shall be priority on certain debts named therein.
In Airedale Garage Co. In re: Anglo South American Bank vs The Company, [1932] Vol.
in the Court of Appeal, Lord Hanworth, Master of Rolls explained the meaning of the provision at page 574 in the following words: "Now section 264 says that in the winding up of a company 'there shall be paid in priority to all other debts ' certain debts, namely, 'parochail or other local rates . .assessed taxes . property or income tax . .wages or salary of any clerk or servant 'during four months next before the 534 relevant date . not exceeding fifty pounds, 'and others, and it is these debts which are to be marshalled and paid in accordance with the priority given to them by section 264.
With regard to local rates it is provided that priority shall be given to 'All parochial or other local rates due from the company at the relevant date ' The relevant date being the date of the appointment of the receiver, in this case, January 28, 1931 'and having become due and payable within twelve months next before that date '.
Those words are put in to restrict the amount for which priority is given.
It is not priority in respect of all the debts for local rates which maybe outstanding at that time; the priority is in respect only of such rates as became due and payable within twelve months before, in this case, January 28, 1931.
" And further at pages 577 78 as follows: "The rate was made on April 1, 1930; at that time it became due and payable.
The alteration that has been made subsequently in September of the year 1931 is to fit into the section to which I have referred, and by that section it is to be deemed to have had effect as from the commencement of the period in respect of which the rate was made.
In those circumstances it seems quite plain that the sum in contest in the present case must be appropriate to that period and that period alone, and, although ascertained at a later date, it nonetheless belongs to and is founded upon the liability to rates during that period and no other.
I find myself, therefore, unable to give a limited meaning to the words, as Eve, J., has done.
I think the words referred to in section 264 of the Companies Act, 'due and payable ', meant to refer to a liability in respect of which there had to be a solution Solvendum in futuro of that particular debt, and that particular debt is now to be deemed to have accrued within the period of the twelve months next before the relevant date." In A. Pamaiya 's the Companies Act, Eleventh Edition, 1988, it has been noticed at page 1320 that Section 530 of the has been largely recast and amended in the light of the following recommendations (exerpted) of the Company Law Committee in paragraph 218 of their Report: 535 "Section 230 of the Act of 1913 deals with the important subject of preferential payment.
The principle underlying this section is that the debts and liabilities enumerated in it should be treated as preferential debts as compared with ordinary unsecured debts.
The right of secured creditors other than debenture holders secured by a floating charge are not affected in any way.
They remain outside the scope of the winding up proceedings and their security remains unaffected by the provisions of this section.
We have set out in the Annexure to our Report the details of our recommendations, which broadly follow the provisions of the English .
Briefly, the more important of these recommendations are as follows: (i) xxxxx (ii) xxxxx (iii) xxxxx In this connection we should like to refer to a memorandum that we received from the Central Board of Revenue, on the question of a priority to be given to crown demands generally and, in particular, to arrears of income tax, super tax and corporation tax.
It was suggested that there should be no time limit for the preferential payment of these crown debts and that section 230 of the Indian should be amended accordingly.
The practical difficulty of giving effect to the suggestion is that it would place a great majority of the unsecured creditors of the company at the mercy of the income tax authorities, inasmuch as, whatever may be the nature of the security on which they may have lent money to a company at the time of the loan, the unforeseeable demands of the income tax authorities on the company without any time limit would rank over the claims of such creditors.
In these circumstances, it may be extremely difficult for the company to raise capital for its working.
In this connection, we would draw attention to the provisions of clause (a) of sub section (1) of section 319 of the English Companies Act, 1948, under which arrears of land tax, income tax, profits tax, excess profits tax or other assessed taxes rank in priority over other debts of a company only if they have been assessed on the company up to a particular date, namely, 5th 536 April or prior to the appointment of the liquidator or resolution for the winding up of the company and do not exceed in amount the whole of one year 's assessment.
It will be noticed that by comparison the provision of clause (a) of sub section (1) of section 230 of the Indian Companies Act, is much wider and gives much more latitude to the income tax authorities for under these provisions, arrears to taxes would rank in priority if they have become due and payable within twelve months next before the date on which they are payable irrespective of whether such taxes have been assessed on the company or not.
We are aware of the large arrears of income and other taxes which are due by many companies, which are in liqudation, but we would venture to think that the remedy for this unsatisfactory situation is not the conferment of preferential rights without limit to the income tax authorities under section 230 of the Indian Companies Act, but the energetic completion of assessment proceedings and vigorous measures for the collection of the assessed taxes.
" In Pennington 's Company Law, Fourth Edition, Chapter 26 titled 'Rules Common to All Liquidations; occuring under the head "Preferential Claim and Payments" at page 768 it is observed as follows: "The Inland Revenue may select the unpaid corporation or income tax for any one year as its preferential claim, and is not restricted to claiming the tax for the most recent year which ended on or before April 5 immediately preceding the relevant date.
Moreover, when there are two or more kinds of unpaid taxes, the Crown may select different years for different taxes, but since advance corporation tax is paid as an advance instalment of the company 's liability for corporation tax for the accounting period in which the advance corporation tax falls due, it would seem that the Inland Revenue may claim preference for both advance corporation tax and mainstream corporation tax only in respect of the same year.
Both benches of the High Court, with due respect, gave to the provision a very wide and varied interpretation and that too on literality and grammaticals seemingly overlooking the legal philosophy which permeats the provision, the same being that the debts due and 537 payable, so as to claim priority, must be appropriated to the period within 12 months next before the relevant date and their liability for payment must be funded during that period and no other.
To put it in simpler words, the State has a priority over debts, liability and obligation of which was born within the time frame of those twelve months and as such due and becoming due and payable within those twelve months next before the relevant date, ascertainable if necessary later, if not already ascertained.
We are in respectful agreement with the interpretation put by the Court of Appeal to section 264 of the English Companies Act in Airedale Garage 's case (supra), analogous as it is to the provision in hand, warranting the same interpretation; more so when any other interpretation would lead to the results feared by the Company Law Committee extracted above.
In such view of the matter, we need not elaborately comment, discuss or demolish, sentence by sentence, the reasoning given buy the single bench as also the division bench of the High Court towards interpreting the provision.
The words 'having become due and payable within 12 months next before the relevant date ' need be understood to mean putting a restriction or cordoning off the amount for which priority is claimable and not in respect of each and every debt on account of taxes, rates and cesses etc.
which may be outstanding at that time and payable.
And further that such priority is in respect only of debts those of which become due and payable because the liability to those is rooted, founded and belonging to that period of twelve months prior to the relevant date and none other; both the conditions existing.
For the view above taken, we allow the appeal of the Company in liquidation and direct that liquidator to re examine the claim for priority in accordance with the interpretation of the provision put by us, that is to say, he must first ascertain as to whether the liability to sales tax belongs to and is founded within the period of 12 months next before 26 June, 1967, and as such due and payable but preserving, however, the order of the division bench in relation to the view it has taken about penalties.
In the facts and circumstances of the case, we order that there should be no order as to costs.
R.P. Appeal allowed.
| The appellant company was ordered to be wound up by Court 's order dated 26.6.1967.
The liquidator invited creditors to prove their debts or claims and to establish title, if any to determine priority under s.530(1)(a) of the .
The Sales Tax Officer submitted a comprehensive claim of sales tax plus penalty and claimed priority.
The liquidator rejected the claim for priority in its entirety but admitted a part of it payable as debt with other unsecured creditors.
The Revenue appealed to the High Court contending that the liquidator erred in law in not granting priority to the claim to sales tax payable by the company for the period from 1.4.1957 to 31.12.1965 under the Bombay Sales Tax Act, and for period from 1.7.1957 to 31.12.1965 under the Central Sales Tax Act inasmuch as notice of demand was issued and assessment order was made in respect thereof within a period of 12 months before the relevant date.
The Company Judge, interpreting section 530(1)(a) of the Act, held that tax becomes due when taxing event occurs and not when assessment orders passed; that even though the amount for which priority was claimed was the amount of tax arrears that became payable at the time of making assessment orders after giving credit for what was paid alongwith return, yet it was due for a period much prior to 12 months next before the relevant date, and rejected the appeal on that score, but allowed the claim to the extent of a small amount of penalty under the two Sales Tax Acts upto the relevant date.
The Revenue filed an intra court appeal, which along with another referred matter was heard by a Division Bench.
The Division Bench held that sales tax becomes due and payable when the tax has 528 been assessed and notice of demand for its payment is served.
It allowed the claim of priority to the sales tax due under the two Acts, assessment orders in respect of which were passed within the period of 12 months immediately preceding 26.6.1967.
The balance amount was directed to rank as ordinary debts since the relevant orders were passed after the date of winding up order.
The claim of recovery of penalty was negatived, because the demand was held to be without application of mind as to whether there was reasonable cause for the official liquidator for not paying the amount.
Aggrieved, the company filed the present appeal by certificate.
Allowing the appeal, this Court, HELD: 1. Section 530(1)(a) of the provides that State has a priority over debts, liability and obligation of which was born within the time frame of 12 months next before the relevant date and as such due and becoming due and payable within those twelve months, ascertainable, if necessary, later if not already ascertained.
Thus the legal philosophy which permeats the provision is that the debts due and payable, so as to claim priority must be appropriated to the period within 12 months next before the relevant date and their liability for payment must be founded during that period and no other.[536G H, 537 A B] 2.1 The words 'having become due and payable within the twelve months next before the relevant date ' occurring in clause (a) of section 530(1) of the need be understood to mean putting a restriction or cordoning off the amount for which priority is claimable and not in respect of each and every debt on account of taxes, rates and cesses, etc.
which may be outstanding at that time and payable.
And that such priority is in respect only of debts those of which became due and payable because the liability to those is rooted, founded and belonging to that period of twelve months prior to the relevant date and none other; both the conditions existing.
[537C E] Airedale Garage Co. In re:Anglo South American vs The Company, [1832] Vol. , referred to.
2.2 Both Benches of the High Court gave to the provision a very wide and varied interpretation and that too on literality and gramaticals.
The Single Judge was not right in taking the view that the word 'due ' in the first part of clause (a) of s.530(1) of the was to mean 'outstanding and payable at the relevant date ' and in the expression ' having become due ' in the later part of the clause meant that the 529 event which brought the debt into existence occurred and also it became payable so as to be enforced against the company within twelve months before the date of order of winding up.
The Division Bench erred in holding that the only meaning that could be assigned to the word 'due ' occurring in the section was 'it must be presently due ' and the words 'due and payable ' meant that it must be presently payable.
[536G, 531D E & 532F G] Sales Tax Officer, Petlad vs Rajratha Naranbhai Mills Co. Ltd. and Another, [1974] Vol.
and Baroda Board & Paper Mills Ltd. (in liquidation) vs Income Tax Officer etc, [1976] Vol.
46 Company cases 25, overruled.
The liquidator was directed to re examine the claim and to ascertain as to whether the liability to sales tax belonged to and was founded within the period of 12 months next before 26 June, 1967, and as such due and payable, but preserving the order of the Division Bench in relation to its view on penalties.
[537E G]
|
Civil Appeal No. 1960 of 1980 From the Judgment and Order dated 23.7.1980 of the Punjab & Haryana High Court in C.R. No. 904 of 1980 624 Mrs. Urmila Kapur and S.N. Agarwala for M/s. B.P. Maheshwari & Co. for the Appellant.
S.K. Mehta, M.K. Dua, Aman Vachhar and E.M.S. Anam for the Respondents.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
The Ist Respondent Om Parkash is the landlord of a building situated in Ferozpur Jhirka, District Gurgaon in the State of Haryana.
He had leased out the said premises in favour of one Musadi Lal for a commercial purpose.
After Musadi Lal took the premises on lease he sub let the premises in favour of Med Ram Respondent No. 2 without the written consent of the landlord Om Parkash.
Thereupon Om Parkash filed a petition for eviction against Musadi Lal and Med Ram before the Rent Controller, under the provisions of the Haryana Urban (Control of Rent and Eviction) Act, 1973 (Act No. 11 of 1973) (hereinafter referred to as 'the Act ') on the ground mentioned in section 13(2) (ii) (a) of the Act which entitled the landlord to file a petition for eviction where the tenant had after the commencement of the Act without the written consent of the landlord transferred his right under the lease or sub let the building.
Musadi Lal and Med Ram, the tenant and the alleged sub tenant respectively were impleaded as the respondents to the petition.
During the pendency of the petition Musadi Lal died.
Thereupon Bal Kishan, the appellant herein, filed an application before the Rent Controller to bring him on record as the legal representative of the deceased Musadi Lal alleging that he was the adopted son of Musadi Lal.
The said application was opposed by the landlord.
Overruling the objections of the landlord the Rent Controller ordered that the appellant Bal Kishan should be brought on record as the legal representative of the deceased Musadi Lal.
After the above order was passed Bal Kishan filed an additional written statement contending that the premises in question being non residential and commercial premises, the legal heir of a tenant could not be treated as a tenant as defined under section 2(h) of the Act and, therefore, the possession of such legal heir of a tenant would be that of a trespasser.
That being the case, according to the appellant, the Rent Controller had no jurisdiction to proceed with the case as the Rent Controller was not competent to pass a decree for possession against a trespasser.
On the above ground the appellant prayed for the dismissal of the eviction petition.
Overruling the said contention, the learned Rent Controller allowed the petition for eviction holding that Musadi 625 Lal had sub let the premises in favour of Med Ram, Respondent No. 2 without the written consent of the landlord.
Against the judgment of the Rent Controller, the appellant filed an appeal before the Appellate Authority at Gurgaon.
That appeal was dismissed.
Against the judgment in that appeal, the appellant filed a revision petition before the High Court which was also dismissed.
This appeal by special leave is filed against the judgment of the High Court.
In this appeal also it is contended that the proceedings before the Rent Controller were without jurisdiction since the appellant was not a tenant as defined in section 2(h) of the Act because the building in question was a non residential building.
That Musadi Lal was a tenant under Respondent No. 1 is not disputed.
We shall assume for purposes of this case but without deciding, that the appellant Bal Kishan was not entitled to be treated as a tenant of the building in question under the Act on the death of Musadi Lal.
The question for consideration is whether in the circumstances of this case the Rent Controller had lost his jurisdiction to try the case before him.
Order XXII Rule 4 of the Code of Civil Procedure, 1908 provides that where one of two or more defendants dies and the right to sue does not survive against the surviving defendant or defendants alone, or a sole defendant or sole surviving defendant dies and the right to sue survives, the Court, in an application made in that behalf, shall cause the legal representative of the deceased defendant to be made a party and shall proceed with the suit.
Since the action in this case related to property, the right to sue did survive and the Rent Controller was right in bringing the legal representative of the deceased Musadi Lal on record.
Sub rule (2) of rule 4 Order XXII authorises any person who is brought on record as the legal representative of a defendant to make any defence appropriate to his character as legal representative of the deceased defendant.
The said sub rule authorises the legal representative of a deceased defendant or respondent to file an additional written statement or statement of objections raising all pleas which the deceased tenant had or could have raised except those which were personal to the deceased defendant or respondent.
In the instant case Bal Kishan, the appellant could not have, therefore, in the capacity of the legal representative of the deceased respondent Musadi Lal who was admittedly a tenant, raised the plea that he was in possession of the building as a trespasser and the petition for eviction was not maintainable.
It is true that it is possible for the Court in an appropriate case to implead the heirs of a deceased defendant in their 626 personal capacity also in addition to bringing them on record as legal representatives of the deceased defendant avoiding thereby a separate suit for a decision on the independent title as observed in Jagdish Chander Chatterjee & Ors.
vs Sri Kishan & Anr., ; The relevant part of that decision at page 854 reads thus: "Under sub clause (ii) of Rule 4 of Order 22 Civil Procedure Code any person so made a part as a legal representative of the deceased respondent was entitled to make any defence appropriate to his character as legal representative of the deceased respondent.
In other words, the heirs and the legal representatives could urge all contentions which the deceased could have urged except only those which were personal to the deceased.
Indeed this does not prevent the legal representatives from setting up also their own independent title, in which case there could be no objection to the court impleading them not merely as the legal representatives of the deceased but also in their personal capacity avoiding thereby a separate suit for a decision on the independent title.
" But in the instant case the appellant cannot claim the benefit of the above decision for two reasons.
First, the appellant had not been brought on record as a respondent in the eviction petition in his personal capacity but had been brought on record only as the legal representative of Musadi Lal.
Secondly, in the circumstances of this case, even if a prayer had been made to bring the appellant on record in his personal capacity, the Rent Controller could not have allowed the application and permitted him to raise the plea of independent title because such a plea would oust the jurisdiction of the Rent Controller to try the case itself.
The observations made in the Jagdish Chander Chatterjee & Ors. case (supra) have to be confined to only those cases where the Court hearing the case has jurisdiction to try the issues relating to independent title also.
The Rent Controller, who had no jurisdiction to pass the decree for possession against a trespasser could not have, therefore, impleaded the appellant as a respondent to the petition for eviction in his independent capacity.
We do not, therefore, find any substance in the above plea of the appellant.
Further the plea of the appellant that he was holding the property as a trespasser is also not tenable because the possession of Musadi Lal being permissive, the possession of the appellant who had succeeded to the estate of Musadi Lal as his heir could not be that of a trespasser in the circumst 627 ances of the case.
He could not, therefore, resist the passing of the decree for eviction on proof of the ground in section 13(2) (ii) (a) of the Act.
We agree with the findings recorded by the Rent Controller and the Appellate Authority which have been affirmed by the High Court that Musadi Lal had sub let the premises without the written consent of the landlord and, therefore, the legal representative of the tenant and the sub tenant were liable to be evicted from the premises under the Act.
The appeal, therefore, fails and it is dismissed.
There will be no order as to costs.
M.L.A. Appeal dismissed.
| The appellant was brought on record, as the legal representative of the deceased tenant during the pendency of an eviction petition.
He filed an additional written statement contending that the premises in question being non residential and commercial premises, the legal heir of a tenant could not be treated as a tenant as defined under section 2(h) of the Haryana Urban (Control of Rent & Eviction) Act and therefore, the possession of such legal heir of a tenant would be that of a trespasser and, the Rent Controller had no jurisdiction to proceed with the case as he was not competent to pass a decree for possession against a trespasser.
Overruling the said contention, the Rent Controller allowed the petition for eviction on the ground that the tenant had sublet the premises in favour of respondent No. 2 without the written consent of the landlord.
The appellant 's appeal and the revision before the Appellate Authority and the High Court respectively failed.
Dismissing the appeal by the appellant, ^ HELD: 1.
The plea of the appellant that he was holding the property as a trespasser is not tenable because the possession of the tenant being permissive, the possession of the appellant who had succeeded to the estate of the tenant as his heir could not be that of a trespasser in the circumstances of the case.
He could not, therefore, resist the passing of the decree for eviction on proof of the ground in section 13(ii) (a) of the Act.
[525G H; 526A] 623 2.
Order XXII Rule 4 of the Code of Civil Procedure 1908 provides that where one of two or more defendants dies and the right to sue does not survive against the surviving defendant or defendants alone, or a sole defendant or sole surviving defendant dies and the right to sue survives, the court, on an application made in that behalf, shall cause the legal representative of the deceased defendant to be made a party and shall proceed with the suit.
Sub rule (2) of rule 4 of Order XXII authorises the legal representative of a deceased defendant or respondent to file an additional written statement or statement of objections raising all pleas which the deceased tenant had or could have raised except those which were personal to the deceased defendant or respondent.
[625D G] In the instant case, since the action related to property, the right to sue did survive and the Rent Controller was right in bringing the legal representative, of the deceased tenant, on record.
The appellant could not have therefore, in the capacity of the legal representative of the deceased respondent who was admittedly a tenant, raised the plea that he was in possession of the building as a trespasser and the petition for eviction was not maintainable.
[625G H] 3.
It is possible for the court in an appropriate case to implead the heirs of the deceased defendant in their personal capacity also in addition to bringing them on record as legal representatives of the deceased defendant avoiding thereby a separate suit for a decision on the independent title.
But, in the instant case, the appellant cannot claim the aforesaid benefit for two reasons.
First the appellant had not been brought on record as respondent in the eviction petition in his personal capacity but had been brought on record only as the legal representative of the tenant.
Secondly, even if a prayer had been made to bring the appellant on record in his personal capacity, the Rent Controller could not have allowed the application and permitted him to raise the plea of independent title because such a plea would oust the jurisdiction of the Rent Controller to try the case itself.
[626E F] Jagdish Chander Chatterjee & Ors.
vs Sri Kishan & Anr., ; , referred to.
|
Criminal Appeal No. 624 of 1979.
From the Judgment and Order dated 27.3.1979 of the Madhya Pradesh High Court in Criminal Appeal No. 498 of 1977.
Frank Anthony, Sushil Kumar Jain, Ms. Pratibha Jain and R.V. Singh for the Appellants.
U.N. Bachhavat, Uma Nath Singh and J.M. Sood for the Respon dent.
The following Order of the Court was delivered: These two appellants, namely, Mathura Prashad and Binda Prashad have preferred this appeal questioning the correct ness and legality of the judgment rendered in Criminal Appeal No. 498/77 by the High Court of Madhya Pradesh at Jabalpur Bench.
These two appellants (A4 and A5 before the Trial Court) along with three others, namely, Gulab Chand and Gulab Singh and Laxman Rao (who were arrayed as accused Nos. 1 to 3) took their trial on the accusation that on the night intervening 5/6.12.75 at about 12.30 a.m. at Sarkanda, Bilaspur within the limits of Bilaspur Police Station, Civil Lines intentionally caused the death of the deceased, Keshav Singh by Gulab Singh stabbing the deceased with a knife and the rest of the people assaulting him and that in the course of the same transaction, they also committed the offence of dacoity.
Under the above accusation, they were tried for offences punishable u/s 302 IPC in the alternative u/s 302 IPC read with 149 IPC and also for offence u/s 396 IPC.
The Trial Court found the third accused, namely, Laxman Rao not guilty of any of the charges and consequently, acquitted him but convicted these two appellants and accused Nos. 1 and 2 who are not before us u/s 302 read with 34 IPC and sentenced each of them to undergo imprisonment for life.
However, the Trial Court acquitted the appellants and the other two accused of the offence u/s 396 IPC.
On being aggrieved by the judgment of the Trial Court, the convicted accused namely, these two appellants, Gulab Chand and Gulab Singh filed 429 an appeal before the High Court which for the reasons men tioned in its judgment, dismissed the appeal confirming the conviction recorded by the Trial Court.
Challenging this judgment, these two appellants filed their SLP No. 1902/79 and the other two convicted accused, namely, Gulab Chand and Gulab Singh (A1 and A2) filed a separate petition in SLP (Crl.) No. 1435/79.
This Court by an order dated 29.10.79 granted leave so far as SLP filed by these two appellants, but dismissed the SLP filed by the first and the second accused namely, Gulab Chand and Gulab Singh.
Hence, the present appeal by these two appellants.
The facts of the case which led to the filing of this appeal are well set out in the judgments of the Trial Court and the High Court and hence we think that it is not neces sary for us to proliferate the same except to refer to certain salient features relevant for the disposal of this appeal.
The deceased Keshav Singh was a petition writer.
He was living in his house at Sarkanda in Bilaspur with his wife Smt.
Phatokan Bai (PW 19) and two daughters, namely, Anjani Bai (PW 1) and Shail Kumari (PW 2) and his son, Ram Kumar (PW 3) who was younger to PW 1 and eider to PW 2.
There were some tenants in different parts of that house.
The accused Gulab Chand occupied a portion of that house as a tenant, but vacated the same about two months before this occurrence due to frequent quarrels between the children and ladies of the families belonging to Gulab Chand and that of the deceased.
It is alleged that the wife of Gulab Chand had complained about some alleged misbehaviour of the deceased with her.
According to the prosecution, when the deceased was sleeping in a room with his wife on the iII fated night, he heard someone knocking at the door.
On this, the deceased switched on the light and opened the door.
This appellant and the other accused entered his room.
Gulab Chand and Gulab Singh whipped up their knives and gave stab wounds; one on the chest, another on the back while bending.
These two appellants slapped and fisted the deceased.
It is fur ther stated that the second appellant herein, namely, Binda Singh caught hold of the deceased and banged him against the wall repeatedly.
PW 19 tried to save her husband but she was pushed aside.
During the course of the occurrence, a gold 'PUTRI ' which PW 19 was wearing, was attempted to be snatched away from her.
PW 1 who was sleeping in a room on the first floor, on hearing the cry, got down and saw these appellants and the other accused leaving her father 's room.
It is alleged that the appellant while running away took with them a box con taining some clothes and other articles belonging to PW 1.
According to the prosecution, the appellants had chained the doors in such a way that the other inmates of the house could not reach the spot.
430 After the appellants had fled away, PW 1 opened the doors.
PW 3 who was sleeping in another room reached the spot.
PW 15 was a tenant in an adjoining room and he on hearing the distress cry of PW 19, wanted to come out of his room but he could not do so as the house was chained from outside.
Therefore, PW 15 shouted for opening the latches of the door.
He came to the spot after the door was opened.
One Ramji Dayal who seemed to have played an important role in the prosecution, also reached the spot but he has not been examined by the prosecution as a witness.
All the witnesses saw bleeding injuries on the body of Keshav Singh (the deceased herein) who was unable to speak.
PW 3, at the instance of his deceased father brought a pen and a piece of paper on which the injured Keshav Singh wrote 'Gulab Chand ' and thereafter became unconscious.
The injured Keshav Singh was then taken to the Government hospital at Bilaspur where he succumbed to his injuries.
The medical officer sent a requisition exhibit P 14 to the police station.
PW 19, by then, lodged the first information report Exh.
P 43 at about 3.00 a.m. on 6.12.75 before PW 21.
PW 21 held inquest and pre pared the inquest report Exh.
During the course of the investigation, he has seized exhibit P.50, the paper on which the deceased had written the name 'Gulab Chand ' on being produced by PW 3.
PW 9, the medical officer who conducted autopsy on the dead body of the deceased, found two stab wounds and one incised wound on the person of the deceased.
PW 8, another medical officer examined accused Gulab Singh and found on his person a small incised wound at the base of the index finger on the palmer aspect.
After completing the investigation, the charge sheet was laid against all the accused persons.
As aforementioned, the trial court convicted the four accused inclusive of these two appellants which conviction was confirmed by the High Court.
Hence, this appeal by these two appellants.
Of the witnesses examined, PWs 1, 2 and 19 speak about the participation of the appellants in the perpetration of this heinous crime.
No doubt both the Courts below have concurrently found that these two appellants and the other two accused 1 and 2 were responsible for causing the death of the deceased and consequently convicted and so, the question would be whether this Court while exercising its jurisdiction under Article 136 of the Constitution of India, will be justified in interfering with the concurrent find ings of fact.
This Court in Balam Ram vs State of U.P. 11975] 3 SCC 219 at 227 held, that the powers of the Supreme Court under Article 1.36 of the Constitution are wide but in criminal appeals, this Court does not interfere with the concurrent findings of fact save in exceptional circumstances.
The 431 scope of interference by this Court under Article 136 of the Constitution of India in a case of concurrent findings of fact arose in Arunachalam vs PSR Sadhanathan, ; wherein this Court has held that "Article 136 of the Constitution of India invests the Supreme Court with a plenitude of plenary appellate power over all Courts and Tribunals in India.
The power is plenary in the sense that there are no words under Article 136 itself qualifying that power.
But, the very nature of the power has led the Court to set limits to itself within which to exercise such power.
It is now the well established practice of this Court to permit the invocation of the power under Article 136 only in very exceptional circumstances, as when a question of law of general public importance arises or a decision shocks the conscience of the Court.
But, within the restrictions im posed by itself, this Court has the undoubted power to interfere even with findings of the fact, making no distinc tion between judgments of acquittal and conviction, if the High Court, in arriving at those findings had acted "per versely or otherwise improperly".
(See State of Madras vs
A. Vaidyanatha Iyer ; and Himachal Pradesh Admin istration vs Om Prakash, We think that it is not necessary to swell this judgment by citing all the decisions relating to this principle of law.
When the facts and circumstances of the case are scruti nised, in our considered opinion, they do compel this Court to interfere on the ground that the findings of the Courts below suffer from the vice of perversity.
I1 is the admitted case that the deceased was a petition writer and so in that capacity he was very well conversant as to how to draft a complaint.
He asked for a pen and paper, and wrote the name, 'Gulab Chand ', evidently thereby saying that Gulab Chand was the assailant.
The deceased had not written any other name except the name of Gulab Chand.
Now the explana tion given by the prosecution is that the deceased became unconscious after writing this one name Gulab Chand, thereby saying had he not become unconscious, probably he would have written the names of other assailants also.
But we have to test this evidence in the background of the evidence given by other witnesses namely PWs '1, 2 and 19.
PW 19 who is none other than the wife of the deceased, was sleeping in the same room in which the deceased was sleeping and, there fore, she must be the proper and natural witness and her evidence has to be given credence.
PW 19 admittedly did not inform either PW 1 or PW 2 the names of the assailants but she gave the names only to PW 3, her son.
It transpires from the evidence of PW 19 that after PW 1 went to fetch the rickshaw, PW 3 asked his father as to who had assailed him 'and that it was only thereafter the injured Keshav Singh wrote the name of Gulab Chand on a piece of paper.
The relevant portion of the evidence of PW 19 reads as follows: 432 Then Ram Kumar asked my husband as to who had assaulted and he asked for a pen and paper.
Ram Kumar brought a paper and pen and my husband could write on it the name of Gulab Chand.
In this connection, evidence of PW 2 may also be re ferred to which is as follows: "Then at this stage, my brother asked him as to who had assaulted him.
My father asked by a sign of hand for a pen and paper, whereupon my brother brought the pen and paper and gave that to my father.
My father wrote on it by his hand; he wrote the name of Gulab Singh and thereafter he became unconscious. ' This dearly indicates that before the deceased wrote the name of Gulab Chand on the paper given by his son, PW 3, no one including PW 19 came forward with the names of the assailants but it is only thereafter, PW 19 gave the names of the assailants.
Here also, the prosecution is not con sistent because PW 2 says that her father also gave the name of all the assailants to Ram Kumar (PW 3).
The relevant part of PW 2 's evidence reads thus: "Then my mother and father both mentioned the names of the assailants.
At that time my brother, Ram Kumar was also there.
After Ramji had enquired, my brother also enquired them.
My father asked for by a sign of hand for pen and a copy.
" The above extracted pieces of evidence of PWs 2 and 19 indicate that PW 3 was not informed of the names of the assailants before his father (the deceased herein) wrote the name of Gulab Chand.
Had PW 3 informed by his mother (PW 19) of the names of the assailants, he might not have asked his father as to who the assailants were.
In other words, till the deceased wrote the name of Gulab Chand on a piece of paper evidently PW 3 did not know as to who assailant or assailants was/were.
It seems that both the Courts below have not approached this significant aspect of this salient feature in the proper perspective.
On the other hand, it has conveniently omitted this significant factor from consideration which gives the death knell to the prosecution case so far as the alleged participation of these two appellants in this brutal crime.
In the inquest report Exh.
P 24, it is stated that all the relatives of the deceased 433 Keshav Singh were examined and the following conclusion was arrived at: ". . the conclusion was reached that the death of deceased Keshav Singh by Gulab Singh, Gulab Chand etc.
was due to knife wounds.
" This 'etc. ' in the present case has no relevance because there is a specific averment that the two assailants namely, Gulab Singh and Gulab Chand stabbed the deceased with knives which case alone fits in with the earlier statements of PWs 2 and 19 as well as the version of the deceased in Exh.
If really the names of these two appellants had been mentioned by the witnesses, those names also would have been specifically mentioned in Exh.
P :24.
At this juncture, the learned senior counsel appearing on behalf of the State referred to a decision of this Court reported in ; Pedda Narayana vs State of Andhra Pradesh wherein this Court has held that the question regarding the details as to how the deceased was assaulted or who assaulted him or under what circumstances, he was assaulted is foreign to the ambit and scope of the proceedings under Section 174.
This decision will not be of any help to the prosecution because only two names are mentioned in the inquest report as as sailants, leaving the names of these two appellants who are now rightly attempting to take advantage of this conspicuous omission in Exh.
P. 24.
Though PW 19 is said to be the author of Exh.
P 43, she before the Trial Court does not claim to be the author of the entire averments.
She states that the police who record ed the report, asked only her name and her husband 's name and nothing further was asked from her and she did state anything more than that.
PW 19 further had deposed that she did not give the names of the accused who assaulted, that she did not know whether her husband was then dead or alive, that at Thana (Police Station) she came to know about the death of her husband, that even then she did not mention the names of the assailants, and that before going to the Thana, she did not give the names of any of the assailants to any person.
It is in evidence that both these appellants were present at the scene of occurrence when the police constable came, but none pointed out to the police that these two appellants also participated in the crime.
Now the explana tion offered by the prosecution is that these two appellants took the constable aside and whispered something and there fore, PW 1 suspecting that the police constable was taking side with the appellants did not come forward with a state ment that these two appellants were also the participants in the crime.
This explanation seems to have been offered only before the Trial Court.
Both the Courts below have conven iently over 434 looked and ignored all the above glaring infirmities appear ing in the case and as such the concurrent findings recorded by both the Courts are not proper but perverse.
After meticulously and scrupulously analysing the evi dence, we are left with an impression that the prosecution has not satisfactorily established the guilt of these two appellants beyond all reasonable doubt.
Hence, we are unable to agree with the findings of the lower Courts that these two appellants also participated in the crime with the other two accused.
In the result, the conviction of these two appellants u/s 302 read with 34 IPC and the sentence of imprisonment for life imposed therefore are set aside and both of them are acquitted.
The appeal is thus allowed.
V.P.R Appeal al lowed.
| According to the prosecution, when the deceased a peti tion writer, was sleeping in a room with his wife (PW.19) on the iII fated night, he heard someone knocking at the door.
The deceased switched on the light and opened the door.
The accused (A.1 and A.2) entered his room.
They whipped up their knives and gave stab wounds; one on the chest, another on the hack while bending.
They also slapped and listed the deceased.
It was further stated that the second appellant (A 5) caught hold of the deceased and banged him against the wall repeatedly.
PW19 tried to save her husband but she was pushed aside.
During the course of the occurrence, a gold 'PUTRI ' which PW 19 was wearing, was attempted to be snatched away from her.
The eldest daughter of the deceased, PW 1, who was sleeping in a room on the first floor, on hearing the cry, got down and saw the appellants and the other accused leav ing her father 's room.
The appellants while running away took with them a box containing some clothes and other articles belonging to PW 1 and chained the doors in such a way that the other inmates of the house could not reach the spot.
The deceased 's son, PW 3, who was sleeping in another room reached the spot.
PW 15, a tenant in an adjoining room on hearing the distress cry of PW 19, wanted to come out of his room but he could not do 426 so as the house was chained from outside.
He came to the spot after the door was opened.
All the witnesses saw bleeding injuries on the body of the deceased who was unable to speak.
PW 3, at the instance of his deceased father brought a pen and a piece of paper on which the injured deceased wrote 'Gulab Chand ' and thereaf ter became unconscious, and he was then taken to the Govern ment hospital where he succumbed to his injuries.
The two appellants (A4 and A5 before the Trial Court) along with three others were tried section 302 IPC or section 302/149 and section 396, for causing the death of the deceased, accused No. 2 stabbing the deceased with a knife and the rest of the accused assaulting him and for committing the offence of dacoity.
The Trial Court found the third accused not guilty of any of the charges and acquitted him but convicted others section 302 read with 34 IPC and sentenced each of them to undergo imprisonment for life, and acquitted them of the offence section 396 IPC.
The High Court confirmed the conviction.
The present two appellants (A4, A5) filed the present appeal against the judgment of the High Court through special leave.
The other two accused (A1 and A2) preferred a separate special leave petition, which was dismissed by this Court.
Allowing the appeal of the two accused (A4, A5), this Court, HELD: 1.
The powers of the Supreme Court under Article 136 of the Constitution are wide but in criminal appeals, this Court does not interfere with the concurrent findings of fact, save in exceptional circumstances.
[430 H] 2.
Within the restrictions imposed by itself, this Court has the undoubted power to interfere even with findings of the fact, making no distinction between judgments of acquit tal and conviction, if the High Court, in arriving at those findings has acted perversely or otherwise improperly.
[431 C] Arunachalam vs PSR Sadhananthan, ; ; State of 427 Madras vs
A. Vaidyanatha Iyer; , ; Himachal Pradesh Administration vs Om Prakash, [1972]1 SCC 249, referred to. 3.01 The deceased was a petition writer and so in that capacity he was very well conversant as to how to draft a complaint.
He asked for a pen and paper, and wrote the name, 'Gulab Chand ', evidently thereby saying that Gulab Chand was the assailant.
The deceased had not written any other name except the name of Gulab Chand.
Now the explanation given by the prosecution is that the deceased became unconscious after writing this one name Gulab Chand, thereby saying had he not become unconscious, probably he would have written the name of other assailants also.
[431 E F] 3.02.
PW 19 the wife of the deceased, was sleeping in the same room in which the deceased was sleeping did not inform either PW 1 or PW 2 the names of the assailants but she gave the names only to PW 3, her son.
It transpires from the evidence of PW 19 that after PW 1 went to fetch the rickshaw, PW 3 asked his father as to who had assailed him and that it was only thereafter the injured deceased wrote the name of Gulab Chand on a piece of paper.
Before the deceased wrote the name of Gulab Chand on a piece of paper given by his son, PW 3, no one including PW 19 came forward with the names of the assailants.
[431 F G] 3.03.
The evidence of PW 2 and 19 indicated that PW 3 was not informed of the names of the assailants before his father (the deceased) wrote the name of Gulab Chand.
Till the deceased wrote the name of Gulab Chand on a piece of paper evidently PW 3 did not know as to who the assailant or assailants was/were.
The Courts below have not approached this signifi cant aspect of this salient feature in the proper perspec tive.
[432 G] 3.05.
In the inquest report there is a specific averment that the two assailants namely, Gulab Singh (A.2) and Gulab Chand (A.1) stabbed the deceased with knives which case alone fits in with the earlier statements of PWs 2 and 19 as well as the version of the deceased in Exh.
P. 50.
If really the names of the two appellants had been mentioned by the witnesses, those names also would have been specifically mentioned in Exh.
P. 24, the inquest report.
[433 B C] 428 3.06.
It is in evidence that both the appellants were present at the scene of occurrence when the police constable came, but none pointed out to the police that these two appellants also participated in the crime.
The prosecution has not satisfactorily established the guilt of the two appellants beyond all reasonable doubt.
|
Criminal Appeal No. 122 of 1967.
Appeal by special leave from the judgment and order dated April 18, 1966 of the Allahabad High Court in Criminal Appeal No. 1642 of 1964.
R.K. Garg, S.C.Agarwal, Sumitra Chakravarty and Uma Dutt, for the appellant.
O.P. Rana, for respondent No. 2.
The Judgment of the Court was delivered by Hegde J.
Two contentions advanced in this appeal by special leave are (1) that the appeal filed by the Municipal Board, Saharanpur before the High Court of Allahabad under section 417(3) of the Criminal Procedure Code was not maintainable in law and (2) the accused could not have been convicted on the strength of the certificate of the Public Analyst annexed to the complaint.
The High Court rejected both these contentions.
The material facts relating to this appeal are these: The accused in this case is proprietor of Khalsa Tea Stall situated in Court Road, Saharanpur.
Among other things, he was selling coloured sweets.
On suspicion that the sweets sold by him were adulterated, the Food Inspector, Municipal Board, Saharanpur purchased from the accused for examination some coloured sweets under a Yaddasht on May 31, 1963 and sent a portion if the same to the Public Analyst of the Government of U.P. for examination.
The Public Analyst submitted his report on June 24, 1963.
It reads: "See Rule 7 ( 3 ) REPORT BY THE PUBLIC ANALYST Report No. 11652.
I hereby certify that I, Dr. R.S. Srivastava, Public Analyst for Uttar Pradesh, duly appointed under the provisions of the , received on the 4th day of June 1963 from the 738 Food Inspector c/o Medical Officer of Health, Municipal Board, Saharanpur, a sample of coloured sweet (Patisa) prepared in Vanaspati No. 264 for analysis, properly sealed and fastened and that I found the seal intact and unbroken.
I further certify that I have caused to be analysed the aforementioned sample, and declare the result of the analysis to be as follows: Test for the presence of coal tar dye : Positive.
Coal tar dye identified : Metanil yellow.
(colour Index No. 138) ANALYTICAL DATA IN RESPECT OF FAT OR OIL USED IN THE PREPARATION OF THE SAMPLE.
Butyro refractometer reading at 40 dgree C : 50.5.
Melting point : 33.80C. 3.
Baudouin 's test for the presence of Til oil :Positive.
Tintometer reading on Lovibond Scale 4.0 Red Units plus 0.1 yellow unit coloured with a coal tar dye namely, Metanil Yellow (Colour Index No. 138) which is not one of the coal tar dyes permitted for use in foodstuffs under rule No. 28 of the Prevention of Food Adulteration Rules, 1955.
No chance had taken place in the constitutents of the sample which would have interfered with analysis.
Signed this 24th day of June 1963.
The sample belongs to : section DHIAN SINGH S/O JIWAN SINGH R.S. Srivastava M.Sc., LL.B. Ph.D. (Lond.) P.R.L.C. Public Analyst to Govt.
of U.P. Sendor 's address: Public Analyst, Uttar Pradesh, Lucknow The Food Inspector, c/o.
Medical Officer of Health, Municipal Board, Saharanpur.
" 739 On the basis of that certificate, a complaint was filed in the court of City Magistrate, Saharanpur under section 7 read with section 16 of the .
It is purported to have been filed by the Municipal Board, Saharanpur but it was signed by its Food Inspector.
The accused pleaded not guilty.
Various contentions were taken by the accused in support of his defence.
The trial court acquitted him taking the view that as the report of the analyst did not contain any data, no conviction could be rounded on its basis and as the Yaddasht relating to the sale had not been attested as required by law, the seizure in question must be held to be invalid.
As against that decision, the Municipal Board of Saharanpur went up in appeal to the High Court under section 417(3), Cr.
P.C. the High Court allowed the appeal disagreeing with the trial court on both the questions of law referred to earlier.
It came to the conclusion that the analyst had given the necessary data hence his report afforded sufficient basis for conviction.
It further opined that the fact that the Yaddasht had not been attested by the witnesses of the locality, did not vitiate the seizure made.
At the hearing of the appeal, no objection about the maintainability of the appeal was taken.
The judgment of the High Court was rendered on April 18, 1966.
The High Court convicted the appellant and sentenced him to undergo rigorous imprisonment for two months.
and to pay a fine of Rs. 100/ , in default to undergo further imprisonment for a period of one, month.
On April 28, 1966, the accused field an application for certificate under article 134 of the Constitution.
On May 4, 1966, when the application filed under article 134 of the Constitution for certificate was still pending, the accused moved the High Court under section 561 (A), Cr.
P.C. for reviewing its judgment dated April 18, 1966 principally on the ground that the appeal filed by the Municipal Board was not maintainable under section 417(3), Cr.
P.C. as the complaint had been instituted by the ' Food Inspector and no.t by the Municipal Board.
The application under section 561(A) was dismissed by the High Court as per its order of March 16, 1967 repelling the contention of the accused that the complaint had not been instituted by the Municipal Board.
It further came to the conclusion that it had no power to review its own judgment.
The certificate prayed for under article 134 of the Constitution was also refused by a separate order of the same date.
Thereafter this appeal was brought after obtaining special leave.
Mr. Garg, learned Counsel for the appellant strenuously contended that the appeal filed by the Municipal Board of Saharanpur before the High Court under section 417(3), Cr.
P.C. was not maintainable as the complaint from which that appeal had arisen had been instituted by the Food Inspector.
Section 417(3) of the Criminal Procedure Code provides that if an order of acquittal 740 is passed in any case instituted upon complaint, the High Court may grant to the complainant special leave to appeal against the order of acquittal.
It is clear from that section that special leave under that provision can only be granted to the complainant and to no one else.
It may be noted that in this case no appeal against acquittal had been filed by the State.
Hence the essential question for consideration is whether the complainant before the Magistrate was the Municipal Board of Saharanpur ? The complainant shown in the complaint is the Municipal Board of Saharanpur but the complaint was signed by the Food Inspector.
Section 20 of the prescribes that no prosecution for an offence under that Act should be instituted except by, or with the written consent of, the Central Government or the State Government or a local authority or a person authorised in this behalf, by general or special order, by the Central Government or the State Government or a local authority.
There is no dispute that the Municipal Board is a local authority.
Hence it was competent to file a complaint.
It was also competent for that board to authorise someone else to file complaints under the on its behalf.
As seen earlier, the complaint purports to have been filed by the Municipal Board.
That Board could have authorised its Food Inspector to file the complaint on its behalf.
Neither in the trial court, nor in the High Court at the stage of hearing of the appeal, any objection was taken by the accused as to the maintainability either of the complaint or of the appeal.
Both those courts and the parties before it proceeded on the basis that the Municipal Board, Saharanpur was the complainant and its Food Inspector had filed the complaint on its behalf.
It is only after the disposal of the appeal, the accused for the first time took up the contention that the Municipal Board was not the real complainant.
It is true that the complaint was signed by the Food Inspector.
As seen earlier it was competent for the Municipal Board to authorise him to file the Complaint.
The question whether he was authorised by the Municipal Board to file the complaint was never put into issue.
Both the parties to the complaint proceeded on the basis that it was a validly instituted complaint.
If the Municipal Board had not authorised him to file the complaint then the complaint itself was not maintainable.
If that is so, no question of the invalidity of the appeal arises for consideration.
It was never the case of the accused that the complaint was invalid.
In K.C. Aggarwal vs Delhi Administration(1), this Court has held that a complaint filed by one of the officers of a local authority ', at the instance of that authority is in law a complaint institut (1) Criminal Appeal No. 100 of 1966 decided on 27th May, 1969; 741 ed by that local authority.
Therefore if the Complaint with which we are concerned in this case had been filed by the Food Inspector on the authority of local board, the complaint must be held to have been instituted by the local board itself.
The question whether the Food Inspector had authority to file the complaint on behalf of the local board is a question of fact.
Official acts must be deemed to have been done according to law.
If the accused had challenged the authority of the Food Inspector to file the complaint, the trial court would have gone into that question.
The accused cannot be permitted to take up that contention for the first time after the disposal of the appeal.
This Court refused to entertain for the first time an objection as regards the validity of a sanction granted in Mangaldas Raghavji and Anr.
vs State of Maharashtra and Anr.
(1) Mr. Garg, learned Counsel for the accused urged that a permission under section 20 of the to file a complaint is a condition precedent for validly instituting a complaint under the provisions of that Act.
The fulfilment of that condition must be satisfactorily proved by the complainant before a court can entertain the complaint.
Without such a proof, the court will have no jurisdiction to try the case.
In support of that contention of his he sought to take assistance from the decision of the Judicial Committee in Gokulchand Dwarkadas Morarka vs The King(2) and Madan Mohan Singh vs The State of U.P.(3).
Both those decisions deal with the question of the validity of sanctions given for the institution of certain criminal proceedings.
The provisions under which sanction was sought in those cases required the sanctioning authority to apply its mind and find out whether there was any justification for instituting the prosecutions.
The Judicial Committee as well as this Court has laid down that in such cases, the court must be satisfied either from the order of sanction or from the other evidence that all the relevant facts had been placed before the sanctioning authority and that authority had granted the sanction after applying its mind to those facts.
The ratio of those decisions has no bearing on the facts of this case.
Under section 20 of the , no question of applying one 's mind to the facts of the case before the institution of the complaint arises as the authority to be conferred under that provision can be conferred long before a particular offence has taken place.
It is a conferment of an authority to institute a particular case or even a class of cases.
That section merely prescribes that persons or authorities designated in that section are alone competent to file complaints under the statute in question.
(1) ; (2) 75 I.A.p. 30.
(3) A.I.R. 1954 S.C. 736.
742 For the reasons mentioned above, we are unable to accept the contention of the accused that the Municipal Board of Saharanpur was not competent to file the appeal.
The only other question canvassed before us is that the report of the analyst could not have afforded a valid basis for rounding the conviction as the data on the basis of which the analyst had reached his conclusion is not found in that report or otherwise made available to the court.
We are unable to accept this contention 'as well.
It is not correct to.
say that the report does not contain the data on the basis of which the analyst came to his conclusion.
The relevant data is given in the report.
A report somewhat similar to the one before us was held by this Court to contain sufficient data in Mangaldas 's(1) case referred to earlier.
The correct view of the law on the subject is as stated in the decision of the Allahabad High Court in Nagar Mahapalika of Kanpur vs Sri Ram(2) wherein it is observed: "that the report of the public analyst under section 13 of the need not contain the mode or particulars of analysis nor the test applied but should contain the result of analysis namely, data from which it can be inferred whether the article of food was or was not adulterated as defined in section 2 (1 ) of the Act.
" In the result the appeal fails and the same is dismissed.
The appellant is on bail.
He should surrender to his bail and serve the sentence imposed on him.
Y.P. Appeal dismissed.
(1) ; (2) [1963] All.
L.J. 765.
| On a report of the Public Analyst that the coloured sweets sold by the appellant were adulterated a complaint was filed before the Magistrate under section 7, read with section 16 of the Prevention of Food Adulteration Act.
The trial court acquitted the appellant.
In appeal by the Municipal Board under section 417(3), Code of Criminal Procedure, the High Court convicted the appellant.
The appellant did not raise any objection as to the maintainability of the complaint or of the appeal, either in the trial court or in the High Court before the appeal was disposed of, on the ground that the Municipal Board was shown as the complainant and the complaint was signed by its Food Inspector.
In appeal to this Court, it was contended that: (i) the appeal filed by the Municipal Board in the High Court was not maintainable in law as the complaint had been instituted by the Food Inspector and not by the Municipal Board; (ii) a permission under section 20 of the Act was a condition precedent for validly instituting a complaint and the fulfilment of that condition had to be satisfactorily proved before the Court could exercise jurisdiction to try the case; and (iii) the appellant could not have been convicted on the strength of the certificate of the Public Analyst.
HELD: Dismissing the appeal, (i) Under section 20 of the Prevention of Food Adulteration Act, it was competent for the Municipal Board to authorise the Food Inspector to file the complaint.
If the complaint had been filed by the Food Inspector on the authority of the Board the complaint must be held to have been instituted by the Board itself.
The question whether the Food Inspector was so authorised is a question of fact.
This was never put into issue and both the courts below and the parties before them proceeded on the basis that the Municipal Board was the complainant and the Food Inspector filed the complaint on its behalf.
The appellant could not, therefore, be permitted to take up the contention for the first time after the appeal was disposed of in the High Court.
[741 A C] K.C. Aggarwal vs Delhi Administration, Cr. A. No. 100 of 1966, dt.
27 5 1969, referred to.
(ii) There is no analogy between the section and those provisions requiring sanction for the institution of certain criminal proceedings.
Under the section, no question of applying one 's mind to the facts of the case before the institution of complaint arises as the authority under the section can be conferred long before a particular offence has taken place.
It is a conferment of an authority to institute a particular case or even a class of cases.
[741 G] 737 Gokal Chand Dwarkadas vs The King, 75 I.A. 30 and Madan Mohan Singh vs State of U.P.A.I.R. , held inapplicable.
(iii) It is not necessary that the report of the Public Analyst should contain the mode or particulars of analysis or the test applied.
But it should contain the result of analysis, namely, data from which it can be inferred whether the article of food was of was not adulterated.
In the present case.
the report of analyst did contain the data on the basis of which the analyst came to his conclusion.
[742 C E]
|
Appeal No. 234/60.
Appeal from the judgment and order dated November 18, 1958, of the Bombay High Court at Nagpur in Special Civil Application No. 201 of 1958.
N. C. Chatterjee, M. N. Phadke, section A. Sonhi and Ganpat Rai, for the appellants.
A. V. Viswanatha Sastri, B. R. Mandekar and A. G. Ratnaparkhi, for respondent No. 1.
G. C. Mathur and R. H. Dhebar, for respondent No. 2. 1961.
January 27.
, J. This is an appeal against the jugdment and order of the High Court of Judicature of Bombay at Nagpur dismissing a petition under articles 226 & 227 of the Constitution challenging the legality of the imposition of the octroi tax under section 66(1)(e) of the C. P. & Berar Municipal Act (Act II of 1922) hereinafter termed the Act.
The appellants who were the petitioners in the High Court are some of the rate payers of the town of Akola in the erstwhile State of Bombay and respondent No. 1 is the Municipal Committee, Akola.
On November 11, 1957, respondent No. 1 passed a resolution to impose an octroi tax on animals and goods brought within the limits of the Akola Municipality.
This resolution and the draft Rules of Assessment and Collection were later on forwarded by the Akola Municipality to the State Government for publication.
A notification dated January 3, 1958, was published in the Bombay Government Gazette on January 16, 1958.
This Gazette Notification contained the draft rules, the schedule of goods liable to octroi duty and the rates to be charged.
This was in accordance with the requirements of section 67(2) of the Act.
Respondent 620 No. 1, the Municipal Committee, affixed on the Notice Board of the Committee and published in the local newspapers the proposed rules for the imposition of the tax, but the objection of the appellants is that they did not publish along with them the draft of the " System of Assessment ".
It is true that a pamphlet in Marathi language was distributed in the town of Akola and the proposals were also published in the local newspaper Jan Sewak.
Objections to the proposals were filed by some of the rate payers of the town of Akola and all of them were considered and a resolution was passed by the Municipal Committee on March 3, 1958, and that is the resolution which was challenged in the petition filed in the High Court by a petition dated April 14, 1958, p raying for the quashing of the resolution and for the issuing of a prohibitory order against the State Government against sanctioning the proposal sent by the Municipal Committee.
On April 18, 1958, a rule was issued by the High Court to the opposite parties calling upon them to show cause why the, order as prayed should not be made.
This notice was served on the Special Government Pleader on May 9, 1958, and the Special Government Pleader put in his appearance on June 17, 1958.
On June 23, 1958, an interim injunction was issued, but previous to that on June 19, 1958, a final notification was issued by the Government approving of the proposal to impose the octroi tax.
As a consequence of this the petition was allowed to be amended, but ultimately the High Court dismissed the petition and this appeal has been brought on a certificate of the High Court.
The sole question which has been debated before us is the legality of the imposition.
The ground on which the legality is challenged is that there was no full compliance with the mandatory requirements of section 67(2) of the Act.
It is, therefore, necessary to deal with the relevant provisions of the Act.
Chapter IX of the Act deals with Imposition, Assessment and Collection of taxes.
Section 66 provides for the taxes which can be imposed and section 67 deals with the mode of the imposition of the tax.
By section 71, the State 621 Government is empowered to make rules regulating the assessment of taxes and for preventing evasion of assessment.
Section 76 empowers the State Government to make rules regulating the collection of taxes and preventing evasion of payment.
Section 85 em Con powers the State Government to make rules regulating the refund of taxes.
But it was argued on behalf of the appellants that as the mandatory provisions of section 67 as to publication of the " System of Assessment " in accordance with the rules was not complied with, the imposition of the tax was illegal.
Reliance was placed on certain judgments, but it is not necessary to discuss those cases because in the circumstances of this case they are of little assistance.
The respondents, on the other hand, submitted that what was published was all that the section required and that the word assessment there did not mean anything more.
As section 67(2) has been mainly relied upon, it may be quoted.
It provides: " 67(2) When such a resolution has been passed, the committee shall publish in accordance with rules made under this Act, a 'notice defining the class of persons or description of property proposed to be taxed, the amount or rate of the tax to be imposed and the system of assessment to be adopted.
" The scheme of section 67 appears to be this: that when a Municipal Committee wishes to impose a tax it has to pass a resolution at a special meeting and then it has to publish its resolution for imposition of that tax so that the rate payers may be able to place their objections against the imposition.
This publication must appear in the Government Gazette and also locally as required by the rules.
The Municipal Committee has then to consider the objections, if any, of the rate payers and if the Committee does not consider it necessary to alter its original proposals, it has to send its proposals with the objections received and its decision thereon and any modifications of the original proposals to the State Government which, after considering the matter, may sanction them or refuse to sanction or sanction them with modifications, 622 The real objection of the appellants was that the system of assessment had not seen published as required.
The Rule relating to publication under section 67 is as follows : " 1.
A notice under section 67(2) of the intention of the municipal committee to impose a tax, or under section 68(3) of the proposal of the committee to increase the amount of rate of any tax, shall be forwarded to the State Government through the Deputy Commissioner for publication in the " Madhya Pradesh Gazette.
" The notice under section 67(2)shall be accompanied by draft rules for the assessment and collection of the tax.
After its publication in the Gazette the, notice shall be published by affixing copies thereof to a notice board at the municipal office and at conspicuous places in the town, and shall also be published in the local papers, if any.
As an alternative to its publication in local papers, the committee may circulate the notice in print in vernacular within the municipal limits.
Proclamation shall also be made by beat of drum throughout the municipality notifying the intention of the committee and calling the attention of the inhabitants to the notice in question and to the term of thirty days laid down in the law as that within which objections to the proposed imposition or increase must be submitted to the committee.
" According to this rule the notice under section 67(2) has to be accompanied by draft rules for the assessment and collection of the tax and after its publication in the Gazette the notice has to be published by affixing copies thereof to a notice board at the Municipal Office and at conspicuous places in the town and has to be published in the local papers, if any, or it may circulate the notice in print within the municipal limits.
It is admitted that in the Gazette dated January 16, 1958, the draft rules were published which contained the articles to be taxed, the rate or rates at which they were to be taxed and what articles were not to be taxed.
It also contained a brief statement of objects.
and reasons for the imposition of the tax.
This was 623 followed by draft rules as to how taxation was to be done.
In short what was published in the Gazette was admitted to conform to all the requirements of section 67(2).
But the contention raised is that in the Jan Sewak, a local Marathi newspaper, the rules which were published contained the articles to be taxed, the rate or rates at which they were to be taxed, but the draft rules in regard to " System of Assessment " were not published along with it.
The High Court has pointed out that what was done was a sufficient compliance with the provisions of section 67(2) and that the words " System of Assessment " meant only the stage of the imposition of the tax and not other stages as a whole.
Sections 71, 76 and 85, as has been said above, deal with rules for assessment and for preventing evasion of taxes, rules for collection of taxes and rules for refund respectively.
Read together these provisions of the Act support the decision of the High Court that the words " System of Assessment " do not necessarily mean the whole procedure of taxation, i.e., imposition, collection and procedure in regard to collection and refunds.
The rule also shows that what is to be affixed on the notice board and at conspicuous places of the town is the notice and not the draft rules relating to assessment and collection.
In our opinion there has been a compliance with the provision of section 67(2) and that the publication of the rules relating to the rates at which the tax had been imposed was sufficient to comply with the provisions of the Act and the rules made thereunder.
It is unnecessary to deal with the efficacy of sub sections
(7) and (8) of section 67.
In our opinion the judgment of the High Court was right and the appeal is therefore dismissed with costs.
Appeal dismissed.
| The Municipal Committee, Akola, passed a resolution to impose an octroi tax and forwarded it along with the draft rules of assessment and collection to the State Government.
The State Government published a notification in the Gazette which contained the articles to be taxed, the rate or rates at which they were to be taxed and a brief statement of objects and reasons for the imposition of the tax.
This was followed by draft rules as to how taxation was to be done.
Thereafter the Municipal Committee affixed on its notice board and also published in the local newspapers the said proposed rules but the draft rules in regard to the " system of assessment " were not published along with other particulars.
It was alleged by the appellants that the Municipality by not publishing the draft rules of the " system of assessment ", failed to comply in full with the mandatory requirements of section 67(2) of the Act rendering the imposition of tax illegal.
Held, that the words " system of assessment " did not neces sarily mean the whole procedure of taxation, i.e. imposition, collection and procedure in regard to collection and refund.
The notice and not the draft rules relating to assessment and collection were required under the Rules to be affixed on the notice 619 board of the Municipality and at other conspicuous places of the town.
In the instant case the publication of the Rules relating to the rates at which the tax had been imposed was sufficient compliance with the provisions of Section 67(2) of the C. P. S Berar Municipal Act, 1922, and the rules made thereunder.
|
No. 119 of 1957.
Writ Petition, under Article 32 of the Constitution of India for the enforcement of Fundamental Rights.
Achhru Ram, J. P. Goyal and K. L. Mehta, for the petitioners.
H. N. Sanyal, Additional Solicitor General of India, K.L. Misra, Advocate General for the State of U. P. and Gopi Nath Dixit, for the respondent.
December 17.
The Judgment of the Court was delivered by WANCHOO, J.
This petition under article 32 of the Constitution challenges the constitutionality of the 117 930 U.P. Consolidation of Holdings Act, (U. P. V of 1954), as amended by U. P. Acts No. XXVI of 1954, No. XIII of 1955, No. XX of 1955, No. XXIV of 1956 and No. XVI of 1957, (hereinafter called the Act).
The applicants are four brothers holding land in village Banat, tahsil Kairana, District Muzaffarnagar.
A notification was issued under section 4 of the Act in respect of 223 villages in tahsil Kairana, declaring that the State Government had decided to make a scheme of consolidation in that area.
This was followed up by necessary action under the various provisions of the Act resulting in a statement of proposals under section 19.
Objections to these proposals were filed by the petitioners and others, which were decided in April 1956.
The petitioners went in appeal to the Settlement Officer (Consolidation), which was decided in August 1957.
It was thereafter that the present petition was filed in this Court.
The petitioners challenge the constitutionality of the Act on various grounds, of which the following five have been urged before us: (1)Section 6 read with section 4 of the Act gives arbitrary powers to the State Government to accord discriminatory treatment to tenure holders in different villages by placing some villages under consolidation while excluding others, thus offending article 14 of the Constitution.
(2)Sections 8, 9 and 10 read with section 49 of the Act provide a procedure for the correction and revision of revenue records for villages under consolidation, which is vitally different from that applicable to villages not under consolidation, and there is thus discrimination which offends article 14 of the Constitution ; (3)Sections 14 to 17 read with section 49, confer arbitrary powers on the consolidation authorities under which they can deprive a tenure holder of his land or rights therein and the tenure holder has been deprived of the protection of courts available to other tenure holders in villages not under consolidation, thus creating discrimination which offends article 14. 931 (4)Sections 19 to 22, read with section 49, again create discrimination on the same grounds as sections 14 to 17, and are, therefore, hit by article 14; and (5)Section 29 B, which provides for compensation gives inadequate compensation and is, therefore, hit by article 31(2) of the Constitution.
Before we take these points seriatim, it is useful to refer to the background of this legislation.
As far back as 1939, the U. P. Consolidation of Holdings Act No. VIII of 1939, was passed.
It was, however, of little effect, because it could only be applied when more than one third of the proprietors of the cultivated area of a village applied for an order of consolidation of the village.
It was, therefore, felt that some kind of compulsion would be necessary in order to achieve consolidation of holdings in villages.
That consolidation would result in improving agricultural production goes without saying and it was with the object of encouraging the development of agriculture that consolidation schemes with a compulsory character were taken up in various States, after the recommendation of The Famine Inquiry Commission, 1944, in its Final Report; (Seepage 263).
The State of Bombay.
was the first to pass an Act called the Bombay Prevention of Fragmentation and Consolidation of Holdings Act, (Bom.
LXII of 1947).
This was followed by the impugned Act in Uttar Pradesh.
The object of the Act is to allot a compact area in lieu of scattered plots to tenure holders so that large scale cultivation may be possible with all its attendant advantages.
Thus ' by the reduction of boundary lines saving of land takes place and the number of boundary disputes is reduced.
There is saving of time in the management of fields inasmuch as the farmer is saved from travelling from field to field, which may be at considerable distances from each other. ' Proper barriers such as fences, hedges and ditches can be erected around a compact area to prevent trespassing and thieving.
It would further be easier to control irrigation and drainage and disputes over water would be reduced considerably where compact areas are allotted to tenure holders.
Lastly, the control of pests, insects 932 and plant disease is made easier where farmers have compact areas under cultivation.
These advantages resulting from consolidation of holdings are intended to encourage the development of agriculture and larger production of food grains, which is the necessity of the day.
With these objects in mind, the Act was passed by the U. P. Legislature in 1953 and received the assent of the President on March 4, 1954.
It was published in the gazette on March 8, 1954, and declarations under section 4 were made for the major part of the State of Uttar Pradesh, including the petitioners ' village, in July, 1954.
The scheme of the Act is as follows: When consolidation of a village is taken up, the first thing that is done is to correct the revenue records, and sections 7 to 12 deal with that.
Then comes the second stage of preparing what are called statements of principles ; (see sections 14 to 18).
Objections to these principles are entertained and decided and thereafter the principles are confirmed under section 18.
Then comes the third stage (vide sections 19 to 23), which deals with the preparation of the statement of proposals.
Objections to this are also invited and disposed of, and then proposals are confirmed under section 23.
After the proposals have been confirmed, we come to the last stage in which the confirmed proposals are enforced; (see sections 24 onwards).
It will be clear therefore from the objects of the Act and the advantages that accrue from its implementation that it is a piece of legislation, which should be a boon to the tenure holders in a village and should also lead to the development of agriculture and increase of food production.
It is in this setting that we have to examine the attack that has been made on the constitutionality of the Act.
Re. 1 : Section 6 of the Act gives power to the State Government at any time to cancel the declaration made under section 4 in respect of the whole or any part of the area specified therein.
When such declaration is made the area ceases to be under consolidation operations and section 5 which provides for the effect of a declaration ceases to operate.
It is urged that section 4 933 gives arbitrary power to the State Government to cancel the declaration, even with respect to a part of the area covered by it and thus discriminates between villages which are under consolidation and those which are not under consolidation.
The learned Additional Solicitor General counters this argument in two ways: (i) Section 6 is nothing more than a restatement of the power which the State Government otherwise possessed under the General Clauses Act; and (ii) the high status of the authority to whom the power is given, namely, the State Government, and the rules framed under the Act laying down a standard for the Government to follow, remove any flavour of arbitrariness which the terms of the section might import.
It is not necessary to express any opinion in this case on the said contention, for, even if it be accepted, the result would be only that section 6 would be struck down.
The petitioners would be in the same position with section 6 on the Statute or without it.
It may be that, if a citizen in whose favour an order of consolidation has been made but subsequently cancelled, comes to court with a grievance that the order of consolidation was for his benefit but was cancelled in exercise of a power under a void section, this question might arise for consideration.
It may also be that the petitioners ' right might be infringed if section 6 were not severable from the other provisions of the Act which enable the Government to direct consolidation of holdings.
The power of cancellation cannot be said to be so inextricably mixed up with the power to order consolidation as to prevent the operation of one section without the other.
Nor can it be said that the Legislature would not have conferred the power on the Government to consolidate holdings without at the same time conferring on them the power to cancel the said order of consolidation.
The said provisions are clearly severable.
In the circumstances, as the petitioners ' case is not affected by section 6 of the Act, we leave this open to be decided in an appropriate case.
Re. 2: This deals with the first stage of revision and correction of maps and records, which has to take place before the actual consolidation scheme is put 934 into force.
Section 7 provides for the examination of the revenue records by the Assistant Consolidation Officer and he is enjoined to test the accuracy of the village map, khasra and the current annual registers by making a partal in accordance with the procedure to be prescribed.
After he has done the partal, he is to prepare a statement showing the mistakes discovered in the map, khasra and khatauni, 'and the number and nature of disputes pertaining to land records under the U. P. Land Revenue Act, 1901.
Then under section 8 he submits a report to the Settlement Officer (Con solidation) in this connection with his opinion whether any revision of such maps and records is needed.
On receipt of this report, the Settlement Officer may either order the Assistant Consolidation Officer to proceed with the correction of maps and records, which we presume he will order when there are not too many mistakes, or recommend to the State Government for revision of maps or records in accordance with the provisions of Ch.
IV of the U. P. Land Revenue Act, 1901, which he will presumably do if there are too many mistakes found.
If the Assistant Consolidation Officer is ordered to make the corrections he will make a further partal, if necessary, and correct the map or the entries in annual register in accordance with the procedure to be prescribed.
The procedure is prescribed in r. 22 and among other things it lays down that the Assistant Consolidation Officer shall issue a notice to all persons affected by the provisional entries proposed by him; objections are invited and parties are examined and heard and their evidence taken and then the Assistant Consolidation Officer makes the corrections.
His order is open to appeal within twentyone days under section 8(4) to the Consolidation Officer, and the order of the latter is made final.
It is urged that this procedure is vitally different from the procedure prescribed under the U. P. Land Revenue Act and that under section 49 of the Act the jurisdiction of the civil and revenue courts with respect to any matters arising out of consolidation proceedings is barred, thus depriving those affected by the orders of the Consolidation Officer the right to file a suit as they 935 could have done under the provisions of the U. P. Land Revenue Act; (see sections 40, 41, 51 and 54).
There is no doubt that there is some difference between the procedure provided under the Act and that which the tenure holders 'Would have been entitled to if their village was not under consolidation.
But if consolidation is a boon to the tenure holders of a village, as we hold it is, and if it is to be put through within a reasonable period of time, it is necessary to have a procedure which would be shorter than the ordinary procedure under the U. P. Land Revenue Act or through a suit in a civil or revenue court.
The procedure that has been provided cannot by any means be said to be arbitrary or lacking in the essentials of principles of natural justice.
The Assistant Consolidation Officer gives notice to the persons affected, hears their objections and gives them an opportunity to produce evidence.
Thereafter he decides the objections and one appeal is provided against his order.
This should, in our opinion, be enough in the special circumstances arising under the Act to do justice to those who object to the correction of records.
All that has happened is that the number of appeals is out down to one and that in our opinion is not such a violent departure from the ordinary procedure as to make us strike down the provisions contained in Ch.
II of the Act as discriminatory, in the peculiar circumstances arising out of a scheme of consolidation which must, if it has to be of any value, be put through within a reasonable period of time.
Whatever difference there may be may well be supported as a permissible classification on an intelligible differentia having a reasonable relation to the object sought to be achieved by the Act.
Further section 12 provides that where there is dispute as to title and such question has not already been deter.
mined by any competent Court, the Consolidation Officer has to refer the question for determination to the Civil Judge who thereafter will refer it to the arbitrator.
The arbitrator then proceeds in the manner provided by r. 73 and gives a bearing to the parties and takes evidence both oral and documentary before making his award; and section 37 of the Act makes the 936 Arbitration Act applicable to the proceedings before the arbitrator in the matter of procedure.
Taking, therefore, the scheme of Ch.
11 and remembering that if consolidation is to be put through there must be a more expeditious procedure, there is in our opinion rational basis for classification which justifes the procedure under Ch.
11 of the Act read with the Rules in villages where consolidation scheme is to be effective.
The attack, therefore, under article 14 of the Constitution on the provisions of Ch.
II fails.
Re. 3 and 4: The contentions on these heads may be taken together.
They attack the provisions of Ch.
III dealing with the Statement of Principles and Statement of Proposals.
The statement of principles is first published and objections are invited.
Under section 17 the Assistant Consolidation Officer decides the objections after hearing the parties, if necessary, and taking into account the view of the Consolidation Committee.
He then submits a report to the Consolidation Officer who after hearing the objectors and taking such evidence as may be necessary passes final order and confirms the statement of principles; (see r. 43 B).
Similarly, when statements of proposals are published, objections are invited to them, and the same procedure is followed in the decision of these objections as in the case of the objections to the statement of principles.
In the case of the statement of proposals also, there is similar provision to refer disputed question of title to the Civil Judge, who, in his turn, refers it to the arbitrator.
Section 22 also provides that where such question has been referred to the arbitrator, all suits or proceedings in the court of first instance, appeal, reference or revision, in which the question of title to the same land has been raised, shall be stayed.
Section 22(3) makes the decision of the arbitrator final.
There is no provision for appeal in Ch.
III though in fact two persons hear the matter, namely, the Assistant Consolidation Officer and the Consolidation Officer.
But the main attack is on the provisions of section 22(2) on account of which it is said that even where a party has obtained a decree which might be under appeal, the jurisdiction of the ordinary 937 courts is taken away and the decision of the arbitrator is made final.
That is undoubtedly so.
But if the consolidation scheme has to be put through in a reasonable period of time such a provision is, in our opinion, necessary; but for it the consolidation schemes may never be really put through for there will be little purpose in making consolidation where a large number of disputes are pending in the courts.
Reasons which we have given in dealing with the second point apply with equal force to these two points also, and we are of opinion that there is a rational basis for a classification which has a nexus with the object of the Act, and therefore, the attack under article 14 on the provisons of Chapter III also must fail.
Re. 5.
Under this head,, the inadequacy of compensation provided under section 29 B of the Act is raised.
It may be mentioned that the Act, as originally passed, did not contain any provision for compensation.
There were a number of writ applications in the Allahabad High Court and that court held that inasmuch as some property was taken away under section 14(1) (ee) for public purposes and no compensation was provided, that provision was void under article 31 (2) as it stood before the Constitution (Fourth Amendment) Act, 1955 (hereinafter called the Fourth Amendment,).
Appeals by the State Government from that decision of the Allahabad High Court are pending before us and we shall deal with them separately.
The legislature then enacted section 29 B laying down the principles on which compensation would be paid for lands taken away under section 14 (1) (ee) after the decision of the Allahabad High Court.
This section was put by Act XVI of 1957 in the original Act with retrospective effect from the date from which the original Act was enforced.
It is urged that the compensation provided therein is inadequate, and, therefore, the provision should be struck down under article 31 (2), as it was before the Fourth Amendment.
Arguments were also addressed on the question whether section 29 B would be saved by the 118 938 Fourth Amendment.
We, however, think it unnecessary to go into these arguments for we have come to the conclusion that in the circumstances of this case the compensation provided under section 29 B is adequate.
Assuming that the case is governed by article 31 (2) as it was before the Fourth Amendment, section 29 B provides for payment of cash compensation equal to four times the value determined at hereditary rates to a bhumidar and two times the value to a sirdar.
The difference between the two rates has not been attacked for the rights of a bhumidar are much higher than the rights of a sirdar.
The bhumidar is the owner of the land while the sirdar is merely a tenant; but the argument is that the amount provided is inadequate, and that it is certainly not the fair market value of the land.
Let us see what section 14 (1) (ee) provides.
It lays down the basis on which the tenure holder will contribute towards the land required for public purposes and the extent to which vacant land may be utilised for the said purpose.
We are here concerned with the first part, namely, the contribution of tenure holders towards land required for public purposes.
In this case the petitioners had lands in one chak of the rental value of Rs. 20 6 0 and they have been allotted lands of the rental value of Rs. 20 5 0 instead.
In another chak, in place of land the rental value of which is Rs. 148 10 0 they have been allotted land of the rental value of Rs. 147 13 0.
Thus out of the land valued at Rs. 169 0 0, they have been allotted land of the value of Rs. 168 2 0, and land valued at Annas 0 14 0 has gone to the common pool.
The percentage is just over a half per cent.
it hardly ever exceeds one per cent.
Thus the land which is taken over is a small bit, which sold by itself would hardly fetch anything.
These small bits of lands are collected from various tenure holders and consolidated in one place and added to the land which might be lying vacant so that it may be used for the purposes of section 14 (1) (ee).
A compact area is thus created and it is used for the purposes of the tenure holders themselves and other villagers.
Form CH 21 framed under r. 41 (1) shows the purposes to which this land would be applied, 939 namely, (1) plantation of trees, (2) pasture land, (3) manure pits, (4) threshing floor, (5) cremation ground, (6) graveyards, (7) primary or other school, (8) playground, (9) panchayatghar, and (10) such other objects.
These small bits of land thus acquired from: tenure holders are consolidated and used for these purposes, which are directly for the benefit of the tenure holders.
They are deprived of a small bit and in place of it they are given advantages in a much larger area of land made up of these small bits and also of vacant land.
The question then is whether in these circumstances it can be said that the tenureholders have been given adequate compensation by.
section 29 B for the small bits of land acquired from them for public purposes.
This case must be distinguished from other cases where lands are acquired under the Land Acquisition Act, for here the benefit is direct to the tenure holders while in ordinary cases of land acquired for public purposes, if there is any benefit to the person from whom the land is acquired, it is indirect and remote.
It is contended on behalf of the State in the circumstances that the compensation which the tenure holders get is not merely the cash compensation which they receive under section 29 B but also the advantage which they receive by these small bits taken from them being consolidated into a larger area of land in which they will have benefits, the nature of which is indicated in form CH 21, over and above the advantage of having their scattered holdings consolidated into a compact block.
The question, therefore, is whether in these circumstances the provision of actual cash compensation under section 29 B can be said to be inadequate.
We are of opinion that taking into account the peculiar conditions in cases of this kind and remembering that the land taken from each individual tenure holder may be a small bit and it is then consolidated into a large area by adding some other lands taken from other tenure holders, and the whole is then used for the advantage of the whole body of tenure holders, it cannot be said that the cash compensation, added to the advantages which the tenure holders get in the 940 large area of land thus constituted and on account of getting a compact block for themselves, is inadequate.
Therefore, assuming that article 31 (2) applies as it was before the Fourth Amendment, it cannot be said that the compensation which the tenure holders will get under section 29 B is inadequate in the circumstances.
This ground of attack also therefore fails.
There is no force in this petition and it is hereby dismissed with costs.
Petition dismissed.
| The petitioners challenged the constitutional validity of the U.P. Consolidation of Holdings Act (U .
P. V of 954), as amended by the amending Acts, which was intended to encourage the development of agriculture by the allotment of compact areas to tenure holders in lieu of scattered plots so that large scale cultivation might be possible with all its attendant advantages.
A notification was issued under section 4 Of the impugned Act declaring the decision of the State Government to formulate a scheme of ' consolidation in respect of the area where the petitioners held their lands.
This was followed up by a statement of proposals under section 19.
The petitioners objected to these proposals and thereafter appealed to the Settlement Officer (Consolidation) but to no effect.
It was contended, inter alia, on their behalf that (1) the provisions of sections 8, 9 and 10 read with those Of s 49 Of the impugned Act were discriminatory in that they laid down a procedure for correction and revision of revenue records for 929 villages under consolidation that was vitally different from that applicable to other villages under the U.P. Land Revenue Act, 1901; (2) that sections 14 to 17 as also sections 19 to 22 read with section 49 conferred arbitrary powers on the consolidation authorities in respect of the lands of the tenure holder and his rights therein and deprived him of the protection of courts available to other tenure: holders and that (3) section 29B which provided for compensation, by giving inadequate compensation, offended article 31(2) Of the Con stitution.
Held, that the contentions must fail.
Although the procedure laid down by the impugned Act was to some extent different from that under the U.P. Revenue Act, 1901, it was by no means arbitrary or devoid of natural justice.
Regard being had to the advantages that consolidation conferred on the tenure holder such difference was supportable as a permissible classification on an intelligible differentia reasonably connected with the object of the Act.
The expeditious procedure for effectuating consolidation laid down by ch.
II of the Act read with the Rules, therefore, could not be said to violate article 14 Of the Constitution.
Nor could for similar reasons the provisions of ch.
III of the Act be said to violate article 14 Of the Constitution.
The provision Of section 22(2) Of the Act which made the decision of the arbitrator final by ousting the jurisdiction of ordinary courts even where a party had obtained a decree which might be under appeal, was necessary in the interest of expedition.
Having regard to the peculiar conditions in cases of this kind and the advantages a scheme of consolidation offered to the entire body of tenure holders, it could not be said that the cash compensation for tenure holders provided by section 29B of the impugned Act was inadequate, even assuming that article 31(2) applied to the case.
|
Appeal No. 190 of.1976.
Appeal by special leave from the judgment and order dated 8 8 1975 of the Allahabad High Court in Civil Revision No. 1004/74.
S.C. Manchanda and M.L. Jain, for the appellants.
O.P. Malhotra, N.S. Das Bahl, Y.P. Chadha and Sat Pal, for the respondent.
The Judgment of the Court was delivered by RAY, C.J.
This appeal is by Special Leave from the judgment dated 8 August, 1975 of the High Court of Allaha bad.
The appellants are defendants and the respondent is the plaintiff in suit out of which this appeal arises.
The plaintiff 's suit is for a decree for Rs. 1,30,000/ on the cause of action as laid in the plaint.
The suit was instituted sometime in the month of May, 1971.
The defendants filed written statement.
Two paragraphs of the written statement contained addi tional pleas.
Paragraph 25 states that the agreement dated 7 April, 1967 is appli 729 cable to the transactions in which the plaintiff works as stockist cumdistributor of the defendants.
The defendants further allege in paragraph 25 that the agreement is not applicable to transactions in which the plaintiff acts as a principal, In paragraph 26 the defendants/appellants in the alternative allege that even if agreement dated 7 April, 1967 is applied to the dealings in suit, plaintiff 's posi tion is merely that of an agent of the defendants and as such plaintiff is not entitled to claim any damages from the defendants for non supply of its own goods for sale through the plaintiff.
The defendants/appellants approximately 3 years after the filing of the written statement made an application for amendment of the written statement.
The proposed amendments were for deletion of paragraphs 25 and 26 and for substitu tion of two new paragraph 25 and 26.
The proposed amendment in para 25 was that by virtue of the agreement the plaintiff was appointed a mercantile agent and the plaintiff acted in that capacity in placing orders on the defendants.
The defendants further denied the allegation of the plaintiff that the plaintiff placed orders with the defendants in the plaintiff 's capacity as a purchaser.
The defendants also alleged that the plaintiff throughout acted as an agent of the defendants.
In paragraph 26 of the proposed amendment it was alleged by the defendants that being a mercantile agent and an agent of the defendants in accordance with the terms of the agreement, the plaintiff has no locus standi to file the suit.
The trial court rejected the application of the defend ants for amendment.
One of the reasons given by the trial court is that the defendants wanted to resile from admis sions made in paragraph 25 of the written statement.
The trial court said that "the repudiation of the clear admis sion is motivated to deprive the plaintiff of the valuable right accrued to him and it is against law." The trial court held the application for amendment to be not bonafide.
The High Court on revision affirmed the judgment of the trial court and said that by means of amendment the defend ants wanted to introduce an entirely different case and if such amendments were permitted it would prejudice the other side.
The decision of the trial court is correct.
The defend ants cannot be allowed to change completely the case made in paragraphs 25 and 26 of the written statement and substitute an entirely different and new case.
It is true that inconsistent pleas can be made in plead ings but the effect of substitution of paragraphs 25 and 26 is not making inconsistent and alternative pleadings but it is seeking to displace the plaintiff completely from the admissions made by the defendants in the written statement.
If such amendments are allowed the plaintiff will be irre trievably prejudiced by being denied the opportunity of extracting the admission from the defendants.
The High Court rightly rejected the application for amendment and agreed with the trial court.
We are told that the defendants proposed amendments to two other paragraphs of written statement.
These are para graphs 4 and l 9 730 of the written statement.
These amendments were also rightly rejected.
For the forgoing reasons the appeal must fail.
The defendants, appellants cannot be allowed to amend the writ ten statement in the manner suggested.
The two alternative pleas of the defendants as alleged in paragraphs 25 and 26 of the written statement are there.
The parties will be able to make their rival contentions on the pleadings as to the issues to be raised.
The defendants wish to raise issues on those paragraph 25 and 26.
Counsel for the plaintiff states that it is open to the defendants to apply for the framing of the issues.
They will be at liberty to do so.
The costs of this appeal will be paid by the appel lants to the respondent.
Record can be sent back to the trial court as early as possible.
S.R. Appeal dismissed.
| In response to a notice from the assessing authority under the Punjab General Sales Tax Act that the appellant had not filed a return in respect of the assessment year 1959 60, the appellant claimed that the firm had ceased to do any work since February.
1961 and that a formal document to that effect was executed in August, 1961.
The assessing authority made an order of assessment in March 1962.
In a writ petition under Article 226 of the Constitution filed ' by the appellant; the High Court directed the Sales Tax Officer to enquire and report if the appellant firm had proved its dissolution in August 1961 or before the date of assessment order.
The Sales Tax Officer reported that it had not, The High Court itself examined the matter and came to the s.me conclusion of that reached by the Sales Tax Officer.
It also found that though intimation was required to be given under section 16 of the Act regarding the dissolution of the firm within 30 days of such dissolution no such intimation was given under April, 1962 and dismissed the writ petition.
Dismissing the appeal to this Court, HELD: (1) There is no sufficient ground to interfere with the judgment of the High Court.
The facts and circum stances referred to by the High Court throw a considerable doubt upon the correctness of the appellant 's statement that it had stood dissolved in August, 1961.
[754 D & B] (2) The High Court was dealing with the matter on the writ side.
In a writ petition, the scope for interference.
with a finding of the departmental authorities is much more restricted and the court can normally interfere only if the finding is based upon extraneous or irrelevant evidence or is otherwise perverse.
The same cannot be said of the finding of the sales tax authority embodied in its report sent to the High Court in the present case.
[754 C]
|
ition Nos. 112 115, 175, 297, 194 198, 489 90, 459, 215, 2 3 and 432/80, 1477 of 1979, 1516B 1517/79.
(Under Article 32 of the Constitution) AND SPECIAL LEAVE PETITION (CIVIL) No. 2746 of 1980.
From the judgment and order dated the 11th February, 1980 of the High Court of Calcutta in Appeal from an order No. Nil of 1980.
A. K. Srivastava for the Petitioners in WP Nos. 213 and 175/80.
H. K. Puri for the Petitioners in WP Nos.
1516, 1517, 1477/79 and 2 3 of 1980.
M. P. Jha for the Petitioners in WP No. 297/80.
Dr. Y. section Chitale, B. P. Singh and Naresh K. Sharma for the Petitioners in WPs Nos. 112 115/80.
P. R. Mridul and D. P. Mukherjee for the Petitioners in WPs 489 490 and 432 of 1980.
A. K. Sen, section K. Sinha and C. K. Ratnaparkhi for the Petitioners in WPs.
194 198/80.
Dr. Y. S Chitale, G. section Chatterjee, and D. P. Mukherjee for the Petitioners in SLP No. 2746 of 1980.
section K. Jain for the Petitioners in WP No. 439/80.
M. K. Banerjee Addl.
and Miss A. Subhashini for the Respondent No. 3 in WP Nos.
112 115, 175/80.
Lal Narain Sinha Att.
and U. P. Singh for the Respondent State of Bihar and Its official in WP Nos.
112 115/80, 1477/79, 175, 213, 2 3, 459, 489 90/80 and SLP No. 2746/80.
M. K. Banerjee, Addl.
and section B. Sinha and D. P. Mukherjee for the Respondent No. 9 in WPs 112 115 of 1980.
Rathin Das for the Respondents (State of West Bengal) in WPs.
1516 1517/79.
section section Jauhar for the Interveners in WP No. 175/80.
The Judgment of the Court was delivered by KRISHNA IYER, J.
We have a hunch we leave it at that that these "Workers" writ petitions arc a kind of litigative puppetry.
597 the illicit mine exploiters being the puppeteers.
This set of writ petitions, where some private management claim to have the right to extract coking coal on the score that prohibition enacted in the Coal Mines (Nationalisation) Amendment Act, 1976 does 'not affect or operate on coking coal mines, must be dismissed as devoid of deserts.
The short point sharply focussed by Dr. Chitale and echoed with some variant notes by other counsel, in support of these writ petitions may be briefly stated thus.
According to him, the history of coal nationalisation legislation in this country in the seventies of this century shows that Parliament has treated coal and coking coal separately for legislative purposes in regard to taking over of management, nationalisation of ownership and the like.
It all began with the year 1971 when Parliament enacted the (hereinafter called the 1971 Act, for short).
It took over management of coking coal mines.
Iron and Steel are key industries requiring, importantly, coking coal for their very survival.
When Parliament found that coking coal was not being made available properly to the Industry on account of the unsatisfactory con duct of the private sector operating in this field, the entire management of coking coal mines.
was taken over on an emergency footing in the public interest be the 1971 Act.
Thereafter, with more deliberation and detailed investigation, the management of coking coal mines (and of other coal mines) was taken over by appropriate legislation.
Still later, after mature planning and understanding of implications, Parliament enacted legislation for vesting of ownership of coking coal Mines and eventually of all coal mines.
The Management of coking coal was taken over by the Central Government under .
The management of all other coal mines was taken over by the Central Government under the Coal Mines (Taking over of Management) Act, 1973.
The second step after management came under the control of the Central Government was the actual nationalisation of ownership itself.
This state of planning led to Parliamentary enactments of (36 of 1972) and the (26 of 1973).
The sequence of events shows the evolution of national policy in this regard.
Coking coal, being absolutely essential, was first taken over urgently.
Later on, the entire coal industry came under Parliamentary consideration and management thereof was taken over.
Finally, the ownership of all coal mines, including coking coal mines, was vested in the Central Government and in certain instrumentalities created by Central Government.
Thus we see that the comprehensive plan behind coal nationalisation did not permit of private agencies operating in the field.
Coking coal was 19 289 SCI/80 598 more strategic than ordinary coal having regard to its use for iron and steel industries.
Nevertheless, it was found as a fact that on account of these mines being located in remote places and in jungles, especially in the State of Bihar and Bengal, the Central Government wanted to take effective steps to put an end to clandestine mining by any private agency.
The jungle of laws haphazardly enacted partly helped the privateers get round the law and clandestinely or even through court receivers extract coal as there was big money in it.
Therefore, the 1976 Act was enacted to plug all loopholes, virtually banish the private sector and to ensure legal success for Project Public Sector in the field of coal mining.
Section 3(3) of the 1976 Act reads thus: 3.(3) on and from the commencement of section 3 of the Coal Mines (Nationalisation) Amendment Act.
1976: (i) the Central Government or a Government company or a corporation owned, managed or controlled by the Central Government, or (ii) a person to whom a sub lease, referred to in the proviso to clause (c) has been granted by any such Government, company or Corporation, or (iii) a company engaged in the production of iron and steel, shall carry on coal mining operation in India, in any form; (b) excepting the mining leases granted before such commencement in favour of the Government, company or corporation, referred to in clause(a), and any sub lease granted by any such Government, company or corporation, all other mining leases and sub leases in force immediately before such commencement, shall, in so far as they relate to the winning or mining of coal, stand terminated; (c) no lease for winning or mining coal shall be granted in favour of any person other than the Government, company or corporation, referred to in clause(a): Section 4 of the same Act super adds severe punishment for contravention of the prohibition contained in section 3(3).
The total effect thus is clear.
The Parliament wanted to prevent the mischief of coal P! mining and other illicit extraction of coal to the national detriment.
Scratching, slaughter mining and such like activities on the sly were regarded as defeating the nationalisation scheme.
599 Counsel for the petitioners contended that the legislative history A was relevant to the interpretation of section 3(3) of the 1976 Act.
In his submission, the amendment brought about in 1976 incorporating total interdict of mining applied only in relation to coal mines and not in relation to coking coal mine.
For this argument he sought sustenance from the existence of two sets of legislation dealing with coal mines and coking coal mines throughout the 1970s.
He further pointed out that even as late as 1978 when amendments were contemplated in regard to coal mines ' and coking coal mines ' nationalisation there were separate provisions separately inserted in both the nationalisation measures.
He cited the 1978 Act as illustrative, even decisive.
The absence of any mention of coking coal mines in the 1976 Act, was, in his submission, conclusive of the parliamentary intent in his favour, especially when read in the light of the history of the package of nationalisation legislations.
We are far from satisfied that there is substance in this submission.
History may illumine but cannot imprison interpretation.
It is true that in 1971 when Parliament was faced with a crisis regarding need for coking coal in iron and steel industries a legislation, on an emergency footing, was made solely confined to coking coal mines.
As we have earlier explained, the plan of the nation in regard to these natural resources was then embryonic and later final and there was step by step legislation to implement the policy on a phased programme.
The culmination came in the blanket ban of 1976.
We are concerned here with the interpretation of section 3(3) which we reproduce again for facility of reference at this state: 3.(3) on and from the commencement of section 3 of the Coal Mines (Nationalisation) Amendment Act, 1976, (a) no person, other than (i) the Central Government or a Government company or a corporation owned, managed or controlled by the Central Government.
Or G (ii) a person to whom a sub lease, referred to in the proviso to clause (c) has been granted by any such Government, company or corporation, or (iii) a company engaged in the production of iron and steel, shall carry on coal mining operation, in India, in any form; .
600 (b) excepting the mining leases granted before such commencement in favour of the Government, company or corporation, referred to in clause (a), and any sub lease granted by any such Government, company or corporation, all other mining leases and sub leases in force immediately before such commencement, shall, in so far as they relate to the winning or mining of coal.
stand terminated; (c) no lease for winning or mining coal shall be granted in favour of any person other than the Government, company or corporation, referred to in clause (a): Provided that the Government, company or corporation to whom a lease for winning or mining coal has been granted may grant a sub lease to any person in any area on such terms and conditions as may be specified in the instrument granting the sub lease, if the Government, company or corporation is satisfied that (i) the reserves of coal in the area are in isolated small pockets or are not sufficient for scientific and economical development in a coordinated and integrated manner, and (ii) the coal produced by sub lessee will not be required to be transported by rail.
The short question of statutory construction turns on the meaning to be assigned to the expression "no person, other than the Central Government or a Government company or a corporation owned, managed or controlled by the Central Government. shall carry on coal mining operations in India, in any form".
The expression is semantically sweeping and is wide in meaning so as to spare no class of coal, including even coking coal, because coking coal is a species of coal, coal itself being the genus.
What is more, there is a definition of 'coal mine ' in the Coal mines (Nationalisation) Act, 1973.
Section 2(b) of the 1973 Act defines coal mine to mean "a mine in which there exists one or more seams of coal".
It is apparent that even a coking coal mine is a coal mine because the definition is broad.
It is inarguable that coking coal is not coal.
This conclusion is reinforced by looking at the definition of coking coal mine in section 3(c) of the .
Section 3(c) reads thus: "coking coal mine" means a coal mine in which there exists one or more seams of coking coal, whether exclusively or in addition to any seam of other coal.
601 Indeed, it is irrefutable, viewed literally, lexically, semantically, teleologically or applying the rule in Heydon 's case that coking coal mine is a coal mine.
If it is a coal mine it is covered by the 1976 Act.
Coking coal is more precious,, strategically speaking, than other forms of coal and it would be an error, nay a blunder, to prevent private extraction of common coal and to permit removal of coking coal.
It would be pathetic and bathetic for any policy maker to be so egregious.
Parliament may err but not be absurd ! So construed, it is obvious that coking coal, which is more importantly needed for the nation than other supplies of coal, must be the last to be squandered away by permitting it to be privately exploited.
We have no hesitation in holding that 'coal mine ' in the 1976 Act includes coking coal mine and section 3(3) of that Act clamps down the ban on extraction of coking coal also.
lt was feebly submitted that some of the mines may have fire clay layers to reach which the mining operation may have to pass through coal seams; and, therefore, such operation cannot be prohibited.
We are not impressed with this argument at all.
Even assuming there is fire clay or other layer somewhere in the bowels of the earth the statutory mandate is that once you come up on a coal seam you shall stop extracting it to proceed beyond.
Maybe, some injury may be caused, fancied or real, but it is permissible for Parliament to make provision to prevent evasion of the purpose of the statute by prohibition of mining other minerals which may incidentally defeat the coal nationalisation measure.
In this view we find no merit in any of the writ petitions and dismiss them all with costs.
It has been mentioned on more than one occasion in this court that interlocutory orders have been sought and obtained, that Receivers have been appointed by other courts and that they have been working these mines.
In the face of the statutory prohibition which is imperative in tone and all embracing in language, even punishable for violation, it is surprising that any Receiver could at all dare to work mines without running a grave risk.
The court cannot sanction the commission of a crime.
We make it perfectly plain that there will be no more authorisation for any receiver or other officer of court to extract coal or coking coal from any mine in India.
Section 3(3) of the 1976 Act, being all inclusive and having been constitutionally upheld by thus Court, it is no longer permissible for any court in India n 602 to appoint a receiver for or otherwise permit extraction of coal or coking coal.
These observations and reasonings must converge to only one conclusion that the crowd of writ petitions deserve to be and are hereby dismissed of course, with costs.
We would conclude with a conscientious query will the State keep the coal mafia out, break the coal racket where government agencies are suspect and demonstrate that, the court having come to the aid of the Executive, nationalisation will fulfil the targets and tide over the crisis ? Caesar 's wife must be above suspicion.
S.R. Petitions dismissed.
| The appellants were appointed Inspectors of Police in 1953.
After working as Inspectors for about 12 years, they were promoted by notification dated June 16, 1965 to officiate as Deputy Superintendents of Police.
Before promotion they were subjected to the scrutinies prescribed by rules 22, 23 and 24 of the Bihar Police Service (Recruitment) Rules, 1953.
Rule 648 B of the Bihar and Orissa Police Manual (Volume I) requires a promoted Deputy Superintendent of Police to pass an examination in accounts.
The appellants passed the examination and satisfied all the requirements for confirmation.
However, the posts in which they were officiating were temporary posts.
Thereafter the Government by a notification dated August 22, 1974, confirmed the appellants and other similarly situated officers as Deputy Superintendents of Police with effect from the dates which according to these officers were arbitrarily chosen.
On September 1, 1974 the Government published a combined gradation list in which these promotees were placed even below the direct recruits who were appointed in 1974.
The appellants challenged this gradation list in the High Court by a Writ Petition and during the pendency of the said Writ, the State Government constituted "Saran Singh Committee", to assess the promotional prospects of different State services, examine the problem of "stagnation", and suggest remedial measures.
The recommendations of the committee were accepted by the State Government by Resolution dated April 11, 1977.
In the Writ Petition, the High Court directed the State Government to re examine the matter and prepare a fresh gradation list on the basis of the statement made by the Government in the light of the committees ' recommendations.
None of the parties appealed against this order.
By notification dated January 7, 1978 the State Government appointed on probation the Officers who had been officiating in those posts with effect from the dates mentioned against their names in the notification and the notification issued previously promoting these officers on officiating basis was cancelled.
The dates from which these officers were said to have been appointed on probation were the dates of their promotion as officiating Deputy Superintendents of Police.
The names of the appellants figured against serial numbers 23, 24 and 25 in the list given in the notification dated January 7, 1978.
The revised gradation list which is under challenge was thereafter issued.
451 The appellants questioned the correctness of the Judgment of the High Court which allowed the two Writ Petitions made by two different groups of direct recruits challenging the gradation lists of permanent Deputy Superintendents of Police on February 24,1978.
Accepting the appeal, ^ HELD: 1.
The appellants were promoted to officiate as Deputy Superintendents of Police in the year 1965 (other promotees like the appellants had also been officiating as Deputy Superintendents of Police from different dates between 1948 and 1970), and by the Government order dated December 30,1977 fifty four temporary posts of Deputy Superintendent of Police created between 1948 and 1970 were made permanent from the dates these posts were created.
[456D G] 2.
It is well settled that in the absence of any legislation on the subject, or a rule framed under the Proviso to Article 309 of the Constitution, the State Government can regulate its public services in the exercise of its executive power.
[456 F G] B. N. Nagarajan vs State of Mysore , Sant Ram Sharma vs State of Rajasthan ; , referred to.
There is no statute or any rule framed under the Proviso to Article 309 to determine the seniority as between the direct recruits and the promotees.
The determination of seniority on the basis of continuous officiation has been held valid in section B. Patwardhan 's case ; The gradation list cannot therefore be challenged on the ground that an arbitrary date was taken as its basis or that it offends Article 14 of the Constitution.
[456G H. 457A] 4.
In the year 1977 exigencies of the situation prompted the Government to convert the temporary posts created between 1948 and 1970 into permanent posts with effect from the dates on which the temporary posts had been created.
The appellants were promoted in 1965 to officiate as Deputy Superintendents of Police in posts which were then temporary.
The Governor while exercising his powers under rule 3 in the year 1965 could not naturally take into account the number of posts made permanent in 1977 with effect from 1965.
Whatever was done subsequently to increase the strength of the cadre in 1965 under compulsion of the situation cannot be said to have effected the validity of the action taken by the Governor in 1965.
[457 F] section G. Jaisinghani vs Union of India & Ors. ; ; referred to.
Rule 3 of the Bihar Police Service (Recruitment) Rules, 1953 is not really a quota rule, it does not lay down a fixed proportion, all it does is to insist that the number of vacancies to be filled by proportion, should not be less than half of the total number of vacancies to be filled in any year.
Adding to the number of vacancies and filling them by promotees does not certainly violate the rule requiring, that no less than half of the vacancies must be filled by promotees.
What the Governor had done in a previous year in exercise of his power under rule 3, if it was valid then is not invalidated by the subsequent conversion of some posts which were temporary at the time into permanent posts with effect from the earlier year.
If for administrative reasons 452 such a measure was considered necessary, there is nothing rule 3 to suggest a bar.
Rule 3, as already mentioned, does not prescribe a fixed proportion of promotees and direct recruits for the vacancies to be filled in any year but only ensures not less that half of the vacancies for the promotees, that being so, filling more than half of the vacancies by promotees, cannot be an infringement of that rule.
[457G H, 458A B] 6.
The gradation list contains certain mistakes, and these shall be corrected by the concerned authority.
[458F]
|
ivil Appeal Nos. 116117 of 1987.
309 From the Judgment and Order dated 28.11.1986 of the Bombay High Court in Civil Writ Petition Nos.
5391 And 55 15 of 1985.
F.S. Nariman, R.F. Nariman, Ashok Goel, Rajan Karanjawa la and Ejaz Mazbool for the Appellant.
H.C. Tunara, M.N. Shroff, A.G. Parekh and K.M.K. Khan for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This appeal by special leave is by the tenant from the judgment and order of the High Court of Bombay dated 28th of November, 1986.
The only question involved in this appeal is what is the period of limitation for the recovery of possession of the demised premises.
The premises in question is located on the Municipal Street No. 16 in Fanaswadi area of Bombay.
The tenant was inducted as a monthly tenant in respect of the said premises at a monthly rent of Rs. 105.60 for the purpose of conducting ice cream business which was being carried on by her husband who was the holder of the power of attorney on her behalf.
The premises consisted of the entire structure on the ground floor with a loft covering the entire area with corrugated iron sheets.
The letting was done on an agreement dated 29th of December, 1975 which was to become effective from the 1st of January, 1976.
It is the case of the landlord, the re spondent herein, that in breach of the agreement and the terms of tenancy as also in violation of.
the prohibition prescribed under section 13(1) of the Bombay Rents, Hotel & Lodging House Rates (Control) Act, 1947 (hereinafter re ferred to as the Rent Act), the tenant had indulged in several acts of commission by which not only there has been permanent alterations of major nature but the entire struc ture was completely changed so much so that even the height of the structure was increased and thus, the loft lost its initial character and became almost as a first floor which was the creation of the appellant tenant herein.
Several other breaches were alleged to have been committed in re spect of the terms of tenancy.
It was alleged that the tenant had indulged in the acts of waste and damage to the property and that further she had changed the user of the suit premises when some of the employees started residing there.
On the basis of those and other allied allegations on the 20th of September, 1978 the landlord, respondent herein, gave a notice to quit to the tenant, the appellant herein, on the ground that the tenant had (1) made alterations of permanent nature in respect of the demised premises, (2) committed 310 acts of waste and damage and (3) changed the user of the premises.
In 1979 the landlord filed R.A.E. Suit No. 1326/4557 of 1979 against the tenant in the Small Causes Court, Bombay for possession of the demised premises.
The Trial Court on 11th November.
1982 decreed the suit uphold ing, inter alia, that the tenant had made alterations of permanent nature in the demised premises and had committed acts of waste and damage.
Aggrieved by the said decision Appeal No. 667 of 1982 was filed by the tenant against the decree of the Trial court.
The same was allowed by the Appellate Bench of the Small Causes Court on 28th September, 1985 and the respondent 's suit for eviction was dismissed on the ground that the suit was barred by lapse of time under article 113 of the (hereinafter called the ).
The High Court of Bombay on 28th of November, 1986 allowed the writ petition being Writ Petition No. 5391 of 1985 filed by the landlord under Article 227 of the Constitution against the judgment of the Appellate Bench of the Small Causes Court.
The High Court allowed the said Writ Petition filed by the landlord and dismissed the Writ Petition being Writ Petition No. 5515 of 1985 filed by the tenant.
In the premises the High Court 's judgment and order dated 28th of November, 1986 impugned in this appeal re stored the judgment of the Trial Court decreeing the re spondent 's suit for possession.
All the three courts have held that the tenant, appel lant herein, had made alterations of permanent nature and had committed acts of waste and damage.
The Appellate Bench of the Small Causes Court and the High Court, however, differed on the question of limitation.
The Appellate Bench of the Small Causes Court had held that the suit was barred under article 113 of the which prescribed a period of 3 years while the High Court held that articles 66 or 67 was applicable which prescribed a period of 12 years.
According to the landlord respondent, the suit though filed after 3 years was filed within 12 years of the accrual of the cause of action.
The only question which was argued in this appeal was the question of limitation.
No factual aspect was agitated before this Court.
This appeal must therefore, decide the question which article of the Limita tion Act would be applicable, that is to say, whether arti cle 113 or either of the article 66 or 67 and what would be the date of the accrual of cause or ' action.
On behalf of the appellant, it was submitted by Mr. Nariman that on the facts of this case, article 113 of the would alone apply because according to him neither article 66 nor article 67 would have any applica tion.
It may not be inappropriate to set out article 66 and article 67 of the Schedule of the .
The said articles 311 appear in of the Schedule First Division dealing with suits relating to immovable property.
The first column gives the description of suit, the second column gives the period of limitation and the third column deals with time from which period begins to run.
Articles 66 and 67 read as follows: "66.
For possession Twelve When the forfeiture of immovable property years is incurred or the when the plaintiff condition is has become entitled broken.
to possession by reason of any forfeiture or breach of condition.
By a landlord to Twelve When the recover possession years tenancy is from a tenant.
determined.
" Article 113 on the other hand which is in dealing with suits provides that for any suit for which no period of limitation is provided elsewhere in the Schedule the period would be three years from the date when the right to sue accrues.
It was submitted by Shri Tunara, learned counsel for the respondent landlord that for any suit by a landlord against a tenant for recovery of possession under the Rent Act, the was inherently inapplicable.
We are, however, unable to accept this argument.
Recovery of possession is by a suit and there is no section in the scheme of the Limita tion Act to indicate that was inherently inapplicable.
In the scheme of the Rent Act or in the var ious contingencies contemplated under the Rent Act, there is nothing to indicate or warrant that there would be no limi tation of any period.
Article 67 of the which has been set out hereinbefore indicates that time begins to run only when the tenancy is determined.
It comprehends suit by a landlord and deals with fight to recover possession from the tenant.
Therefore, it deals with landlord and tenant.
We are therefore unable to accept the argument of the respondent that limitation was inapplicable to eject ment.
On behalf of the appellant it was however submitted that article 67 of the had no application inasmuch as time begins to run only when the tenancy is determined.
A determination of tenancy which takes place under the Trans fer of Property Act is wholly irrele 312 vant for cause of action in ejectment.
It is an act in law and not an act of law because under the scheme a determina tion of tenancy which takes place under the Transfer of Property Act, according to the appellant, is wholly irrele vant for rounding a cause of action in ejectment because the provisions of the Transfer of Property Act are superseded by the provisions of the Rent Act and according to the appel lant a cause of action for eviction is to be rounded only on one of the grounds mentioned in Section 13 of the Rent Act.
For this reliance was placed on V. Dhanpal Chettiar vs Yesodai Ammal; , where this Court held that a lease between a lessor and a lessee comes into exist ence by way of contract when the parties to the contract agree on the rent, duration of tenancy and other relevant terms.
Section 111 of the Transfer of Property Act provides various methods by which a lease of immovable property can be determined.
Under clause (h) of section 111 a lease determines on the expiry of a notice to determine the lease given by the landlord to the tenant.
But a notice is not compulsory or obligatory nor must it fulfil all the techni cal requirements of section 106 of the Transfer of Property Act, because as a result of the various State Rent Acts the liability to be evicted if incurred by the tenant, he cannot turn round and say that the contractual tenancy had not been determined.
It was further reiterated that the action of the landlord in instituting a suit for eviction on the ground mentioned in the State Rent Act would tantamount to an expression of the intention of the landlord that he does not want the tenant to continue as his lessee and the jural relationship between the lessor and the lessee would come to an end on the passing of an order or a decree for eviction.
Until then, under the extended definition of 'tenant ' under the various State Rent Acts, the tenant continued to be a tenant even though the contractual tenancy had been deter mined by giving a valid notice under section 106 of the Transfer of Property Act.
Therefore notice under section 106 of the Transfer of Property Act terminating the tenancy is no longer necessary.
At page 353 of the said report, the Court was of the view that making out a case under the Rent Act for eviction of the tenant by itself was sufficient and it was not obligatory to the proceeding on the basis of the determination of the lease by issue of a notice in accord ance with section 106 of the Transfer of Property Act.
This view was also reiterated again in Pradesh Kumar Bajpai vs Binod Behari Sarkar; , where this Court observed that once the requirements of Rent Act were satis fied, the tenant could not claim the double protection of invoking the provisions of the Transfer of Property Act or the terms of the contract.
Therefore, in the case before this Court the question of termination of lease by forfei ture did not arise on the facts of that case 313 and after the Rent Act came into force, the landlord could not avail himself of clause 12 which provided for forfei ture, in that case, even if the tenant had neglected to pay the rent for over two months and further the landlord could not enter into possession forthwith without notice.
The only remedy for him is to seek eviction under the provisions of the Rent Act.
See also in this connection the observations in Gian DeviAnandv.
Jeevan Kumar & others, [1985] 2 S.C.C. 683.
It was further submitted on behalf of the appellant that columns 1 and 3 of the Schedule of the should be read together and if a case does not fall within either column 1 or column 3 the residuary article must apply.
Reference may be made to the observations in Kripal Shah Sant Singh vs Shri Harkishan Das Narsingh Das, at 275; M/s. Swastik Agency, Madras vs The Madras Port Trust and another, A.I.R. 1966 Madras 130 at 135 and Mulla Vittil Seeti, Kutti and others vs K.M.K. Kunhi Pathum ma and others, A.I.R. 1919 Madras 972.
Mr. Nariman, learned counsel for the appellant submitted that the expression "determination" appears in section 111 of the Transfer of Property Act.
Under section 14 of the Bombay Rent Act, the same expression was used in the context of a sub tenant becoming a direct tenant of the landlord.
This expression however, according to the appellant, is not to be found in section 13.
of the Act.
This Court has held that this expression contained in section 14 of the Rent Act is different from the expression contained in section 111 of the Transfer of Property Act inasmuch as the tenancy only determines under the Rent Act for a decree only for eviction is passed, and not before.
Reliance was placed in support of this argument on the observation of this Court in Hiralal Vallabhram vs Kastorbhai Lalbhai & Ors., ; at 349 and 350.
It was further urged therefore that article 67 of the would not apply.
Article 66, according to the appellant, contemplates an immediate fight to recover possession.
Breach of a condition must lead to an immediate right to possession without more.
This would not be a determination in law according to the appellant.
Section 13 of the Rent Act contemplated, however, two conditions being fulfilled one is a ground for ejectment subsisting and the other is the Court 's satisfaction which is a condition precedent before which there is a no immedi ate right to possession.
Reliance in support of this propo sition was placed on Sharoop Dass Mondal vs Joggessur Roy Chowdhry, I.L.R. 26 Calcutta 564 at 568; Annamalai Pathar vs Sri la sri 314 Vythilinga Pandara Sannadhi A vergal and another, A.I.R. 1937 Madras 295 at 297; Mahalinga Bandappa Lakhannavar vs Venkatesh Waman Karnataki, 59 B.L.R. 227 at 233; Bahadur Singh & Anr.
vs Muni Subrat Dass & Anr., at 436; Kaushalaya Devi & Ors.
vs Shri K.L. Bansal, ; at 1050 and Ferozi Lal Jain vs Man Mal and another, at 795 and 796.
Under section 13 of the Rent Act, possession is not recoverable only for breach of a condition, and it is recoverable on fulfilment and not breach of a condition precedent to the Court 's satisfaction, according to counsel for the appellant.
It was further submitted on behalf of the appellant that section 13(1) of the Rent Act was to be contrasted with section 12(1) recovery of possession under section 13(1) was not directly upon a breach of condition of tenancy, but only upon the Court 's satisfaction that a ground for recovery of possession was made out.
Under section 12(1), however, a landlord is not entitled to recover possession so long as the tenant observed the "conditions of tenancy".
It was further submitted that section 13 is subject to sections 15 and 15A of the Rent Act if the landlord and the tenant respectively have fulfilled (not breached) according to the counsel, the provisions of these two sections, no suit for ejectment will lie.
It was urged that again showed that section 13(1) of the Rent Act contained conditions that were to be fulfilled before a landlord can recover possession for a tenant 's breach of condition.
Section 13(1) contained grounds for eviction of a tenant which need not be for breach of any condition.
According to the appellant only one article for recovery of possession is reserved under the by a landlord from a tenant, that is article 139 of the Limitation Act, 1908.
This article is the exact predecessor of article 67.
Article 66 is a general article, says the appellant, which does not apply to landlord or tenant and it was further submitted that when a specific article applied, a general article should not be applied specially when it was not free from doubt.
Some authorities were referred to in this behalf.
We accept this submission on the principle of construc tion.
It is further reiterated that a strained construction to give a more favourable limitation period is to be avoid ed considerations of equity were out of place in construing the articles under the Limitation Act.
It was submitted before us that section 12(1) of the Rent Act did not apply to the facts of the present case.
The decree for eviction was grounded upon section 13(i)(b) of the Rent Act and not on section 12(1).
It was further reiterated that the non obstante clause of section 13 made it clear that where a condition of tenancy coincided with a ground for eviction, the ground for eviction alone is to be looked at and to that 315 extent, any breach of the condition of tenancy was supersed ed by the ground for eviction.
Also in the instant case, clause 3 of the agreement dated 29th December, 1975 is inconsistent with the provisions of the Act inasmuch as even temporary structures were not allowed to be erected and there is no provision for the written consent of the land lord.
It was further submitted without prejudice to the aforesaid submission that section 12(1) of the Rent Act was a section that was designed to afford protection to a tenant if his lease was determined under the Transfer of Property Act and it was thus designed to be a shield but not a word.
It was submitted that the decision in Haji Suleman Haji Ayub Bhiwandiwala vs Narayan Sadashiv Ogale, [1967] 84 Bombay LaW Report p. 122 is against the current of modern rent juris prudence.
Haji Suleman Haji Ayub Bhiwandiwala vs Narayan Sadashiv Ogale, (supra) which is a decision of the Bench of three judges and as such binding on this Court held that sections 12 and 13 of the Bombay Rent Act dealt with different topics and have different objects.
It was held that section 12(1) clothed a tenant with the cloak of statutory protection against eviction so long as he performs the conditions of tenancy.
Section 13 provides that notwithstanding that protection the landlord can sue for eviction provided he established any one of the circumstances set out in that section.
This Court further observed that it was impossible to say that it was only when circumstances set out in sec tion 13 arose that a landlord could evict and that eviction on the ground of the failure to perform the conditions of tenancy would not deprive the tenant of the protection under section 12(1) of the Rent Act.
Such a reading would be contrary to the whole scheme underlying the objects of the two sections.
We accept the aforesaid legal position.
It is not against the trend of the principle behind rent legisla tion.
It affords protection to the tenant inasmuch as it says that it was only on the fulfilment of the condition stipulated in the two sections and on satisfaction of the contingencies mentioned in section 12 which would deprive the tenant of the protection that the tenant can be evicted.
Much argument was advanced to the contrary but in our opinion to prevent unreasonable eviction, in balancing and harmonising the rights of the landlords and tenant if the sections are so read as done in Haji Sulernan 's case, it would meet the ends of justice and that would be proper construction.
If that is so then on the strict grammatical meaning article 67 of the Limitation Act would be applicable.
This is indubitably a suit by the landlord against the tenant to recover possession from the tenant.
316 Therefore the suit clearly comes within article 67 of the Limitation Act.
The suit was filed because the tenancy was determined by the combined effect of the operation of sec tions 12 and 13 of the Bombay Rent Act.
In this connection, the terms of sections 12 and 13 of the Bombay Rent Act may be referred to.
At the most it would be within article 66 of the Limitation Act if we hold that forfeiture has been incurred by the appellant in view of the breach of the conditions mentioned in section 13 of the Bombay Rent Act and on lifting on the embargo against eviction of tenant in terms of section 12 of the said Act.
That being so, either of the two, article 66 or article 67 would be applicable to the facts of this case; there is no scope of the application of article 113 of the Limitation Act in any view of the matter.
Sections 12 and 13 of the Bombay Rent Act co exist and must be harmonised to effect the purpose and intent of the legislature for the purpose of eviction of the tenant.
In that view of the matter article 113 of the Limitation Act has no scope of application.
Large number of authorities were cited.
In the view we have taken on the construction of the provisions of articles 67 and 66 of the Limitation Act and the nature of the cause of action in this case in the light of sections 12 and 13 of the Bombay Rent Act, we are of the opinion that the period of limitation in this case would be 12 years.
There is no dispute that if the period of limitation be 12 years, the suit was not barred.
In that view of the matter, the appeals fail and are accordingly dismissed with costs.
N.V.K. Appeals dis missed.
| The appellant in the appeals was the tenant of the demised premises who was inducted as a monthly tenant for the purpose of conducting the ice cream business carried on by her husband.
The letting was done on an agreement dated December 29, 1975 by the landlord respondent which was to become effective from January 1, 1976.
The landlord alleged that in breach of the agreement and the terms of the tenancy, as also in violation of the prohi bition prescribed under section 13(1) of the Bombay Rents, Hotels & Lodging House Rates (Control) Act, 1947 the tenant had indulged in several acts of commission by which not only there had been permanent alterations of major nature, but the entire structure of the demised premises was completely changed.
it was also alleged that the tenant had indulged in acts of waste and damage to the property, and that she had changed the user of the premises when some of the employees started residing there.
On the basis of the aforesaid allegations the landlord gave a notice to quit dated 20th September, 1978 to the tenant.
Thereafter in 1979 the landlord fried a suit against the tenant in the Small Causes Court for possession of the demised premises.
The Trial Court on 11th November, 1982 decreed the suit upholding the allegation that the tenant had made 307 alterations of permanent nature in the demised premises and had committed acts or waste and damage.
Aggrieved by the aforesaid decision the tenant filed an appeal before the Appellate Bench of the Small Causes Court on 28th September, 1985, and the respondent 's suit for eviction was dismissed on the ground that the suit was barred by lapse of time under Article 113 of the Limitation Act, 1973, which prescribed a period of three The landlord thereafter filed a writ petition under Article 227 which was allowed by the High Court which held that Article 66 or Article 67 was applicable which pre scribed a period of 12 years.
The writ petition filed by the tenant was however dismissed.
In the appeals by the tenant to this Court the only question for consideration was: whether Article 113 or either of Articles 66 or 67 of the Limitation Act would be applicable, and what would he the date of the accrual of the cause of action.
On behalf of the tenant appellant it was contended that on the facts of the case Article 113 of the Limitation Act alone would apply and that neither Article 66 nor Article 67 would have any application.
Article 67 of the Limitation Act had no application inasmuch as time begins to run only when the tenancy is determined and that determination of tenancy which takes place under the Transfer of Property Act is wholly irrelevant for cause of action in ejectment.
That Article 66 contemplates an immediate right to recover pos session.
Breach of a condition only leads to an immediate right to possession without more, and not a determination in law.
That Article 66 is a general article which does not apply to landlord or tenant, and that when a specific Arti cle applied the general Article should not be applied spe cially when it was not free from doubt.
On behalf of the respondent landlord it was however submitted that for any suit by a landlord against the tenant for recovery of possession under the Rent Act the Limitation Act was inherently inapplicable.
Dismissing the Appeals, HELD: 1.
Recovery of possession is by a suit and there is no section in the scheme of the Limitation Act to indicate that the Limitation Act was inherently inapplicable.
In the scheme of the Rent Act or in 308 the various contingencies contemplated under the Rent Act, there is nothing to indicate or warrant that there would be no limitation of any period.
[311E F] 2.
Sections 12 and 13 of the Bombay Rent Act co exist and must be harmonised to effect the purpose and intent of the legislature for the purpose of eviction of the tenant.
In that view of the matter Article 113 of the Limitation Act has no scope of application.
[316C D] 3.
Article 67 indicates that time begins to run only when the tenancy is determined.
It comprehends suit by a landlord and deals with the right to recover possession from the tenant.
Therefore it deals with landlord and tenant.
[31 IF G] 4.
On the strict grammatical meaning Article 67 of the Limitation Act would be applicable.
This is indubitably a suit by the landlord against the tenant to recover posses sion from the tenant.
Therefore, the suit clearly comes within Article 67 of the Limitation Act.
The suit was flied because the tenancy was determined by the combined effect of the operation of Sections 12 and 13 of the B ombay Rent Act.
At the mast it would be within Article 66 of the Limitation Act if it is held that forfeitures have been incurred by the appellant in view of the breach of the conditions mentioned in Section 13 of the Bombay Rent Act, and on lifting of the embargo against eviction of tenant in terms of section 12 of the said Act.
That being so, either of the two, Article 66 or Article 67 would be applicable to the facts of the instant case.
There is no scope for the application of Article 113 of the Limitation Act in any view of the matter.
The period of limitation in this case would therefore be 12 years.
The suit was therefore not barred.
[315H; 316A E] Dhanpal Chettiar vs Yesodai Ammal, ; ; Pradesh Kumar Bajpai vs Binod Behari Sarkar, [1980] 3 S.C.R. 93, Gian Devi Anand vs Jeevan Kumar & Other, [1985] 2 S.C.C. 683; Hiralal Vallabhram vs Kastorbhai Lalbhai & Others, ; at 349 and 350; Bahadur Singh & Anr.
vs Muni Subrat Dass & Anr., at 436, Kau shaiaya Devi & Others vs Shri K.L. Bansal, [1969] 2 S.C.R. 1048 at 1050; Ferozi LaIJain vs Man Mal and another, A.I.R. at 795 aud 796; aud Haji Suleman Haji Ayub Bhiwandiwala vs Narayan Sadashiv Ogale, [1967] 84 Bombay Law Report p. 122, referred to.
|
Appeals Nos. 33 and 34 of 1959.
Appeal by special leave from the order dated May 29,1957, of the Central Government Ministry of Finance, New Delhi in Appeal Cases Nos. 24 and 33 of 1957.
A. V. Viswanatha Sastri and Ganpat Rai, for the appellants.
B. P. Maheshwari, for the respondents.
M. C. Setalvad, Attorney General for India, B. B. L. Iyengar and T. M. Sen, for Union of India.
April 25.
The Judgment of section K. Das, Kapur, Shah and Venkatarama Ayyar, JJ., was delivered by Shah, J. Hidayatullah, J. delivered a separate Judgment.
SHAH, J. M/s.Harinagar Sugar Mills Ltd. is a public limited company incorporated under the Indian Companies Act, 1913 (7 of 1913).
Article 47B of the Articles of Association of the company invests the 44 342 directors of the company with absolute discretion to refuse to register any transfer of shares.
That Article is in the following terms: "The directors may in their absolute discretion and without giving any reason refuse to register any transfer of any shares whether such shares be fully paid or not.
If the directors refuse to register the transfer of any shares, they shall within two months, after the date on which the transfer was lodged with the company, send to the transferees and the transferor notice of the refusal.
" One Banarasi Prasad Jhunjhunwala is the holder of a block of 9500 fully paid up shares of the company.
In January, 1953, he executed transfers in respect of 2500 out of those shares in favour of his son Shyam Sunder and in respect of 2100 shares in favour of his daughter in law Savitadevi and lodged the transfers with the company for registration of the shares in the names of the transferees.
The directors of the company by resolution dated August 1, 1953, in purported exercise of the powers under Article 47B of the Articles of Association, declined to register the shares in the names of the transferees.
Petitions were then filed by Banarasi Prasad and the transferees in the High Court of Judicature at Bombay for orders under section 38 of the Indian Companies Act, 1913 for rectification of the register of the company maintaining that the refusal by the board of directors to register the transfer of the shares was "mala fide, arbitrary and capricious" and that the directors had acted with improper and ulterior motives.
The High Court rejected these petitions holding that in summary proceedings under section 38, controversial questions of law and fact could not be tried and that the proper remedy of the transferees, if so advised, was to file suits for relief in the civil court.
Requests were again made by the transferees to the company by letters dated February 29, 1956 to register the transfers made by Banarasi Prasad in 1953.
The directors of the company in their meeting of March 15, 1956 reiterated their earlier resolution not to register the shares trans ferred in the names of the transferees.
Against this 343 action of the company, appeals were preferred to the Central Government under section 111 el.(3) of the Indian , which had since been brought into operation on April 1, 1956.
K. R. P. Ayyangar, Joint Secretary, Ministry of Finance, who heard the appeals declined to order registration of transfers, because in his view, the questions raised in the appeals could, as suggested by the High Court of Bombay, be decided only in a civil suit.
Thereafter, Banarasi Prasad transferred a block of 100 shares to his son Shyam Sunder and another block of 100 shares to his daughter in law Savitadevi, and the transferees requested the company by letters dated November 21, 1956, to register the transfers.
In the meeting dated January 12, 1957, the directors of the company resolved not to register the transfers and informed the transferees accordingly.
Against this resolution, separate appeals were preferred by Shyam Sunder and Savitadevi under section 111 el.(3) of the Indian to the Central Government.
It was submitted in para 4 of the petitions of appeal that the refusal to register the transfer of shares was without "any reason, arbitrary and untenable".
The company filed representations submitting that the refusal was bona fide and was not "without any reason, arbitrary and untenable" as alleged.
Shyam Sunder and Savitadevi filed rejoinders to the representations submitting that they had never alleged that refusal to transfer the shares "was capricious or mala fide" and that all they had alleged was that the "refusal was without any reason, arbitrary and untenable".
By separate orders dated May 29, 1957, the Deputy Secretary to the Government of India, Ministry of Finance set aside the resolution passed by the board of directors in exercise of the powers conferred by sub sections(5) and (6) of section Ill of the Indian , and directed that the company do register the transfers.
In so directing, the Deputy Secretary gave no reasons.
Against the orders passed by the Deputy Secretary, with special leave under article 136 of the Constitution, these two appeals are preferred by the company.
Two questions fall to be determined in these appeals, (1) whether the Central Government exercising appellate powers under section 111 of the before its amendment by Act 65 of 1960 is a tribunal exercising judicial functions and is subject to the appellate jurisdiction of this court under article 136 of the Constitution, and (2) whether the Central Government acted in excess of its jurisdiction or otherwise acted illegally in directing the company to register the transfer of shares in favour of Shyam Sunder and Savitadevi.
Article 136 of the Constitution, by the first clause provides: "Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India".
The Central Government exercising powers under section Ill of the is not a court; that is common ground.
The Attorney General intervening on behalf of the Union of India submits that the Central Government merely exercises administrative authority in dealing with an appeal under section 111 of the Indian and is not required to act judicially.
He submits that the authority of the directors of the company which is in terms absolute, and is not required to be exercised judicially, when exercised by the Central Government under section 111 does not become judicial, and subject to appeal to this court.
But the mere fact that the directors of the company are invested with absolute discretion to refuse to register the shares will not make the jurisdiction of the appellate authority administrative.
In a recent case decided by this court Shivji Nathu bhai vs The, Union of India (1), it was held that the Central Government exercising power of review under r. 54 of the Mineral Concession Rules, 1949 against an (1) ; 345 administrative order of the State Government granting a mining lease was subject to the appellate jurisdiction of this court, because the power to review was judicial and not administrative.
In that case, the action of the State Government granting the mining lease was undoubtedly an administrative act, but r. 54 of the Mineral Concession Rules, 1949 granted a right of review at the instance of an aggrieved party to the Central Government, and authorised it to cancel the order of the State Government or to revise it in such manner as it deemed just and proper.
The exercise of this power was held by this court to be quasi judicial.
Before it was amended by section 27 of Act 65 of 1960, section III of the Indian Companies Act, 1956 omitting parts not material provided: (1) Nothing in sections 108, 109 and 110 shall prejudice any power of the company under its articles to refuse to register the transfer of, or the transmission by operation of law of the right to, any shares or interest of a member in, or debentures of, the company.
(2) If, in pursuance of any such power, a company refuses to register any such transfer or transmission of right, it shall, within two months from the date on which the instrument or transfer, or the intimation of such transmission, as the case may be, was delivered to the company, send notice of the refusal to the transferee and the transferor or to the person giving intimation of such transmission, as the case may be.
(3) The transferor or transferee, or the person who gave intimation of the transmission by operation of law, as the case may be, may, where the company is a public company or a private company which is a subsidiary of a public company, appeal to the Central Government against any refusal of the company to register the transfer or transmission, or against any failure on its part within the period referred to in sub section
(2) either to register the transfer or transmission or to send notice of its refusal to register the same.
(4). . . . . . . . . (5) The Central Government shall, after causing reasonable notice to be given to the company and 346 also to the transferor and the transferee or as the case may require, to the person giving intimation of the transmission by operation of law and the previous owner, if any, and giving them a reasonable opportunity to make their representations, if any, in writing by order, direct either that the transfer or transmission shall be registered by the company or that it need not be registered by it: and in the former case, the company shall give effect to the decision forthwith.
(6) The Central Government may, in its order aforesaid give such incidental and consequential directions as to the payments of costs or otherwise as it thinks fit.
(7) All proceedings in appeals under sub section
(3) or in relation thereto shall be confidential and no suit, pro secution or other legal proceeding shall lie in respect of any allegation made in such proceedings, whether orally or otherwise.
(8) In the case of a private company which is not a subsidiary of a public company, where the right to any shares or interest of a member in, or debentures of, the company, is transmitted by a sale thereof held by a court or other public authority, the provisions of sub sections (3) to (7) shall apply as if the company were a public company: Provided that the Central Government may, in lieu of an order under sub section
(5) pass an order directing the company to register the transmission of the right unless any member or members of the company specified in the order acquire the right aforesaid within such time as may be allowed for the purpose by the order, on payment to the purchaser of the price paid by him therefor or such other sum as the Central Government may determine to be a reasonable compensation for the right in all the circumstances of the case.
Against the refusal by a company to register the transfer or transmission of a right to the shares, an appeal lies to the Central Government.
The Government, after giving notice of the appeal and hearing the parties concerned may order that the shares be registered if it thinks that course is in the circumstances proper.
The Central Government may 347 by the proviso to sub section
(8) in lieu of an order under sub section (5), directing a private company to register,, transmission of shares sold by a court or public authority, order that any member or members of the company specified in the order do acquire the right on payment to the purchaser of the price paid by him, or such other sum as the Central Government determine to be reasonable compensation.
In exercise of the powers under section 642, rules called "The Companies (Appeals to the Central Government) Rules, 1957" have been framed by the Central Government.
By cl. (3) of the rules, the form of the petition of appeal is prescribed.
Clause (4) provides that the memorandum of appeal shall be accompanied by an affidavit and documentary evidence if any in support of the statements made therein including a copy of the letter written by the appellant to the company for the purpose of registration of the shares.
Clause (5) pres cribes the mode of service of notice of appeal to the company and el.(6) authorises the Central Government before considering the appeal to require the appellant or the company to produce within a specified period such further documentary or other evidence as it considers necessary.
Clause (7) enables the parties to make representations if any in writing accompanied by affidavits and documentary evidence.
Clause (8) authorises the Central Government after considering the representations made and after making such further enquiries as it considers necessary to pass such orders as it thinks fit under sub section(5) of section 111 of the Act.
By the appendix to the rules, the form in which notice is to be given to the company is prescribed.
Paragraph 2 of the form states that the company shall be called upon to make its representations in writing against, the appeal and be informed that if no representation is received, the appeal will be determined according to law.
There was no provision similar to section Ill of the Indian , in the Act of 1913, nor is our attention invited to any provision in the English on which our Act is largely based, to a similar provision.
Prior to 1956, if transfer of 348 shares was not registered by the directors of a company, action under the of 1913 could only be taken under section 38 of the Indian Companies Act, 1913 by petition for rectification of the share register.
As we will presently point out, the power to refuse to register a transfer granted by the Articles of Association, if challenged in a petition for rectification of register was to be presumed to have been exercised reasonably, bona fide and for the benefit of the company, and unless otherwise provided by the Articles, the directors were not obliged to disclose reasons on which they acted.
The power had to be exercised for the benefit of the company and bona fide, but a heavy onus lay upon those challenging the resolution of the directors to displace the presumption of bona fide exercise of the power.
The discretion to refuse to register transfers was not liable to be controlled unless the directors "acted oppressively, capriciously or corruptly, or in some way mala fide" (Re Bell Brothers Ltd. ex parte Hodgson) (1).
Power to refuse to register transfer of shares, without assigning any reasons, or in their absolute and uncontrolled discretion, is often found in the Articles of Association, and exercising jurisdiction under section 38 of the Indian Companies Act, 1913, the court may not draw unfavourable inferences from the refusal to disclose reasons in support of their resolution.
The power given to the court under section 38 is now confirmed with slight modification by section 155 of the Indian .
Under that section, the court may rectify the register of shareholders if the name of any person is without sufficient cause entered in or omitted from the register of members of a company, or default is made, or unnecessary delay has taken place in entering on the register the fact of any person having ceased to be a member.
The court is in exercising this jurisdiction competent to decide any question relating to the title of the person claiming to have his name registered and generally to decide all questions which may be necessary or expedient to decide for the rectification.
A person aggrieved by the refusal to (1) 349 register transfer of shares has, since the enactment of the , therefore two remedies for seeking relief under the , (1) to apply to the court for rectification of the register under section 155, and (2) to appeal against the resolution refusing to register the transfers under section 111.
It is common ground that in the exercise of the power under section 155, the court has to act judicially: to adjudicate upon the right exercised by the directors in the light of the powers conferred upon them by the Articles of Association.
The respondents however submit and they are supported by the Union of India that the authority of the Central Government under section Ill is nevertheless purely administrative.
But in an appeal under section 111 el.(3) there is a lis or dispute between the contesting parties relating to their civil rights, and the Central Government is invested with the power to determine that dispute according to law, i.e., it has to consider and decide the proposal and the objections in the light of the evidence, and not on grounds of policy or expediency.
The extent of the power which may be exercised by the Central Government is not delimited by express enactment, but the power is not on that account unrestricted.
The power in appeal to order registration of transfers has to be exercised subject to the limitations similar to those imposed upon the exercise of the power of the court in a petition for that relief under section 155: the restrictions which inhere the exercise of the power of the court also apply to the exercise of the appellate power by the Central Government, i.e., the Central Government has to decide whether in exercising their power, the directors are acting oppressively, capriciously or corruptly, or in some way mala fide.
The decision has manifestly to stand those objective tests, and has not merely to be founded on the subjective satisfaction of the authority deciding the question.
The authority cannot proceed to decide the question posed for its determination on grounds of expediency: the statute empowers the Central Government to decide the disputes arising out of the claims made by the transferor or transferee which claim is opposed by the company, 45 350 and by rendering a decision upon the respective con tentions, the rights of the contesting parties are directly affected.
Prima facie, the exercise of such authority would be judicial.
It is immaterial that the statute which confers the power upon the Central Government does not expressly set out the extent of the power: but the very nature of the jurisdiction requires that it is to be exercised subject to the limitations which apply to the court under section 155.
The proviso to sub section(8) of section III clearly indicates that in circumstances specified therein reasonable compensation may be awarded in lieu of the shares.
This compensation which is to be reasonable has to be ascertained by the Central Government; and reasonable compensation cannot be ascertained except by the application of some objective standards of what is just having regard to all the circumstances of the case.
In The Province of Bombay vs Kusaldas section Advani(1), this court considered the distinction between decisions quasi judicial and administrative or ministerial for the purpose of ascertaining whether they are subject to the jurisdiction to issue a writ of certiorari.
Fazl Ali, J. at p. 642 observed: "The word "decision" in common parlance is more or less a neutral expression and it can be used with reference to purely executive acts as well as judicial orders.
The mere fact that an executive authority has to decide something does not make the decision judicial.
It is the manner in which the decision has to be arrived at which makes the difference, and the real test is: Is there any duty to decide judicially?" The court also approved of the following test suggested in The King vs London County Council (2) by Scrutton L.J.: "It is not necessary that it should be a court in the sense in which this court is a court; it is enough if it is exercising, after hearing evidence, judicial functions in the sense that it has to decide on evidence between a proposal and an opposition; and it is not necessary to be strictly a court; if it is a tribunal which has to (1) T. (2) , 233.351 decide rights after hearing evidence and opposition, it is amenable to the writ of certiorari.
" In The Bharat Bank Ltd., Delhi vs Employees of the Bharat Bank Ltd., Delhi (1), the question whether an adjudication by an industrial tribunal functioning under the Industrial Disputes Act was subject to the jurisdiction of this court under article 136 of the Constitution fell to be determined:, Mahajan J. in that case observed: "There can be no doubt that varieties of administrative tribunals and domestic tribunals are known to exist in this country as well as in other countries of the world but the real question to decide in each case is as to the extent of judicial power of the State exercised by them.
Tribunals which do not derive authority from the sovereign power cannot fall within the ambit of article 136.
The condition precedent for bringing a tribunal within the ambit of article 136 is that it should be constituted by the State.
Again a tribunal would be outside the ambit of article 136 if it is not invested with any part of the judicial functions of the State but discharges purely administrative or executive duties.
Tribunals however which are found invested with certain functions of a Court of Justice and have some of its trappings also would fall within the ambit of article 136 and would be subject to the appellate control of this Court whenever it is found necessary to exercise that control in the interests of justice.
" It was also observed by Fazl Ali J. at p. 463 that a body which is required to act judicially and which exercises judicial power of the State does not cease to be one exercising judicial or quasi judicial functions merely because it is not expressly required to be guided by any recognised substantive law in deciding the disputes which come before it.
The authority of the Central Government entertaining an appeal under section 111(3) being an alternative remedy to an aggrieved party to a petition under section 155 the investiture of authority is in the exercise of the judicial power of the State.
Clause (7) of section III (1) ; 352 declares the proceedings in appeal to be confidential, but that does not dispense with a judicial approach to the evidence.
Under section 54 of the Indian Income tax Act, (which is analogous) all particulars contained in any statement made, return furnished or accounts or documents produced under the provisions of the Act or in any evidence given, or affidavit or deposition made, in the course of any proceedings under the Act are to be treated as confidential; but that does not make the decision of the taxing authorities merely executive.
As the dispute between the parties relates to the civil rights and the Act provides for a right of appeal and makes detailed provisions about hearing and disposal according to law, it is impossible to avoid the inference that a duty is imposed upon the Central Government in deciding the appeal to act judicially.
The Attorney General contended that even if the Central Government was required by the provisions of the Act and the rules to act judicially, the Central Government still not being a tribunal, this court has no power to entertain an appeal against its order or decision.
But the proceedings before the Central Government have all the trappings of a judicial tribunal.
Pleadings have to be filed, evidence in support of the case of each party has to be furnished and the disputes have to be decided according to law after con sidering the representations made by the parties.
If it be granted that the Central Government exercises judicial power of the State to adjudicate upon rights of the parties in civil matters when there is a lis between the contesting parties, the conclusion is inevitable that it acts as a tribunal and not as an executive body.
We therefore over rule the preliminary objection raised on behalf of the Union of India and by the respondents as to the maintainability of the appeals.
The Memorandum and Articles of Association of a company when registered bind the company and the members of the company to the same extent as if they respectively had been signed by the company and each member, and contained covenants on its and 353 his part to observe all the provisions of the Memorandum and of the Articles.
Clause 47B of the Articles of Association which invests the director with discretion to refuse to register shares is therefore an incident of the contract binding upon the transferor, and registration of transfer or transmission cannot therefore be insisted upon as a matter of right.
The conditions subject to which a party can maintain a petition for an order for rectification of the register of shareholders have been settled by a long course of decisions.
Two of those may be noticed.
In In re Gresham Life Assurance Society Ex parte Penney (1), the deed of settlement of a life insurance company provided that any shareholder shall be at liberty to transfer his shares to any other person who was already a shareholder, or who should be approved by the board of directors, and that no person not being already a shareholder or the executor of a shareholder, should be entitled to become the transferee of any share unless approved by the board.
One J. R. De Paiva who was the holder of ten shares of the company sold them to W. J. Penney and lodged the transfer with the shares for registration at the company 's office.
The directors in exercise of the powers conferred upon them by the deed of settlement refused to register the shares.
In a joint summons taken out by Paiva and Penney under section 35 of the Companies Act, 1862, the Master of the Rolls directed the transfer to be registered, the directors of the company having failed to submit any reasonable ground or objection to the purchaser.
In the view of the Master of the Rolls, it was for the court to judge whether the objection was reasonable and that objection must be disclosed to the court.
Against this order, the company approached the Court of Appeal.
James L. J. in dealing with the contention raised by the appellant observed that the directors were in a fiduciary position both towards the company and towards every shareholder and that it was easy to conceive of cases in which the court may interfere with any violation of the fiduciary duty so (1) (1872) Law Rep. 8 Ch.
354 reposed in the directors.
It was observed by James L. J.: "But in order to interfere upon that ground it must be made out that the directors have been acting from some improper motive, or arbitrarily and capriciously.
That must be alleged and proved, and the person who has a right to allege and prove it is the shareholder who seeks to be removed from the list of shareholders and to substitute another person for himself . this Court would have jurisdiction to deal with it as a corrupt breach of trust; but if there is no such corrupt or arbitrary conduct as between the directors and the person who is seeking to transfer his shares, it does not appear to me that this court has any jurisdiction whatever to sit as a Court of Appeal from the deliberate decision of the board of directors, to whom, by the constitution of the company, the question of determining the eligibility or non eligibility of new members is committed.
If the directors had been minded, and the Court was satisfied that they were minded, whether they expressed it or not, positively to prevent a shareholder from parting with his shares, unless upon complying with some condition which they chose to impose, the Court would probably, in exercise of its duty as between the cestui que trust and the trustees, interfere to redress the mischief, either by compelling the transfer or giving damages, or in some mode or other to redress the mischief which the shareholder would have had a just right to complain of.
" It was also observed by James L.J.: " I am of opinion that we cannot sit as a Court of Appeal from the conclusion which the directors have arrived at if we are satisfied that the directors have done that which alone they could be compelled by mandamus to do, to take the matter into their consideration".
Mellish L.J. observed: "But it is further contended that in order to secure the existing shareholder against being deprived of the right to sell his shares, the directors are 355 bound to give their reason why they reject the transferee, and if they reject him without giving a reason that is a ground from which the Court ought to infer that they were acting arbitrarily.
I cannot agree with that.
It appears to me that it is very important that directors should be able to exercise the power in a perfectly uncontrollable manner for the benefit of the shareholders; but it is impossible that they could fairly and properly exercise it if they were compelled to give the reason why they rejected a particular individual.
I am therefore of opinion that in order to preserve to the company the right which is given by the articles a shareholder is not to be put upon the register if the board of directors do not assent to him, and it is absolutely necessary that they should not be bound to give their reasons although I perfectly agree that if it can be shown affirmatively that they are exercising their power capriciously and wantonly, that may be a ground for the Court interfering".
A similar view was also expressed in In re, Smith and Fawcett Ltd. (1) where the Court of Appeal held that where the directors of the company had uncontrolled and absolute discretion to refuse to register any transfer of shares, while such powers are of a fiduciary nature and must be, exercised in the interest of the company, the petition for registration of transfer should be dismissed unless there is something to show that they had been otherwise exercised.
Rectification of the register under section 155 can therefore be granted only if the transferor establishes that the directors had, in refusing to register the shares in the names of a transferee, acted oppressively, capriciously or corruptly, or in some way mala fide and not in the interest of the company.
Such a plea has, in a petition for rectification, to be expressly raised and affirmatively proved by evidence.
Normally, the court would presume that where the directors have refused to register the transfer of shares when they have been invested with absolute discretion to refuse registration, that the exercise of the power was bona fide.
When (1) 356 the new Companies Act was enacted, it was well settled that the discretionary power conferred by the articles of association to refuse to register would be presumed to be properly exercised and it was for the aggrieved transferor to show affirmatively that it had been exercised mala fide and not in the interest of the company.
Before the Committee appointed by the Government of India under the Chairmanship of Mr. C. H. Bhabha representation was made by several bodies that this power which was intended to be exercised for the benefit of the company was being misused and the Committee with a view to afford some reasonable safeguards against such misuse of the power recommended that a right of appeal should be provided against refusal to register transfer of shares.
The Legislature, it appears, ,accepted this suggestion and provided a right of appeal.
But the power to entertain the appeal is not unrestricted: being an alternative to the right to approach the civil court, it must be subject to the same limitations which are implicit in the exercise of the power by the civil court under section 155.
The Central Government may therefore exercise the power to order that the transfer which the directors have in their discretion refused, be registered if it is satisfied that the exercise of the discretion is mala fide, arbitrary or capricious and that it is in the interest of the company that the transfer should be registered.
Relying upon el.(7) of section 111 which provided that the proceedings in appeals under sub section(3) or in relation thereto shall be confidential, it was urged that the authority hearing the appeal is not obliged to set out reasons in support of its conclusion and it must be assumed that in disposing of the appeal, the authority acted properly and directed registration of shares.
But the provision that the proceedings are to be treated as confidential is made with a view to facilitate a free disclosure of evidence before the Central Government which disclosure may not, in the light of publicity which attaches to proceedings in the ordinary courts, be possible in a petition under section 155 of the 357 Companies Act.
The mere fact that the proceedings are to be treated as confidential does not dispense with a judicial approach nor does it obviate the disclosure of sufficient grounds and evidence in support of the order.
In the present case, the position is somewhat un satisfactory.
The directors passed a resolution declining to register the shares and informed the transferor and the transferees of that resolution.
The transferees in their petition stated that the refusal to register transfer was without any reason, arbitrary and untenable and in the grounds of appeal they stated that they did not know of any reasons in sup port of the refusal and reserved liberty to reply thereto if any such reasons were given.
The company in reply merely asserted that the refusal was not without any reason or arbitrary or untenable.
The transferees in their rejoinder made a curious statement of which it is difficult to appreciate the import that they had "nowhere stated in the memoranda of appeals that the refusal to transfer shares was capricious or mala fide" and all that they "had stated was that the refusal was without any reason, arbitrary or untenable".
The Deputy Secretary who decided the appeals chose to give no reasons in support of his orders.
There is nothing on the record to show that he was satisfied that the action of the directors in refusing to register the shares "was arbitrary and untenable" as alleged.
If the Central Government acts as a tribunal exercising judicial powers and the exercise of that power is subject to the jurisdiction of this court under article 136 of the Constitution, we fail to see how the power of this court can be effectively exercised if reasons are not given by the Central Government in support of its order.
In the petition under section 38 of the Indian Companies Act, 1913, the Bombay High Court declined to order rectification on a summary proceeding and relegated the parties to a suit and a similar order was passed by the Joint Secretary, Ministry of Finance.
These proceedings were brought to the notice of the Deputy Secretary who heard the appeals.
Whether 46 358 in spite of the opinion recorded by the High Court and by the Joint Secretary, Ministry of Finance in respect of another block out of shares previously attempted to be transferred, there were adequate grounds for directing registration, is a matter on which we are unable to express any opinion.
All the documents which were produced before the Deputy Secretary are not printed in the record before us and we were told at the bar that there were several other documents which the Deputy Secretary took into con sideration.
In the absence of anything to show that the Central Government exercised its restricted power in hearing an appeal under section 111(3) and passed the orders under appeal in the light of the restrictions imposed by article 47B of the articles of association and in the interest of the company, we are unable to decide whether the Central Government did not transgress the limits of their power.
We are however of the view that there has been no proper trial of the appeals, no reasons having been given in support of the orders by the Deputy Secretary who heard the appeals.
In the circumstances, we quash the orders passed by the Central Government and direct that the appeals be re heard and disposed of according to law.
Costs of these appeals will be costs in the appeals before the Central Government.
HIDAYATULLAH, J. I have had the advantage of reading the judgment just delivered by my brother, Shah, J.
In view of the strong objection to the competence of the appeals under article 136 by the respondents, to whom liberty was reserved by the order granting special leave, I have found it necessary to express my views.
The facts have been stated in detail by my learned brother, and I shall not repeat them in full.
Very shortly stated, the facts are that the second respondent, Banarsi Prasad Jhunjhunwala, transferred 2500 shares to his son, and 2100 shares to his daughter in law, in the appellant Company in 1953.
The appellant Company declined to register these transfers.
Proceedings for rectification of the Register under section 38 of the Indian Companies Act, 1913, followed 359 in the High Court of Bombay, but the High Court referred the disputants to the Civil Court.
In the petition before the High Court, the respondents had charged the Directors of the appellant Company with bad faith and arbitrary dealing.
The respondents renewed their requests for registration, but they were again declined, and appeals were filed before the Central, Government under section 111(3) of the , which had come into force from April 1, 1956.
These appeals were heard by Mr. K. R. P. Aiyengar, Joint Secretary, Ministry of Finance, who dismissed them, holding that only a suit was the appropriate remedy.
Banarsidas Prasad then made a fresh transfer of 100 shares each to his son and daughter in law, and requests for registration of these shares were made.
The appellant Company again declined to register the shares, but gave no reaons.
Under cl. 47 B of the Articles of Association of the appellant Company, it is provided: "The Directors may in their absolute discretion and without giving any reason refuse to register any transfer of any shares whether such shares be fully paid or not.
If the Directors refuse to register the transfer of any shares, they shall, within two months after the date on which the transfer was lodged with the company, send to the trans feree and the transferor notice of the refusal.
" The appellant Company was prima facie within its rights when it did not state any reasons for declining to register the shares in question.
Appeals were again taken to the Central Government under section 111(3).
It was alleged that the refusal to register the shares without giving any reasons was "arbitrary and untenable".
In accordance with the provisions of the section, representations were filed by the appellant Company and rejoinders by the opposite party.
The transferees made it clear that they did not charge the appellant Company with "capricious or mala flee conduct" but only with arbitrary any reasons.
The appeals 360 succeeded, and the shares were ordered to be registered.
The Deputy Secretary, who heard and decided the appeals, gave no reasons for his decision.
Against his order, the present appeals have been filed with special leave.
The preliminary objection is that the appeals are incompetent, because the Central Government, which heard them, is not a tribunal muchless a Court, and the action of the Central Government is purely administrative.
It is, therefore, submitted that article 136 does not apply, because special leave can only be granted in respect of a determination by a Court or a tribunal, which the Central Government is not.
This is not the only provision of law, under which the Central or State Governments have been empowered to hear appeals, revisions or reviews, and it is thus necessary to find out the exact status of the Central Government when it hears and decides appeals, etc., for the application of article 136.
Article 136(1) reads as follows: "Notwithstanding anything in this Chapter, the Supreme Court may in its discretion, grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any Court or tribunal in the territory of India.
" The orders which the Central Government passes, certainly fall within the words "determination" and "order".
The proceeding before the Central Government also falls within the wide words "any cause or matter".
The only question is whether the Central Government, when it hears and decides an appeal, can be said to be acting as a Court or tribunal.
That the Central Government is not a Court was assumed at the hearing.
But to ascertain what falls within the expression "Court or tribunal", one has to begin with "Courts".
The word "Court" is not defined in the .
It is not defined in the Civil Procedure Code.
The definition in the Indian Evidence Act is not exhaustive, and is for the purposes of that Act.
In the Now English Dictionary (Vol. II, pp. 1090, 1091), the meaning given is: 361 "an assembly of judges or other persons legally appointed and acting as a tribunal to hear and determine any cause, civil, ecclesiastical, military or naval.
" All tribunals are not Courts, though all Courts are tribunals.
The word "Courts" is used to designate those tribunals which are set up in an organised State for the administration of justice.
By administration of justice is meant the exercise of judicial power of the State to maintain and uphold rights and to punish "wrongs".
Whenever there is an infringement of a right or an injury, the Courts are there to restore the vinculum juris, which is disturbed.
Judicial power, according to Griffith, C. J. in Huddart, Parker & Co. Proprietary Ltd. vs Moorehead (1) means: "the power which every sovereign authority must of necessity have to decide controversies between its subjects, or between itself and its subjects, whether the rights relate to life, liberty or property.
The exercise of this power does not begin until some tribunal which has power to give a binding and authoritative decision (whether subject to appeal or not) is called upon to take action.
" When rights are infringed or invaded, the aggrieved party can go and commence a querela before the ordinary Civil Courts.
These Courts which are instrumentalities of Government, are invested with the judicial power of the State, and their authority is derived from the Constitution or some Act of legislature constituting them.
Their number is ordinarily fixed and they are ordinarily permanent, and can try any suit or cause within their jurisdiction.
Their numbers may be increased or decreased, but they are almost always permanent and go under the compendious name of "Courts of Civil Judicature".
There can thus be no doubt that the Central Government does not come within this class.
With the growth of civilisation and the problems of modern life, a large number of administrative tribunals have come into existence.
These tribunals have the authority of law to pronounce upon valuable (1) ; , 357.362 rights; they act in a judicial manner and even on evidence on oath, but they are not part of the ordinary Courts of Civil Judicature.
They share the exercise of the judicial power of the State, but they are brought into existence to implement some administrative policy or to determine controversies arising out of some administrative law.
They are very similar to Courts, but are not Courts.
When the Constitution speaks of 'Courts ' in article 136, 227 or 228 or in Art,% 233 to 237 or in the Lists, it contemplates Courts of Civil Judicature but not tribunals other than such Courts.
This is the reason for using both the expressions in articles 136 and 227.
By "Courts" is meant Courts of Civil Judicature and by "tribunals", those bodies of men who are appointed to decide controversies arising under certain special laws.
Among the powers of the State is included the power to decide such controversies.
This is undoubtedly one of the attributes of the State, and is aptly called the judicial power of the State.
In the exercise of this power, a clear division is thus noticeable.
Broadly speaking, certain special matters go before tribunals, and the residue goes before the ordinary Courts of Civil Judicature.
Their procedures may differ, but the functions are not essentially different.
What distinguishes them has never been success fully established.
Lord Stamp said that the real distinction is that Courts have "an air of detachment".
But this is more a matter of age and tradition and is not of the essence.
Many tribunals, in recent years, have acquitted themselves so well and with such detachment as to make this test insufficient.
Lord Sankey, L.C. in Shell Company of Australia vs Federal Commissioner of Taxation (1) observed: "The authorities are clear to show that there are tribunals with many of the trappings of a Court, which, nevertheless, are not Courts in the strict sense of exercising judicial power.
In that connection it may be useful to enumerate some negative propositions on this subject: 1.
A tribunal is not necessarily a Court in this strict sense because it gives a final decision.
Nor because it hears (1) [1931] A.C.275.363 witnesses on oath.
Nor because two or more contending parties appear before it between whom it,, has to decide.
Nor because it gives decisions which affect the rights of subjects.
Nor because there is an appeal to a Court.
Nor because it is a body to which a matter is referred by another body.
See Rex vs Electricity Commissioners In my opinion, a Court in 'the strict sense is a tribunal which is a part of the ordinary hierarchy of Courts of Civil Judicature maintained by the State under its constitution to exercise the judicial power of the State.
These Courts perform all the judicial functions of the State except those that are excluded by law from their jurisdiction.
The word "judicial", be it noted, is itself capable of two meanings.
They were admirably stated by Lopes, L.J. in Royal Aquarium and Summer and Winter Garden Society vs Parkinson (2), in these words: "The word 'judicial ' has two meanings.
It may refer to the discharge of duties exercisable by a judge or by justices in court, or to administrative duties which need not be performed in court, but in respect of which it is necessary to bring to bear a judicial mind that is, a mind to determine what is fair and just in respect of the matters under con sideration.
" That an officer is required to decide matters before him "judicially" in the second sense does not make him a Court or even a tribunal, because that only establishes that he is following a standard of conduct, and is free from bias or interest.
Courts and tribunals act "judicially" in both senses, and in the term "Court" are included the ordinary and permanent tribunals and in the term "tribunal" are included all others, which are not so included.
Now, the matter would have been simple, if the had designated a person or persons whether by name or by office for the purpose of hearing an appeal under section 111.
It would then have been clear that though such person or persons were not "Courts" in the sense explained, they were clearly (1) (2) , 452, 364 "tribunals".
The Act says that an appeal shall lie to the Central Government.
We are, therefore, faced with the question whether the Central Government can be said to be a tribunal.
Reliance is placed upon a recent decision of this Court in Shivji Nathubai vs The Union of India (1), where it was held that the Central Government in exercising power of review under the Mineral Concession Rules, 1949, was subject to the appellate jurisdiction conferred by article 136.
In that case which came to this Court on appeal from the High Court 's order under article 226, it was held on the authority of Province of Bombay vs Kushaldas section Advani (1) and Rex vs Electricity Commissioners (3) that the action of the Central Government was quasi judicial and not administrative.
It was then observed: "It is in the circumstances apparent that as soon as r. 52 gives a right to an aggrieved party to apply for review a lis is created between him and the party in whose favour the grant has been made.
Unless therefore there is anything in the statute to the contrary it will be the duty of the authority to act judicially and its decision would be a quasi judicial act.
" This observation only establishes that the decision is a quasi judicial one, but it does not say that the Central Government can be regarded as a tribunal.
In my opinion, these are very different matters, and now that the question has been raised, it should be decided.
The function that the Central Government performs under the Act and the Rules is to hear an appeal against the action of the Directors.
For that purpose, a memorandum of appeal setting out the grounds has to be filed, and the Company, on notice, is required to make representations, if any, and so also the other side, and both sides are allowed to tender evidence to support their representations.
The Central Government by its order then directs that the shares be registered or need not be registered.
The Central Government is also empowered to include in its orders, directions as to payment of costs or otherwise.
The (1) ; (2) ; (3) 365 function of the Central Government is curial and not executive.
There is provision for a hearing and a decision on evidence, and that is indubitably a curial function.
Now, in its functions Government often reaches decisions, but all decisions of Government cannot be regarded as those of a tribunal.
Resolutions of Government may affect rights of parties, and yet, they may not be in the exercise of judicial power.
Resolutions of Government may be amenable to writs under articles 32 and 226 in appropriate cases, but may not be subject to a direct appeal under article 136 as the decisions of a tribunal.
The position, however, changes when Government embarks upon curial functions, and proceeds to exercise judicial power and decide disputes.
In these circumstances, it is legitimate to regard the officer who deals with the matter and even Government itself as a tribunal.
The officer who decides, may even be anonymous; but the decision is one of a tribunal, whether expressed in his name or in the name of ' the Central Government.
The word "tribunal" is a word of wide import, and the words "Court" and "tribunal" embrace within them the exercise of judicial power in all its forms.
The decision of Government thus falls within the powers of this Court under article 136.
It is next argued by the learned Attorney General that there is no law to interpret or to apply in these cases.
He argues that since there are no legal standards for judging the correctness or otherwise of the order of the Central Government and the decision being purely discretionary, it is neither judicial nor quasi judicial but merely administrative, and that no appeal can arise from the nature of things.
Such a line was taken before the Committee on Ministers ' Powers by Lord Hewart, and the argument reminds one of what he then said that such decisions are purely discretionary and the exercise of such arbitrary power is "neither law nor justice or at all".
Sir Maurice Gwyer also was of the opinion that an appeal could not be taken to Court against a Minister 's 47 366 decision even on the ground of miscarriage of justice, because that, in his opinion, was "putting a duty on the Court" which was "not the concern of the Court".
This argument takes me to the heart of the controversy, and before I give my decision, I wish to say a few preliminary things.
Article 47 B gives to the Directors a right to refuse to register shares in their absolute discretion, without giving reasons.
In In re Gresham Life Assurance Society, Ex Parte Penney James, L.J. observed: "No doubt the directors are in a fiduciary position both towards the company and towards every shareholder in it.
It is very easy to conceive cases such as those cases to which we have been referred, in which this Court would interfere with any violation of the fiduciary duty so reposed in the directors.
But in order to interfere upon that ground it must be made out that the directors have been acting from some improper motive, or arbitrarily and capriciously.
That must be alleged and proved, and the person who has a right to allege and prove it is the shareholder who seeks to be removed from the list of shareholders and to substitute another person for himself.
But if it is said that wherever any shareholder has proposed to transfer his shares to some new member, the Court has a right to say to the directors, 'We will presume that your motives are arbitrary and capricious, or that your conduct is corrupt, unless you choose to tell us what your reasons were, and submit those reasons to our decision ', it would appear to me entirely altering the whole constitution of the company as provided by the articles."
That shows that the Directors are presumed to have acted honestly in the interests of the company and a case has to be made out against them.
I shall only quote from another case, which summarises the position very aptly.
In In re Hannan 's King (Browning) Gold Mining Company (Limited) (2), Lindley, M.R. is reported to have decided the case thus: "Their Lordships did not sit there as a Court of (1) (1872) Law Rep. 8 Ch.(2) , 367 honour; the question was whether the applicants had made out that the transferee was being improperly kept off the register.
There was no evidence of that .
The Court ought, as a matter of honesty between man to man., to presume that the directors were acting within their powers unless the contrary was proved; but that was not proved by casting unfounded aspersions upon them."
Thus, the matter comes to this that the Directors have a presumption in their favour and the opposite party must prove that there was want of good faith.
The right of appeal which is given under the , allows the Central Government to judge this issue.
For that purpose, parties are required, if they desire, to make representations and to put in evidence.
But to enable the parties to have a free say, the proceedings are made confidential by law, and there is protection against action, both civil and criminal.
The appeal is disposed of on the basis of the representations and the evidence.
A decision of a tribunal on a dispute inter partes, in the light of pleadings and evidence, is essentially a judicial one, and this Court ought to be able, on the same material, to decide in an appeal whether the decision given was correct.
If no substantive law is applicable, there are questions of evidence, of burden and adequacy of proof and of the application of the principles of justice, equity and good conscience to guide the Court.
Once it is held that the decision is that of a tribunal and subject to appeal, it is manifest that an appeal may lie, unless there be some other reason.
The difficulty which arises in these cases is whether it was not the intention of the law that the decision of the Central Government was to be final.
The law makes all allegations and counter allegations confidential.
If Courts cannot compel disclosure of these allegations and the veil of secrecy drawn by law is not rent, then it appears to me that a further appeal can hardly be efficacious.
In this view, in my opinion, this Court should not grant special leave in such cases.
The situation which arises is not very different from what arose before the Judicial Committee in Moses vs 368 Parker, Ex Parte Moses (1).
The headnote adequately gives the facts, and may be quoted: "By Tasmanian Act No. 10 of 1858, section 5, disputes concerning lands yet ungranted by the Crown are referred to the Supreme Court, whose decision is to be final; and by section 8 the Court is directed to be guided by equity and good conscience only, and by the best evidence procurable, even if not required or admissible in ordinary cases, and not to be bound by strict rules of law or equity or by any legal forms: Held: that the Crown 's prerogative to grant special leave to appeal is inapplicable to a decision so authorised."
In dealing with the case, Lord Hobhouse observed at p. 248: "The Supreme Court has rightly observed that Her Majesty 's prerogative is not taken away by the Act of 1858, but intimates a doubt whether it ever came into existence.
Their Lordships think that this doubt is well founded.
They cannot look upon the decision of the Supreme Court as a judicial decision admitting of appeal.
The Court has been substituted for the commissioners to report to the governor.
The difference is that their report is to be binding on him.
Probably it was thought that the status and training of the judges made them the most proper depositaries of that power.
But that does not make their action a judicial action in the sense that it can be tested and altered by appeal.
It is no more judicial than was the action of the commissioners and the governor.
The Court is to be guided by equity and good conscience and the best evidence.
So were the commissioners.
So every public officer ought to be.
But they are expressly exonerated from all rules of law and equity, and all legal forms.
How then can the propriety of their decision be tested on appeal? What are the canons by which this Board is to be guided in advising Her Majesty whether the Supreme Court is right or wrong? It seems almost (1) 369 impossible that decisions can be varied except by reference to some rule; whereas the Court making them is free from rules.
If appeals were allowed, the certain result would be to establish some system of rules; and that is the very thing from which the Tasmanian Legislature has desired to leave the Supreme Court free and unfettered in each case.
If it were clear that appeals ought to be allowed, such difficulties would doubtless be met somehow.
But there are strong arguments to show that the matter is not of an appealable nature."
See also The ' berge vs Laudry (1).
The exercise of the powers under article 136 is a counterpart of the royal prerogative to hear appeals in any cause or matter decided by Courts or tribunals.
But where the Articles of Association of a company give absolute discretion to the Directors and empower them to withhold their reasons, the appeal taken to the Central Government would involve decision on such material, which the parties place before it.
If the allegations are made confidential by law and the Central Government in giving its decision cannot make them public, it is manifest that the decision, to borrow Lord Hobhouse 's language, "is not of an appealable nature".
Whether the right to hear appeals generally against decisions of the Central Government acting as a tribunal be within article 136, in my opinion and I say it with great respect special leave to appeal should not be granted in such cases, unless this Court is able to rend the veil of secrecy cast by the law without rending the law itself.
The argument is that the allegations are confidential only so far as the public are concerned but not confidential where Courts are concerned.
The question is not that but one of practice of this Court.
This Court should intervene only when practicable, and that can only arise if the parties agree not to treat the allegations as confidential.
That, however, does not end the present appeals.
Special leave has been granted, and I have held that the appeals are competent, even though such cases (1) 370 often may not be fit for appeal.
In this case, there is no claim that any allegation was confidential.
In fact, the appellants before the Central Government made it clear that they did not charge the Directors with "capricious or mala fide conduct" but only with arbitrary refusal, without stating any reasons.
The appellant Company in its representation set out the history of previous refusals and the decisions of the High Court of Bombay and the Central Government, and made it clear that the action was taken in the interest of the Company.
There are indications in the representation to show that on the previous occasion when these claimants were referred by the High Court and by Mr. K. R. P. Aiyengar, Joint Secretary, to the Civil Court, they did not go to Court to establish that the action was mala fide and capricious.
Before the Central Government, they dropped that allegation, and confined the case to one of refusal without giving any reasons, and that was the plain issue before the Central Government.
There was no evidence for the Central Government to consider, and the Articles of Association give the Directors an absolute discretion to refuse to register shares without giving any reasons, and, on the authorities quoted earlier, the Directors must be presumed to have acted honestly.
There was thus no reason for the Central Government to reverse the decision of the Directors, and the fact that no reasons have been given when nothing was confidential, leads to the only inference that there was none to give.
In my opinion, these appeals must succeed.
I would, therefore, set aside the order of the Central Government, and allow the appeals with costs here and before the Central Government, if an order to that effect was passed by the Central Government.
Before parting with the case, I may say that the Report of the Amendment Committee had recommended amendment of section 111, and it has been amended, inter alia, by the addition of sub section (5A), which reads: "Before making an order under sub section (5) on an appeal against any refusal of the company to 371 register any transfer or transmission, the Central Government may require the company to disclose to it the reasons for such refusal, and on the failure or refusal of the company to disclose such reasons, that Government may, notwithstanding anything contained in the articles of the company, presume that the disclosure, if made, would be unfavourable to the company."
That would stop the blind man 's buff under the unamended law!
By COURT.
In view of the majority judgment of the Court, we quash the orders passed by the Central Government and direct that the appeals be reheard and disposed of according to law.
Costs of these appeals will be costs in the appeals before the Central Government.
| Section 9 of the , entitles a duly enrolled Mukhtar to "Practise" in any Civil Court, and section 11 thereof empowers the High Court to make rules declaring .what shall be deemed to be the ,functions, powers and duties" of Mukhtars practising in the subordinate Courts.
Rule 2 framed under section 1 1 lays down that a Mukhtar shall not be allowed to address any Civil Court except for the purpose of "stating the nature.
and effect of his application or to offer any legal argument or to examine any witness" without the leave of the Court.
The petitioners contended that r. 2 was in excess of the rule making power under section 1 1 and was an unreasonable restriction on their rights under article 19 (1) (g) of the Constitution.
Held, that sections 9 and 1 1 of the Act must be read together and the right to "practise" given under section 9 cannot be dissociated from the "functions, powers and duties of Mukhtars" as contemplated under section 11.
In declaring what shall be the functions, powers and duties of a Mukhtar the High Court may by its rules so delimit them as to regulate their right of practice in the Civil Courts, and such delimitation is no violation of their fundamental right to practise the profession as allowed under the Act.
Aswini Kumar Ghosh vs Arabinda Bose, , explained and distinguished.
|
ule as found in rule 8(1)(a), enormous prejudice would be caused to the petitioners and others who are similarly situated, even though their appointments have been made by deliberate deviation from the rules.
The just solution to it would be to treat the petitioners as persons duly appointed to the Services with effect from the date on which they were promoted to the Grade IV posts.
[235 G H; 236 B] & ORIGINAL JURISDICTION: Civil Miscellaneous Petition No. 2604 of 1985.
IN Writ Petition No. 1595 of 1979.
(Under Article 32 of the Constitution of India.) Petitioner No. 1 in person.
P.P. Rao, Uma Dutta and Miss C.K. Suchitra for Petitioner Nos. 2 to 25.
Govinda Mukhoty and P.K. Gupta for the Intervener.
R.K. Garg, R.K. Jain and Guptha Jain for the Respondents.
F.S. Nariman, A.K. Ganguli, R.D. Agarwala and C.V. Subba Rao for the Respondents.
(Union of India) The Judgment of the Court was delivered by 218 VENKATARAMIAH, J.
The perennial dispute regarding seniority between direct recruits and promotees which exists in Almost all the departments of Government has not spared the Indian Economic Service and the Indian Statistical Service with which we are concerned in this case.
This is the second phase of the battle which is being waged in this Court.
Earlier certain persons who had been holding posts in Grade IV of these two Services had filed Writ Petition No. 1595 of 1979 under Article 32 of the Constitution of India praying for a writ, direction or order in the nature of mandamus directing the Union of India to confirm or regularise the petitioners in the posts held by them as and from the dates when they became due for confirmation or regularisation in accordance with the Indian Economic Service Rules, 1961 or the Indian Statistical Service Rules, 1961 and to consider them for all future promotions when due on the basis of such seniority.
The said petition was filed in a representative capacity with the leave of the Court under Order I Rule 8 C.P.C. A few officers who had been recruited as direct recruits to the posts in Grade IV in the said departments were impleaded as respondents and they were sued in a representative capacity as representing all other direct recruits who were likely to be affected by the decision.
After the above case was heard, the Court passed a short order on February 1, 1984 which reads thus : "We are not able to understand why the vacancies available to the departmental candidates under Rule 8(ii) of the Indian Economic and Indian Statistical Services Rules, 1961, have not been filled up on regular basis.
We find that some of the departmental candidates (petitioners) have been holding the promotional posts on ad hoc basis for several years.
mere appears to be no justification for keeping them 'ad hoc ' so long.
We, therefore, issue a Writ of Mandamus directing the Union of India to fill up, within four weeks from today, the vacancies available to the departmental candidates under Rule 8(ii) with effect from the date from which the petitioners became entitled to be promoted on regular basis.
Their seniority will be determined according to Rules.
We wish to make it clear that there is no question of any rotation system being applied under the Rules, as they exist now.
The 219 writ petition is disposed of in these terms.
There will be no order as to costs." (Rule 8(ii) has to be read as Rule 8(1)(a)(ii)) The Union of India, as can be seen from the order set out above, was directed to comply with the directions contained therein within four weeks from the date of the order.
On the expiry of four weeks, stipulated by this Court, the Union of India filed an application for extension of time to comply with the directions contained therein fully.
Time was extended by the Court till April 30, 1984.
On May 1, 1984 the Union of India filed before the Court two sets of seniority lists in respect of the above two Services namely, lists based on the principle of rotation and lists based on Rule 9 C of the Indian Economic Service/Indian Statistical Service Rules.
Since on a perusal of the said lists it was found that the position of some of the departmental promotees who had already put in nearly 15 years of service in Grade IV was worse than V the position in which they were before the writ petition was filed and were facing imminent threat of reversion to the feeder posts from which they had been promoted several years ago, the Court directed the petition to come up for hearing before the Court on its re opening after summer vacation and directed that status quo should be maintained in the mean while.
Then on July 24, 1984 the Court while declining to endorse either of the two seniority lists directed the Union of India to implement the order dated February 1, 1984 on or before 30th November, 1984.
In the meanwhile the petitioners filed Civil Miscellaneous Petition No. 2604 of 1985 complaining that the Union of India had failed to comply with the order made by this Court and that action should be taken for contempt against it.
While opposing the application for contempt, on behalf of the Union of India it was stated in the course of the affidavit sworn by Shri P.L. Sakarwal, Deputy Secretary, Department of Economic Affairs, New Delhi thus : "23.
In view of the submissions made above this Respondent would urge that the directions of the Hon 'ble Court dated 1.2.84 in the matter of (i) filling the vacancies under Rule 8(ii) and (ii) to fix the seniority according to Rules without the application of rotation system, have been complied with bona fide and in a good faith.
Rule 8(ii) of 220 the IES Rules/ISS Rules provides for the quota for the departmental promotees and also the manner in which the Select List for promotion by a duly constituted DPC presides over by a Member of UPSC has to be drawn.
All the vacancies available to the departmental candidates under Rule 8(ii) up to the end of 1983 have already been given to them by issuance of Select Lists drawn from time to time.
Action is in process to prepare further Select List in respect of the vacancies available to the officers till the end of the year 1984.
As regards seniority, the Hon 'ble Court had ordered to fix the seniority according to the Rules and without the application of the rotation system.
The revised seniority lists prepared by this Respondent and finalised after inviting objections etc.
from the concerned officers have been framed according to the Rules i.e. in terms of the provisions of Rule 9 C of the IES Rules/ISS Rules and without application of the rotation system.
This Respondent, would, therefore, urge with respect ad all humility that he has complied with the directions of the Hon 'ble Court bona fide ant in good faith.
However, If there 18 any slip on the part of this Respondent in carrying out the directions of this Hon 'ble Court of if the Hon 'ble Court considers that the orders should have been executed in any other manner, this Respondent would tender unconditional apology ant will be duty bound to obey ant implement, such orders directions as this Hon 'ble Court may teem fit or pleaset to issue in the circumstance of the case.
" In the meanwhile certain direct recruits also intervened in the course of the said petition ant requested that they should be heart before any order was passed by the Court on the contempt application.
While the order passed by the Court on February 1, 1984 did not require any clarification at all, since the parties tried to place different interpretation on lt, prayer was mate by the Union Government as stated above seeking further clarifications in the light of certain recent decisions rendered by this Court, we gave opportunity to all the parties to make their submissions once again.
Availing 221 themselves of the opportunity given by the Court learned counsel for the promotees and the direct recruits have virtually reargued the matter.
It should be stated here that no specific stand was taken on this occasion by the Union Government except bringing to the notice of the Court the relevant provisions of law.
On its behalf it was submitted very fairly by Shri F.S. Nariman, that there was no intention on the part of the Government or any of its officers to flout the order of the Court passed earlier and that if the Court found that there has been any mistake in the preparation of the lists of seniority, those lists would be prepared afresh in the light of any direction that may be given by the Court in the course of these proceedings.
Having regard to the facts of the case and the events that have followed the order passed by this Court on February 1, 1984, we do not feel called upon to take any action for contempts against the Union Government or any of its officers for not obeying the orders of this Court.
We have, however, found it necessary to consider the matter again in the light of the submissions made by the parties and issue fresh directions in this case.
We feel that a detailed order is also called for in the circumstances of the case.
The Indian Economic Service Rules, 1961 and the Indian Statistical Service Rules, 1961 (hereinafter referred to as 'the Rules ') which are more or less identical with regard to the questions involved in this case were notified on November 1, 1961 and these Services were constituted with effect from that date by encadering numerous posts carrying economic and statistical functions in the various ministries of the Government of India.
These Services were meant to comprise a pool of officers having appropriate qualifications for performing the aforesaid technical functions involved in various posts.
me strength of the various grades of the Indian Economic Service at the initial constitution of the Service, i.e., on November 1, 1961 was Grade 1 15, Grade II 15, Grade III 95 and Grade IV 199 Total 324 posts.
me strength of the various grades of the Indian Statistical Service at the initial constitution of the Service, i.e., on November 1, 1961 was Grade I 8, Grade II 7, Grade III 54 and Grade IV 116 Total 185 posts.
The officers of Grade I to Grade IV are classified as Class I Officers.
The authorised permanent strength of each of 222 the Services is to be fixed by the Controlling Authority with the guidance of the Ministry of Finance in accordance with the provisions of the Rules.
It is required to be based on the following principles: 1) it shall be assumed that 80 per cent of the total number of semi permanent posts are likely to be continued indefinitely in one form or another, and shall be provided for in the permanent strength; and 2) all the purely temporary posts and 20 per cent of the semi permanent posts shall be excluded for purposes of determining the permanent strength.
The Ministry of Home Affiars (Department of Personnel and Administrative Reforms) advised by a Board known as the Indian Economic Statistical Service Board is designated as the Controlling Authority under rule 6 of the Rules.
Initial constitution of both the Services was required to be done in accordance with rule 7.
& der that Rule the Union Public Service Commission was required to constitute a Selection Committee with a Chairman or a Member of the commission as President, not more than two representatives of the partici pating Ministries and the Chief Economic Adviser in the Ministry of Finance (Department of Economic Affairs) to deter mine the suitability of departmental candidates for appointment to the different grades and to prepare an order of preference for each grade for the initial constitution of the Service.
On receipt of the Committee 's report the Commission was required to forward its recommendations to the Government and such recommendations might include a recommendation that a person considered suitable for appointment to a grade might, if a sufficient number of vacancies were not available in that grade, be appointed to a lower grade.
me departmental d i dates who were not absorbed at the initial constitution of the Service were to continue to work as on the date of the initial constitution and were given the opportunity to apply (and getting selected if they were found suitable) for future vacancies.
We are informed that the notifications regarding the initial constitution of these two Services were issued by the middle of February 1, 1964 with effect from February 15, 1964.
Future maintenance of these two Services is governed by 223 rule 8 of the Rules.
Initially rule 8, which is relevant for the purposes of this case read as follows : "8.(1) Future maintenance of the Service after the initial constitution of the Service has been completed by appointment of departmental candidates or otherwise, vacancies shall be filled as hereinafter provided.
(a) Grade IV Assistant Director.
(i) Not less than 75 per cent of the vacancies in this grade shall be filled by direct recruitment through an open competitive examination to be held by the Commission in the manner prescribed in Schedule II.
Provided that 25 per cent of the said quota for direct recruitment may be set apart for a maximum period of 5 years for absorption of officers considered suitable for appointment at the initial constitution of the Service but who could not be so appointed in the absence of vacancies.
(ii) Not more than 25 per cent of the vacancies in this grade shall be filled by selection from among officers serving in offices under the Government in Economic posts recognised for this purpose by the Controlling Authority who shall prepare a list of such posts in consultation with the commission.
The Controlling Authority may, in consultation with the Commission, add to or modify the list from time to time.
The selection will be made from amongst those who have completed at least 4 years of service in those posts on the basis of merit with due regard to seniority by the Controlling Authority on the advice of the Commission. . " Rule 8(1)(a) now reads thus : "8.(1) Future maintenance of the service; after the initial constitution of the service had been completed by appointment of departmental candidates or otherwise and after promotions in accordance with sub rule (2A) of Rule 7 have taken place, vacancies shall be filled as hereinafter provided.
224 (a) Grade IV Assistant Director.
(i) Not less than 75 per cent of the vacancies in this grade shall be filled by direct recruitment through an open competitive examination to be held by the Commission in the manner prescribed in Schedule II.
Provided that 25 per cent of the said quota for direct recruitment may be set apart for a maximum period of 5 years for absorption of officers considered suitable for appointment at the initial constitution of the service but who could not be so appointed in the absence of vacancies.
(ii) Not more than 25 per cent of the vacancies in this grade shall be filled by selection from among officers serving in offices under the Government in Economic posts recognised for this purpose by the Controlling Authority who shall prepare a list of such posts in consultation with the Commission.
The Controlling Authority may, in consultation with the Commission, add to or modify the list from time to time.
The selection will be made from amongst those who have completed at least 4 years of service on a regular basis in these posts on the basis of merit with due regard to seniority by the Controlling Authority on the advice of the Commission.
Provided that if any junior person in an office under the Government is eligible and is considered for selection for appointment against these vacancies, all persons senior to him in that office shall also be so considered notwithstanding that they may not have rendered 4 years of service on a regular basis in their posts.
" After the initial constitution or the two Services was completed it was found that a number of posts carrying Economic/Statistical functions could not be considered for inclusion in the officers ' Grades due either to misunderstanding or to inadvertence.
Further as the process of formation of the Indian Economic Service and the Indian Statistical Service was prolonged for number of years and the need for appointing more officers in the said Departments during that long period 225 also arose gradually several posts carrying economic/statistical functions were created.
Although rule 8 provided that not less than 75 per cent of the vacancies in Grade IV should be filled up by direct recruitment through an open competitive examination to be held by the Union Public Service Commission in the manner prescribed in Schedule II to the Rules and further provided that not more than 25 per cent posts of the vacancies in that grade should be filled by selection from among officers serving in The offices under the Government in Economic/Statistical posts recognised for that purpose by the Controlling Authority, no direct recruitment was resorted to till about the year 1968.
In the meanwhile a large number of persons in the feeder posts were appointed to the posts in Grade IV from time to time from the year 1962 onwards although the orders promoting them stated that they had been promoted only temporarily.
It is not disputed that all those promotees have been holding those posts continuously till now without being reverted to the feeder posts from which they had been promoted.
Some have retired from those posts on attaining the age of superannuation.
We shall reproduce below one of the notifications issued in connection with the promotion to the posts in Grade IV of such officers, some of whom are the petitioners in this petition.
It reads thus : "GOVERNMENT OF INDIA PLANNING COMMISSION Yojana Bhawan, Parliament Street New Delhi 1, the 20th/23rd November '65 NOTIFICATION No.
F.8(10)/65 ADM.I: The President is pleased to appoint the following Economic Investigators Grade I, Planning Commission, as Research Officers in the Commission in a temporary capacity with effect from the 6th November 1965 (forenoon), and until further order : Shri K.V.
Vishwanathan Shri S.N. Padru Shri C.L. Kapur 226 Smt.
K. Passi Shri Narendra Chaddha Shri R.N. Mokhey Shri N. Srinivasan Shri K. Suryanarayana Shri P.N.
Radhakrishnan Shri B.R.
Kharbanda Shri Kamla Prasad Shri M.M.
Gupta Shri S.P. Kumar Sd/ (N.S. Gidwani) (Deputy Secretary to the Government of India) . . . . . . . .
All these officers excepting Shri P.N. Radha Krishnan are either permanent or quasi permanent in the grade of Economic Investigators.
Shri Radha Krishnan is quasi Permanent in the grade of Senior Computor.
The promotion of all is in the direct line. . . . . . . .
In another order of promotion issued while promoting another officer by name Jagdish Chandra on November 21, 1966 it was mentioned that his promotion to the post of Research Officer was in direct line of Economic Investigator Grade I/II.
It should be stated here that although rule 8 (1) (a) provided that not less than 75 per cent of the vacancies in Grade IV of the two Services should be filled up by direct recruitment through an open competitive examination to be held by the Commission in the manner prescribed in Schedule II to the Rules and that not more than 25 per cent of the vacancies in the Grade could be filled up by a selection from among officers serving in offices under the Government in Economic/Statistical posts recognised for this purpose by the Controlling Authority, the prescribed quota of appointment from the two different sources, referred to above, was not maintained right from the commencement of the Constitution of the Services.
me initial constitution of the two Services was completed under rule 7 of the Rules with effect from February 15, 1964 as mentioned earlier.
Thereafter rule 7A was added.
227 That rule was added by a notification dated December 24, 1966 and it has been amended subsequently by a notification dated February 12, 1972.
Rule 7A made special provision regarding certain departmental candidates who were to be absorbed in the two Services.
It provided that notwithstanding anything contained in rule 8 of the Rules, the Controlling Authority on the advice of the Board should constitute a Selection Committee for the purpose of appointing officers who were departmental candidates to the Services in question.
A departmental candidate who was not selected for appointment for any grade in the Services could continue to hold the post which he was holding then and might be considered by the Controlling Authority on the advice of the Board for appointment to the service at the subsequent stage or stages in consultation with the Commission.
It further provided that any departmental candidate, referred to in sub rule (1) of rule 7A who did not on a selection to any Grade in the Service desire to be absorbed tn the service might continue to hold the post held by him immediately before the selection as if he had not been selected.
The validity of rule 7A was questioned by some of the direct recruits, who were appointed in the year 1968 in the High Court of Delhi by a Writ Petition.
We understand that the said writ petition has been transferred to the file of the Central Administrative Tribunal and the said writ petition is still pending.
We are not concerned here with the merits of the contentions urged by the contesting parties in those proceedings.
We are concerned in this case only with the question of seniority as between direct recruits and promotees.
From the statements annexed to the counter affidavit filed by Shri V. Subramanian, Director in the Department of Economic Affairs, it is seen that in the Indian Economic Service there were 3 vacancies for direct recruits in the year 1964, 18 in the year 1965, 80 in the year 1966 and 12 in the year 1967.
Nobody was recruited directly to those posts during those years.
In the year 1968 there were 11 vacancies for direct recruits but 32 were recruited directly during that year.
In 1969 there were 6 vacancies for direct recruits and 31 were recruited, in 1970 there were 33 vacancies for direct recruits, in 1971 there were 12 vacancies for direct recruits, in 1973 there were 25 vacancies for direct recruits, 'n 1974 there were 20 vacancies for direct recruits and in 1975 there were 11 vacancies for direct recruits.
By the year 1984 in all 228 there were 435 vacancies for direct recruits out of which only 342 posts were filled up by direct recruitment.
In all 93 posts intended for direct recruits remained unfilled and most of them were held all along by persons who had been promoted from the feeder posts.
The position in the Indian Statistical Service was more or less the same.
As against a total of 303 vacancies meant for direct recruits between the years 1964 and 1984 only 275 direct recruits were appointed.
In this department also the posts which remained unfilled had been held by the persons who were departmental candidates.
It is alleged in the counter affidavit filed on behalf of the Union of India of which the deponent is Shri P.G. Lele, Deputy Secretary in the Department of Personnel and Administrative Reforms that many of the departmental candidates had been allowed to hold posts including in Grade IV of the aforesaid Services purely on ad hoc and ex gratia basis.
The relevant part of the counter affidavit is to be found in paragraphs 21 to 24 thereof.
It is unfortunate that even though the promotees have been discharging their duties to the best of their ability and receiving salary and allowances from the Government for the services rendered by them, it is alleged in the course of the said counter affidavit that what was being paid to them was by way of grace.
This statement adds insult to injury.
If the Government felt that they were not competent to discharge their duties and they had not been appointed permanently to the posts held by them, it was open to it to revert them to their posts from which they had been promoted leaving it open to them to question the orders of reversion in Court.
The Government was in need of their services and the petitioners have been holding these posts for nearly 15 to 20 years.
It is not fair to say at this distance of time that the Government was only keeping them in their posts as a matter of grace.
Be that as it may, it is seen that the Departmental Promotion Committee met only thrice between 1965 and 1584, i.e. 1970, 1972 and 1984 although under te rules and instructions issued by the Central Government on the advice of the Union Public Service Commission, the Departmental Promotion Committee had to meet annually.
When the Departmental Promotion Committee met in the year 1970, it prepared a select list consisting of 33 names to fill 33 vacancies only in Grade IV from amongst those who had already been promoted to Grade IV temporarily and at that time only officers who had completed four years of regular service in the feeder posts as 229 on December 31, 1966 were considered although the Departmental Promotion Committee was meeting in the year 1970.
If it had taken into consideration the service put in by the departmental candidates till the date on which it took up their cases for consideration for promotion many others who had been promoted on a temporary basis to Grade IV would have become eligible for consideration.
By omitting to take the cases of those persons into consideration on the ground that they had not completed four years of regular service in the feeder posts as on December 31, 1966 the Departmental Promotion Committee violated Articles 14 and 16(1) of the Constitution of India.
It is further seen that the Departmental Promotion Committee made its recommendations on the basis of the records of service and seniority of each of the departmental candidate.
It is not known whether any of them were found to be unfit on the basis of their record of service only.
It is, however, seen that the select list contained only 33 names because the Departmental Promotion Committee felt that they were the only vacancies for which it could make recommendations under rule 8(1)(a)(ii) of the Rules.
If it had made recommendations to the Government in respect of all the vacancies which were available then, perhaps, the names of some others who were left out would have been included in the select list.
Then after an interval of 12 years the Departmental Promotion Committee met in the year 1982.
There again the same procedure was followed and the next meeting of the Departmental Promotion Committee, as already stated, was in 1984.
For no fault of the petitioners and the officers similarly situated their cases for promotion were not considered every year and even those who have been found fit by the Departmental Promotion Committee for promotion had to wait for nearly 15 years to get into the 'regular ' service through a select list prepared by the Departmental Promotion Committee.
In, compliance with our direction the Government has produced before the Court two lists showing the names of officers who were appointed to Grade IV posts of the Indian Economic/Statistical Service either regularly or on ad hoc basis arranged according to the dates from which they have been officiating in these posts continuously.
large number of decisions were cited at the Bar by the learned counsel for the parties.
Some of them are S.B. 230 Patwarthana & Ors.
vs State of Maharashtra & Ors.
[1977] 3 S.C.R. 775, Rajendra Narain Singh & Ors.
vs State of Bihar & Ors.
; , Baleshwar Dass & Ors. etc.
vs State of U.P. & Ors.
[1981] 1 S.C.R. 449, A. Janardhana vs Union of India & Ors. ; , P.S. Mahal & Ors.
vs Union of India & Ors.
[1984] 3 S.C.R. 847, O.P. Singla & Anr.
vs Union of India & Ors.
; , Karam Pal & Ors. etc.
vs Union of India & Ors.
; , G.S. Lamba & Ors.
vs Union of India & Ors.
; , Pran Krishoa Goswami & Ors.
vs State of West Bengal & Ors.
[1985] Supp.
S.C.C. 221 and D.K. Mitra & Ors.
vs Union of India & Ors.
[1985] Supp.
S.C.C. 243.
We have carefully considered all the decisions cited before us.
It is now well settled that it is permissible for the Government to recruit persons from different sources to constitute a service.
It is also open to it to prescribe a quota for each source.
Rules of recruitment framed on the above lines are perfectly legitimate and quite consistent with Articles 14 and 16 of the Constitution.
It is also true that when the Rules of recruitment prescribe recruitment from different Services in accordance with the specified quota the Government is bound to appoint persons to the Service concern ed in accordance with the said Rules.
The seniority of persons recruited from different sources will have to be regulated accordingly.
So far there can be no controversy.
But we are faced in this case with the problem of resolving conflicts which have arisen on account of a violent departure made by the Government from the Rules of recruitment by allowing those who were appointed contrary to the Rules to hold the posts continuously over a long period of time.
The question is whether after such a long period it is open to the Government to place them in seniority at a place lower than the place held by persons who were directly recruited after they had been promoted, and whether it would not violate Articles 14 and 16 of the Constitution if the Government is allowed to do so.
Promotions of officers have been made in this case deliberately and in vacancies which have lasted for a long time.
A letter dated August 11, 1978 written by Shri S.D. Patil, Minister of State for Home Affairs, Personnel Department to Shri Ganga Bhakt Singh, Member of Parliament substantiates the conclusion.
The relevant part of the letter reads : "Government resorted to making ad hoc appointments as it was separately considering proposals to re 231 Organise Grade IV of the two Services.
Pending such reorganisation Govt. has taken a deliberate decision to restrict direct recruitment for the present.
It is, therefore not correct to say that ad hoc appointments have been made due to nonavailability of direct recruits.
I may add that but for his deliberate decision, most of the officers holding ad hoc posts in Grade IV would have continued to stagnate in the lower posts of Investigators.
" At one stage it was argued before us on behalf of some of the respondents that the petitioners who have not been appointed in accordance with rule 8(1)(a)(ii) could not be treated as members of the Indian Economic Service or of the Indian Statistical Service at all and hence there was no question of determining the question to seniority as between the petitioners and the direct recruits.
This argument has got to be rejected.
It is true that the petitioners were not promoted ay following the actual procedure prescribed under rule 8(1)(a)(ii) but the fact remains that they have been working in posts included in Grade IV from the date of which they were appointed to these posts.
The appointments are made in the name of the President by the competent authority.
They have been continuously holding these posts.
They are being paid all along the salary and allowances payable to incumbents of such posts.
They have not been asked to go back to the posts from which they were promoted at any time since the dates of their appointment.
The orders of promotion issued in some cases show that they are promoted in the direct line of their promotion.
It is expressly admitted that the petitioners have been allowed to hold posts included in Grade IV of the aforesaid services, though on an ad hoc basis.
(See Para 21 of the counter affidavit filed by Shri P.G. Lele, Deputy Secretary, Department of Personnel and Administrative Reforms).
It is, therefore, idle to contend that the petitioners are not holding the posts in Grade IV of the two Services in question.
It is significant that neither the Government has issued orders of reversion to their former posts nor has anybody so far questioned the right of the petitioners to continue in the posts which they are now holding.
It would be unjust to hold at this distance of time that on the facts and in the circumstances of this case the petitioners are not holding the posts 232 in Grade IV.
The above contention is therefore without sub stance.
But we, however, make it clear that it is not our view that whenever a person is appointed in a post without following the Rules prescribed for appointment to that post, he should be treated as a person regularly appointed to that post.
Such a person may be reverted from that post.
But in a case of the kind before us where persons have been allowed to function in higher posts for 15 to 20 years with due deliberation it would be certainly unjust to hold that they have no sort of claim to such posts and could be reverted unceremoniously or treated as persons not belonging to the Service at all, particularly where the Government is endowed with the power to relax the Rules to avoid unjust results.
In the instant case the Government has also not expressed its unwillingness to continue them in the said posts.
m e other contesting respondents have also not urged that the petitioners should be sent out of the said posts.
m e only question agitated before us relates to the seniority as between the petitioners and the direct recruits and such a question can arise only where there is no dispute regarding regarding the entry of the officers concerned into the same Grade.
In the instant case there is no impediment even under the Rules to treat these petitioners and others who are similarly situated as persons duly appointed to the posts in Grade IV because of the enabling provision contained in the rule 16 thereof.
Rule 16 as it stood at the relevant time read as follows : "16.
m e Government may relex the provisions of these rules to such extent as may be necessary to ensure satisfactory working or remove ln equitable results.
" Now rule 16 reads thus : "16.
Powers to relex: me Government may in consultation with the Commission and for reasons to be recorded in writing relex any of the provisions of these rules with respect to any class or category of persons or posts and no such relaxation shall be given so as to have retrospective effect. " G.S. Lamba 's case (supra) may be carefully considered at this stage.
In that case this Court was concerned with the Indian Foreign Service which was governed by the Indian Foreign Service, Branch 'B ' (Recruitment, Cadres, Seniority and Promotion) Rules, 1964.
The said rules provided for recruitment to the said Service from three different Services, 233 (i) direct recruitment by competitive examination, (ii) substantive appointment of persons included in the select list promoted on the basis of a limited competitive examination and (iii) promotion on the basis of seniority.
One of the Rules provided that the recruitment should be made from the above sources on the following basis: (i) 1/6th of the substantive vacancies to be filled in by direct recruitment, (ii) 33, 1/3% of the remaining 5/6 of the vacancies to be filled on the basis of results of limited competitive examinations and (iii) the remaining vacancies to be filled in by promotion on the basis of seniority.
The Court found that the direct recruitment had rot been made for years, limited competitive examination had also not been held for years and promotions from the select list had been made in excess of the quota.
It found that there was enormous departure from the rules of recruitment in making appointments over several years.
The Court was of the view that the situation in this case was similar to the situation in two other earlier cases of this Court in A. Janarthana 's case (supra) and O.P. Singla & Anr. (supra).
The Court felt that in the circumstances it should be presumed that the excess appointment by promotion had been made in relaxation of the Rules since there was power to relax the Rules similar to the power under rule 16 in the Rules with which we are concerned here.
Justifying the above view the court observed at pages 458 459 thus : "It was however contended that it is not permissible to infer that promotions in excess of quota were given by relaxing the quota rule because the posts in Integrated Grade II and III were within the purview of the Union Public Service Commission and the proviso to Rule 29(a) mandates that power to relax is hedged in with a condition that it can be done after consultation with the Commission, and there is nothing to show that the Commission was ever consulted.
Undoubtedly, the proviso to Ru e 29(a) requires that the controlling authority cannot relax any of the provisions of the rules in respect of posts which are within the purview of the Union Public Service Commission unless after consultation with the Commission.
It was submitted that nothing is placed on the record by the petitioners to show that power to relax the quota 234 rule was exercised after consultation with the Union Public Service Commission.
Assuming that there was no consultation, would the exercise of power to relax be vitiated and the appointments made in relaxation of the mandatory quota rule would be ab initio invalid.
Commencing from the decision of the Privy Council in Montreal Street Railway Company vs Normandin AIR 1917 P.C. 142 it is well settled that 'when the provisions of a statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of this duty would work general inconvenience or injustice to persons who have not control over those entrusted with the duty and that at the same time would not promote the main object of the Legislature, it has been the practice to hold such provisions to be directory only, the neglect of them, though punishable, not affecting the validity o the acts done '.
The view was expressed in the context of the failure to revise list of Jurors by the Sheriff according to the revised statues of Quebec and conviction was challenged on the ground of mistrial held by selecting Jurors from unrevised lists.
The challenge failed.
Coming home in State of U.P. vs Manbodan Lal Srivastava, [1958] S.C.R. 533 a Constitution Bench of this Court specifically held that where consultation with the Public Service Commission is provided as required by article 320(3) (c) of the Constitution such provisions is not mandatory and they do not confer any rights on public servants so that the absence of consultation or irregularity In consultation does not afford him a cause of action in a court of law.
There are number of subsequent decisions to which our attention was called reiterating the same principle.
Therefore assuming there was failure to consult the Union Public Service Commission before exercising the power to relax the mandatory quota rule and further assuming that the posts in Integrated Grade IT and III were within the purview of the Union Public Service Commission and accepting for the time being that the Commission was not 235 consulted before the power to relax the rule was exercised yet the action taken would not be vitiated nor would it furnish any help to Union of India which itself cannot take any advantage of its failure to consult the Commission.
Therefore it can be safely stated that the enormous departure from the quota rule year to year permits an inference that the departure was in exercise of the power of relaxing the quota rule conferred on the controlling authority.
Once there is power to relax the mandatory quota rule, the appointments made in excess of the quota from any given source would not be illegal or invalid but would be valid and legal as held by this Court in N.K. Chauhan and Ors.
vs State of Gujarat, [1977] 1 S.C.R. 1037.
Therefore the promotion of the promotees was regular and legal both on account of the fact it was made to meet the exigencies of service in relaxation of the mandatory quota rule and to substantive vacancies in service.
The Court ultimately quashed the seniority list and directed the preparation of seniority list on the basis of length of continuous officiation in the cadre.
The facts in this case being almost identical there is no reason why the view express in G.S. Lamba 's case (supra) should not be adopted here also.
The continuance of these petitioners may be justified on the basis of the above quoted rule 16 onthe assumption that the Government had relaxed the Rules and appointed them to the posts in question to meet the administrative requirements.
The enormity of the prejudice that is likely to be caused to the petitioners and others who were similarly situated can be demonstrated by setting out the effect of sticking to the quota rule as found in rule 8(1)(a) even though there has been a deliberate deviation from it.
The result of applying the quota rule would be as follows: Petitioner No.1 who was promoted to Grade 17 on November 6, 1965 would be junior to a direct recruit of 1974 batch.
Petitioner No.3 who was promoted to Grade IV on March 22, 1966 would become junior to a direct recruit of 1979 batch.
Petitioner No.6 who was promoted to 236 Grade IV post in July 1, 1966 would become junior to direct recruits of 1982 batch.
Petitioner No. 10 who was promoted to Grade IV on May 18, 1968 would become junior to direct recruits of 1982 batch.
Petitioners Nos.
16 to 18 and 21 to 25 would continue to be treated as ad hoc appointees and will be junior to every body appointed till now into the service as they cannot be fitted any whf e even though they have put in 9 to 15 years of service in Grade IV.
These startling results ought to shock anybody 's conscience.
The only just solution to this problem is to treat the petitioners as persons duly appointed to the Service with effect from the day on which they were promoted to the Grade IV posts.
As observed in D.R. Nim, I.P.S. vs Union of India ; when an officer has worked for a long period as in this case for nearly fifteen to twenty years in a post and had never been reverted it cannot be held that the officer 's continuous officiation was a mere temporary or local or stop gap arrangement even though the order of appointment may state so.
In such circumstances the entire period of officiation has to be counted for seniority.
Any other view would be arbitrary and violative of Articles 14 and 16(1) of the Constitution because the temporary service in the post in question is not for a short period intended to meet some emergent or unforeseen circumstances.
Clause (b) of rule 9C of the Rules which deals with the question of seniority of promotees becomes irrelevant in the circumstances of this case as regards the promotees who have been holding the posts from a long time as stated above.
The decision in A. Janardhana 's case (supra) and the decision in O.P. Singla 's case (supra) strongly support the above view.
It is necessary to refer to them in great detail since in G.S. Lamba 's case (supra) the effect of the said decisions is set out very clearly.
The decision in Karam Pal 's case (supra) is not of much assistance to the direct recruits.
In that decision there was a specific finding that except for a period o ' two years i.e. in 1966 and 1970, direct recruitment had been made in accordance with the Scheme governing recruitment to the Central Secretariat Service and that there was substantial compliance with the rules of recruitment governing that Service.
The 237 Court observed that in the absence of serious failure in implementing the relevant rules there was no ground to interfere with the inter se seniority of the officers in the Grades concerned.
Hence that decision is distinguishable on facts from the present case.
We are aware that the view we are taking may upset the inter se seniority between those promotees who were included in the Select List of 1970, 1982 and 1984 and those who were included later on or who have not been included at all till now.
The existence of this possibility should not deter us from adopting a uniform rule in the case of all promotees and direct recruits to adjust the equities amongst them as regards their relative seniority in the light of the violent departure made by the Government both as regards direct recruitments and promotions which lt had to make every year under the Rules.
The prejudice which the promotees included in the Select Lists might suffer is marginal and has to be ignored.
Having given our anxious consideration to the submissions made on behalf of the parties and the peculiar facts present in this case we feel that the appropriate order that should be passed in this case is to direct the Union Government to treat all persons who are stated to have been promoted in this case to several posts in Grade IV in each of the two Services contrary to the Rules till now as having been regularly appointed to the said posts in Grade IV under rule 8(1)(a)(ii) and assign them seniority in the cadre with effect from the dates from which they are continuously officiating in the said posts.
Even those promotees who have been selected in 1970, 1982 and 1984 shall be assigned seniority with effect from the date on which they commenced to officiate continuously in the posts prior to their selection.
For purposes of seniority the dates of their selection shall be ignored.
The direct recruits shall be given seniority with effect from the date on which their names were recommended by the Commission for appointment to such grade or post as provided in clause (a) of Rule 9 C of the Rules.
A seniority list of all the promotees and the direct recruits shall be prepared on the above basis treating the promotees as full members of the Service with effect from the dates from which they are continuously officiating in the posts.
This direction shall be applicable only to officers who have been promoted till now.
This is the meaning of the direction given by the Court on February 1, 1984 which stated, 238 'we wish to make it clear that there is no question of any rotation system being applied under the Rules, as they exist now. ' All appointments shall be made hereafter in accordance with the Rules and the seniority of all officers to be appointed hereafter shall be governed by rule 9 C of the Rules.
We are informed that some of the promotees and direct recruits who are governed by this decision have been promoted to higher grades.
If as a result of the preparation of the seniority list in accordance with the decision and the review of the promotions made to higher grades any of them is likely to be reverted such officer shall not be reverted.
He shall be continued in the higher post which he is now holding by creating a supernumerary post, if necessary to accommodate him.
His further promotion shall however be given to him when it becomes due as per the new seniority list to be prepared pursuant to this decision.
There shall, however, be a review of all promotions made so far from Grade IV to higher posts in the light of the new seniority list.
If any officer is found entitled to be so promoted to a higher grade he shall be given such promotion when he would have been promoted in accordance with the new seniority list and he shall be given all consequential financial benefits flowing therefrom.
Such review of promotions shall be completed within three months and the consequential financial benefits shall be paid within three months thereafter.
In giving these directions we have followed more or less the directions given in P.S. Mahal & Ors.
V. Union of India & Ors.
(supra).
We direct that the above directions shall be complied with within the period indicated above.
The petition is accordingly disposed of.
| The Indian Economic Service Rules, 1961 and the Indian Statistical Service Rules, 1961 were notified on November 1, 1961.
These Services were constituted with effect from that date by encadering numerous posts carrying economic and statistical functions in various ministries of the Government of India.
Both the Services have Grade I, Grade II, Grade III and Grade IV posts and Officers of Grade I to Grade IV are classified as Class I Officers.
The authorised permanent strength of each of the Services is to be fixed by the Controlling Authority, constituted under Rule 6, in accordance with the Rules.
Under Rule 7, the Union Public Service Commission was required to constitute a Selection Committee to determine the suitability of departmental candidates for appointment to the different grades and to prepare an order of preference for each grade for the initial constitution of both the Services.
On receipt of the Committee ' 8 report, the Commission was required to forward its recommendations to the Government.
The departmental candidates who were not absorbed at the initial constitution of the Service were given the opportunity to apply for future vacancies.
Future maintenance of the two Services is governed by Rule 8. 212 After the initial constitution of the two Services was completed it was found that a number of posts carrying economic/statistical functions could not be considered for inclusion in the officers ' Grades.
Further as the process of formation of the two Services was prolonged for a number of years and the need for appointing more officers in various Departments during that long period also arose gradually, several posts carrying economic/statistical functions were created.
Although Rule 8 provided that not less than 75 per cent of the vacancies in Grade IV should be filled up by direct recruitment through an open competitive examination to be held be the Union Public Service Commission in the manner prescribed in Schedule II to the Rules and lt further provided that not more than 25 per cent posts of the vacancies in that Grade should be filled by selection from among officers serving in the offices under the Government in Economic/ Statistical posts recognized for that purpose by the Controlling Authority, no direct recruitment we resorted to till about the year 1968.
In the meanwhile, a large number of persons in the feeder posts were appointed to the posts in Grade IV from time to time from the year 1962 onwards although the orders promoting them stated that they had been promoted only temporarily.
Undisputedly, all those promotees have been holding those posts continuously till now without being reverted to the feeder posts from which they had been promoted.
Some have been retried from those posts.
Thus the prescribed quota of appointment from the two different sources was not maintained right from the commencement of the constitution of the Services.
After completion of the initial constitution of the two services under Rule 7, Rule 7A was added and subsequently amended.
Rule 7A made special provision regarding certain departmental candidates who were to be absorbed in the two Services.
Between the years 1964 to 1984 in all there were 435 vacancies for direct recruitment in the Indian Economic Service out of which only 342 posts were filled up by direct recruitment.
Out of 93 remaining unfilled posts most of them were held all along by persons promoted from the feeder posts.
In the Indian Statistical Service as against a total of 303 vacancies meant for direct recruits between the years 1964 to 1984 only 275 direct recruits were appointed.
The remaining 213 unfilled posts were held by the & departmental candidates.
It was alleged that many of the departmental candidates had been allowed to hold posts including Grade IV of the two Services purely on ad hoc and ex gratia basis.
Earlier certain persons holding posts in Grade IV of these two services had filed Writ Petition under Article 32 seeking direction/order to the Union of India to confirm and regularise the petitioners in the posts held by them as and from the dates when they had become due for confirmation or regularisation in accordance with the Indian Economic Services Rules 1961 or the Indian Statistical Service Rules 1961 and to consider them for all future promotions when due on the basis of such seniority.
This Court on February 1 1984 directed the Union of India to fill up, within four weeks, the vacancies available to the departmental candidates under Rule 8 (1)(a)(ii) with effect from the date from which the petitioners become entitled to be promoted on regular basis, that their seniority will be determined according to Rules and that rotation system will not apply under the existing Rules.
On May 1, 1984, after expiry of the extended time, the respondent Union of India filed two sets of seniority lists in respect of the two services, namely, (i) lists based on the principle of rotation, and (11) lists based on Rule 9C of the Rules.
Since the lists were to the disadvantage of the departmental prouotees, the Court while declining to endorse either of the two seniority lists directed the respondent Union to implement the order dated February l, 1984 on or before 30th November, 1984.
In the meanwhile the petitioners filed a petition for initiating contempt proceedings against the respondent Union of India which was resisted by the respondents Certain direct recruits also intervened and wanted to be heard before disposal of the contempt application.
Opportunity was given to all the parties to make their submissions.
Disposing of the petition, ^ HELD: 1.
Having regard to the facts of the case and the events that have followed the order passed by this Court on February 1, 1984, no action for contempt against the Union Government or any of its officers for not obeying the orders of this Court would be taken.
[221 B C] 214 2.
The Union Government is directed to treat all persons who have been promoted to several posts in Grade (n ) in Indian Economic Service and Indian Statistical Service contrary to the Rules till now as having been regularly appointed to those posts in Grade (IV) under Rule 8(1) (a) (ii) and assign them seniority in the cadre with effect from the dates from which they are continuously officiating in those posts.
Even those promotees who have been selected in 1970, 1982 and 1984, shall be assigned seniority with effect from the date on which they commenced to officiate continuously in the posts prior to their selection.
For purposes of seniority the dates of their selection shall be ignored.
The direct recruits shall be given seniority with effect from the date on which their names were recommended by the Commission for appointment to such grade or posts as provided in clause (a) of Rule 9 C. A seniority list of all promotees and direct recruits shall be prepared on the above basis treating the promotees as full members of the Service with effect from the dates from which they are continuously officiating in the posts.
This direction shall be applicable only to officers who have been promoted till now, which means that rotation system will not be applicable under the Rules, as they exist now.
All appointments shall be made hereafter in accordance with the Rules, and the seniority of all the officers to be appointed hereafter shall be governed by Rule 9 C. [237 D H: 238 A] 3.
If as a result of the preparation of the seniority list as aforesaid any officer is likely to be reverted, such officer shall not be reverted.
He shall be continued in the higher post which he is now holding by creating a supernumerary post to accommodate him.
Further promotion shall be given to him when it becomes due as per the new seniority list to be prepared.
There shall be a review of all the promotions made so far from Grade (IV) to higher posts in the light of the new seniority list.
[238 B D] P.S. Mahal & Ors.
vs Union of India & Ors.
; followed.
When an officer has worked for a long period for nearly 15 to 20 years in a post and had never been reverted it cannot be held that the officer 's continuous officiation 215 was a mere temporary or local or stop gap arrangement even though the order of appointment may state so.
In such circumstances the entire period of officiation has to be counted for seniority.
Any other view would be arbitrary and violative of Articles 14 and 16(1) because the temporary service in the post in question is not for a short period intended to meet some emergent or unforseen circumstances.
[236 C E] In the circumstances of the instant case, clause (b) of rule 9 C of the Rules which deals with the question of seniority of promotees becomes irrelevant as regards promotees who have been holding the posts from a long time.
[236 E] 5.
It is permissible for the Government to recruit persons from different sources to constitute a service.
It is also open to it to prescribe a quota for each source.
Rules of recruitment framed on the above lines are perfectly legitimate and quite consistent with Articles 14 and 16 of the Constitution.
When the Rules of recruitment prescribe recruitment from different sources in accordance with the specified quota the Government is bound to appoint persons to the Service concerned in accordance with the Rules.
me seniority of persons recruited from different sources will have to be regulated accordingly.
[230 C E] In the instant case, the Government had made violent departure from the Rules of recruitment by deliberately allowing those who were appointed contrary to Rules to hold the posts continuously over a period of long time.
[230 E F] 6.
The petitioners were not promoted by following the actual procedure prescribed under rule 8(1)(a)(ii) but the fact remains that they have been working in posts included in Grade IV from the date on which they were appointed to these posts.
The appointments are made in the name of the President by the competent authority.
They are being paid all along the salary and allowances payable to incumbents of such posts.
They have not been asked to go back to the posts from which they were promoted at any time since the dates of their appointment.
me orders of promotion issued in some cases show that they are promoted in the direct line of their promotion.
It was expressly admitted that the petitioners have been allowed to hold posts included in Grade IV of the said 216 Services, though on an ad hoc basis.
Therefore, it cannot be said that the petitioners are not holding the posts in Grade IV of the two Services.
Neither the Government has issued orders of reversion to their former posts nor has anybody so far questioned the right of the petitioners to continue in the posts which they are now holding.
It would be unjust to hold at this distance of time that the petitioners are not holding the posts in Grade IV.
However, it is not the case that whenever a person is appointed in a post without following the Rules prescribed for appointment to that post, he should be treated as a person regularly appointed to that post.
Such a person may be reverted from that post.
[231 B H; 232 A] In the instant case, where persons have been allowed to function in higher posts for 15 to 20 years with due deliberation it would be certainly unjust to hold that they have no sort of claim to such posts and could be reverted unceremoniously or treated as persons not belonging to the Service at all, particularly where the Government is endowed with the power to relax the Rules to avoid unjust results.
The Government has also not expressed its unwillingness to continue them in the said posts.
The other contesting respondents have also not urged that the petitioners should be sent out of the said posts.
There is no impediment even under the Rules to treat the petitioners and others who are similarly situated as persons duly appointed to the posts in Grade IV because of the enabling provision contained in Rule 16.
[232 B E] 7.
If there is enormous departure from the Rules of recruitment in making appointments over several years, it should be presumed that the excess appointment by promotion had been made in relaxation of the Rules when power to relax the Rules is available.
[233 C D] A.Janardhana vs Union of India & Ors.
[1983] 2 S.C.R. 936; O.P. Singla & Anr.
vs Union of India & Ors.
; ; G.S. Lamba & Ors.
vs Union of India & Ors.
; ; D.B. Nim, I.P.S. vs Union of India followed.
S.B. Patwardhan & Ors.
vs State of Maharastra 217 State of Bihar & Ors.
; ; Baleshwar Das Ors.
vs State of U.P. 7 Ors. etc.
[1981] 1 S.C.R. 449; P.S. Mahal & Ors.
vs Union of India & Ors.
[1984] 3 S.C.R. 847; Pran Krishna Goswami & Ors.
vs State of West Bengal Ors.
[1985] Supp.
S.C.C. 221; D.K. Mitra & Ors.
vs Union of India & Ors.
[1985] Supp.
S.C.C. 243 referred to.
Karam Pal Ors.
vs Union of India & Ors.
; distinguished.
|
: Special Leave Petition (Crl.) No. 2856 of 1979.
From the Judgment and Order dated 6 8 1979 of the Madhya Pradesh High Court in Crl.
Revision No. 392/76.
Sobhag Mal Jain and section K. Jain for the Petitioner.
C. section Chhazed, Miss Manisha Gupta and M. section Gupta for Respondents 1 5.
section K. Gambhir for the State.
The Order of the Court was delivered by KRISHNA IYER, J. `It is procedural rules ', as this appeal proves, `which infuse life into substantive rights, which activate them to make them effective '.
Here, before us, is what looks like a pedestrian quasi criminal litigation under section 133 Cr.
P.C., where the Ratlam Municipality the appellant challenges the sense and soundness of the High Court 's affirmation of the trial court 's order directing the construction of drainage facilities and the like, which has spiralled up to this Court.
The truth is that a few profound issues of processual jurisprudence of great strategic significance to our legal system face us and we must zero in on them as they involve problems of access to justice for the people beyond the blinkered rules of `standing ' of British Indian vintage.
If the centre of gravity of justice is to shift, as the Preamble to the Constitution mandates, from the traditional individualism of locus standi to the community orientation of public interest litigation, these issues must be considered.
In that sense, the case before us between the Ratlam Municipality and the citizens of 100 a ward, is a path finder in the field of people 's involvement in the justicing process, sans which as Prof. Sikes points out,(1) the system may `crumble under the burden of its own insensitivity '.
The key question we have to answer is whether by affirmative action a court can compel a statutory body to carry out its duty to the community by constructing sanitation facilities at great cost and on a time bound basis.
At issue is the coming of age of that branch of public law bearing on community actions and the court 's power to force public bodies under public duties to implement specific plans in response to public grievances.
The circumstances of the case are typical and overflow the particular municipality and the solutions to the key questions emerging from the matrix of facts are capable of universal application, especially in the Third World humanscape of silent subjection of groups of people to squalor and of callous public bodies habituated to deleterious inaction.
The Ratlam municipal town, like many Indian urban centres, is populous with human and sub human species, is punctuated with affluence and indigence in contrasting co existence, and keeps public sanitation a low priority item.
what with cesspools and filth menacing public health.
Ward No. 12, New Road, Ratlam town is an area where prosperity and poverty live as strange bedfellows.
The rich have bungalows and toilets, the poor live on pavements and litter the street with human excreta because they use roadsides as latrines in the absence of public facilities.
And the city fathers being too busy with other issues to bother about the human condition, cesspools and stinks, dirtied the place beyond endurance which made the well to do citizens protest, but the crying demand for basic sanitation and public drains fell on deaf ears.
Another contributory cause to the insufferable situation was the discharge from the Alcohol Plant of malodorous fluids into the public street.
In this lawless locale, mosquitoes found a stagnant stream of stench so hospitable to breeding and flourishing, with no municipal agent disturbing their stinging music at human expense.
The local denizens, driven by desperation, at long last, decided to use the law and call the bluff of the municipal body 's bovine indifference to its basic obligations under section 123 of the M. P. Municipalities Act, 1961 (the Act, for short).
That provision casts a mandate: 123.
Duties of Council. (1) In addition to the duties imposed upon it by or under this Act or any other enactment for the time being in force, it shall be the duty of a Council to 101 undertake and make reasonable and adequate provision for the following matters within the limits of the Municipality, namely: XX XX XX (b) cleansing public streets, places and sewers, and all places, not being private property, which are open to the enjoyment of the public whether such places are vested in the Council or not; removing noxious vegetation, and abating all public nuisances: (c) disposing of night soil and rubbish and preparation of compost manure from night soil and rubbish.
And yet the municipality was obvious to this obligation towards human well being and was directly guilty of breach of duty and public nuisance and active neglect.
The Sub Divisional Magistrate, Ratlam, was moved to take action under section 133 Cr.
P.C., to abate the nuisance by ordering the municipality to construct drain pipes with flow of water to wash the filth and stop the stench.
The Magistrate found the facts proved, made the direction sought and scared by the prospect of prosecution under section 188 I.P.C., for violation of the order under section 133 Cr.
P.C., the municipality rushed from court to court till, at last, years after, it reached this Court as the last refuge of lost causes.
Had the municipal council and its executive officers spent half this litigative zeal on cleaning up the street and constructing the drains by rousing the people 's sramdan resources and laying out the city 's limited financial resources, the people 's needs might have been largely met long ago.
But litigation with other 's funds is an intoxicant, while public service for common benefit is an inspiration; and, in a competition between the two, the former overpowers the latter.
Not where a militant people 's will takes over people 's welfare institutions, energises the common human numbers, canalises their community consciousness, forbids the offending factories from polluting the environment, forces the affluent to contribute wealth and the indigent their work and thus transforms the area into a healthy locality vibrant with popular participation and vigilance, not neglected ghettoes noisy with squabbles among the slimy slum dwellers nor with electoral 'sound and fury signifying nothing. ' The Magistrate, whose activist application of section 133 Cr.P.C., for the larger purpose of making the Ratlam municipal body to do its duty and abate the nuisance by affirmative action, has our appreciation.
He has summed up the concrete facts which may be usefully quoted in portions: "New Road, Ratlam, is a very important road and so many prosperous and educated persons are living on this Road.
On 102 the southern side of this Road some houses are situated and behind these houses and attached to the College boundary, the Municipality has constructed a road and this new Road touches the Government College and its boundary.
Just in between the said area a dirty Nala is flowing which is just in the middle of the main road i.e. New Road.
In this stream (nala) many a time dirty and filthy water of Alcohol Plant having chemical and obnoxious smell, is also released for which the people of that locality and general public have to face most obnoxious smell.
This Nala also produces filth which causes a bulk of mosquitoes breeding.
On this very southern side of the said road a few days back municipality has also constructed a drain but it has (?) constructed it completely but left the construction in between and in some of the parts the drain has not at all been constructed because of this the dirty water of half constructed drain and septic tank is flowing on the open land of applicants, where due to insanitation and due to non removing the obstructed earth the water is accumulated in the pits and it also creates dirt and bad smell and produces mosquitoes in large quantities.
This water also goes to nearby houses and causes harm to them.
For this very reason the applicants and the other people of that locality are unable to live and take rest in their respective houses.
This is also injurious to health".
There are more dimensions to the environmental pollution which the magistrate points out: "A large area of this locality is having slums where no facility of lavatories is supplied by the municipality.
Many such people live in these slums who relieve their lateral dirt on the bank of drain or on the adjacent land.
This way an open latrine is created by these people.
This creates heavy dirt and mosquitoes.
The drains constructed in other part of this Mohalla are also not proper it does not flow the water properly and it creates the water obnoxious.
The Malaria Department of the State of M.P. also pays no attention in this direction.
The non applicants have not managed the drains, Nallahs and Naliyan properly and due to incomplete construction the non applicants have left no outlet for the rainy water.
Owing to above reasons the water is accumulated on the main road, it passes through living houses, sometimes snakes and scorpions come out and this obstruct the people to pass through this road.
This also causes financial loss to the people of this area.
The road constructed by Nagarpalika is on a high level and due to this, this year more 103 water entered the houses of this locality and it caused this year more harm and loss to the houses also.
This way all works done by the non applicants i.e. construction of drain, canal and road come within the purview of public nuisance.
The non applicants have given no response to the difficulties of the applicants, and non applicants are careless in their duties towards the public, for which without any reason the applicants are facing the intolerable nuisance.
In this relation the people of this locality submitted their returns, notices and given their personal appearance also to the non applicants but the non applicants are shirking from their responsibilities and try to avoid their duty by showing other one responsible for the same, whereas all the non applicants are responsible for the public nuisance.
" Litigation is traumatic and so the local people asked first for municipal remedies failing which they moved for magisterial remedies: "At the last the applicants requested to remove all the nuisance stated in their main application and they also requested that under mentioned works must be done by the non applicants and for which suitable orders may be issued forthwith: 1.
The drains constructed by Municipality are mismanaged and incomplete, they should be managed and be completed and flow of water in the drains should be made so that the water may pass through the drain without obstruction.
The big pits and earthen drains which are situated near the College boundary and on the corners of the road where dirty water usually accumulates, they should be closed and the filth shall be removed therefrom.
The big 'Nala ' which is in between the road, should be managed and covered in this way that it must not create overflow in the rainy season.
The Malaria Department should be ordered to sprinkle D.D.T. and act in such a manner and use such means so that the mosquitoes may be eradicated completely from the said locality." The proceedings show the justness of the grievances and the indifference of the local body: "Both the parties heard.
The court was satisfied on the facts contained in their application dated 12 5 72 and granted conditional order against non applicants No. 1 and 2 u/s 133 of Cr.
P.C. (Old Code).
In this order all the nuisances were described (which were there in their main application) and the court directed to remove 104 all the nuisances within 15 days and if the non applicants have any objection or dissatisfaction against the order then they must file it on the next date of hearing in the court." XX XX XX "The applicants got examined the following witnesses in their evidence and after producing following documents they closed their evidence." XX XX XX "No evidence has been produced by the non applicants in spite of giving them so many opportunities.
Both the parties heard and I have also inspected the site." XX XX XX "The non applicant (Municipal Council) has sought six times to produce evidence but all in vain.
Likewise non applicant (Town Improvement Trust) has also produced no evidence.
" The Nallah comes into picture after the construction of road and bridge.
It has shown that Nallah is property of Nagarpalika according to Ex.p. 10.
Many applications were submitted to remove the nuisance but without result.
According to Sec.
32 to 43 of the Town Improvement Trust Act, it is shown, that it has only the provisions to make plans.
Many a time people tried to attract the attention of Municipal Council and the Town Improvement Trust but the non applicants always tried to throw the responsibility on one another shoulder.
XX XX XX It is submitted by non applicant (Municipality) that the said Nallah belongs to whom, it is still disputed i.e. whether it belongs to non applicant 1 or 2.
Shastri Colony is within the area of Town Improvement Trust.
The Nagarpalika (non applicant No. 1) is financially very weak.
But Municipal Council is not careless towards its duties.
Non applicant (Town Improvement Trust) argued that primary responsibility lies with the Municipal Council only.
There is no drainage system.
At the end of it all, the Court recorded: . . . after considering all the facts I come to this conclusion that the said dirty Nallah is in between the main road of Ratlam City.
This dirty Nallah affects the Mohalla of New 105 Road, Shastri Colony, Volga Talkies and it is just in the heart of the city.
This is the very important road and is between the Railway Station and the main city.
In these mohallas, cultured and educated people are living.
The Nallah which flows in between the New Road and Shastri Colony the water is not flowing rapidly and on many places there are deep pits in which the dirty water is accumulated.
The Nallah is also not straight that is also the reason of accumulation of dirty water.
The Nallah is not managed properly by the non applicants.
It is unable to gush the rainy water and due to this the adjoining areas always suffer from over flowing of the water and it causes the obstruction to the pedestrians.
XX XX XX It is also proved by the evidence given by the applicants that from time to time the Power Alcohol factory which is situated outside the premises of the Municipal Council and it flows its dirty and filthy water into the said Nallah, due to this also the obnoxious smell is spreading throughout the New Road or so it is the bounden duty of the Municipal Council and the Town Improvement Trust to do the needful in this respect.
XX XX XX The dirty water which flows from the lavatories and urinals of the residential houses have no outlet and due to this reason there are many pits on the southern side of the New Road and all the pits are full of dirty and stinking water.
So it is quite necessary to construct an outlet for the dirty water in the said locality.
In this area many a places have no drainage system and if there is any drain it has no proper flow and water never passes through the drain properly.
That causes the accumulation of water and by the time it becomes dirty and stink and then it produces mosquitoes there.
The Magistrate held in the end: Thus after perusing the evidence I come to this conclusion and after perusing the applications submitted by the persons residing on the New Road area from time to time to draw the attention of the non applicants to remove the nuisance, the non applicants have taken no steps whatsoever to remove all these public nuisances.
He issued the following order which was wrongly found unjustified by the Sessions Court, but rightly upheld by the High Court: 106 Therefore, for the health and convenience of the people residing in that particular area of all the nuisance must be removed and for that the following order is hereby passed: (1) The Town Improvement Trust with the help of Municipal Council must prepare a permanent plan to make the proper flow in the said Nallah which is flowing in between Shastri Colony and New Road.
Both the non applicants must prepare the plan within six months and they must take proper action to give it a concrete form.
(2) According to para 13 a few places are described which are either having the same drains and the other area is having no drain and due to this the water stinks there; so the Municipal Council and the Town Improvement Trust must construct the proper drainage system and within their own premises where there is no drain it must be constructed immediately and all this work should be completed within six months.
(3) The Municipal Council should construct drains from the jail to the bridge behind the southern side of the houses so that the water flowing from the septic tanks and the other water flowing outside the residential houses may be channellised and it may stop stinking and it should have a proper flow so that the water may go easily towards the main Nallah.
All these drains should be constructed completely within six months by the Municipal Council.
(4) The places where the pits are in existence the same should be covered with mud so that the water may not accumulate in those pits and it may not breed mosquitoes.
The Municipal Council must complete this work within two months.
A notice under Section 141 of the Criminal Procedure Code (Old Code) may be issued to the non applicants Nos. 1 and 2 so that all the works may be carried out within the stipulated period.
Case is hereby finalised.
Now that we have a hang of the case we may discuss the merits, legal and factual.
If the factual findings are good and we do not re evaluate them in the Supreme Court except in exceptional cases one wonders whether our municipal bodies are functional irrelevances, banes rather than booms and 'lawless ' by long neglect, not leaders of the people in local self government.
It may be a cynical obiter of pervasive veracity that municipal bodies minus the people and plus the bureaucrats are the bathetic vogue no better than when the British were here: 107 We proceed on the footing, as we indicated even when leave to appeal was sought, that the malignant facts of municipal callousness to public health and sanitation, held proved by the Magistrate, are true.
What are the legal pleas to absolve the municipality from the court 's directive under section 133 Cr.
P.C. ? That provision reads: section 133(1) whenever a District Magistrate or a Sub Divisional Magistrate or any other Executive Magistrate specially empowered in this behalf by the State Government, on receiving the report of a police officer or other information and on taking such evidence (if any) as he thinks fit, considers (a) that any unlawful obstruction or nuisance should be removed from any public place or from any way, river or channel which is or may be lawfully used by the public; XX XX XX such Magistrate may make a conditional order requiring the person causing such obstruction or nuisance, or carrying on such trade or occupation, or keeping any such goods or merchandise, or owning, possessing or controlling such building, tent, structure, substance, tank, well or excavation or owning or possessing such animal or tree, within a time to be fixed in the order (i) to remove such obstruction or nuisance; or XX XX XX (iii) to prevent or stop the construction of such building, or to alter the disposal of such substance; or if he objects so to do, to appear before himself or some other Executive Magistrate subordinate to him at a time and place to be fixed by the order, and show cause, in the manner hereinafter provided.
why the order should not be made absolute.
So the guns of section 133 go into action wherever there is public nuisance.
The public power of the Magistrate under the Code is a public duty to the members of the public who are victims of the nuisance, and so he shall exercise it when the jurisdictional facts are present as here.
"All power is a trust that we are accountable for its exercise that, from the people, and for the people, all springs, and all must exist.
"(i) Discretion becomes a duty when the beneficiary brings home the circumstances for its benign exercise.
If the order is defied or ignored, section 188 I.P.C. comes into penal play: 108 188.
Whoever, knowing that, by an order promulgated by a public servant lawfully empowered to promulgate such order, he is directed to obtain from a certain act, or to take certain order with certain property in his possession or under his management, disobeys such direction and if such disobedience causes or tends to cause danger to human life health or safety, or causes or tends to cause a riot or affray, shall be punished with imprisonment of either description for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.
There is no difficulty in locating who has the obligation to abate the public nuisance caused by absence of primary sanitary facilities.
Section 123, which is mandatory, (we repeat), reads: 123.
Duties of Council : (1) In addition to the duties imposed upon it by or under this Act or any other enactment for the time being in force, it shall be the duty of a Council to undertake and make reasonable and adequate provision for the following matters within the limits of the Municipality, namely: (a). . . (b) cleansing public streets, places and sewers, and all places not being private property, which are open to the enjoyment of the public whether such places are vested in the Council or not; removing noxious vegetation, and abating all public nuisances; (c) disposing of night soil and rubbish and preparation of compost manure from night soil and rubbish.
The statutory setting being thus plain, the municipality cannot extricate itself from its responsibility.
Its plea is not that the facts are wrong but that the law is not right because the municipal funds being insufficient it cannot carry out the duties under section 123 of the Act.
This 'alibi ' made us issue notice to the State which is now represented by counsel, Shri Gambhir, before us.
The plea of the municipality that notwithstanding the public nuisance financial inability validly exonerates it from statutory liability has no juridical basis.
The Criminal Procedure Code operates against statutory bodies and others regardless of the cash in their coffers, even as human rights under Part III of the Constitution have to be respected by the State regardless of budgetary provision.
Likewise, section 123 of the Act has no saving clause when the municipal council is penniless.
Otherwise, a profligate 109 statutory body or pachydermic governmental agency may legally defy duties under the law by urging in self defence a self created bankruptcy or perverted expenditure budget.
That cannot be.
Section 133 Cr.
P.C. is categoric, although reads discretionary.
Judicial discretion when facts for its exercise are present, has a mandatory import.
Therefore, when the sub Divisional Magistrate, Ratlam, has, before him, information and evidence, which disclose the existence of a public nuisance and, on the materials placed, he considers that such unlawful obstruction or nuisance should be removed from any public place which may be lawfully used by the public, he shall act.
Thus, his judicial power shall, passing through the procedural barrel, fire upon the obstruction or nuisance, triggered by the jurisdictional facts.
The Magistrate 's responsibility under section 133 Cr.
P.C. is to order removal of such nuisance within a time to be fixed in the order.
This is a public duty implicit in the public power to be exercised on behalf of the public and pursuant to a public proceeding.
Failure to comply with the direction will be visited with a punishment contemplated by section 188 I.P.C. Therefore, the Municipal Commissioner or other executive authority bound by the order under section 133 Cr.
P.C. shall obey the direction because disobedience, if it causes obstruction or annoyance or injury to any persons lawfully pursuing their employment, shall be punished with simple imprisonment or fine as prescribed in the Section.
The offence is aggravated if the disobedience tends to cause danger to human health or safety.
The imperative tone of section 133 Cr.
P.C. read with the punitive temper of section 188 I.P.C. make the prohibitory act a mandatory duty.
Although these two Codes are of ancient vintage, the new social justice orientation imparted to them by the Constitution of India makes it a remedial weapon of versatile use.
Social justice is due to the people and, therefore, the people must be able to trigger off the jurisdiction vested for their benefit in any public functionary like a Magistrate under section 133 Cr.
In the exercise of such power, the judiciary must be informed by the broader principle of access to justice necessitated by the conditions of developing countries and obligated by article 38 of the Constitution.
This brings Indian public law, in its processual branch, in line with the statement of Prof. Kojima :(1) "the urgent need is to focus on the ordinary man one might say the little man. " "Access to Justice" by Cappelletti and B. Garth summarises the new change thus:(2) 110 "The recognition of this urgent need reflects a fundamental change in the concept of "procedural justice".
The new attitude to procedural justice reflects what Professor Adolf Homburger has called "a radical change in the hierarchy of values served by civil procedure"; the paramount concern is increasingly with "social justice," i.e., with finding procedures which are conducive to the pursuit and protection of the rights of ordinary people.
While the implications of this change are dramatic for instance, insofar as the role of the adjudicator is concerned it is worth emphasizing at the outset that the core values of the more traditional procedural justice must be retained.
"Access to justice" must encompass both forms of procedural justice." Public nuisance, because of pollutants being discharged by big factories to the detriment of the poorer sections, is a challenge to the social justice component of the rule of law.
Likewise, the grievous failure of local authorities to provide the basic amenity of public conveniences drives the miserable slum dwellers to ease in the streets, on the sly for a time, and openly thereafter, because under Nature 's pressure, bashfulness becomes a luxury and dignity a difficult article A responsible municipal council constituted for the precise purpose of preserving public health and providing better finances cannot run away from its principal duty by pleading financial inability.
Decency and dignity are non negotiable facets of human rights and are a first charge on local self governing bodies.
Similarly, providing drainage systems not pompous and attractive, but in working condition and sufficient to meet the needs of the people cannot be evaded if the municipality is to justify its existence.
A bare study of the statutory provisions makes this position clear.
In this view, the Magistrate 's approach appears to be impeccable although in places he seems to have been influenced by the fact that "cultured and educated people" live in this area and "New Road, Ratlam" is a very important road and so many prosperous and educated persons are living on this road.
In India 'one man, one value ' is the democracy of remedies and rich or poor the law will call to order where people 's rights are violated.
What should also have been emphasised was the neglect of the Malaria Department of the State of Madhya Pradesh to eliminate mosquitoes, especially with open drains, heaps of dirt, public excretion by humans for want of lavatories and slums nearby, had created an intolerable situation for habitation.
An order to abate the nuisance by taking affirmative action on a time bound basis is justified in the circumstances.
The nature of the judicial process is not purely adjudicatory nor is it functionally that of an umpire only.
111 Affirmative action to make the remedy effective is of the essence of the right which otherwise becomes sterile.
Therefore, the court, armed with the provisions of the two Codes and justified by the obligation under section 123 of the Act, must adventure into positive directions as it has done in the present case.
Section 133 Cr.
P.C. authorises the prescription of a time limit for carrying out the order.
The same provision spells out the power to give specific directives.
We see no reason to disagree with the order of the Magistrate.
The High Court has taken a correct view and followed the observations of this Court in Govind Singh vs Shanti Sarup(1) where it has been observed: "We are of the opinion that in a matter of this nature where what is involved is not merely the right of a private individual but the health, safety and convenience of the public at large, the safer course would be to accept the view of the learned Magistrate, who saw for himself the hazard resulting from the working of the bakery.
" We agree with the High Court in rejecting the plea that the time specified in the order is unworkable.
The learned judges have rightly said.
"It is unfortunate that such contentions are raised in 1979 when these proceedings have been pending since 1972.
If in seven year 's time the Municipal Council intended to remedy such a small matter there would have been no difficulty at all.
Apart from it, so far as the directions are concerned, the learned Magistrate, it appears, was reasonable.
So far as direction No. 1 is concerned, the learned Magistrate only expected the Municipal Council and the Town Improvement Trust to evolve a plan and to start planning about it within six months: the learned Magistrate has rightly not fixed the time limit within which that plan will be completed.
Nothing more reasonable could be said about direction No. 1.
" A strange plea was put forward by the Municipal Council before the High Court which was justly repelled, viz., that the owners of houses had gone to that locality on their own choice with eyes open and, therefore, could not complain if human excreta was flowing, dirt was stinking, mosquitoes were multiplying and health was held hostage.
A public body constituted for the principal statutory duty of ensuring sanitation and health cannot outrage the court by such an ugly plea.
112 Luckily, no such contention was advanced before us.
The request for further time for implementation of the Magistrate 's order was turned down by the High Court since no specific time limit was accepted by the municipality for fulfillment of the directions.
A doleful statement about the financial difficulties of the municipality and the assurance that construction of drains would be taken up as soon as possible had no meaning.
The High Court observed: "Such assurances, it appears, are of no avail as unfortunately these proceedings for petty little things like clearing of dirty water, closing the pits and repairing of drains have taken more than seven years and if these seven years are not sufficient to do the needful, one could understand that by granting some more time it could not be done." The High Court was also right in rejecting the Additional Sessions Judge 's recommendation to quash the Magistrate 's order on the impression that section 133 Cr.
P.C. did not provide for enforcement of civic rights.
Wherever there is a public nuisance, the presence of section 133 Cr.
P.C. must be felt and any contrary opinion is contrary to the law.
In short, we have no hesitation in upholding the High Court 's view of the law and affirmation of the Magistrate 's order.
Before us the major endeavour of the municipal council was to persuade us to be pragmatic and not to force impracticable orders on it since it had no wherewithal to execute the order.
Of course, we agree that law is realistic and not idealistic and what cannot be performed under given circumstances cannot be prescribed as a norm to be carried out.
From that angle it may well be that while upholding the order of the Magistrate, we may be inclined to tailor the direction to make it workable.
But first things first and we cannot consent to a value judgment where people 's health is a low priority.
Nevertheless, we are willing to revise the order into a workable formula the implementation of which would be watch dogged by the court.
Three proposals have been put forward before us in regard to the estimated cost of the scheme as directed by the Magistrate.
The Magistrate had not adverted to the actual cost of the scheme nor the reasonable time that would be taken to execute it.
As stated earlier it is necessary to ascertain how far the scheme is feasible and how heavy the cost is likely to be.
The Court must go further to frame a scheme and then fix time limits and even oversee the actual execution of the scheme in compliance with the court 's order.
Three schemes placed before us, together with tentative estimates of the costs, have been looked into by us.
Judges are laymen and cannot put on expert airs.
That was why we allowed the municipality 113 and the respondents to produce before us schemes prepared by expert engineers so that we may modify the directions issued by the Magistrate suitably.
Scheme 'A ' is stated to cost an estimated amount of Rs. 1.016 crores.
The State Government has revised this proposal and brought down the cost.
In our view, what is important is to see that the worst aspects of the insanitary conditions are eliminated, not that a showy scheme beyond the means of the municipality must be undertaken and half done.
From that angle we approve scheme 'C ' which costs only around Rs. 6 lakhs.
We fix a time limit of one year for completing execution of the work according to that scheme.
We further direct that the work shall be begun within two months from to day and the Magistrate shall inspect the progress of the work every three months broadly to be satisfied that the order is being implemented bona fide.
Breaches will be visited with the penalty of section 188 I.P.C. We make the further supplementary directions which we specifically enjoin upon the municipal authority and the State Government to carry out.
We direct the Ratlam Municipal Council (R1) to take immediate action, within its statutory powers, to stop the effluents from the Alcohol Plant flowing into the street.
The State Government also shall take action to stop the pollution.
The Sub Divisional Magistrate will also use his power under section 133 I.P.C., to abate the nuisance so caused.
Industries cannot make profit at the expense of public health.
Why has the Magistrate not pursued this aspect ? 2.
The Municipal Council shall, within six months from to day, construct a sufficient number of public latrines for use by men and women separately, provide water supply and scavenging service morning and evening so as to ensure sanitation.
The Health Officer of the Municipality will furnish a report, at the end of the six monthly term, that the work has been completed.
We need hardly say that the local people will be trained in using and keeping these toilets in clean condition.
Conscious cooperation of the consumers is too important to be neglected by representative bodies.
The State Government will give special instructions to the Malaria Eradication Wing to stop mosquito breeding in Ward 12.
The Sub Divisional Magistrate will issue directions to the officer concerned to file a report before him to the effect that the work has been done in reasonable time.
The municipality will not merely construct the drains but also fill up cesspools and other pits of filth and use its sanitary 114 staff to keep the place free from accumulations of filth.
After all, what it lays out on prophylactic sanitation is a gain on its hospital budget.
We have no hesitation in holding that if these directions are not complied with the Sub Divisional Magistrate will prosecute the officers responsible.
Indeed, this court will also consider action to punish for contempt in case of report by the Sub Divisional Magistrate of willful breach by any officer.
We are sure that the State Government will make available by way of loans or grants sufficient financial aid to the Ratlam Municipality to enable it to fulfil its obligations under this order.
The State will realise that article 47 makes it a paramount principle of governance that steps are taken 'for the improvement of public health as amongst its primary duties '.
The municipality also will slim its budget on low priority items and elitist projects to use the savings on sanitation and public health.
It is not our intention that the ward which has woken up to its rights alone need be afforded these elementary facilities.
We expect all the wards to be benefited without litigation.
The pressure of the judicial process, expensive and dilatory, is neither necessary nor desirable if responsible bodies are responsive to duties.
Cappelletti holds good for India when he observes :(1) "Our judicial system has been aptly described as follows: Admirable though it may be, (it) is at once slow and costly.
It is a finished product of great beauty, but entails an immense sacrifice of time, money and talent.
This "beautiful" system is frequently a luxury; it tends to give a high quality of justice only when, for one reason or another, parties can surmount the substantial barriers which it erects to most people and to many types of claims.
" Why drive common people to public interest action ? Where Directive Principles have found statutory expression in Do 's and Dont 's the court will not sit idly by and allow municipal government to become a statutory mockery.
The law will relentlessly be enforced and the plea of poor finance will be poor alibi when people in misery cry for justice.
The dynamics of the judicial process has a new 'enforcement ' dimension not merely through some of the provisions of the Criminal Procedure Code (as here), but also through activated tort consciousness.
The officers in charge and even the elected representatives will have 115 to face the penalty of the law if what the Constitution and follow up legislation direct them to do are defied or denied wrongfully.
The wages of violation is punishment, corporate and personal.
We dismiss this petition subject to the earlier mentioned modifications.
N.V.K. Petition dismissed.
| The residents (respondents) of a prominent residential locality of the Municipality (petitioner) in their complaint under section 133 Criminal Procedure Code to the Sub Divisional Magistrate averred that the Municipality had failed despite several pleas, to meet its basic obligations, like provision of sanitary facilities on the roads, public conveniences for slum dwellers who were using the road for that purpose, and prevention of the discharge from the nearby Alcohol Plant of maladorous fluids into the public street, and that the Municipality was oblivious to the statutory obligation envisaged in section 123 M. P. Municipalities Act, 1961 The Municipal Council contested the petition on the ground that the owners of houses had gone to that locality on their own choice, fully aware of the insanitary conditions and therefore they could not complain.
It also pleaded financial difficulties in the construction of drains and provision of amenities.
The Magistrate found the facts proved, and ordered the municipality to provide the amenities and to abate the nuisance by constructing drain pipes with flow of water to wash the filth and stop the stench and that failure would entail prosecution under section 188 I.P.C.
The order of the Magistrate was found unjustified by the Sessions Court, but upheld by the High Court.
In the Special Leave Petition by the Municipality to this Court on the question whether a Court can by affirmative action compel a statutory body to carry out its duty to the community by constructing sanitation facilities at great cost and on a time bound basis.
^ HELD : 1.
Wherever there is a public nuisance, the presence of section 133 Criminal Procedure Code must be felt and any contrary opinion is contrary to the law.
[112D] 2.
The public power of the Magistrate under the Code is a public duty to the members of the public who are victims of the nuisance and so he shall exercise, it when the jurisdictional facts are present.
[107G] 98 3.
The Magistrate 's responsibility under section 133 Cr.
P.C. is to order removal of such nuisance within a time to be fixed in the order.
This is a public duty implicit in the public power to be exercised on behalf of the public and pursuant to a public proceeding.
Failure to comply with the direction will be visited with a punishment contemplated by section 188 I.P.C. [109C D] 4.
The Municipal Commissioner or other executive authority bound by the order under section 133 Criminal Procedure Code shall obey the direction because disobedience, if causes obstruction or annoyance or injury to any persons lawfully pursuing their employment, shall be punished with simple imprisonment or fine as prescribed in the section.
The offence is aggravated if the disobedience tends to cause danger to human health or safety.
[109E] 5.
Public nuisance, because of pollutants being discharged by big factories to the detriment of the poorer sections, is a challenge to the social justice component of the rule of law.
[110C] 6.
The imperative tone of section 133 Criminal Procedure Code read with the punitive temper of section 188 I.P.C. make the prohibitory act a mandatory duty.
[109E] 7.
The Criminal Procedure Code operates against statutory bodies and others regardless of the cash in their coffers, even as human rights under Part III of the Constitution have to be respected by the State regardless of budgetary provision.
[108H] 8.
Section 123 M. P. Municipalities Act 1961 has no saving clause when the municipal council is penniless.
[108H] 9.
Although the Cr.
P.C. and I.P.C. are of ancient vintage the new social justice orientation imparted to them by the Constitution of India makes them a remedial weapon of versatile use.
Social Justice is due to the people and, therefore, the people must be able to trigger off the jurisdiction vested for their benefit in any public functionary like a Magistrate under section 133 Criminal Procedure Code.
In the exercise of such power, the judiciary must be informed by the broader principle of access to justice necessitated by the conditions of developing countries and obligated by article 38 of the Constitution.
[109F G] 10.
A responsible municipal council constituted for the precise purpose of preserving public health and providing better finances cannot run away from its principal duty by pleading financial inability.
Decency and dignity are non negotiable facets of human rights and are a first charge on local self governing bodies.
Similarly, providing drainage systems not pompous and attractive, but in working condition and sufficient to meet the needs of the people cannot be evaded if the municipality is to justify its existence.
[110E] 11.
The Court, armed with the provisions of the two Codes and justified by the obligation under section 123 of the Act, must adventure into positive directions as it has done in the present case.
Section 133 Criminal Procedure Code authorises the prescription of a time limit for carrying out the order.
The same provision spells out the power to give specific directives.
[111A B] Govind Singh vs Shanti Sarup, ; , 279 referred to.
The state will realise that article 47 makes it a paramount principle of governance that steps are taken for the improvement of public health as amongst its primary duties.
The municipality also will slim its budget on 99 low priority items and elitist projects to use the savings on sanitation and public health.
[114C] 13.
Where Directive Principles have found statutory expression in Do 's and Don 'ts the court will not sit idly by and allow municipal government to become a statutory mockery.
The law will relentlessly be enforced and the plea of poor finance will be poor alibi when people in misery cry for justice.
The dynamics of the judicial process have a new `enforcement ' dimension not merely through some of the provisions of the Criminal Procedure Code (as here) but also through activated tort consciousness.
The officers in charge and even the elected representatives will have to face the penalty of the law if what the Constitution and follow up legislation direct them to do are defied or denied wrongfully.
The wages of violation is punishment, corporate and personal.
[114G 115A] [The Court approved a scheme of construction work to be undertaken by the Municipality for the elimination of the insanitary conditions and directed that the work be commenced within two months and that the Magistrate inspect the progress of the work every three months and see that it is implemented.
[113 D 114 B]
|
Appeal No. 328 of 1959.
Appeal by special leave from the judgment and order dated 23rd February, 1956, of the Bombay High Court in Income tax Reference No. 34 of 1955.
K. N. Rajagopala Ayyangar and D. Gupta, for the appellant.
Rameshwar Nath, section N. Andley, J. B. Dadachanji and P. L. Vohra, for the respondent.
December 1.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
The Commissioner of Incometax has filed this appeal, with special leave, against the judgment and order of the High Court of Bombay, by which the High Court answered two questions referred to it in favour of the respondents, Messrs. Dwarkadas Khetan & Co., Bombay.
These questions were: "(1) Whether the instrument of partnership dated 27 3 1946 created a deed of partnership? (2).
If the answer to question No. 1 is in the affirmative, whether the fact that on 1 1 1946 there was no firm in existence would be fatal to the application for registration of the firm under Section 26A of the Indian Income tax Act or whether the firm could be registered with effect from 26 3 1946 if it is held that the firm was genuine?" Prior to January 1, 1945, there was a firm called Dwarkadas Khetan & Co. On that date, the firm ceased to exist, because the other partners had previously withdrawn, and it came to be the sole proprietary concern of Dwarkadas Khetan.
On February 12, 1946, Dwarkadas Khetan obtained the selling agency of Seksaria Cotton Mills, Ltd. On March 27, 1946, he entered into a partnership, with three others 823 by an instrument of partnership executed that day.
Those three others were Viswanath Purumul, Govindram Khetan and Kantilal Kasherdeo.
Dwarkadas Khetan 's share in the partnership was 7 annas in the rupee, while the remaining 9 annas ' share was divided equally among the three others.
Though Kantilal Kasherdeo was a minor, he was admitted as a full partner and not merely to the benefits of the partner ship, as required by section 30 of the Indian Partnership Act.
To the instrument of partnership, Kantilal Kasherdeo was also a signatory, though immediately after his signature there was the signature of one Kasherdeo Rungta, the natural guardian of the minor.
In the instrument, Kantilal Kasherdeo was described as a full partner entitled not only to a share in the profits but also liable to bear all the losses including loss of capital.
It was also provided that all the four partners were to attend to the business, and if consent was needed, all the partners including the minor had to give their consent in writing.
The minor was also entitled to manage the affairs of the firm, including inspection of the account books, and was given the right to vote, if a decision on votes had to be taken.
In short, no distinction was made between the adult partners and the minor, and to all intents and purposes, the minor was a full partner, even though under the partnership law he could only be admitted to the benefits of the partnership and not as a partner.
The deed of partnership was produced before the Registrar of Firms showing the names of the four partner,%.
The Registrar of Firms granted a registration certificate, and in the certificate, Kantilal Kasherdeo was shown as a full partner and not as one entitled merely to the benefits of the,, partnership.
Banks were also informed about the four partners, and.
it does not appear that to them intimation was sent that one of the named partners was a minor.
Though the partnership came into existence on March 27, 1946, the firm was stated to have started retrospectively from January 1, 1946.
It may be pointed out that the firm has the calendar year as its account year, and the matter before us refers to the account year, 1946 corresponding to the assessment year, 1947 48. 824 For purposes of that year, registration of the firm was sought under section 26A of the Indian Income tax Act.
The Income tax Officer refused to accord registration on the ground that a minor had been admitted as a partner contrary to law, and that the deed could not, therefore, be registered.
The appeal to the Appellate Assistant Commissioner also failed, the Commissioner holding that registration could only be of a legal or valid document and not of a document which was invalid in law.
An appeal was then taken to the Tribunal, and it was contended that the document must be construed as showing only that the minor was admitted not as a full partner but to the benefits of the partnership.
The Accountant Member hold that the order of the Appellate Assistant Commissioner was correct, giving two reasons.
The first was that the construction sought to be placed upon the document was not open, and the second, that since retrospective operation was given to the firm even though no firm existed from January 1, 1946, registration could not be granted.
The Judicial Member differed from the Accountant Member, holding, as was contended, that the document must be construed as showing merely that the minor had been admitted to the benefits of the partnership.
The appeal was then placed before the President, who agreed with the conclusion of the Accountant Member, with the result that the refusal to register the firm under section 26A by the authorities was upheld.
Two questions were then posed for the decision of the High Court.
The High Court differed from the Tribunal, and answered both the questions in favour of the assessee.
In so far as the second question is concerned, the matter is now settled by the decision of this Court in B. C. Mitter & Sons vs Commissioner of Income tax (1).
But, in our opinion, the decision of the High Court on the first question was not correct, and the correct answer does not leave the second quest ion open at all.
There is a distinct cleavage of opinion among the High Courts on this point.
The Bombay, Madras and (1) 825 Patna High Courts have held that where a minor is admitted as a full partner by adult partners, the document can be registered after interpreting it to mean that the minor has been admitted to the benefits of partnership and not as a full partner.
The Calcutta, Allahabad and Punjab High Courts have taken a contrary view.
The Bombay case is the one which is under appeal, and the Patna High Court followed that decision and the two earlier decisions of the Madras High Court.
The Madras High Court decisions are of the same Divisional Bench, and were pronounced on the same day.
The leading case in support of the respondents is the Madras decision reported in Jakka Devayya and Sons vs Commissioner of Income tax (1), and that case alone needs to be considered, because all the reasons on which the cases on this side have proceeded are given there.
In that case, there were three partners, one of whom was a minor.
They formed a Hindu undivided family; later, a deed of partnership was executed in which the minor was represented by his father in law.
It was held that the fact that the minor was included as a partner did not make the partnership as between the two adult partners invalid, and that the minor must be deemed to have been admitted to the benefits of the partnership by the two adults.
The learned Judges referred to the provision of section 2 (6 B) of the Income tax Act, where it is provided: " "Partner" includes any person who being a minor has been admitted to the benefits of partnership;", and observed that in view of this definition and the fact that a minor could be admitted to the benefits of partnership under section 30, the document was not invalid, but must be read as giving to the minor the rights laid down by the Partnership Act.
They also observed that too rigid a construction need not be put upon the deed, and referred to Lindley on Partnership, 11th Edn., p. 87 and A. Khorasany vs C. Acha and Others (2).
The other cases which we need not examine are Vincent and Others vs Commissioner of (1) (2) Ran.
826 Income tax and Sahai Brothers vs Commissioner of Income tax On the other hand, there is a decision of the Calcutta High Court reported in Hoosen Kassam Dada vs Commissioner of Income tax, Bengal (3), in which Costello and Panckridge, JJ. have held that under section 26A of the Income tax Act and the Rules, the Income tax Officer is only.
empowered to register a partnership which is specified in the instrument of partnership and of which registration is asked for.
The learned Judges, therefore, hold that it is not open to the Department to 'register partnership different from that which is formed by the instrument.
In Hardutt Ray Gajadhar Ram vs Commissioner of Income tax(4) Malik, C. J. and Seth, J. hold that where a minor is admitted as a full partner with equal rights and obligations with adults, the deed is invalid.
It is pointed out that the English law on the subject is different.
In that case, however, there was one other ground for invalidating the deed, because the minor had been adopted into another family and his natural father who had signed as his guardian in the deed could not do so, as he had ceased to be the natural guardian.
The decision, however, supports the case of the Commissioner.
In Banka Mal Lajja Ram & Co. vs Commissioner of Income tax (5), it is held that a minor cannot be a partner, and that the partnership which admits a minor as full partner cannot be registered.
It is true that in that case the High Court did not consider the question whether the partnership should have. been taken to be a valid partnership consisting of the adult partners, because no such question was referred.
The decision, however, is against a claim for registration of such a document.
In our opinion, the Calcutta vie ' is preferable to the view taken by the Madras High Court.
The error in the Madras view is in using the definition to show that a deed including a minor as a competent partner (1)[1952] (3)[1937] (2)[1950] (4)[1950] (5)[1953] 827 is valid.
What the definition does is to apply to a minor admitted to the benefits of partnership all the 2 provisions of the Income tax Act applicable to partners.
The definition cannot be read to mean that in every case where a minor has, contrary to law, been admitted as a full partner, the deed is to be regarded as valid, because, under the law, a minor can be admitted to the benefits of partnership.
The Rules which have been framed under section 26A quite clearly show that a minor who is admitted to the benefits of partnership need not sign the application for registration.
The law requires all partners to sign the application, and if the definition were to be carried to the extreme, even a minor who is admitted to the benefits of partnership would be competent to sign such an application.
The definition is designed to confer equal benefits upon the minor by treating him as a partner; but it does not render a minor a competent and full partner.
For that purpose, the law of Partnership must be considered, apart from the definition in the Income tax Act.
Section 30 of the Indian Partnership Act clearly lays down that a minor cannot become a partner, though with the consent of the adult partners, he may be admitted to the benefits of partnership.
Any document which goes beyond this section cannot be regarded as valid for the purpose of registration.
Registration can only be granted of a document between persons who are parties to it and on the covenants set out in it.
If the Income tax Authorities register the partnership as between the adults only contrary to the terms of the document, in substance a new contract is made out.
It is not open to the Income tax authorities to register a document which is different from the one actually executed and asked to be registered.
In our opinion, the Madras view cannot be accepted.
The judgment under appeal has followed the Madras view, and, in our opinion, it falls into the same error in which the Madras High Court had fallen earlier.
The answer to the first question should, therefore, have been in favour ;of the Department.
The answer given by the High Court is vacated, and 828 the question will now be answered in the negative.
As already stated, there is no need to answer the second question, which does not arise.
The appeal is allowed with costs here and in the High Court.
Appeal allowed.
| The appellants, a Hindu undivided family, carrying on business in the former State of Mysore, were assessed under the Mysore Income tax Act for the year of assessment 1949 50 corresponding to the year of account July 1, 1948, to June 30, 1949.
The Indian Income tax Act came into force in that area in April 1, 1950, and on December 26, 1950, notice under section 22(2) of that Act was served upon the appellants to submit their return for the assessment year 1950 51.
On September 8, 1952, the appellants submitted their return stating that they had no assessable income for that year.
The Income Tax Officer passed on that return an order, "no proceeding", and closed the assessment.
When the appellants submitted their return for the next assessment year, their books of account disclosed an opening cash credit balance of Rs. 1,87,000 and odd on July 1. 1949.
They failed to produce the books of account of the previous years, and the Income tax Officer held that Rs. 1,37,000 out of the said opening balance represented income from an undisclosed source.
The appellants submitted a fresh return for the assessment year 1950 51 purporting to do so under section 22(3) of the Indian Incometax Act.
Pursuant to the direction of the Appellate Assistant Commissioner, the Income Tax Officer on October 15, 1957, served on the appellants a notice under section 34 of the Act and thereupon the appellants moved the High Court under article 226 for an order quashing the said notice and the proceeding as without jurisdiction.
The High Court dismissed the petition.
Held, that it was not correct to say that the issue of the notice for reassessment was without jurisdiction as the assessment was yet pending.
Under section 23(1) of the Indian Income tax Act, it is open to the Income tax Officer, if he is satisfied as to correctness of the return filed by the assessee, to assess the income and determine the sum payable on the basis of the return without requiring the assessee either to be present or to Produce evidence.
The order 'no proceeding recorded on the.
return must, therefore, mean that the Income Tax Officer bad accepted the previous return and assessed the income as nil.
A revised return under section 22(3) filed by the assessee may be 912 entertained only before the order of assessment and not thereafter.
Lodging of such a return after the assessment is no bar to reassessment under section 34(1) of the Act.
It could not be said, having regard to the provisions of section 13(1) of the Finance Act (XXV of 1950) and cl.
5(1) of Part.
B States (Taxation Concessions) Order 1950, issued by the Central Government under section 60A of the Indian Income tax Act, that for the assessment year 1950 51 the appellants were assessable under the Mysore Income tax Act and not under the Indian Income tax Act.
|
Appeal No. 205 of 1953.
Appeal from the Judgment and Order dated the 24th February, 1953, of the High Court of Judicature at Calcutta in Appeal from Original Order No. 19 of 1952, arising out of the Order dated the 23rd day of August, 1951, of the High Court of Calcutta in its Ordinary Original Civil Jurisdiction Matter No. 157 of 1951.
K. P. Khaitan, (section N. Mukherjea and Rajinder Narain, with him) for the appellant.
M. C. Setalvad, Attorney General for India, (A. N. Sen, V. section Sawhney and section P. Varma, with him) for the respondents.
November 1.
The Judgment of the Court was delivered by MUKHERJEA J.
This appeal is directed against a judgment of an appellate bench of the Calcutta High Court, dated the 24th February, 1953, reversing, on appeal, the judgment and order of a single Judge sitting on the Original Side of that Court, passed on an application under section 34 of the .
The material facts are not in controversy and may be shortly stated as follows: On the 7th of July, 1950, the respondent, Moran and Company Limited, passed two Bought Notes to the appellant company, couched in identical terms, under which the appellant purchased 12,00,000 yards of hessian cloth, 6,00,000 yards under each contract, on certain terms and conditions stated therein.
The delivery was to be made every month from January, 1951, at the rate of 1,00,000 yards per month under 864 each of these notes and payments were to be made in cash 'on delivery, each delivery being treated as a separate and distinct contract.
The Bought Notes commenced thus: Dear Sirs, We have this day Bought by your order and on your account from our Principals.
" The particulars of the goods, the price, the time of delivery and other terms of the contract are then set out and amongst the terms is an arbitration clause worded as follows: " All matters, questions, disputes, differences and/ or claims arising out of and/or concerning and/or in connection with and/or in consequence of or relating to this contract, whether or not the obligations of either or both parties under this contract be subsisting at the time of such dispute and, whether or not this contract has been terminated or purported to be terminated or completed, shall be referred to the arbitration of the Bengal Chamber of Commerce under the rules of its Tribunal of Arbitration for the time being in force and according to such rules the arbitration shall be conducted.
" The notes were signed by the respondent, Moran and Company, describing themselves as brokers.
It is admitted that the goods covered by the Bought Notes were delivered to the appellant in all the months from January to June, 1951, with the exception of the goods due to be delivered for the month of March, 1951.
The appellant required from the respondent delivery of goods in respect of the month of March but the latter informed the appellant, by a letter dated the 27th March, 1951, that its principals disowned a liability in this respect as there was default on the part of the appellant in not giving shipping instructions for the said goods within the time mentioned in the contracts.
The appellant denied any default on its part and did not also accept the position that the respondent had any principal, and on the 27th of April, 1951, it sent its bills to the respondent claiming Rs. 1,13,042 3 0 as damages for non delivery of the 865 goods.
As the respondent did not comply with this demand, the appellant contemplated referring the matter in dispute to the arbitration of the Bengal Chamber of Commerce as provided in the contracts and while it was preparing to take steps in that direction, the respondent, on the 11th of June, 1951, filed a suit against the appellant in the Original Side of the Calcutta High Court (being Suit No. 2516 of 1951,) and it is in respect of this suit that the application under section 34 of the has been made.
It was alleged in the plaint that the plaintiff acted merely as broker and in that capacity brought about the two contracts of sale and purchase evidenced by the two Bought Notes mentioned above, that the real seller was a firm known as Gowarchand Danchand, and that the plaintiff not being a party to the contract could not incur any liability under its terms.
There were prayers in the plaint for a declaration that the plaint.
off was not a party to the said contracts and, that it had no liability under the same.
There was a further prayer for an injunction restraining the respondent from, claiming any damages in respect of the said contracts The writ of summons was served on the appellant on the 23rd of June, 1951.
On the 19th July, 1951, it filed an application under section 34 of the praying that the proceedings in the suit may be stayed in order that the matter in dispute between the parties may be dealt with under the arbitration clause contained in the contracts.
The application was heard by Das Gupta J. who allowed the prayer of the applicant and stayed further proceedings in the suit.
In the opinion of the learned Judge the dispute in this case was not whether there was any contract entered into by and between the appellant and the respondent: but whether the respondent, who admittedly passed the two Bought Notes to the appellant, could be made liable under the contract by reason of the fact that it described itself as broker.
The answer to this question depended according to the learned Judge upon the interpretation of the contract itself and the dispute arising as.
it did out of or concerning or relating to the 866 contracts would come within the purview of the arbitration clause.
Against this judgment the respondent took an appeal to the Appellate Division of the High Court and the appeal was heard by a bench consisting of Chakravartti C.J. and Sarkar J.
By two separate judgments which concurred in the result, the Chief Justice and the other learned Judge allowed the appeal and vacated the order for stay.
It is against this judgment that the appellant has come to this Court on the strength of a certificate under article 133(1)(a) of the Constitution.
The short point for our consideration is, whether on the facts of this case, the appellant is entitled to an order under section 34 of the , staying the proceedings of the suit commenced by the respondent.
Section 34 of the is in these terms: " Where any party to an arbitration agreement or any person claiming under him commences any legal proceedings against any other party to the agreement or any person claiming under him in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are pending to stay the proceedings; and if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, such authority may make an order staying the proceedings.
" Thus in order that a stay may be granted under this section, it is necessary that the following conditions should be fulfilled: (1)The proceeding must have been commenced by a party to an arbitration agreement against any other party to the agreement; (2)the legal proceeding which is sought to be.
stayed must be in respect of a matter agreed to be referred 867 (3)the applicant for stay must be a party to the legal proceeding and he must have taken no step in the proceeding after appearance.
It is also necessary that he should satisfy the Court not only that he is but also was at the commencement of the proceedings ready and willing to do everything necessary for the proper conduct of the arbitration; and (4)the Court must be satisfied that there is no sufficient reason why the matter should not be referred to an arbitration in accordance with the arbitration agreement.
The third condition can be taken to have been fulfilled on the facts of the present case, and the fourth is one which is exclusively for the determination of the Court.
The controversy between the parties centres round the other two conditions, namely, conditions (1) and (2) ; and unless the applicant for stay succeeds in establishing that the respondent is a party to an arbitration agreement and that the subject matter of dispute in the suit is a matter coming within the scope of such agreement, it cannot possibly ask the Court to order a stay of the proceedings, under section 34 of the .
The learned Judges of the appellate bench of the High Court have taken the view that the only matter in dispute between the parties to the suit is whether the plaintiff was a party to the contract.
It was definitely alleged by the plaintiff that the contract was not between it and the appellant but was one between the appellant and a third party and since the arbitration agreement is contained in the contract, it is an agreement between those parties only, which could not bind or affect the plaintiff in any way.
The dispute, it is said, which is the subject matter of the suit does not arise under the contract and does not relate to it; it is outside the contract altogether and does not come within the scope of the arbitration agreement.
The decision in the appeal therefore rests entirely on the finding of the learned Judges that the matter in dispute between the parties to the suit does not come within the ambit of the arbitration clause.
In view of this decision the learned Judges did not consider it necessary to go into the first point as to whether in fact 868 there was a binding arbitration agreement between the parties to the suit.
The learned Chief Justice no doubt did in a manner consider that point also, but he refrained from pronouncing any decision upon it, being of opinion that a decision on this question which was the only issue in the suit itself might prejudice the parties and create a bar of res judicata against one or the other.
We think that on the facts of this case it was necessary for the learned Judges of the appellate bench to decide the question as to whether or not the plaintiff in the suit which the applicant wants to stay was a party to the arbitration agreement.
This would have a material bearing on the decision of the other question upon which the learned Judges rested their judgments.
The first and essential pre requisite to making an order of stay under section 34 of the is that there is a binding arbitration agreement between the parties to the suit which is sought to be stayed.
The question whether the dispute in the suit falls within the arbitration clause really pre supposes that there is such agreement and involves consideration of two matters, viz., (1) what is the dispute in the suit and (2) what disputes the arbitration clause covers?(1).
The contention raised by the plaintiff in the present suit is, that the contract was really between the appellant and another party and not between it and the appellant and consequently it was not bound by the contract and could not be made liable for any damages in terms thereof.
In substance therefore the controversy between the parties in the suit is whether the plaintiff did incur any liability in terms of the contracts evidenced by the two Bought Notes to which it was a signatory no matter in whatever capacity.
The question whether the plaintiff was a party to the agreement at all is undoubtedly one which cannot go before the arbitrators and with that question they cannot possibly deal.
But as Lord Porter pointed out in Heyman vs Darwins (2), "this does not mean that in every instance (1) Vide per Viscount Simon in Heyman vs Darwins, at 360.
(2) , 393.
869 in which it is claimed that the arbitrator has no juris diction the Court will refuse to stay an action.
If this were the case such a claim would always defeat an agreement to submit disputes to arbitration, at any rate until the question of jurisdiction had been decided.
The Court to which an application for stay is made is put in possession of the facts and arguments and must in such a case make up its mind whether the arbitrator has jurisdiction or not as best it can on the evidence before it.
Indeed, the application for stay gives an opportunity for putting these and other considerations before the court that it may determine whether the action shall be stayed or not.
" Section 34 of the as is well known is a virtual reproduction of section 4 of the English of 1889.
The observations quoted above were approved of by Mr. Justice section R. Das in the case of Khusiram V. Hanutmal (1) and it was held by the learned Judge that where on an application made under section 34 of the for stay of a suit, an issue is raised as to the formation, existence or validity of the con.
tract containing the arbitration clause, the Court is not bound to refuse a stay but may in its discretion, on the application for stay, decide the issue as to the existence or validity of the arbitration agreement even though it may involve incidentally a decision as to the validity or existence of the parent contract.
We are in entire agreement with the view enunciated above.
As we have said already, it is incumbent upon the Court when invited to stay a suit under section 34 of the to decide first of all whether there is a binding agreement for arbitration between the parties to the suit.
So far as the present case is concerned if it is held that the arbitration agreement and the contract containing it were between the parties to the suit, the dispute in the present suit would be one relating to the rights and liabilities of the parties on the basis of the contract itself and would come within the purview of the arbitration clause worded as it is in the widest of terms, in accordance with the principle enunciated by this Court in A. M. Nair and (1) at 518.
870 Company vs Gordhandass (1).
If on the other hand it is held that the plaintiff was not a party to the agreement, the application for stay must necessarily be dismissed.
The appellate Judges of the High Court in our opinion held rightly that the decision in A. M. Mair and Company vs Gordhandass (1) was not in any sense conclusive in the present case on the question of the dispute in the suit being included in the arbitration agreement.
The report shows that the dispute in that case was whether the appellants had made the contract in their own right as principals or on behalf of the Bengal Jute Mill Company as agents of the latter.
The decision of this question was held to turn upon a true construction of the contract and consequently it was a dispute under or arising out of or concerning the contract.
The judgment proceeds on the footing that there was in fact a contract between the parties and the only dispute was in which character they were parties to it, the respondents contending that the appellants were not bound as principals while the latter said that they were.
Mr. Justice Fazl Ali in delivering the judgment pointed out that the error into which the learned Judges of the appellate bench of the High Court appeared to have fallen was their regarding the dispute raised by the respondent in respect of the position of the appellants under the contract as having the same consequence as a dispute as to the contract never having been entered into.
In this case it is certainly not admitted that the respondent was a party to the contract.
In fact that is the subject matter of controversy in the suit itself.
But, as has been said already, the question having been raised , in this application, under section 34 of the , the Court has undoubted jurisdiction to decide it for the purpose of finding as to whether or not there is a binding arbitration agreement between the, parties to the suit.
It has been said by Chakravartti C.J. and in our opinion rightly, that if the person whose concern with the agreement is in question is a signatory to,the contract and formally a (1) ; 871 contracting party, that will be sufficient to enable the Court to hold for purposes of section 34 that he is a party to the agreement.
It was the contention of the respondent in the Court below that this test was not fulfilled in the present case.
The point has been canvassed before us also by Mr. Sen and it has been argued on the authority of several decided cases that in cases of this description the Bought Note is a mere intimation to the buyer, that the orders of the latter have been carried out and purchases have been made from other persons and not from them.
The writer does not thereby become a party to the contract of purchase and sale even as an agent.
He remains a mere broker or intermediary and the provision of section 230(2) of the Contract Act 'Cannot be invoked against him.
Mr. Khaitan on the other hand argues that the English law being quite different from the Indian law regarding the liability of an agent contracting on behalf of an undisclosed principal, the English authorities are no guide to a solution of the problem.
It is said that the case of Patiram Banerjee vs Kanknarrah Co., Ltd.(1), upon which the respondent relies, was wrongly decided being based upon English authorities which have no application to India.
The respondent here, it is pointed out, signed an elaborate document setting out in full every particular of the contract entered into and it is impossible to say that he was not an agent executing a contract on behalf of another whose identity he did not disclose but was a mere intermediary conveying an information to the buyer.
In our opinion, the point is not free from doubt and requires careful consideration and as it was not decided by the learned Judges of the High Court and we have not the advantage of having their views upon it, the proper course for us to follow would be to send the case back for a hearing of and decision on this point.
We, therefore, allow the appeal and set aside the judgments of both the Courts below.
The matter will go back to the appellate bench of the Calcutta High Court which will decide as an issue in the proceeding under section 34 of the the question whether the respondent was or was not a party (1) Cal.
I050. 872 to the arbitration agreement.
If the Court is of opinion that the respondent was in fact a party, the suit shall be stayed and the appellant would be allowed to, proceed by way of arbitration in accordance with the arbitration clause.
If on the other hand the finding is adverse to the appellant, the application will be dismissed.
The appellant will have its costs of this appeal.
Further costs between the parties will abide the result.
Appeal allowed.
| Paragraph 516 B of the Manual for the Superintendence and Management of Jails in Punjab provides for premature release of prisoners.
The State Government had issued in structions in 1971 modifying the executive instructions in paragraph 516B, to the effect that a convict must have undergone 8 1/2 years of substantive sentence before his case could be submitted to the Government for consideration.
Again there was another executive instruction in 1976 which provided that cases of convicts who were sentenced to death and whose sentences were subsequently commuted to life imprisonment would not be submitted to the State Government for consideration unless the convict has undergone atleast 14 years of substantive imprisonment.
Paragraph 631 of the said Manual relates to remission of sentences.
The note below paragraph 631 reproduces the gist of paragraph 516 B. Going by the preface of the Manual, paragraph 631 has statutory force whereas paragraph 5 16B being in the nature of executive instruction has no statutory force.
The respondents filed Criminal Writ Petitions before the High Court praying for their premature release on the basis that the note under paragraph 631 has statutory force, the executive instructions issued in 1971 and 1976 have to be ignored and that the Jail Superintendent was bound to submit their cases to the Government for premature release.
148 The High Court allowed the claim of the respondents and held that the executive instructions issued in 1971 and 1976 being in conflict with the statutory note must give way to the latter.
These appeals, by special leave, preferred by the State Government challenge the High Court 's decision on the ground that the source of paragraphs 516 and the note at the foot of paragraph 631 being the same, viz., resolution dated 6th September, 1905, it cannot be concluded that the note being an integral part of the statutory rule incorporated in paragraph 631 must receive the same character and in case of conflict between the two, the note which is statutory in character must prevail.
Allowing the appeals, this Court, HELD: 1. Remissions by way of reward or otherwise cannot cut down the sentence awarded by the Court except under Section 432 of the Criminal Procedure Code or in exercise of constitutional power under Article 72/161 of the Constitu tion.
Remission cannot detract from the quantum and quality of the judicial sentence except to the extent permitted by Section 432 of the Code, subject of course to Section 433A, or where the clemency power under the Constitution is in voked.
The power under Articles 72 and 161 of the Constitu tion is absolute and cannot be lettered by any statutory provision such as Sections 432, 433 and 433A of the Code.
This power cannot be altered, modified or interfered with in any manner whatsoever by any statutory provisions or Prison Rules.
[153H; 154A C] 2.
Remission schemes are introduced to ensure prison discipline and good behaviour and not to upset sentences.
If the sentence is of imprisonment for life, ordinarily the convict has to pass the remainder of his life in prison but remissions and commutations are granted in exercise of power under Sections 432 and 433 Cr.
P.C., carving out an exception in the category of those convicts who have already enjoyed the generosity of executive power on the commutation of death sentence to one of life imprisonment.
Even in such cases Section 433A of the Code or the executive instruction of 1976 does not insist that the convict pass the remainder of his life in prison but merely insists that he shall have served time for at least 14 years.
In the case of other 'lifers ' the insistence under the 1971 amendment is that he should have a period of atleast 8 1/2 years of incarceration before release.
The 1976 amendment was possibly introduced to make the remission scheme consistent with Section 433A of the Code.
Since Section 433A is prospective, so also 149 would be the 1971 and 1976 amendments.
[154E H] Gopal Vinayak Godse vs State of Maharashtra, ; and Maru Ram vs Union of India, ; , relied on.
According to the preface only those paragraphs which are blacklined have statutory character.
The note in ques tion is not so blacklined.
The source of paragraph 516B and the note is the very same Resolution No. 159 167 of the Government of India dated 6th September, 1905.
It is diffi cult to believe that the same resolution was intended to be a mere executive instruction in one part of the Manual and was intended to be conferred a statutory character in anoth er.
The marginal note to the Note in question in terms refers to paragraph 516 B which means it was merely a repro duction of the latter paragraph.
In the circumstances, if the note was intended to be conferred a statutory character, it would have been blacklined in keeping with the scheme of the Manual.
Paragraph 631 classifies prisoners and fixes the duration of their sentences e.g., 20 years for life convicts and class 3 prisoners and 25 years for class 1 and 2 prison ers.
The note at the foot of the paragraph is by way of a reminder that notwithstanding the duration fixed under the said rule, paragraph 5 16B requires that cases of such prisoners should be submitted on the expiry of the duration fixed under paragraph 516B.
It is, therefore, clear that the note is neither an integral part of paragraph 631; nor does it have statutory flavour as held by the High Court.
[155B F]
|
Appeals Nos.
678 and 679 of 1963.
Appeals from the judgment and order dated April 4, 1961 of the Kerala High Court in Tax Revision Nos. 52 & 53 / 1959.
G.B. Pai, T. N. Ramachandra, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellants (in all the appeals).
Govinda Menon and V. A. Seyid Muhammad, for the respondent (in both the appeals).
C.S. Pathak, section N. Andley, Rameshwar Nath and P. L. Vohra, for the interveners (in both the appeals).
March 20, 1964.
The judgment of GAJENDRAGADKAR,C.J., WANCHOO, RAJAGOPALA AYYANGAR AND SIKRI, JJ. was delivered by AYYANGAR J. SHAH, J. delivered a separate Opinion.
AYYANGAR, J. The appellant owns several estates wherein inter alia tea is grown and was assessed to sales tax in respect of the tea sold by it during the years 1954 55 and 1955 56, by the Sales Tax Officer, First Circle, Quilon in the State of Travancore Cochin by his order dated December 23.
In the taxable turnover on which sales tax was computed by the assessing authority were included two items which are the subject of complaint in these two appeals which relate to these two years of assessment.
Before the assessing officer the appellant claimed that certain sales of its tea which were 393 conducted by auction at Fort Cochin a place which at the relevant date was in the Madras State, were sales "outside" the Travancore Cochin State and that consequently these sales were exempted from taxation by the State of Travan core Cochin under article 286(l) (a) of the Constitution.
The Sales Tax Officer rejected this contention and included the sum involved in these sales in the taxable turnover.
An appeal filed to the Appellate Assistant Commissioner also failed, this authority holding that as the tea sold was, at the date of the auction, admittedly in godowns in Willingdon Island in the State of Travancore Cochin, the sales must be deemed to have taken place within taxing State by virtue of a provision in the State Sales Tax Act to which we shall refer later and hence liable to be included in the taxable turnover.
There was a further appeal taken by the Appellant to the Sales Tax Appellate Tribunal which upheld the appel lant 's contention and set aside the assessment in so far as it included the turnover relating to the auction sales of tea held at Fort Cochin, this turnover amounting to Rs. 56,43,184/11/in regard to the assessment year 1954 55 and Rs. 62,13,604/3/in regard to the assessment year 1955 56 and remanded the case for fresh disposal by excluding these sums from the computation of the taxable turnover.
A revision petition was thereafter filed before the High Court by the State under section 15(b) of the General Sales Tax Act of Travancore Cochin and the learned Judges allowed the Revision and upheld the order of the assessing officer and the Appellate Commissioner holding the turnover represented by these auction sales to be validly taxable under the State law relating to sales tax.
The appellant thereafter applied to the High Court for a certificate of fitness and this having been granted the appeals are now before us.
Before proceeding further it is necessary to set out the statutory provision contained in the taxing enactment of the State.
The General Sales Tax Act (Act XI of 1125 (ME) 1950) which imposed a sales tax on sales by dealers defines a "sale" by section 2(j) in these terms: " 'Sale ' with all its grammatical variations and cognate expressions means every transfer of the property in goods by one person to another in the course of trade or business for cash or for deferred payment or other valuable consideration and includes also a transfer of property in goods involved in the execution of a works contract, but does not include a mortgage, hypothecation, charge or pledge; x x x x Explanation (2) Notwithstanding anything to the contrary in the Sale of Goods Act for the time being in 394 force, the sale or purchase of any goods shall be deemed for the purpose of this Act, to have taken place in the State wherever the contract of sale or purchase might have been made (a) if the goods were actually in the State at the time when the contract of sale or purchase in respect thereof was made .
or (b) in case the contract was for the sale or purchase of future goods by description, then, if the goods are actually produced in the State at any time after the contract of sale or purchase in respect thereof was made.
" When the Constitution came into force a new section numbered section 26 was inserted by the Adaptation Order bringing the Act into line with article 286(1) of the Constitution and this read: "No law of a State shall impose.
or authorise the imposition of a tax on the sale or purchase of goods where such sale or purchase takes place(a) outside the State or (b). . . . . .
Explanation For the purposes of sub clause (a) a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the consumption in that State, notwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State.
" The position, therefore, was that though cl.
(a) to Explana tion 2 to section 2(j) enacted that "notwithstanding anything contrary in the Sale of Goods Act, the sale or purchase of goods shall be deemed to take place in the State if the goods were actually in the State at the time the contract for sale or purchase of goods thereof was made", still by the non obstante provision contained in section 26 a tax on the sale or purchase of goods could not be imposed where such sale or purchase took place "outside" the State of Travancore Cochin.
It is only necessary to add that even if section 26 were ignored still by the terms of article 286(1)(a) the position would be the same and the State could not validly levy a tax on a sale which is "outside" that State.
Now the question is can a sale of the tea effected by the Appellant by auction at Fort Cochin and which were included in its taxable turnover be said to be "outside" the State? The facts in relation to the transaction relating to the sale of the tea and which the learned Judges of the High Court held not to be an "outside" sale may be stated in their own words: "The sales of teas were concluded at Fort Cochin and the goods were stocked in godowns situated in the 395 Travancore Cochin State.
The deliveries of the goods were also made to the buyers from the godowns in Willingdon island in the Travancore Cochin State.
The Appellate Tribunal has come to the conclusion that the ownership of the commodity having passed in Fort Cochin, the property had not passed within the taxing State, accordingly they would be 'outside ' sales for purpose of article 286(1) and exempt from taxation.
" The Appellate Tribunal had recorded a finding that the property in the goods sold passed at Fort Cochin on the fall of the hammer at the auction and the learned Judges of the High Court proceeded on the same basis.
The point on which the, learned Judges differed from the Tribunal was only as regards the effect of the circumstance that the tea sold, was at the point of sale, physically in godowns situated in the State of Travancore Cochin.
The Appellate Tribunal had, in reaching the conclusion in favour of the appellant, as to the taxable character of the turnover represented by these auction sales, referred to a large number of decisions of this Court and to the observations contained in them as well as to several decisions of the various High Courts.
When the matter came up before the High Court the position was, that that Court had after a review of most of the earlier cases which had been referred to by the Tribunal, held in Deputy Commissioner of Agricultural Income tax and Sales tax, Trivandrum vs A.V. Thomas & Co.(1) that the word 'outside sale ' in article 286(1)(a) had no reference exclusively to the transfer of the property in the goods according to the provisions of the Sales of Goods Act, and therefore that Explanation 2 to section 2(j) was not violative of article 286(1)(a) and that if at the moment when the property passed, it not being very relevant where the property passed, the goods were in the State of Travancore Cochin, then it was not an "outside" sale quoad Travancore Cochin and could be subjected to salestax by that State.
Before the learned Judges a decision of this Court in India Copper Corporation Limited vs State of Bihar(2) was however relied on as leading to a different result but the learned Judges held that the decision of this Court could be distinguished on the facts and they held that their previous decision reported in A.V. Thomas 's case(1) was still good law and entirely covered the point raised.
The question for consideration in the appeal is the cor rectness of the view expressed by the High Court.
The decision in Deputy Commissioner of Agricultural Income tax and Salestax, Trivandrum vs A. V. Thomas & Co.(1) was brought before this Court on appeal and has been reversed (See A.V. Thomas & CO. Ltd. vs Deputy Commissioner of Agricultural Income tax and Sales tax, Trivandrum(3).
In so doing this Court pointed (1) I.L.R. [1960] Kerala 1395.
(2) ; (2)[1963] supp.
2 S.C.R. 608.
396 out that the decision of this Court in the Indian Copper Corporation case(1) had settled the law by laying down that the State (other than a "delivery cum consumption" State) which could tax a 'non explanation sale ' (to adopt the phraseology used in these cases to identify a sale falling outside the explanation to article 286(1)(a)) could only be that State in which the property in the goods passes.
Now, as regards the facts, there is no distinction between the facts in the A. Y. Thomas 's case(2) and the case now under appeal and, indeed, the learned Judges of the High Court have proceeded on that basis.
Dealing with the question as to what is an "outside" sale Kapur, J. speaking for the Court said in the case of A. Y. Thomas & Co.(2) Ltd.: "It has been foundand it has not been disputed that the title to the goods in the present case passed at Fort Cochin the question is whether the sale was 'outside sale ' or 'inside sale ' as the expressions have been compendiously used in various judgments to indicate sales taking place within a State or without it.
The Explanation to article 286(1) (a)explains what a sale outside the State is where the Explanation applies the difficultyabout the situs is resolved but in a case like the present one the difficulty still remains because the Explanation does not operate in the sense that the rival States claiming to tax the same taxable event are not the States of delivery for consumption in that State and those where the title in the goods passes.
" After referring to the decision in the India Copper Corpo ration Ltd. vs State of Bihar (1) the Court held that the sale in the case before them was an "outside" sale quoad TravancoreCochin, because the title passed at Fort Cochin in the State of Madras.
On this reasoning this Court reversed the decision in the case of the High Court and held that the sale there in question being an "outside" sale was not taxable by reason of the prohibition contained in article 286(1)(a).
Dealing with the connotation of the expression 'outside ' in article 286(1)(a) this Court had observed, in India Copper Corporation Ltd. vs State of Bihar.(1): "If a single State was designed to have the power to tax any particular transaction of sale, the question that next falls to be considered is the determination of that State in regard to which it could be predicated that the sale in question was not 'outside ' that State or in other words, the determination of the (1) ; (2) [1963] Supp.2 S.C.R.698 397 particular State in regard to which it could be said that the sale was 'inside ' that State.
The key to the problem is afforded by two indications in the Article itself: (1) the opening words of Article 286(1) which speak of a sale or purchase taking place and (2) the non obstante clause in the Explanation which refers to the general law relating to sale of goods under which property in the goods has, by reason of such sale or purchase, passed in another State '.
These two together indicate that it is the passing of property within the State that is intended to be fastened on, for the purpose of determining, whether the sale in question is 'inside ' or outside ' the State, and therefore subject to the operation of the 'Explanation ' that State in which property passes would be the only State which would have the power to levy a tax on the sale.
As was explained in the recent decision of this Court in Burmah Shell Oil Storage and Distributing Co. of India Ltd. vs The Commercial Tax Officer.
" It was the principle of law laid down in this passage that was given effect to by this Court in A. V. Thomas 's case(1) and it was on this basis that the appeal was allowed.
it would therefore follow that the present appeals which are wholly dependent on the correctness of the meaning of the expression 'outside sales ' in article 286(1)(a) which High Court adopted in A. V. Thomas 's case have necessarily to be allowed.
Learned Counsel for the respondent State, however, urged that in the present case a point had been raised before the High Court as to whether on the facts the property in the goods sold by auction conducted at Fort Cochin really passed at Fort Cochin in the Madras State or whether it passed in Willingdon island in Travancore Cochin when the goods were actually delivered to the buyer.
As regards this question of fact or of mixed fact and law the position is this.
The Sales Tax Appellate Tribunal recorded a finding on this matter in these terms: "The question whether the sales took place outside the State or not will have to be decided on the basis of the general law relating to sale of goods.
We hold that in the case of auction sales of full lots the sales were of ascertained goods and hence became complete on the fall of the hammer and that the sales took Place within the Madras State." In the revision application which the department filed to the High Court this question Whether the property in the goods (1) [1963] Supp. 2 S.C.R. 608.
398 did pass at Fort Cochin was raised but nevertheless the argument before the High Court proceeded wholly on the basis; of the correctness of the finding by the Appellate Tribunal that the property in the teas did pass on the fall of the hammer at Fort Cochin.
The point about the property not having passed in the Madras State does not appear to have been even argued before the High Court.
Even in the statement of the case filed by the respondent it is not stated that this point about the property not having passed at Fort Cochin in Madras was urged before the High Court during the course of the argument.
Before concluding it might be mentioned that in A. Y. Thomas 's case (supra) where, as we have stated earlier, the nature of the trans action was identical with the one in the appeals before us this Court observed: "It has been found and it has not been disputed that the title to the goods in the present case passed at Fort Cochin.
" In these circumstances, we declined to permit learned Counsel for the respondent to urge any ground relating to the property in the goods in the teas sold not having passed in Fort Cochin in the Madras State to be raised, as the point which is not one of pure law was not urged before the learned fudges of the High Court.
The appeals are, therefore, allowed ' and the, order of the High Court reversed and that of the Sales Tax Appellate Tribunal restored.
The appellant will have his costs here and in the High Court one hearing fee.
If the question raised in these appeals were res integra, I would hold that the price obtained at auction sales of tea held at Fort Cochin when the goods were lying in warehouses in the Travancore Cochin State was liable to be taxed under the General Sales Tax Act (11 of 1125 M.E.), for in my view article 286(1)(a) Explanation, before it was amended by the Constitution (Sixth Amendment) Act, did not altogether exclude the doctrine of territorial nexus in its application to salestax legislation.
It is settled law in this Court that under the Government of India Act, 1935, the Provincial Legislatures could, relying upon the territorial nexus, levy sales tax upon transactions of sale, not wholly completed within their territory, fixing upon one or more ingredients of a sale furnishing a territorial connection with the taxing Province: Poppat Lal Shah vs The State of Madras(1) and The Tata Iron & Steel Company Ltd. vs The State of Bihar (2).
By the Constitution certain restrictions were placed upon the power of the States (1) ; (2) 399 to legislate in respect of taxes on sales and purchases.
By article 286(1)(a) read with the Explanation, an Explanation sale i.e. a sale in which goods sold were actually delivered in a State for the purpose of consumption in that State was made taxable only by the State in which the goods were delivered for consumption.
But article 286 was, in my view, not intended to exclude the operation of the doctrine of territorial nexus in the field not covered by the legislative prohibitions.
In dealing with the effect of section 33 of the Bihar Sales Tax Act which incorporated the prohibitions imposed by article 286(1) & (2).
with the concurrence of section K. Das J., it was observed by me in Indian Copper Corporation Ltd. vs The State of Bihar and others(1) at P. 293: " x x x by enacting that a tax shall not be imposed under the Act when the sale takes place outside the State of Bihar x x, "Only the power to tax "Explanation sales" which do not take place within the State of Bihar is taken away, but not the power to tax "non Explanation sales" in which though under the general law of sale of goods the property passes outside the State, there exists between the taxing power of the State and the sale a nexus as contemplated by the definition of sale in section 2(g).
If the sale is one in which the goods have been delivered outside the State of Bihar, but not as a direct result of the sale or not for the purpose of consumption in the State of first delivery, the sale will not be covered by the Explanation, and the right to tax the sale, if arising otherwise under the Act relying upon the territorial nexus, will not be impaired by the prohibition imposed by cl.
(1)(a)(i) of section 33.
" It may be mentioned that section 33 of the Bihar Sales Tax Act was enacted to give effect expressly to the legislative restrictions imposed by article 286 of the Constitution.
In Indian Copper Corporation Ltd. 's case(1) certain transactions of sale were effected by the assessee after the promulgation of the Constitution, under which the property in the goods passed in the State of Bihar but delivery was effected outside the State of Bihar for consumption also outside Bihar.
In some of these transactions goods were delivered in the State of first destination for consumption therein whilst in others the goods were delivered not for consumption in the State of first delivery.
The assessee contended that both these categories of transactions were exempt from tax under article 286(1)(a) as they were (1) ; 400 outside sales.
This Court unanimously negatived the conten tion of the assessee in respect of sales in which delivery in the State of first destination was not for consumption therein, and the transactions were on that account not "Explanation sales".
It was held that the State of Bihar was competent to tax those "Non explanation sales" in which the property in the goods had passed in the State of Bihar.
But two different grounds were given in support of the conclusion in that case.
My brethren Hidayatullah, Das Gupta and Rajagopala Ayyangar, JJ., were of the view that passing of property within the State alone was intended after the Constitution to be fastened upon for the purpose of determining whether the sale is inside or outside the State, and therefore subject to the operation of the Explanation that State in which the property passes would be the only State, which had the power to tax the sale.
section K. Das.
J., and I were of the view that sale transactions not falling within the constitutional prohibitions remained taxable because in adjudging whether a "non Explanation" sale transaction was "outside the State", the doctrine of territorial nexus could not be wholly excluded from consideration.
In a recent judgment of this Court in A.V. Thomas & Co. Ltd. vs Deputy Commissioner of Agricultural Income tax and Sales tax, Trivandrum(1) this Court held in construing article 286(1)(a) in the light of the Explanation before that Article was amended by the Constitution (Sixth Amendment) Act, that: Where the Explanation to Article 286(1)(a) of the Constitution of India is inapplicable, it is the 'passing of property within the State ' that is intended to be fastened on for the purpose of determining whether a sale is 'inside ' or 'outside ' the State.
Therefore subject to the operation of the 'Explanation ', that State in which the property in the goods passes would be the only State which would have the power to levy a tax on the sale.
" In A. V. Thomas & Co. Ltd. 's case(1) chests of tea were stored in warehouses at Willingdon Island in the Travancore Cochin State, but auctions of the tea chests were held at Fort Cochin which was at the material time within the State of ' Madras, and after the price was paid at Fort Cochin delivery orders were given to the purchasers addressed to the warehouse keepers at Willingdon Island and actual delivery was given at the warehouses.
The chests of tea were then sent from Willingdon Island for consumption in other parts of India or were exported out of India.
It was held by the Court in that (1) [1963] Supp. 2 S.C.R. 608.
401 case that the property in the goods passed at Fort Cochin and as the goods were delivered not for the purpose of consumption in any particular State, the sales were not inside the State of Travancore Cochin but were outside that State and were not liable to be taxed under the Travancore Cochin General Sales Tax Act (11 of 1125 ME).
The Court observed that in sales which were not "Explanation sales" passing of property within the State was decisive of the liability to pay sales tax.
No opinion was expressed on the question whether the doctrine of territorial nexus as investing the State with the right to tax a sale transaction outside the legislative restrictions imposed by article 286, was, since the promulgation of the Constitution, rendered ineffective.
As the fact which give rise to this case are substantially the same as the facts on which a. V. Thomas & Co. Ltd. 's case(1) was decided, the decision of the appeals must be in favour of the assessee.
It is necessary to record this judgment, lest it be assumed that I agree with the view that the doctrine of territorial nexus in its application to sales tax legislation has, since the enactment of the Constitution, been completely abrogated.
It may be pertinent to note that since the amendment of the Constitution by the Constitution (Sixth Amendment) Act, article 286(1)(a) (which remains unamended) is now free from the shackles of the Explanation which is deleted and by cl.
(2) the Parliament is invested with power to formulate principles for determining when a sale or purchase of goods takes place in any of the ways mentioned in cl.
(1), namely, outside the State or in the course of the import of the goods into, or export of the goods out of, the territory of India.
Exercising the power under cl.
(2) the Parliament has enacted the (74 of 1956), and by section 4(2) the doctrine of territorial nexus has been given legislative recognition, though in somewhat limited form.
That subsection provides: "A sale or purchase of goods shall be deemed to take place inside a State if the goods are within the State (a) in the case of specific or ascertained goods, at the time the contract of sale is made; and (b) in the case of unascertained or future goods.
at the time of their appropriation to the contract of sale by the seller or by the buyer, whether assent of the other party is prior or subsequent to such appropriation.
Explanation.
Where there is a single contract of sale or purchase of goods situated at more places than [1963] Supp.
2 S.C.R. 608.
402 one, the provisions of this sub section shall apply as if there were separate contracts in respect of the goods at each of such places.
" The doctrine of territorial nexus had full play in sales tax legislation under the Government of India Act, 1935: it also applies subject to certain modifications since the amendment of the Constitution by the Constitution (Sixth Amendment) Act.
And I am unable to persuade myself that by the enact ment of article 286 of the Constitution, it stood abrogated in the interregnum between the promulgation of the Constitution and the amendment of article 286 by the Constitution (Sixth Amendment) Act.
Appeal allowed.
| The appellant company owns several estates wherein tea is grown and it was assessed to sales tax by the Sales Tax Officer in respect of the tea sold by it during the years 1954 55 and 1955 56.
An appeal filed by the appellant was rejected by the, Appellate Assistant commissioner on the ground that the tea when sold was admittedly in godowns in the State of Travancore Cochin and that consequently the sales must be deemed to have taken place within the State of Travancore Cochin and hence liable to be included in the taxable turn over.
When a further appeal was taken to the Sales Tax Appellate Tribunal, it was held that the property in the goods sold passed at Fort Cochin in Madras State on the fall of the hammer at the auction and hence the same was not taxable.
The State filed a revision petition to the High Court.
While the High Court accepted the finding of the Tribunal that the property in the goods sold passed at Fort.
Cochin on the fall of the hammer at the auction, it differed from the Tribunal as regards the effect of the circumstance that the tea sold was, at the point of sale, physically in godowns situated in the State of Travancore Cochin and held the sales to be taxable.
The appellant came to this Court after obtaining a certificate of fitness from the High Court.
The only question argued before this court was whether a sale of tea effected by the appellant by auction at Fort Cochin in Madras State was a sale outside the State of Travancore Cochin orinside it and whether the same was taxable or not.
Accepting.the appeal.
HELD: No sales tax was to be levied in this case as the sales took place outside the State of Travancore Cochin.
The test for determining whether a sale is inside or outside a State is where the property in the goods passed and in the present case the property in the goods passed in Fort Cochin in Madras State on the fall of the hammer at the auction.
The point about the property not having passed in the Madras State was not argued before the High Court and was also not urged in the statement of case filed by respondent and hence the same was not allowed to be argued in the Supreme Court.
Per Shah.
The property in the goods passed at Fort Cochin in Madras State and as the goods were delivered not for the purpose of consumption in any particular State, the sales were not inside Travancore Cochin but were outside the 392 State and were as held by this Court in A. V. Thomas & Co. vs Deputy Commissioner of Agricultural Income tax and Sales Tax Trivandrum, 14 S.T.C. 363, not liable to be taxed under the Travancore Cochin General Sales Tax Act, 1950.
The doctrine of territorial nexus had full play in sales tax legislation under the Government of India, Act, 1935 and was not abrogated by the enactment of Art, 286 of the Constitution.
It continued to be in operation in the interregnum between the promulgation of the Constitution and the amendment of article 286 by the Constitution (Sixth Amendment) Act, 1956.
It also applies now subject to certain modifications.
Parliament has been given the power to formulate principles for determining when a sale or purchase of goods takes place outside the State or in the course of the import of the goods into or export of the goods out of the territory of India.
Exercising the power under cl.
(2) Parliament has enacted the and by section 4(2) the doctrine of territorial nexus has been given legislative recognition though in somewhat limited form.
Deputy Commissioner of Agricultural Income tax and Salestax, Trivandrum vs A.V. Thomas & Co., I.L.R. 1960 Kerala 1395; India Copper Corporation Limited vs State of Bihar, ; ; A. V. Thomas & Co. Ltd. vs Deputy Commissioner of Agricultural Income tax and Sales tax, Trivandrum 1953 Supp.
2 S.C.R. 608 363; Poppat Lal Shah vs The State of Madras, ; ; and the Tata Iron & Steel Company Ltd. vs The State of Bihar , referred to.
|
ivil Appeal No. 2047 of 1982.
690 From the Judgment and Order dated 16.3.
1982 of the Delhi High Court in Civil Rev. No. 147 of 1982.
W.A. Quadri and Kailash Mehta for the Appellant.
M.C. Dhingra for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This is an appeal by special leave against the judgment and order dated the 16th March, 1982 of the High Court of Delhi in Civil Revision No. 147 of 1982 directing eviction of the premises in question under Section 14(1)(e) of the Delhi Rent Control Act on the ground of bonafide requirement of the landlord.
The special leave was sought for and obtained from this Court on the ground that Civil Appeal No. 1051/81 and special leave petition (civil) No. 2290/82 were pending at that time.
It appears that the said appeal has been disposed of by this Court in Ravi Dutt Sharma vs Ratan Lal Bhargava, ; where this Court held that Sections 14A, 14(e), 25A, 25B and 25C of the Delhi Rent Control Act are special provisions so far as the landlord and tenant are concerned and further in view of the non obstante clause in the section these provi sions override the existing law so far as the new procedure is concerned.
In that view of the matter we are of the opinion that the would have no application in cases covered by Sections 14A and 14(1)(e) of the Delhi Rent Control Act especially in view of the provisions which were added by the Amending Act of 1976.
This Court held that there is no difference either on principle or in law between section 14(1)(e) and 14A of the Rent Act even though these two provisions relate to eviction of tenants under different situations.
This Court further held that in view of the procedure in Chapter IIIA of the Rent Act, the Slum Act is rendered inapplicable to the extent of inconsistency and it is not, therefore, necessary for the landlord to obtain permission of the Competent Authority under Section 19(1)(a) of the Slum Act before instituting a suit for eviction and coming within Section 14(1)(e) or 14A of the Rent Act.
In the premises the appeal fails and is dismissed.
There will be no order as to costs.
691 The decree for eviction shall not be executed before 30.11.87 provided the appellant files an undertaking in the usual form within four weeks from today.
A.P.J. Appeal dismissed.
| The appellants, who had let out the premises in question to the respondent Riled a suit for eviction inter alia on the ground that the tenant had erected unauthorised struc tures of a permanent nature in violation of the provisions of cl.
(p) of section 108 of the and section 13(1)(b) of the Bombay Rents.
Hotel and Lodging House Rates Control Act, 1974 and was using the premises for unauthorised purposes.
The alleged permanent structures consisted of lofts and rooms which had been constructed by sinking pillars and stanchions into the flooring and the tenant admitted that these had been constructed after it had taken the premises from the landlord.
After discussing the evidence tendered in detail, including the deposition of the architect who had prepared the plan of the constructions in question and who had deposed that the constructions consist ed of permanent structures, the Judge of the Court of Small Causes held that the structures were of a permanent nature and ordered eviction of the tenant on the ground of perma nent construction.
The respondent 's appeal was dismissed by the Appellate Bench of the Court of Small Causes which, on a detailed reappraisal of the evidence on record, not only confirmed the decree for eviction on the ground of permanent construction but granted eviction on the ground of change of user as well.
The respondent went in appeal against the order of the appellate court.
The High Court, dealing with the matter under article 227 of the Constitution, reversed the concurrent findings of the courts below and allowed the respondent 's petition.
Allowing the appeal and restoring the order of the lower appellate court, 594 HELD: 1.
(a) Interference by the High Courts under article 227 of the Constitution must be within limits.
This question has been considered by this Court from time to time and principles laid down.
The power under article 227 is one of judicial superintendence and it cannot be exercised to upset the conclusions of facts, however erroneous these may be.
It is possible that another Court may be able to take a differ ent view of the matter by appreciating the evidence in a different manner, if it determinedly chooses to do so.
That will not be justice administered according to law to which courts are committed.
[605D E] (b) In exercise of jurisdiction under article 227 ' of the Constitution, the High Court can go into questions of facts or look into the evidence if justice so requires it.
But the High Court should decline to exercise that jurisdiction to look into the facts in the absence of clear cut reasons where the question depends upon the appreciation of evi dence.
The High Court should not interfere with a finding within the jurisdiction of the inferior tribunal or court except where the finding is perverse in law, in the sense that no reasonable person properly instructed in law could have come to such a finding, or there is misdirection in law, or view of fact has been taken in the teeth of prepon derance of evidence, or the finding is not based on any material evidence or it resulted in manifest injustice.
Except to the extent indicated above the High Court has no jurisdiction.
[606B D] Satyanarayan Laxminarayan Hegde & Ors.
vs Mallikarjun Bhavanappa Tirumale, [1960] 1 S.C.R. 890; India Pipe Fitting Co. vs Fakruddin M.A. Baker & Anr., ; ; Ganpat Ladha vs Shashikant Vishnu Shinde, [1978] 3 S.C.R. 198; Mrs. Labhkuwar Bhagwani Shah & Ors.
vs Janardan Mahadeo Kalan & Anr., and Chandavarkar Sita Ratna Rao vs Ashalata section Guram, ; ; re ferred to. 2.
No hard and fast rule can be laid down for determin ing the question whether a particular structure put up by the tenant is a permanent structure for the purpose of cl.
(p) of section 108 of the as it is dependent on the facts of each case.
One must look to the nature of the structure, the purpose for which it was in tended and take a whole perspective as to how it affects the enjoyment, the durability of the building, etc.
and other relevant factors and come to a conclusion.
[601D E; 602D E] Surya Properties Private Ltd. & Ors.
vs Bimalendu Nath Sarkar & Ors., and M/s Surya Proper ties Private Ltd. 595 vs Bimalendu Nath Sarkar, A.I.R. 1965 Calcutta 408, ap proved.
Khureshi Ibrahim Ahmed vs Ahmed Haji Khanmahomad, A.I.R. 1965 Gujarat 152 and Ramji Virji & Ors.
vs Kadarbhai Esufa li, A.I.R.1973 Gujarat 110, referred to.
In this case, on an analysis of the evidence the trial court as well as the appellate court had held that the structures were permanent.
All the relevant factors had been borne in mind by the learned trial Judge as well as the Appellate Bench of the Court of Small Causes.
The view taken by them was a possible view.
A different view might have been taken but that is no ground which would justify the High Court to interfere with the findings.
[600F]
|
ition No. 6816 of 1981.
(Under Article 32 of the Constitution of India.) Kapil Sibal for the Petitioner.
274 B.D. Sharma for the Respondent.
The following judgments were delivered BHAGWATI, J.
The petitioner is the Director of a social action group called Social Work and Research Centre operating in and around Tilonia village in Ajmer district of the State of Rajasthan.
The Social Work and Research Centre is duly registered society and since February 1972, it has been actively engaged in the work of upliftment of Scheduled Castes and Scheduled Tribes in different areas and particularly in and around Tilonia village.
It operates through various groups and the present writ petition has been filed by the petitioner for the purpose of remedying gross violations of the which have been discovered by one such group.
These violations, according to the petitioner, have been taking place in the following circumstances and they need to be redressed through judicial intervention.
The Public Works Department of the State of Rajasthan is constructing Madanganj Harmara Road close to village Tilonia and according to the State Government, it is a part of famine relief work undertaken with a view to providing relief to persons affected by drought and scarcity conditions.
The State Government in the Public Works Department has engaged a large number of workers for construction of this road and they include women belonging to Scheduled Castes.
It is common ground that the minimum wage for a construction worker in Rajasthan is Rs. 7 per day and it was asserted on behalf of the petitioner and not disputed on behalf of the State Government that the Notification fixing the minimum wage of Rs. 7 per day does not specify any particular quantity of work to be turned out by the worker in order to be entitled to this minimum wage.
Now the practice followed by the Public Works Department for engaging workers for the construction work is to issue an identity card to every resident in the famine affected area who registers himself with the Halka patwari and the identity card would show the number of members in the family of the card holder including males, females and children.
Every resident in the famine affected area would be entitled to be employed in the famine relief work undertaken by the State Government on production of the identity card.
This way a large number of workers including women belonging to Scheduled Castes are engaged in the construction work of the Madanganj Harmara Road.
The workers employed in this construction work are divided into gangs of 20 persons or multiple 275 thereof and there is a separate muster roll for each such gang and the work done by it is measured every fortnight and payment is made by the Public Works Department to the Mate who is the leader of the gang according to the work turned out by such gang during each fortnight.
The Public Work Department has fixed a certain norm of work to be turned out by each gang before the workmen belonging to such gang can claim the minimum wage of Rs. 7 per day with the result that if any particular gang turns out work according to the norm fixed by the Public Works Department the Mate would be paid such amount as would on distribution give a wage of Rs. 7/ per day to the workmen constituting such gang, but if less work is turned out by such gang, payment to be made to the mate of such gang would be proportionately reduced and in that event, the wage earned by each member of such gang would fall short of the minimum of Rs. 7 per day.
The petitioner has stated in the writ petition that as a consequence of this practice followed by the Public Works Department workmen belonging to most of the gangs receive a wage very much less than the minimum wage of Rs. 7 per day as illustrated by a few instances set out in Annexure I to the writ petition.
The petitioner has also averred that even within the gang itself, deferential payments are made to the workmen without any visible principle or norm and it is not uncommon that a worker who has put in full day 's work throughout the period of the fortnight, may get less than the minimum wage of Rs.7/ per day, while a worker who has put in much less work may get more than the proportionate wage due to him.
This system of payment adopted by the Public Works Department created considerable discontent amongst the women workers belonging to Scheduled Castes who were engaged in this construction work and on 21st August 1981 about 200 to 300 such women workers approached the Social Work and Research Centre seeking advice as to what course of action should be adopted by them for the purpose of eliminating differential payments in wages and securing payment of minimum wage of Rs. 7 per day for each worker.
Mrs. Aruna Roy, the Development Coordinator of the Social Work and Research Centre thereupon contacted Shri Atul Gupta, Asstt.
Collector and both of them immediately proceeded to the site of the construction work.
On their arrival at the site, an impromptu meeting took place where the women workers gave vent to their grievances which included inter alia complaint in regard to the "wide difference in respect of payments made by Mates to several gangs for the same category 276 of work performed" and pointed out that "differentials in payments also existed between the women workers working in the same gang and performing the same category of work.
" Since these differential payments in wages were made by the Public Works Department to the gangs allegedly on the basis of the quantity of work turned out by each such gang and, according to the petitioner, there were even within the gang itself, differentials in payment of wages to the workers resulting in perpetuation of inequality, the petitioner in his capacity as Director of the Social Work and Research Centre filed the present writ petition challenging the system of payment of wages to the workers and seeking a writ of mandamus directing the State Government to "comply with the prescribed rates of minimum wages under the as applicable in the State of Rajasthan.
" When the writ petition reached hearing before us, the State Government produced the Rajsthan Famine Relief Works Employees (Exemption from Labour Laws) Act, 1964 (hereinafter referred to as the Exemption Act) and relying upon this statute, the State Government contended that since the construction work of Madangang Harmara Road was a famine relief work, the was not applicable to employees engaged on this construction work by reason of section 3 of this Act.
The Exemption Act is a Rajasthan statute enacted on 7th September 1964 and it is deemed to have come into force with effect from 1st July 1963.
Section 2 clause (b) of this Act defines "famine relief works" to mean "works already started or which may hereafter be started by the State Government to provide relief to persons affected by drought and scarcity conditions" and "Labour Law" is defined in section 2 clause (c) to mean "any of the enactments as in force in Rajasthan relating to Labour and specified in the Schedule".
The is one of the enactments specified in the Schedule to the Exemption Act.
Then section 3 of the Exemption Act proceeds to enact that "Notwithstanding. .any such law." Section 4 of the Exemption Act excludes the jurisdiction of courts and provides that "no court shall take cognizance of any matter in respect of an employees of famine relief works under any Labour Law", which includes the .
Now if the Exemption Act were a valid piece of legislation, it is obvious that no workman employed in a famine relief work would be entitled to complain that he is paid less than the minimum wage because the applicability of the would be 277 excluded by reason of section 3 of the Exemption Act and the women workers engaged in the construction work of Madanganj Harmara Road would have to be content with whatever wage is paid to them even though it be less than the minimum wage of Rs. 7 per day and their only complaint which would then survive would be that there is discrimination by reason of differential payment of wages to workmen doing the same quantity of work.
The petitioner therefore sought leave to amend the writ petition by including a challenge to the constitutional validity of the Exemption Act and on such leave being granted, the petitioner filed an amended writ petition in this Court.
The principal grounds on which the constitutionality of the Exemption Act was challenged were based on Articles 14 and 23 of the Constitution.
I am, for reasons which I shall presently state, of the view that the challenge under Article 23 is well founded and it is therefore not necessary to investigate the facts relating to the violation of Article 14 and I accordingly propose to confine my judgment only to a consideration of the attack based on Article 23.
If the Exemption Act is unconstitutional on the ground that it violates Article 23, it would be out of the way so far as the claim of the workmen for the minimum wage of Rs. 7 per day is concerned and the only question then would be whether the workmen are entitled to the minimum wage of Rs. 7 per day in any event or any deduction can be made from such minimum wage on the ground that the workmen have not turned out work according to the norm set down by the Public Works Department.
This Court had occasion to consider the true meaning and effect of Article 23 in a judgment given on 18th September 1982 in writ petition No. 8143 of 1981 Peoples Union for Democratic Rights and Ors.
vs Union of India and Ors.
(1) The Court pointed out that the constitution makers, when they set out to frame the Constitution, found that the practice of 'forced labour ' constituted an ugly and shameful feature of our national life which cried for urgent attention and with a view to obliterating and wiping out of existence this revolting practice which was a relic of a feudal exploitative society totally incompatible with new egalitarian socio economic order which "We the people of India" were determined to build, they enacted Article 23 in the Chapter on Fundamental Rights.
This Article, said the Court, is intended to eradicate the pernicious 278 practice of 'forced labour ' and to wipe it out altogether from the national scene and it is therefore not limited in its application against the State but it is also enforceable against any other person indulging in such practice.
It is designed to protect the individual not only against the state but also against other private citizens.
The Court observed that the expression "other similar forms of forced labour" in Article 23 is of the widest amplitude and on its, true interpretation it covers every possible form of forced labour begar or otherwise and it makes no difference whether the person forced to give his labour or service to another is remunerated or not.
Even if remuneration is paid, labour supplied by a person would be hit by this Article if it is forced labour, that is, labour supplied not willingly but as a result of force or compulsion and the same would be the position even if forced labour supplied by a person has its origin in a contract of service.
The Court then considered whether there would be any breach of Article 23 when a person provides labour or service to the State or to any other person and is paid less than the minimum wage for it and observed: "It is obvious that ordinarily no one would willingly supply labour or service to another for less than the minimum wage, when he knows that under the law he is entitled to get minimum for the labour or service provided by him.
It may therefore be legitimately presumed that when a person provides labour or service to another against receipt of remuneration which is less than the minimum wage, he is acting under the force of some compulsion which drives him to work though he is paid less than what he is entitled under the law to receive.
What Article 23 prohibits is 'forced labour ' that is labour or service which a person is forced to provide and 'force ' which would make such labour or service 'forced labour ' may arise in several ways.
It may be physical force which may compel a person to provide labour or service to another or it may be forced exerted through a legal provision such as a provision for imprisonment or fine in case the employee fails to provide labour or service or it may even be compulsion arising from hunger and poverty, want and destitution.
Any factor which deprives a person of a choice of alternatives and compels him to adopt one particular course of action may properly be regarded as 'force 'and if labour or service is compelled as a result of such 279 'force ',it would be 'forced labour '.
Where a person is suffering from hunger or starvation, when he has no resources at all to fight disease or to feed his wife and children or even to hide their nakedness where utter grinding poverty has broken his back and reduced him to a state of helplessness and despair and where no other employment is available to alleviate the rigour of his poverty, he would have no choice but to accept any work that comes his way, even if the remuneration offered to him is less than the minimum wage.
He would be in no position to bargain with the employer; he would have to accept what is offered to him.
And in doing so he would be acting not as a free agent with a choice between alternatives but under the compulsion of economic circumstances and the labour or service provided by him would be clearly 'forced labour '.
There is no reason why the word 'forced ' should be read in a narrow and restricted manner so as to be confined only to physical or legal 'force ' particularly when the national charter, its fundamental document has promised to build a new socialist republic where there will be socioeconomic justice for all and everyone shall have the right to work, to education and to adequate means of livelihood.
The constitution makers have given us one of the most remarkable documents in history for ushering in a new socio economic order and the Constitution which they have forged for us has a social purpose and an economic mission and therefore every word or phrase in the constitution must be interpreted in a manner which would advance the socio economic objective of the Constitution.
It is not unoften that in a capitalist society economic circumstances exert much greater pressure on an individual in driving him to a particular course of action than physical compulsion or force of legislative provision.
The word 'force ' must therefore be construed to include not only physical or legal force but also force arising from the compulsion of economic circumstances which leaves no choice of alternatives to a person in want and compels him to provide labour or service even though the remuneration received for it is less than the minimum wage.
Of course, if a person provides labour or service to another against receipt of the minimum wage, it would not be possible to say that the labour or service provided by him is 'forced 280 labour ' because he gets what he is entitled under law to receive.
No inference can reasonably be drawn in such a case that he is forced to provide labour or service for the simple reason that he would be providing labour or service against receipt of what is lawfully payable to him just like any other person who is not under the force of any compulsion.
We are therefore of the view that where a person provides labour or service to another for remuneration which is less than the minimum wage, the labour or service provided by him clearly falls within the scope and ambit of the words 'forced labour ' under Article 23, Such a person would be entitled to come to the court for enforcement of his fundamental right under Article 23 by asking the court to direct payment of the minimum wage to him so that the labour or service provided by him ceases to be 'forced labour ' and the breach of Article 23 is remedied.
" I must, therefore hold consistently with this decision that where a person provides labour or service to another for remuneration which is less than the minimum wage,the labour or service provided by him clearly falls within the meaning of the words 'forced labour ' and attracts the condemnation of Article 23.
Every person who provides labour or service to another is entitled at the least to the minimum wage and if anything less than the minimum wage is paid to him he can complain of violation of his fundamental right under Article 23 and ask the court to direct payment of the minimum wage to him so that the breach of Article 23 may be abated.
If this be the correct position in law, it is difficult to see how the constitutional validity of the Exemption Act in so far as it excludes the applicability of the Minimum wages Act 1948 to the workmen employed in famine relief works can be sustained.
Article 23, as pointed out above, mandates that no person shall be required or permitted to provide labour or service to another on payment of anything less than the minimum wage and if the Exemption Act, by excluding the applicability of the , provides that minimum wage may not be paid to a workman employed in any famine relief work, it would be clearly violative of Article 23.
The respondent however contended that when the State undertakes famine relief work with 281 a view to providing help to the persons affected by drought and scarcity conditions, it would be difficult for the State to comply with the labour laws, because if the State were required to observe the laws, the potential of the State to provide employment to the affected persons would be crippled and the State would not be able to render help to the maximum number of affected persons and it was for this reason that the applicability of the was excluded in relation to workmen employed in famine relief work.
This contention, plausible though it may seem is in, my opinion, unsustainable and cannot be accepted.
When the State undertakes famine relies work it is no doubt true that it does so in order to provide relief to persons affected by drought and scarcity conditions but none the less it is work which enures for the benefit of the State representing the society and if labour or service is provided by the affected persons for carrying out such work, there is no reason why the State should pay anything less than the minimum wage to the affected persons.
It is not as if a dole or bounty is given by the State to the affected persons in order to provide relief to them against drought and scarcity conditions nor is the work to be carried out by the affected persons worthless or useless to the society so that under the guise of providing work what the State in effect and substance seeks to do is to give dole or bounty to the affected persons.
The court cannot proceed on the basis that the State would undertake by way of famine relief, work which is worthless and without utility for the society and indeed no democratic State which is administered by a sane and sensible Government would do so because it would be sheer waste of human labour and resource which can usefully be diverted into fruitful and productive channels leading to the welfare of the community and creation of national asset or wear.
It is difficult to appreciate why the State should require the affected persons to provide labour or service on work which is of no use to the society, instead of simply distributing dole or bounty amongst the affected persons.
There is no reason which the State should resort to such a camouflage.
The presumption therefore must be that the work undertaken by the State by way of famine relief is useful to the society and productive in terms of creation of some asset or wealth and when the State exacts labour or service from the affected persons for carring out such work, for example, a bridge or a road, which has utilised for the society and which is going to augment the wealth of the State, there can be no justification for the State not to pay minimum wage to the affected persons.
The State cannot be permitted to take advantage of the 282 helpless condition of the affected persons and extract labour or service from them on payment of less than the minimum wage.
No work of utility and value can be allowed to be constructed on the blood and sweat of persons who are reduced to a state of helplessness on account of drought and scarcity conditions.
The State cannot under the guise of helping these affected persons extract work of utility and value from them without paying them the minimum wage.
Whenever any labour or service is taken by the State from any person, whether he be affected by drought and scarcity conditions or not, the State must pay, at the least, minimum wage to such person on pain of violation of Article 23 and the Exemption Act in so far as it excludes the applicability of the to workmen employed on famine relief work and permits payment of less than the minimum wage to such workmen, must be held to be invalid as offending the provisions of Article 23.
The Exemption Act cannot in the circumstances be relied upon by the respondent as exempting it from the liability to pay minimum wage to the workmen engaged in the construction work of Madanganj Harmara Road.
We must then proceed to consider whether on the facts the labour provided by the workers employed in the construction work of Madanganj Harmara Road could be said to be 'forced labour on the ground that they received wage less than Rs.7 per day.
Now it was not disputed on behalf of the respondent that the wage paid to a gang of workmen depended upon the work turned out by a particular gang and if it was less than the norm fixed by the Public Works Department, the wage earned by each member of the gang would fall short of the minimum wage of Rs. 7 per day.
But the argument was that this did not involve any breach of Article 23 because if any particular gang turned out work according to the norm fixed by the Public Works Department, the amount paid to the Mate of the gang was enough to give to each workman, on distribution, the minimum wage of Rs. 7 per day, and it was only if less work was turned out by the gang that the workmen would receive less than the minimum wage of Rs. 7 per day and this result would ensue not on account of any default on the part of the respondent but entirely because of the lethargy of the workmen constituting the gang.
The workmen, said the respondent, could always earn the minimum wage of Rs. 7 per day by turning out work according to the norm fixed by the Public Works Department but if they did not do so and in consequence received less than the minimum 283 wage of Rs. 7 per day the respondent could not be held responsible for breach of the fundamental right conferred under article 23.
This argument does, at first blush, appear to be attractive, but a closer scrutiny will reveal that it is unfounded.
If we look at the Notification issued under the fixing the minimum wage of Rs. 7 per day for workmen employed in the construction work, it will be obvious that the minimum wage is fixed per day and not with reference to any particular quantity of work turned out by the workman during the day.
Nor does the Notification empower the employer to fix any particular norm of work to be carried out by the workman with reference to which the minimum wage shall be paid by the employer.
The minimum wage is not fixed on piece rate basis, so that a particular minimum wage would be payable only if a certain amount of work is turned out by the workman and if he turns out less work, then the minimum wage payable would be proportionately reduced.
Here the minimum wage is fixed at Rs. 7 per day and that is the minimum wage which must be paid by the employer to the workman so long as the workman works throughout the working hours of the day for which he can lawfully be required to work.
The employer may fix any norm he thinks fit specifying the quantity of work which must he turned out by the workman during the day, but if the workman does not turn out work in conformity with such norm, the employer cannot pay him anything less than the minimum wage.
If the norm fixed by the employer is reasonable and the workman does not turn out work according to such norm, disciplinary action may be taken against the workman and in a given case he may ever be liable to be thrown out of employment, but he cannot be paid less than the minimum wage, unless, of course, the minimum wage fixed by the Notification under the is co related with the quantity of work to be turned out by the workman.
Otherwise, it would be the easiest thing for the employer to fix an unreasonably high norm which a workman working diligently and efficiently during the day cannot possibly reach and thereby deprive the workman of the minimum wage payable to him.
There can therefore be no doubt that in the present case the respondent was not entitled to pay less than the minimum wage to the workman belonging to a gang on the ground that such gang turned out work less than the norm fixed by the Public Works Department.
I must therefore hold that each workman employed in the construction work of Madanganj Harmara Road was entitled to 284 receive the minimum wage of Rs. 7 per day from the respondent and the respondent was not entitled to reduce the wage payable to the workman below the minimum of Rs. 7 per day on the ground that the gang of which the workman was a member had turned out work less than the norm fixed by the Public Works Department.
I would accordingly direct the respondent to pay to each workman employed in the construction work of Madanganj Harmara Road the difference between the minimum wage of Rs. 7 per day and the actual wage paid during the period that the workman provided labour on this construction work.
I do not think it should be difficult for the State to carry out this direction since the workman employed on this construction work are all residents of the surrounding area and the muster roll maintained by the Public Works Department would give the particulars of such workmen.
I would direct that the arrears of difference between the minimum wage of Rs. 7 per day and the actual wage disbursed shall be paid by the respondent to the workmen within two months from today and a report to that effect shall be submitted by the respondent to this Court on or before 30th April, 1983 setting out particulars of the payments made and the names of the workmen to whom such payments are made.
I would also direct that the State shall hereafter pay to each workman employed in any famine relief work including the construction work of Madanganj Harmara Road, minimum wage for the labour provided in such construction work and no deduction in the minimum wage shall be made on the ground that the work turned out by such workman is less than the norm fixed by the Public Works Department, unless and until a notification is issued under the co relating the minimum wage with a particular quantity of work to be turned out by the workman.
Since the petitioners have succeeded in the writ petition, the respondent will pay the costs of the writ petition to the petitioners.
PATHAK J. I agree with the order proposed by my learned brother.
But while he has found substance in the contention that the case is one of "forced labour" within the meaning of article 23 of the Constitution, I prefer to rest my decision on the ground that there is a breach of article 14 of the Constitution.
It appears that in order to provide relief to persons affected by drought and scarcity conditions in the area, employment has been offered in the construction of the Madanganj Harmara Road 285 Payment of wages for the day is determined by the Public Works Department on the basis of a standard norm of work, the wage for completing the daily standard norm being fixed at Rs. 7.
It may be noted that the minimum wage prescribed under the in respect of such work is also Rs. 7 per day.
The Public Works Department has declared that if the quantum of work turned out during the day is less than the fixed standard norm the workers will be paid a mere proportionate amount of the wage of Rs. 7 per day, that is to say they will be entitled to a reduced wage only.
Sanction for not adhering to the prescribed minimum wage of Rs. 7 per day and making payment of a lesser wage has been drawn from section 3 of the Rajasthan Famine Relief Works Employees (Exemption from Labour Laws) Act, 1964, which in provides, inter alia, that the will not apply to famine relief works or the employees thereof.
The being thus out of the way, it is open to the Public Works Department to prescribe whatever wages norms it considers appropriate for payment to persons, employed by way of relief, who are affected by drought and scarcity conditions.
It is apparent that in the matter of wages such persons have been treated as a class different from that to which workers from other areas belong.
While the latter are entitled under the to the prescribed minimum wage, the former must be content with a lesser wage if the work turned out is less than the norm.
To my mind, there is no justification for such discrimination.
The circumstance that employment has been given to persons affected by drought and scarcity conditions provides only the reason for extending such employment.
In other words, the granting of relief to persons in distress by giving them employment constitutes merely the motive for giving them work.
It cannot affect their right to what is due to every worker in the course of such employment.
The rights of all the workers will be the same, whether they are drawn from an area affected by drought and scarcity conditions or come from elsewhere.
The mere circumstance that a worker belongs to an area effected by drought and scarcity conditions can in no way influence the scope and sum of those rights.
In comparison with a worker belonging to some other more fortunate area and doing the same kind of work, is he less entitled than the other to the totality of those rights? Because he belongs to a distressed area, is he liable in the computation of his wages, to be distinguished from the other by the badge of his misfortune? The prescription of equality in Art, 286 14 of the Constitution gives one answer only, and that is a categorical negative.
It is urged for the respondents that employment is provided to all able bodies inhabitants of the area as a measure of relief in their distress and it has been considered desirable to provide employment to all, even though at a wage below the prescribed minimum wage, than to provide employment to some only at the prescribed minimum wage.
The argument evidently proceeds on the assumption that the wages are drawn from a fund too limited to provide for payment of a minimum wage to all.
I see no justification for proceeding on that assumption.
When the State employs workers for doing work needed on its development projects, it must find funds for such projects.
And the fund must be sufficient to ensure the prescribed minimum wage to each worker, and this is particularly so having regard to the concept of a "minimum wage.
" It seems to me that by prescribing the criterion which it has, the Public Works Department has effected an invidious discrimination bearing no reasonable nexus to the object behind the employment.
In my judgment, the workers employed in the construction of the Madanganj Harmara Road as a measure of relief in a famine stricken area are entitled to a minimum wage of Rs. 7 per day, and that wage cannot be reduced by reference to the Rajasthan Famine Relief Works Employees (Exception from Labour Laws) Act, 1964 because in so far as the provisions of section 3 OF that Act countenance a lesser wage they operate against Art 14 of the Constitution and are, therefore, void.
S.R. Petition allowed.
| Under the Reserve Bank of India (Staff) Regulations, 1948 framed under section 58 of the , the terms and conditions of service of the staff (including officers) in the Reserve Bank were revised and regulated from time to time.
Ever since the date of the Staff Regulations of 1948 and even prior thereto, there were "groups" constituted for the different departments of the Reserve Bank, and officers were required to exercise irrevocable options for service in any particular Group.
Those who had opted for a service in a particular Group were to be normally eligible for promotion in that Group only.
The grouping was revised with effect from April 1951 when employees were asked to exercise their option with regard to the Group of their choice.
In 1951, the various departments of the Bank were re classified into three Groups, Group I, Group II and Group III.
This system of grouping continued until 1955, in which year the Bank found it necessary to reorganise the Agricultural Credit Department.
Accordingly, the staff attached to the various departments were regrouped into Groups I, II, III, and IV, with effect from April 1, 1957.
In each of these Groups, there are six grades of officers based on pay scales, namely, Grades A, B, C, D, E and F, the lowest being Grade A and the highest being Grade F.
Each Group had its own seniority list, that is to say, there were four separate seniority lists, one for each group.
The latest of such lists prior to the draft combined seniority list of 1978 is dated July 1,1976.
Earlier to the said list dated July 1, 1976, the Reserve Bank had constituted a Cadre Review Committee in 1970 followed by another Committee.
On the 412 basis of the report submitted by the Cadre Review Committee in October 1972, the Bank issued an Administrative Circular No. 15 dated May 22, 1974 specifying the decisions taken by it in the light of the recommendations made by the Committee.
One such decision which the Bank took was to prepare a common seniority list for and to provide for inter group mobility at the lowest level of officers in each group, namely, Grade A officers, including those who were promoted to Grade B on or after January 1, 1970.
With regard to higher grades (including officers in Grade B promoted prior to January 1, 1970), the Bank decided to retain the "group wise seniority as at present".
The inter group mobility in Grades C and D was to be introduced only to a limited extent, namely, "on a swap basis".
It was first to be introduced in Grade C and thereafter to be extended "in due course" to the officers in Grade D.
The two higher Grades, namely, Grades E and F were left untouched and no intention was expressed in the above circular to introduce either combined seniority or any scheme for inter mobility in these grades.
In accordance with the decisions expressed in the Administrative Circular dated May 22, 1974 the Bank published separate seniority lists of officers in Grade B and above for the years 1974, 1975 and 1976.
By the Administrative Circular No. 8 dated January 7, 1978, the Bank stated that it had decided to combine the seniority of all officers on the basis of their total length of service (including officiating service) in Group I (Section A), Group II and Group III.
The seniority of all officers in each of the three Groups was to be combined with effect from May 22, 1974 on the basis of their total length of service, including officiating service, in the grade in which they were then posted on a regular basis.
The Circular introduced combined seniority with retrospective effect from May 22, 1974 (the date of Administration Circular No. 15) as it was "fair and equitable to the officers as a class".
The effect of this decision is that the group wise system of seniority which was in existence for more than 27 years stands substituted by a combined seniority for officers in Group I (Grade A) and in Groups II and III with retrospective effect.
That has adversely affected the existing seniority of officers, particularly of those in Group I, who are now placed many places below their existing position of seniority, some by several hundred places.
Hence these twenty five petitions under article 32 by the petitioners, all of whom are officers in Group I, and who are given their due seniority as on July 1, 1976.
Dismissing the petitions, the Court ^ HELD: 1:1.
The Administrative Circular No. 8 dated 7 1 1978, the Office Order No. 679 dated 22 4 1978 and the draft combined seniority list are not violative of the rights of the petitioners under Articles 14 and 16 of the Constitution.
Whether there should be a combined seniority in different cadres or groups is a matter of policy which does not attract the applicability of the equality clause.
[442 D F] Reserve Bank of India vs N. C. Paliwal, ; , applied and followed.
413 1:2.
The historical events make it clear that the various Departments of the Reserve Bank were grouped and regrouped from time to time.
Such adjustments in the administrative affairs of the Bank are a necessary sequel to the growing demands of new situations which are bound to arise in any developing economy.
The group system has never been a closed or static chapter and the officers of the various groups were not kept, as it were, in quarantine.
The group system has been a continuous process of trial and error and the impugned scheme of inter group mobility has emerged as the best solution of the experience of the past.
Combined seniority has been recommended by two special committees, whose reports reflect the expertise and objectivity which was brought to bear on their sensitive task.
[441 B D] 1:3.
Inter group mobility and common seniority are a safe and sound solution to the conflicting demands of officers belonging to Group I on one hand and those of Groups II and III on the other.
Private interest of employees of public undertakings cannot override public interest and an effort has to be made to harmonize the two considerations.
No scheme governing service matter can be fool proof and some section or the other of employees is bound to feel aggrieved on the score of its expectations being falsified or remaining to be fulfilled.
[441 D E] Arbitrariness, irrationality, perversity and mala fides will of course render any scheme unconstitutional but the fact that the scheme does not satisfy the expectations of every employee is not evidence of these.
Vested interests are prone to hold on to their acquisitions and the Group I officers have to surrender a part of the benefits which had accrued to them in a water tight system of grouping.
Combined seniority is indispensable for the smooth functioning of the Bank and no organisation can function smoothly if one section of its officers has an unfair advantage over others in matters of promotional opportunities.
The reports of the Cadre Review Committee and the Thareja Committee show that combined seniority has emerged as the most acceptable solution as a matter of administrative, historical and functional necessity.
Further, the conclusion to which these committees came were considered by the Bank when Shri M. Narasimhan, later India 's Executive Director in the World Bank, was the Governor and it was after Dr. I.G. Patel, Formerly Secretary, Economic Affairs, Govt.
of India and Deputy Administrator, United Nations Development Programme, took over as Governor in December 1977 that the final decision was taken by the Central Board to introduce inter group mobility and combined seniority.
[441 E H, 442 A B] 2.
As regards the retrospective operation given to Scheme with effect from May 22, 1974, it does appear that the Board has struck a via media between two extreme contentions advanced by officers belonging to Group I and those belonging to Groups II and III.
But that was inevitable and it was the best solution in the peculiar circumstances of the case.
In order to rectify the imbalances and anomalies caused by the compartmentalised and group wise seniority, it was necessary to give retrospective effect to the Combined Seniority List.
Officers belonging to Group I urged that the Scheme should be brought into effect from January 1, 1976, while those belonging to Groups II and III wanted the Scheme to be brought into effect from January 1, 1970.
The Central Board struck a balance by choosing the date May 22, 1974, because that was the date on which 414 the decision in regard to combining the seniority retrospectively with effect from January 1, 1970 in regard to Grade 'A ' and part of Grade 'B ' officers was announced.
It was, again, on that date that the Bank had announced that a similar decision in regard to the remaining grades of officers was under its consideration.
Thus, at least on May 22, 1974 it was known to officers of all grades that a combined seniority list was due to be brought into force.
If a certain section officers succeeded in obtaining promotional benefits thereafter, the imbalance introduced thereby in the services of the Bank and the consequent dissatisfaction had to be rectified.
That could only be done by not recognising the accelerated promotions obtained in the intervening period by a certain class of officers.
Any scheme of seniority is bound to produce isolated aberrations and that fact cannot justify the argument that the entire scheme is for that reason violative of the guarantee of equality.
[442 F H, 443 A D] 3:1.
The power to frame service conditions is not derived from clause (j) of section 58(2) of the .
Section 58(2) (j) refers to staff funds and superannuation funds and it cannot comprise service conditions.
Clause (j) cannot be split up to read: "the constitution and management of staff: and superannuation funds for the officers and servants of the Bank".
It hardly makes any sense that way.
What the clause means is: "the constitution and management of staff and superannuation funds for the officers and servants of the Bank".
An important subject like the service conditions of the staff could not have been provided for in such a dubious and indirect manner.
Nor indeed, could it have been described as "constitution and management of staff".
A rule of seniority cannot properly fall under such a head.
[426 A D] Reserve Bank Employees Association vs Union of India, approved.
Where a specific power is conferred without prejudice to the generality of a power already conferred, the specific power is only illustrative and cannot restrict to width of the general power.
Therefore, the ambit of the general power conferred by sub section (1) cannot be attenuated by limiting it to matters specified in sub section (2) of section 58, the provisions whereof are not exhaustive of the power of the Central Board to make regulations.
[426 D F] Emperor vs Shibnath Banerjee, 72 I.A. 241; Omparkash vs Union of India, A.I.R. 1971 SC 771, 773, 774, referred to.
The doctrine of ultra vires in relation to the powers of a statutory corporation has to be understood reasonably and so understood, "whatever may fairly be regarded as incidental to, or consequential upon, those things which the Legislature has authorised ought not (unless expressly prohibited) to be held by judicial construction to be ultra vires".
The Central Board of Directors of the Reserve Bank has the power to make service regulations under section 58(1) of the Act.
The Board is vested with power to make regulations in order to provide for all matters for which provision is necessary or convenient for the 415 purpose of giving effect to the provisions of the Act and it is not only convenient but manifestly necessary to provide for the service conditions of the Bank 's staff in order to give effect to the provisions of the Act.
It cannot be denied that the power to provide for service conditions of the staff is at least incidental to the obligation to carry out the purposes for which Bank was constituted.
[426 G H, 427 A D] Armour vs Liverpool Corporation, , 434, 435; Attorney General vs Great Eastern Ry.
Co., 5 Appeal Cases 473, quoted with approval.
There is no doubt that a statutory corporation can do only such acts as are authorised by the statute creating it and that, the powers of such a corporation cannot extend beyond what the statute provides expressly or by necessary implication.
If an act is neither expressly or impliedly authorised by the statute which creates the corporation, it must be taken to be prohibited.
But, section 58(1) being in the nature of an enabling provision under which the Central Board "may" make regulations in order to provide for all matters for which it is necessary or convenient to make provisions for the purposes of giving effect to the provisions of the Act, the Central Board has the power to frame regulation relating to the conditions of service of the Bank 's staff.
If it has that power, it may exercise it in accordance with section 58(1) or by acting appropriately in the exercise of its general power of administration and superintendence.
[428 E F, G H, 429A] 4:3.
By section 7(2) of the , the general superintendence and direction of the affairs and business of the Bank are entrusted to the Central Board of Directors, which is empowered to exercise all powers and do all acts and things which may be exercised or done by the Bank.
Matters relating to the service conditions of the staff are, pre eminently, matters which relate to the affairs of the Bank.
It would therefore be wrong to deny to the Central Board the power to issue administrative directions or circulars regulating the conditions of service of the Bank 's staff.
To read into the provisions of section 58 (1) a prohibition against the issuance of such administrative directions or circulars is patently to ignore the scope of wholesome powers conferred upon the Central Board of Directors by section 7 (2) of the Act.
While issuing the administrative circular governing the staff 's conditions of service, the Central Board of Directors has neither violated any statutory injunction nor indeed has it exercised a power which is not conferred upon it by the statute.
The circular is strictly within the confines of section 7 (2).
[429 A E,G H, 430 A] Sukhdev Singh vs Bhagatram, ; , reiterated.
So long as staff regulations are not framed under section 58 (1), it is open to the Central Board to issue administrative circulars regulating the service conditions of the staff, in the exercise of power conferred by section 7 (2) of the Act.
The power to frame rules or regulations does not necessarily imply that no action can be taken administratively in regard to a subject matter on which a rule or regulation can be framed, until it is so framed.
The only precaution to observe in the cases of statutory corporations is that they must act within the framework of their charter.
Its express provisions and necessary implications must at all events be observed scrupulously.
[430 A B, 431 A B] 416 T. Cajee vs U. Jormanik Siom, ; ; B.N. Nagarajan vs State of Mysore, , explained and applied.
Any action taken by the Central Board of Directors under section 7 (2) is subject to the directions given by the Central Government under section 7(1), just as any regulation framed by it under section 58 is subject to the previous sanction of the Central Government.
In either case, the Central Board has to abide by the decision or directions of the Central Government.
There can, therefore; be no apprehension that, by taking action under section 7 (2), the Central Board may circumvent the condition on which the power conferred by section 58 can be exercised by it.
The overall authority of the Central Government acts as a restraining influence on any action taken by the Central Board, whether it acts under one or the other provision of the Act.
[431 B D] 5:1.
A consideration of the entire material on the subject, including the correspondence that has transpired between the Reserve Bank and the Central Government and in particular the Memorandum of January 21, 1949, makes it clear that the Staff Regulations of 1948 were not framed in the exercise of power conferred by section 58 of the Act and that they were not made with the previous sanction of the Central Government.
Whereas section 58 (1) envisages the making of regulations "with the previous sanction of the Central Government", the Regulations of 1948 do not purport to have been made with such sanction.
Indeed, in so far as the ex facie aspect of the matter is concerned, the Regulations of 1948 have not been made under section 58 at all.
The statement contained in paragraph 9 of the counter affidavit of the Deputy Manager dated March 30, 1980 that the Memorandum of January 21, 1949 contains a "factual mistake" to the effect that the Staff Regulations (which would include the Regulations of 1948) were made with the approval of the Central Government, correctly clarifies the position.
It is one thing to infer that the Regulations had the approval of the Central Government since no objection was raised by it to the making of the Regulations and quite another that they were made with its previous sanction.
[431 F H, 433 B D] Reserve Bank Employees Association vs Union of India, ; Emperor vs Shibnath Barerjee; 72 I.A. 241; Om Parkash vs Union of India A.I.R. 1971 S.C. 771, 773, 774; Reserve Bank of India vs N.C. Paliwal,[1977] 1 SCR 377; Bimal Kumar Shome vs P.C. Bhattacharya, Misc.
Petition No. 206 of 1967 decided on August 6, 1969 (Bombay H.C.) R.M. Joshi vs The Reserve Bank of India, Civil Writ No. 876 of 1974 decided on March 19, 1980 by a Full Bench (Delhi H.C.), approved 5:2.
Since the Staff Regulations of 1948 are in the nature of administrative directions, it was competent to the Central Board to alter or amend them by an administrative circular.
No lack of statutory powers is involved in that process.
Under section 7(2), the Central Board has the power to provide for service conditions of the Bank 's staff by administration circulars, so long as they do not impinge upon any Regulations made under section 58 of the Act.
[433 F G, 434 A] 417
|
Civil Appeal Nos. 386, 529 & 532 of l98O. From the Judgment and order dated the 8th February, 198() of the Bombay High Court in Miscellaneous Petitions Nos.
1340 of 1977, 141 of 1977 and 1535 of 1976.
IN C.A. 386 OF 1980.
Dr. L.M. Singhvi, O.P. Rana, R.P. Vyas, M.N. Shroff and Abhishek Manu Singhvi for the Appellant.
K.K. Singhvi, Anil Gupta and Brij Bhushan, for Respondent.
lN CIVIL APPEAL No. 529 AND 532 OF l98O. Harish Salve, J.B. Dadachanji and D.N. Mishra for the Appellants in C.A. 529.
S.B. Bhasme, S.S. Khanduja and A.K. Galati for the Respondent in C.A. 529 of 1980.
Y.H. Mocdala B.P. Singh and Ranjit Kumar for the Respondent in CA.
532 of l98O.
The Judgment of the Court was delivered by CHANDRACHUD, C.J.
These appeals by the State of Maharashtra arise out of a judgment dated February 8, 1980 of the High Court of Bombay in a group of writ petitions which were filed under Article 226 of the Constitution.
By those writ petitions, the petitioners, who are respondents herein, challenged the validity of the Maharashtra Vacant Lands (Prohibition of Unauthorised occupation and Summary Eviction) Act, LXVl of 1975 and the legality of certain orders passed thereunder.
We will refer to the aforesaid 135 Act as "the Act".
The Act replaced an ordinance, bearing a A similar title, which was promulgated by the Governor of Maharashtra on November 11, 1975.
The Act was amended twice, first by Act No. XXXVII of 1976 and then by Act No. VII of 1977.
We will refer to these two these two Acts as 'the First Amendment Act ' and the 'Second Amendment Act '.
Several writ petitions were filed in the Bombay High Court to challenge the validity of the Act and the orders passed under it, the facts being broadly or the same pattern.
In order to understand the nature of the controversy in these appeals, it would be sufficient for our purpose to set out the facts in one of those petitions, namely Writ Petition No. 1340 of 1977.
The petitioners in that petition are the owners of a plot of land which is part of survey No. 154, Bandra, Greater Bombay admeasuring about 1100 square meters.
Though the petitioners had obtained possession of the plot in about .
1964 under an agreement of sale, they became owners thereof under an agreement of sale dated September 20, 1974.
The plot is assessed to non agricultural assessment and to property tax by the Bombay Municipal Corporation.
There are four chawls consisting of 31 one room tenements and a two storeyed building having four rooms on each floor on the plot.
These buildings were constructed by the petitioners between 1964 and 1970.
The two storeyed structure is in the occupation of the petitioners while the one room tenements have been let out by them.
These structures having been put up by the petitioners without the requisite permission, the Bombay Municipal Corporation called up them to demolish the same.
Thereupon, the owners of various plots of land comprised in Survery No. 154 formed an Association through, which they requested the Standing Committee of Bombay Municipal Corporation to regularise the constructions.
The Association was, however, informed that its request could not be granted because, the Government was considering a proposal for the acquisition of the land for the purpose of an industrial estate.
The Association then approached the Special Land Acquisition officer requesting that the land be released from acquisition.
The Land Acquisition officer informed the Association that Survey No 154 had been released from acquisition by a notification dated September 14, 1964.
It would appear from the contentions of the petitioners in the aforesaid writ petition that there are two main tarred roads, two tarred by lanes, two Municipal Primary Schools,one High School 136 and one Municipal dispensary in the area comprised in Plot No. 154.
Besides, the head office of the Central Consumer Co operative Society is also situated in one of the buildings situated on that plot of land.
The structure standing on the plot are alleged to be of a permanent nature.
In any event, it seems clear that they are provided with essential civic amenities like water and electricity.
The land belonging to the petitioners was declared by the Competent Authority as "Vacant Land" in exercise of the powers conferred upon it by section 2 (f) (b) of the Act.
The constitutionality of the Act was challenged by the respondents on the ground that it violates the fundamental rights conferred upon them by Articles 14, 19(1) (f) and 51 of the Constitution, that the Legislature lacked the legislative competence to pass the Act and that, the Act delegated excessive and uncanalised powers to the Executive to pass orders under its provisions.
The long title of the Act shows that it was passed in order to prohibit unauthorised occupation of vacant lands in urban areas in the State of Maharashtra and to provide for summary eviction of persons from such lands and for matters connected therewith.
According to the preamble of the Act, it had become necessary to take certain measures because the number of unauthorised occupants on vacant lands in urban areas was increasing rapidly and was causing grave danger to public health and sanitation and to the peaceful life of the inhabitants of these areas.
The Act was applicable to the entire State of Maharashtra but, in the first instance, it was brought into force in the Bombay Metropolitan Region on November 11, 1975 which was the date on which the ordinance was promulgated.
The Act confers power on the State Government to bring its provisions into force in such other urban areas as may be specified by a notification.
Later, the Act was brought into force in the urban areas of Solapur, Aurangabad, Nagpur and Kolhapur.
Sections 3 and 4 of the Act around which a large part of the argument revolves read thus: "3.
Prohibition against unauthorised Occupation of vacant land.
(1) No person shall, on or after the appointed date, occupy any vacant land or continue in occupation of any vacant land 137 in any urban area or erect any shelter or enclosure or other A structure on such land for the purposes of residence or otherwise without the express permission in writing of the Municipal commissioner in a corporation area, of the Chief officer in a municipal area and elsewhere, of the Collector, or except in accordance with any law for the time being in force in such urban area.
(2) No person shall on or after the appointed date abet any person in occupying any vacant land or in continuing to occupy such land in any urban area, or in erecting any shelter, enclosure or other structure on such land for the purposes of residence or otherwise in contravention of the provisions of sub section (1), or shall receive or collect from the occupier of such vacant land any amount whether by way of rent compensation or otherwise or shall in any manner whatsoever operate in relation to the unauthorised occupation of such vacant land.
Provided that, the State Government or any officer or authority specified by it in this behalf, shall have a right to receive or collect from the occupier of such vacant land such reasonable amount by way of penal charges as may be determined, by general or special order, by the State Government, till such time as the structure erected in contravention of the provisions of sub section (1) is removed from the land.
Payment of any such amount shall not create or confer on the unauthorised occupant any right of occupation of such land or structure.
Such amount if not paid on demand shall be recoverable as an arrear of land revenue.
The amount so collected shall, as far as possible, be utilised for purposes connected with the eviction, rehabilitation and improvement of conditions of unauthorised occupants of vacant lands." "4.
Power of Competent Authority to evict persons from unauthorised occupation of vacant lands.
(1) Notwithstanding anything contained in any law for time being in force, if the Competent Authority, either on application or suo motu, has reason to believe that any person is occupying any vacant land in an urban area in contravention of the provisions of section 3, it may by 138 order require such person to vacate the land forthwith or by certain time intimated to such person, and to remove all property therefrom, and if such person fails to comply with the order to vacate the land and to remove all property therefrom, he may be similarly evicted from such land by the Competent Authority, and any property which may be found thereon may be ordered by the Competent Authority to be forfeited to such authority as State Government may by general or special order specify and be removed from the vacant land.
For the purposes of eviction and removal of any such property, the Competent Authority may take, or cause to be taken such steps and use, or cause to be used, such force, and may take such assistance of the Police officers as the circumstance of the case may require.
Explanation For the avoidance of doubt, it is hereby declared that the power to take steps under this sub section includes the power to enter upon any land or other property whatsoever.
(2) The order of eviction of any person from any vacant land or forfeiture of any property therein or any property therefrom under sub section (1) shall be final and conclusive, and shall not be called in question in any Court.
(3) A person who is found to be on any vacant land belonging to, or vesting in, another person shall, unless the contrary is proved by him to the satisfaction of the Competent Authority, be deemed to be in occupation of such vacant land in contravention of the provisions of section 3." Sections 4 A, 4 B and 4 C were inserted into the Act by the Second Amendment Act.
Those sections read thus: "4 A. Permission for renovation of structure on vacant lands a temporary measure in certain circumstances.
(1) Notwithstanding anything contained in sections 3 and 4, where any occupier of a structure on a vacant land, in respect of which penal charges are collected from hi under section 3, or any occupier is by an order made under sub section (1) of section 4 required to vacate any vacant 139 land and to remove all property (including any structures) A therefrom, desires to renovate the structure at his risk and expense as a temporary measure, he may seek the previous permission of the Controller of Slums to do so.
On receipt of any application for such permission, if the Controller or Slums is, after such inquiry as he deems fit to make, satisfied that the structure is not fit for human habitation and the proposed renovation is necessary to make it so fit temporarily, he may, subject to such conditions as he may impose grant the required permission.
(2) Where any structure is renovated in accordance with the permission granted under sub section (1), the Competent Authority shall not evict the occupier of the structure so renovated.
till such time as the Controller of Slums may specify .
Provided that if, in the opinion of the Controller of Slums, occupier has at any time committed a breach of any of the conditions subject to which the permission was granted, he may cancel the permission granted and direct the Competent Authority to take necessary action against the occupier under section 4 forthwith for his eviction and forfeiture and removal of his property.
4 B. Recovery of dues of financing institutions, which render assistance for renovation of structures.
(1) Where an occupier of any structure referred to in section 4A has availed of an y financial assistance for renovation of the structure from any financing institution recognised by the State Government in this behalf; the Controller of Slums may, at the request of the financing institution, collect on behalf of that institution the amount of loan advanced to the occupier by that institution in such instalments and at such intervals, and remit the amount so collected to the institution in such manner, as may be directed by the State Government.
(2) If any such occupier fails to pay any amount due to the financing institution on or before the due date, the Controller of Slums may send to the Collector, a certificate under his hand indicating therein the amount which is due 140 to the financing institution.
Thereupon, the Collector or any officer authorised by him shall recover the amount due as an arrear of land revenue: Provided that no such certificate shall be sent to the Controller, unless the occupier has been served with a notice by the Controller of slums calling upon him to pay the amount due by a specified date.
4 C. Powers of controller of Slums under sections 4A and 4B exercisable by authorised officer also.
For the purposes of section 4A and section 4A, "Con troller of Slums" includes any officer subordinate to him, who is authorised by him in writing in that behalf.
" Section 5 of the Act prescribes the penalty for contravention of the provisions of Section 3(1) or for failure to comply with an order made by the Competent Authority under section 4 or for obstructing the Competent Authority in the exercise of any power conferred upon it by the Act.
The penalty extends to imprisonment for a period of three years and fine.
Section 8 of the Act provides that no court shall have jurisdiction to entertain any proceeding, civil or criminal, in respect of the eviction of any person from any vacant land under the Act or in respect of any order made or action taken by the Competent Authority in the exercise of the powers conferred by the Act or to grant any stay or injunction in respect of such order or action.
This section further provides if any suit or other proceeding in respect of the eviction of any person from any vacant land is pending on the appointed date in any court, it shall abate.
The expression "Vacant Land" is defined in section 2 (f) of the Act.
The original definition was replaced by the First Amendment Act after which the section reads as follows .
"2 (f) 'vacant land ', in relation to any urban area, means (a) all lands in such area, whether agricultural or non.
agricultural, which are vacant and are not built upon on the appointed date; 141 (b) all lands in such area on which any structure has been or is being constructed otherwise than in accordance with any law regulating the construction of such structure and which the Competent Authority may, from time to time, by an order in writing, specify and declare to be vacant lands by announcing by beat of drum or other suitable means on or in the vicinity of such lands, and the declaration so made shall be deemed to be notice to all those who are occupying such lands that all such lands shall be vacant lands for the purposes of this Act; and includes, in particular, all lands specified in the Schedule to this Act.
The State Government may, from time to time, by an order, published in the Official Gazette amend that Schedule by adding thereto any land or lands specified in that order or by modifying or transferring any entry in that Schedule.
" On December 3, 1971 a Proclamation of Emergency was issued by the President of India under Article 352 of the Constitution on the ground that a grave emergency existed whereby the security of India was threatened by external aggression.
Another proclamation of Emergency was issued under the same Article on June 25, 1975 on the ground that the security of India was threatened by internal disturbance.
On June 27, 1975, the President issued an order under Article 359 (1) suspending the right to move any Court for the enforcement of the fundamental rights conferred by Articles 14, 21, and 22 of the Constitution for the period during which the above two Proclamations of Emergency were in force.
On August 1, 1965, the Constitution (Thirty eighth Amendment) Act, 1977 was passed whereby, clause 1A was inserted in Article 359 with retrospective effect.
The ordinance which preceded the Act in the instant case was passed on November 11, 1975 while the Act was passed on December 24, 1975.
As stated earlier, the Act came into force in the Bombay Metropolitan Region with retrospective effect from November 11, 1975.
On January 8, 1975, the President of India issued another order under Article 359(1) of the Constitution suspending the right of any person to move any Court for the enforcement of any of the fundamental rights conferred by Article 19 of the Constitution for the period during which the said two proclamations of emergency 142 were in force.
The First Amendment Act was passed on August 3, 1976 while the Second Amendment Act was passed on January 25, 1977.
The Proclamation of Internal Emergency was revoked by the President of India on March 21, 1977 while the proclamation of External Emergency was revoked on March 27, 1977.
On April 30, 1979, the Constitution (Forty Fourth Amendment) Act, 1978 was passed.
By section 2 (a) (ii) of the said Act.
sub clause (f) of clause (i) of Article 19 was omitted from the Constitution and, by section 2(b), consequential amendments were made in clause (5, of Article 19.
By section 8 of the said Act, Article 31 was omitted from the Constitution.
By section 34, a new chapter, namely, Chapter IV, headed "Right to Property", was inserted in Part XII of the Constitution, containing Article 30O A.
As a result of these constitutional provisions, the Act would be void and would cease to have effect from March 27, 1977 if it infringes the fundamental rights conferred by Articles 14 and 19 of the Constitution.
If it infringed Article 31 (1) of the Constitution on the ground that the provisions of Article 19 (1) (f) were violated, the Act would be void and would cease to have effect from March 27, 1977.
If the State Legislature had no legislative competence to pass the Act or the Act infringed the provisions of clauses 2 or 3 of Article 31, the Act would be void from its inception.
Putting it briefly, the Act or any of its provisions would be void or would cease to have effect, as the case may be, from diverse dates depending upon the violation of the particular Article or Articles of the Constitution involved herein.
Since the statutory concept of vacant land ' as defined in Section 2 (f) of the Act permeates the entire Act and is, as it were, the quintessence of the Act, respondents concentrated their attention in the High Court on challenging the vires and legality of that definition.
They succeeded in that challenge for the wighty reasons given by the High Court, which we adopt, except with some minor variations.
Indeed, if the draftsman were to give to the framing of the Act even a part of the care and concern bestowed upon it by the High Court, though not at the same length, many an impediment in upholding the validity of the Act could have been cleared without much difficulty.
If we were to deal again with the manifold challenges made to the validity of the Act, we will be repeating, more 143 or less, what the High Court has said.
Therefore, we propose to dwell upon some of the fundamental objections to which the Act is open and some of the more serious infirmities from which its provisions suffer.
Coming first to the definition of 'vacant land ', Section 2 (f) as amended retrospectively by the first Amendment Act divides vacant lands into four categories: (1) lands which are in fact vacant, that is to say, not built upon; (2) lands on which structures have been or are being constructed otherwise than in accordance with any law regulating the construction of such structures and which the Competent Authority may specify and declare to be vacant lands by announcing by beat of drum or other suitable means; (3) lands specified in the Schedule to the Act; and (4) lands included in the Schedule by the State Government by an order amending the Schedule.
It is evident, despite some needless controversy upon that question in the High Court, that the expression 'land ' in Section 2 (f) of the Act means plots of land with defined boundaries which are generally recognised for revenue and survey purposes.
Section 2(f) (b) requires two conditions to be satisfied in order that a land can be described as a vacant land; Firstly, there has to be an unauthorised structure on the land and secondly, the Competent Authority has, by an order in writing, to specify and declare that land to be a vacant land.
The Act confers upon the Competent Authority the discretion to declare a land as a vacant land without laying down any guidelines to control that discretion.
The Competent Authority has the freedom to pick and choose lands on which there are unauthorised structures and declare some of them as vacant lands and leave other similarly situated untouched.
The second recital in the preamble to the Act on which reliance is placed by the State Government as affording a guideline to the Competent Authority for making a declaration that a certain land is a vacant land cannot serve that purpose.
That recital reads thus: "AND WHEREAS the number of unauthorised occupants on vacant lands in the urban areas in the State was rapidly increasing and was causing grave danger to the public health and sanitation and peaceful life of inhabitants of such areas.
" The Act does not contain any provision whatsoever which is 144 directed at ensuring the public health and sanitation or the peaceful life of the inhabitants of the concerned locality.
Indeed, nothing is farther removed from the true purpose and object of the Act than these considerations.
The last item in the Schedule to the Act includes all public roads and highways in Greater Bombay.
These, surely, cannot be regarded as constituting a grave danger to public health, sanitation or peaceful life of the citizens.
The circumstances which led to the passing of the Act are mentioned in the Statement of objects and Reasons to the Ordinance which are as follows; "It was found that the vacant lands in Greater Bombay and similar other urban areas were rapidly being unauthorisedly occupied by squatters and traffickers in lands.
The different laws and various authorities constituted under these laws, as well as different procedures laid down by these laws, did not permit immediate demolition of unauthorised huts or prevent the growth of unauthorised structures.
The lengthy procedure laid in the laws also prevented the authorities from taking immediate preventive action.
A law which would simplify the procedure and reduce possibilities of litigation, and adequately arm the law enforcing authorities such as Municipal officers, Police officers, Revenue officers and other officers of Government Department to demolish the unauthorised huts and houses was found in mediately necessary.
Further, it was also necessary to take drastic penal action against those who construct unauthorised hutments or colonies of temporary sheds, and traffic in lands and such structures or recover rents by letting out such structures.
" It is clear from this Statement that the evil which was sought to be remedied by the ordinance, which was later replaced by the Act, was not danger to public health or sanitation or to the peaceful life of the inhabitants of the Metropolis of Bombay.
The danger posed by the construction of unauthorised structures is the evil which the Act seeks to remedy.
The Act does not also provide for any safeguard against the arbitrary exercise of the discretion conferred upon the Competent Authority to declare a land as a vacant land.
It is true that abuse of 145 power is not to be assumed lightly but, experience belies the expectation that discretionary powers are always exercised fairly and objectively.
In fact, instances of discriminatory declarations made by the Competent Authority were cited in the High Court to which according to the High Court, no satisfactory answer was given in, the return filed on behalf of the State Government.
The Act does not prescribe any procedure which the Competent Authority is required to adopt before declaring a land as a vacant land.
There is no provision in the Act requiring the Competent Authority to observe even the rudimentary norms of natural justice before making the statutory declaration.
The Authority is not obliged to give notice to anyone and it need not hear any person who is likely to be affected by the declaration.
The State Government, too, is under no obligation to follow any set procedure prior to amending the Schedule so as to include new lands therein.
The power conferred by Sections 3(1) and 4(1) of the Act is similarly uncontrolled and arbitrary.
Indeed, the hall mark of this ill conceived legislation is; "No notice and no hearing".
There can be cases, though their category ought not be enlarged by Courts, wherein failure to afford to hearing before an adverse decision is rendered may not necessarily vitiate that decision.
But, in cases like those before us, a hearing preceding a decision is of the essence of the matter.
It is notorious as the Statement of objects and Reasons of the ordinance shows, that, in Bombay, open lands have been trespassed upon by professional slumlords who have become a law into themselves.
Perhaps, they rise to the occasion by pandering to political needs and pressures but that is beside the point.
Massive encroachments on private properties have led to the virtual deprivation of the title of rightful owners of these properties.
The Act penalises such owner for no fault of theirs and, that too, without giving them an opportunity to be heard.
The fact that the power to make the requisite declaration under the Act is vested in officers of the higher echelons makes no difference to this position and is not a palliative to the prejudice which is inherent in the situation.
The judgment of the High Court cites a glaring instance of the arbitrary and undesirable consequences which follow upon orders which are passed unilaterally, that is, without hearing the parties affected by these orders.
One of the petitioners before the High Court was the owner of a hotel called Nakesh Punjab Hotel.
He held various licences which authorised him to run the hotel.
There was a dispute between him and the Revenue Authorities as to the 146 increase in the quantum of assessment, whereupon he obtained an interim injunction from the City Civil Court, Bombay.
In the meanwhile, the Competent Authority issued a Declaration under Section 2(f)(b) of the Act declaring the plot of land on which the hotel stood as a vacant land.
Within a short time thereafter, the hotel was demolished.
It was urged on behalf of the State Government that the infirmity, if any, from which the Act suffered in its inception has been cured by the passing of the Maharashtra Vacant Lands (Prohibition of Unauthorised occupation and Summary Eviction) (Service of Notice) Rules, 1979.
By these Rules, before issuing any order under Section 2(f)(b) or under Section 4(1) of the Act, the Competent Authority is required to serve a written notice upon any person likely to be affected by such order, calling upon him to show cause within such period as may be specified in the notice why the pro posed order should not be issued.
The Competent Authority is further required to consider any objections submitted to it by any such person within the period specified in the notice.
Rule 3(2) provides for service of such notices.
We are unable to accept that the unconstitutionality of the Act is cured by the framing of the Rules made three and a half years after the Act was passed.
Besides, the Rules only provide for a notice to be given and objections to be considered before the passing of an order under sections 2(f)(b) and 4(1).
They do not make a similar provision before permission is granted or refused under section 3(1) of the Act.
But, what is of greater importance is that, even the Rules do not lay down any guidelines for the exercise of the discretion which is conferred upon the Competent Authority by section 2(f)(b) or section 4(1) of the Act.
Section 2(f)(b) suffers from yet another vice in that, it treats all persons alike irrespective of how they are situated in the matter of their involvement in the construction of unauthorised structures and their interest therein.
Classification requires division into classes which are marked by common characteristics.
Such division has to be founded upon a rational basis and it must be directed at subserving the purposes of the statute.
Section 2(f)(b) and the other cognate provisions of the Act make no distinction at all between owners of lands who have themselves constructed unauthorised structures and those others on whose lands unauthorised structures have been constructed by trespassers.
The latter class of owners who are silent spectators to the forcible and lawless deprivation of 147 their title to their property have been put by the Act on par with trespassers who, taking law into their own hand, defy not merely private owners but public authorities.
Section 2(f)(b), also, suffers from the infirmity of according equal treatment to unequals.
Take a simple example: A plot of land may be vacant in the true sense of the term, that is to say, wholly unbuilt upon.
Another plot of land may have a small structure built upon it in accordance with the Municipal rules and regulations.
The first plot of land attracts drastic provisions of the Act merely by reason of the fact that nothing has been built upon it at all, while the second plot of land is entirely outside the scope of the Act for the reason that some tiny structure is standing thereon.
a Such a classification betrays lack of rationale.
By the second part of the definition of 'vacant land ' in section 2(f) of the Act, vacant land "includes, in particular, all lands specified in the Schedule to the Act".
The Schedule includes various 'lands ' which are built upon, like the B.E.S.T. Depot (Entry 73), the Health Centre at Nawabwadi (Entry 75), the Pumping Station at Vallabhbhai Patel Nagar (Entry 82), the School in Mulund Village (Entry 130) and, last but not the least, all land occupied by public roads and highways in Greater Bombay (Entry 1555).
It is impossible to understand the scheme of the Schedule or to discover any rational basis behind it.
It is also difficult to understand as to why certain lands which are under acquisition for the purposes of the Maharashtra Housing Board and the Bombay Municipal Corporation have been included in the Schedule and other lands similarly situated have not been so included.
Some of the Entries in the Schedule show that unauthorised structures could not have been possibly constructed on the lands mentioned therein.
By and large, the Schedule is divorced from the true object of the Act.
The concluding part of section 2(f) of the Act confers power upon the State Government to amend the Schedule from time to time by an order published in the official Gazette.
This power includes, inter alia, the power to add 'any land or lands ' to the Schedule.
No criterion or standard is laid down in order to enable the State Government to determine objectively as to which lands can be added to the Schedule.
The power to add to the Schedule is in the nature of a legislative power which, in the very nature of things, cannot stipulate for service of notice to the persons affected by the amendment.
This power of amendment of the Schedule is 148 not even conditioned by the fact that the lands added to the Schedule must have unauthorised structures standing thereon.
The State Government is free to pick and choose any land and put it in the Schedule.
This kind of conferment of uncanalised discretion is strawn all over the Act.
Thus, each part of the definition of 'vacant land ' in section 2(f) of the Act is violative of the provisions of Articles 14 and 19(1)(f) of the Constitution.
Article 19(1)(f) has now lost its relevance after the passing of the Constitution (Forty fourth Amendment) Act, 1978 by which clause (f) was deleted.
But the Act had to satisfy the requirements of that clause so long as it was a part of the Constitution.
It may be relevant at this stage to consider as to what is the ultimate fate of lands which are declared as vacant lands under section 2(f).
Until the Competent Authority passes an order under section 4(1) calling upon an occupier to vacate a land, even a trespasser or an unauthorised occupier can continue to be in possession of the land.
If he is granted permission to occupy the land under section 3(1), he cannot be evicted at all, for the simple reason that the order of eviction under section 4(1) can be passed only if a person is in occupation of a land contrary to the provisions of section 3.
Even the eviction of a trespasser from the land can afford no solace to its rightful owner because, the Act does not contain any provision whereby the land can be returned to him after it is freed from unauthorised occupation.
If the owner himself has erected an unauthorised structure, the Act does not provide as to what is to happen to the land after he is evicted therefrom.
By the provisio to section 3(2) which was inserted by the First Amendment Act, power is conferred upon the State Government or, an authority specified in that behalf, to receive and collect from the occupiers of vacant lands a reasonable amount by way of penal charges as may be determined by the State Government Such penal charges can be recovered until such time as the structure erected on the land on contravention of section 3(1) of the Act is removed.
The Statement of objects and Reasons of the First Amendment Act shows that the provision for levying penalty was introduced into the Act in order that occupants of lands on which there were unauthorised structures and.
who are allowed to continue in possession of the structures, do not continue to occupy 149 those lands without payment of any amount at all to public authorities.
It appears that even after forfeiting the structures consequent upon the passing of an order under section 4(1), the State Government has been recovering compensation from unauthorised occupants.
It seems to us quite incongruous that while the true owner is prevented from taking legal proceedings to recover any rent or compensation from persons who had trespassed upon his land, the State Government can recover penal charges from the trespassers.
By the Second Amendment Act, a new section 4 A was inserted in the Act.
That section provides that if any occupier of a structure on a vacant land from whom penal charges are collected under section 3, or if any occupier who is required by an order made under section 4(1) to vacate any vacant land, desires to renovate the structure at his risk as a temporary measure, he may apply to the Controller of Slums for the requisite permission.
The Controller is empowered to grant the permission after making such inquiry as he deems fit, if he is satisfied that the structure is not fit for human habitation and the proposed renovation is necessary to make the structure temporarily fit.
Once such permission is granted and the structure is renovated, the Competent Authority is powerless to evict the occupier of the structure until such time as the Controller of Slums may specify.
By section 4 13, which was also inserted by the Second Amendment Act, financial assistance for renovating structures can be made available by financial institutions recognised by the State Government.
In cases where such financial assistance is availed of, the financial institutions can request the Controller of Slums to collect, on their behalf, the amounts of loans advanced to the occupiers.
The Statement of objects and Reasons of the Second Amendment Act shows that the Government had carried out substantial environment improvements on vacant lands and had sponsored a scheme for building semi permanent houses thereon.
They intended to give to the occupants of such structures security of tenure subject only to the condition of regular repayment by them of the loans given by the financial institutions.
The true owner of lands are totally ignored in this scheme of things, even if they are victims and not the authors of unauthorised constructions.
It was not disputed in the High Court, nor before us, that for a period of more than four years that the Act has been in force, not a single unauthorised and forcible occupier of a vacant land owned by a private person was evicted, nor was a single plot of land encroached upon restored to its rightful owner.
150 We are in agreement with the High Court that the Act does not violate the provisions of article 31(1) of the Constitution.
It does not provide for transfer of ownership of vacant lands to the State or to a corporation owned or controlled by the State; nor does it vest in the State the right of the owner or occupier of vacant lands to recover rent or compensation for use and occupation of such lands.
We are, however, unable to accept the view of the High Court that the Act amounts to a measure of requisition and is bad for the reason that it provides for requisition without payment of compensation.
It is straining the language of the Act to hold that it provides, directly or indirectly, for requisition of private property.
The Act does not transfer the right to possession of vacant lands to the State, its agents or its instrumentalities.
Therefore, the Act does not offend against the provisions of Article 31(2) of the Constitution.
Since that Article is not attracted, no question can arise of the invalidity of the Act on the ground mentioned in Article 31(S), namely, that the Act had not received the assent of the President.
In so far as the question of legislative competence is concerned we uphold the finding of the High Court to the extent that the State Legislature had the competence to pass the Act under Entries 18, 64 and 65 of List II.
Since the Act is, in any event, violative of Article 14 of the Constitution, it is unnecessary to consider the question whether, in so far as it violated Article 19 (l) (f), it revived on the deletion of that Article by the Constitution (Forty fourth Amendment) Act.
We express no opinion on the question whether the doctrine of 'eclipse ' applies both the pre Constitution and post Constitution laws or whether that doctrine applies to pre Constitution laws only.
For these reasons, which are substantially similar to the reasons given by the High Court, we affirm the judgment of the High Court and dismiss these appeals with costs.
We quantify the costs in each appeal at rupees two thousand.
We would like to point out before we close that the object of the state legislature in passing the Act was unquestionably laudable.
It is unfortunate that the legislation has traveled far beyond that object.
The State Government has failed in these proceedings not because the legislature lacks the legislative competence to pass the Act mainly because the provisions of the Act are discriminatory.
151 The Act was passed during the period of Emergency when some of A the safeguards available under Chapter 111 of the Constitution were suspended on the revocation of the Emergency, the Act ought to have been amended or, better still, a new legislation ought to have been introduced so as to comply with the provisions of the Constitution.
We trust that, in the light of our judgment and the judgment of the High Court, the State Legislature will introduce a carefully conceived legislation on the subject at an early date.
The slumlords, who have trespassed on public and private properties, must be evicted and expeditious steps taken to prevent them exploiting any further the helpless member of the community who are virtually at their mercy.
Not only have these defiant law breakers constructed unauthorised structures on private and public properties but, as stated in the objects and Reasons of the Act, they have been collecting extortionate rents from the tenants of such properties, Earlier the State Government acts the better.
M.L.A Appeals dismissed.
| The Maharashtra.
Vacant Lands (Prohibition of Unauthorised occupation and Summary Eviction) Act, LXVI of 1975 passed by the State of Maharashtra was amended twice first by Act No XXXVII of 1976 and later by Act No. VlI of 1977.
Section 2 (f) as amended retrospectively by the First Amendment Act divides "Vacant land" into four categories: (1) lands which are in fact vacant, that is to say, not built upon; (V lands on which structures have been or are being constructed otherwise than in accordance with any law regulating the construction of such structures and which the Competent Authority may specify and declare to be vacant lands by announcing by beat of drum or other suitable means; (3) lands specified in the Schedule to the Act, and (4) lands included in the Schedule by the State Government by an order amending the Schedule.
Section 3 provides that no person shall occupy or enact any shelter enclosure or other structure on such land for the purposes of residence or otherwise without the express permission of the Municipal Corporation and also prohibits any person to collect from the occupier of such vacant land any amount by way 130 of rent or compensation in relation to the unauthorised occupation of such vacant land while it empowers the government to collect or receive from the occupier of such vacant land such reasonable amount by way of penal charges as may be determined till such time as the structure erected in contravention of the provisions of s.3 is removed from the land.
Section 4 empowers the government to evict a person occupying any vacant land in an urban area in contravention of the provisions of section 3.
Section 4A deals with permission for renovation of structures on vacant lands as a temporary measure in certain circumstances.
Section 4B lays down mode of recovery of dues of financial institutions which render assistance for renovation of structures.
The respondents were owners of some plots of land in Bombay.
The plots were assessed to non agricultural assessment and to Property tax by the Bombay Municipal Corporation The respondents had constructed buildings of a Permanent nature on the plots and the same had been provided with essential civic amenities like water and electricity.
The appellants State Government & Municipal Corporation of Bombay called upon the respondents to demolish the buildings since they were constructed without the requisite permission of the Bombay Municipal Corporation.
The respondent 's request to regularize, the unauthorised construction was also rejected because the Government was considering a proposal for acquisition of the said land for the purpose of an industrial estate.
The respondents then approached the Special Land Acquisition officer requesting that the land be released from acquisition.
The Land Acquisition officer informed the respondents that the said plots of land had been released from acquisition by a notification dated September 14, 1964.
But, later on, the said plots of land were declared by the Competent Authority as "vacant land" in exercise of the powers conferred upon it by Section 2 (f) (b) of the Maharashtra Vacant Lands (Prohibition of Unauthorised occupation and Summary Eviction) Act LXVI of 1975.
The respondents challenged before the High Court the constitutional validity of the Act and the legality of orders passed thereunder The High Court declared the Act as violative of the provisions of the Constitution and allowed their writ petitions In the appeals to this Court, the appellants contended that the infirmity, if any, from which the Act suffered in its inception has been cured by the passing of the Maharashtra Vacant Lands (Prohibition of Unauthorised occupation and Summary Eviction) (Service of Notice) Rules, 1979 in as much as the affected person is given a notice before passing an order under section 2 (f) (b) or under section 4(1) of the Act and that the Competent Authority is further required to consider any objections submitted to it by the affected person.
On behalf of the respondents it was argued (1) that at the Act violates the fundamental rights conferred upon them by article 14.
19(1)(f) and 51 of the Constitution; (11) that the State Legislature lacked the Legislative competence to pass the Act and (III) that the Act delegated excessive and uncanalised powers to the Executive to pass orders.
131 Dismissing the appeals, ^ HELD: 1.1 It is evident that the expression 'land ' in Section 2 (f) of the Act means plots of land with defined boundaries which are generally recognized for revenue and survey purposes.
Section 2 (f) (b) requires two conditions to be satisfied in order that a land can be described as a vacant land; Firstly, there has to be an unauthorised structure on the land and secondly, the Competent Authority has, by an order in writing, to specify and declare that land to be a vacant land [143 D.E] 1.2 Section 2 (f) (b) suffers from the vice in that, it treats all persons alike irrespective of how they are situated in the matter of their involvement in the construction of unauthorised structures and their interest therein.
Classification requires division into classes which are marked by common characteristics.
Such division has to be founded upon a rational basis and it must be directing at subserving the purposes of the statue.
Section 2 (f) (b) and the other cognate provisions of the Act make no distinction at all between owners of the lands who have themselves constructed unauthorised structures and those others on whose lands unauthorised structures have been constructed by trespassers The latter class of owners who are silent spectators to the forcible and lawless deprivation of their title to their property have been put by the Act on par with trespassers who, taking law into their own hands, defy not merely private owners but public authorities.
[146 G H; 1 47 A] 1.3.
Section 2(f) (b), also, suffers from the infirmity of according equal treatment to unequals.
Take a simple example: A plot of land may be vacant in the true sense of the term, that is to say, wholly unbuilt upon.
Another, plot of land may have a small structure built upon it in accordance with the Municipal rules and regulations.
The first plot of land attracts drastic provisions of the Act merely by reason of the fact that nothing has been built upon it at all, while the second plot of land is entirely outside the scope of the Act for the reason that some tiny structure is standing thereon.
Such a classification betrays lack of rationale [147 B C] 2.1.
The Act confers upon the Competent Authority the discretion to declare a land as a vacant land without laying down any guidelines to control that discretion.
Competent Authority has the freedom to pick and choose lands on which there are unauthorised structures and declare some of them as vacant lands and leave other lands similarly situated untouched.
[143 E] 2.2.
The Act does not also provide for any safeguard against the arbitrary exercise of the discretion conferred upon the Competent Authority to declare a land as a vacant land.
It does not contain any provision whatsoever which is directed at ensuring the public health and sanitation or the peaceful life of the inhabitants of the concerned locality Indeed, nothing is farther removed from the true purpose and object of the Act than these considerations.
The last item in the Schedule to the A.t includes all public roads and highways in Greater Bombay.
These, surely, cannot be regarded as constituting a grave danger to public health, sanitation or peaceful life of the citizens.
It is clear from the Statement of objects and Reasons that 132 the evil which was sought to be remedied by the ordinance, which was later replaced by the Act, was not danger to public health or sanitation or to the peaceful life of the inhabitants of the Metropolis of Bombay, but, the danger posed by the construction of unauthorised structures, is the evil which the Act seeks to remedy.
[144 H; 143 H; 144 A B; G] 2.3.
The Act does not prescribe any procedure which the Competent Authority is required to adopt before declaring a land as vacant land.
There is no provision in the Act requiring the Competent Authority to observe even the rudimentary norms of natural justice before making the statutory declaration.
The Authority is not obliged to give notice to anyone and it need not hear any person who is likely to be affected by the declaration.
The State Government too, is under no obligation to follow any set procedure prior to amending the Schedule so as to include new lands therein.
The power conferred by Sections 3(1) and 4(1) of the Act is similarly uncontrolled and arbitrary.
[145 B Dl 2.4.
In the instant case, massive encroachments on private properties have led to the virtual deprivation of the title of rightful owners of those properties The Act penalises such owners for no fault of theirs and, that too, without giving them an opportunity to be heared.
The fact that the power to make the requisite declaration under the Act is vested in officers of the higher echelons makes no difference to this position and is not a palliative to the prejudice which is inherent in the situation.
[145 F G] 3.1.
It is impossible to understand the scheme of the Schedule to the Act or to discover any rational basis behind it ii difficult to understand as to why certain lands which are under acquisition for the purposes of the Maharashtra Housing Board and Bombay municipal Corporation have been included in the Schedule and other lands similarly situated have not been so included Some of the entries in the Schedule show that unauthorised structures could not have been possibly constructed on the lands mentioned therein By and large, the Schedule is divorced from the true object of the Act .
[147 E F] 3.2.
No criterion or standard is laid down in order to enable the State Government to determine objectively as to which lands can be added to the Schedule.
The power to add to the Schedule is in the nature or a legislative power which, in the very nature of things cannot stipulate for service of notice to the persons affected by the amendment.
This power of amendment of the Schedule is not even conditioned by the fact that the lands added to the Schedule must have unauthorised structures standing thereon.
The State a Government is free to pick and choose any land and put it in the Schedule This kind of conferment of uncanalised discretion is strawn all over the Act.
[147 G H; 148 A] 3.3.
It is therefore clear that each part of the definition of 'vacant land ' in section 2(f) of the Act is violative of the provisions of Articles 14 and 19 (1) (f) of the Constitution.
The Act had to satisfy the requirements of article 19 (1) (f) so long as it was a part of the Constitution.
[148 B C] 133 (4) It may be noted that until the Competent Authority passes an A order under section 4(l) calling upon an occupier to vacate a land, even a trespasser or an unauthorised occupier can continue to be in possession of the eland.
lf he is granted permission to occupy the land under section 3(1), he cannot be evicted at all, for the simple reason that the order of eviction under section 4(1) can be passed only if a person is in occupation of a land contrary to the provisions of section 3.
Even the eviction of a trespasser from the land can afford no solace to its rightful owner because, the Act doesn 't contain any provision whereby the land can be returned to him after it is freed from unauthorised occupational If the owner himself has erected an unauthorised structure, the Act does not provide as to what is to happen to the land after he is evicted therefrom [148 D F] (5) The Statement of objects and Reasons of the First Amendment Act shows that the provision for levying penalty was introduced into the Act in order that occupants of lands on which there were unauthorised structures and, who are allowed to continue in possession of the structures do not continue to occupy those lands without payment of any amount at all to public authorities.
It appears that even after forfeiting the structures consequent upon the passions of ;U1 order under section 4(l), the State government has been recovering compensation from unauthorised occupants.
It seems quite incongruous that while the true owner is prevented from taking legal proceeding to recover any rent or compensation from persons who had trespassed upon his land, the State Government can recover penal charges from the trespassers.
Moreover, the Statement of objects and Reasons of the Second Amendment Act shows that the Government had carried out substantial environmental improvements on vacant lands and had sponsored a scheme for building semi permanent houses thereon.
They intended to give to the occupants of such structures security of tenure subject only to the condition of regular repayment by them of the loans given by the financial institutions.
The true owners of lands are totally ignored in this scheme of things, even if they are victims and not the authors of unauthorised constructions.
[14811; 149A B; F G] (6) The unconstitutionality of the Act cannot be cured by the framing of the Rules made three and a half years after the Act was passed.
Besides, the Rules only provide for a notice to be given and objections to be considered before the passing of an order under sections 2 (f) (b) and 4(l).
They do not make a similar provision before permission is granted or refused under section 3(1) of the Act.
But, even, the Rules do not lay down any guidelines for the exercise of the discretition which is conferred upon the Competent Authority by section 2(f) (b) or section 4(1) of the Act.
[146E F] (7) The Act does not violate the provisions of article 31(1) of the Constitution as it then stood.
It does not provide for transfer of ownership of vacant lands to the State or to a corporation owned or controlled by the State; nor does it vest in the State the right of the owner or occupier of vacant lands to recover rent or compensation for use and occupation of such lands.
[150A B] (8) The Act does not amount to a measure of requisition and is not 134 bad for the reason that it provides for requisition without payment of compensation.
It is straining the language of the Act to hold that it provides, directly or indirectly, requisition of private property the Act does not transfer the right to possession of vacant lands to the State, its agents or its instrumentalities.
Therefore the Act does not offend against the provisions of Article 31(2) of the Constitution as it then stood Since that Article is not attracted, no question can arise of the invalidity of the Act on the ground mentioned in Article 31(5), namely that the Act had not received the assent of the President.
[150C D] (9) In so far as the question of legislative competence is concerned, the High Court was right in holding that the State Legislature had the competence to pass the Act under Entries 18, 64 and 65 of List 11 [150C D]
|
Appeals Nos. 34 and 35 of 1969.
Appeals by special leave from the judgment and order dated August 5, 1968 of the Punjab and Haryana High Court in Income tax Reference No. 40 of 1964.
K. C. Puri, K. L. Mehta, section K. Mehta and section section Hussain, for the appellant (in both the appeals).
B. Sen, P. L. Juneja, Badri Das Sharma for R. N. Sachthey, for the respondent (in both the appeals).
The Judgment of the Court was delivered by P. Jaganmohan Reddy, J.
These two Appeals are by Special Leave against the Judgment Of the Punjab & Haryana High Court answering the Reference under Section 66(1) of the Indian Income tax Act 1922 (hereinafter referred to as 'the Act ') against the assessee the Appellant.
The Appellant who was admittedly a Ruler of the erstwhile Faridkot State challenged the assessments made against him for the years 1946 47 and 1947 48 with respect to which the accounting years were Vikram year 2002 and.2003 corresponding to the period 13th April 1945 to 12th April 1946, and 13th April 1946 to 12th April 1947 respectively.
The; assessment in each of these years was made under Sec.
34 read with Sec. 23 of the Act, as the assessee 's income from dividends and interest and capital gains earned by the assessee during the relevant accounting year in what was then British India had not been brought to tax.
The assessee objected to these proceedings and contended before the Income tax Officer that he 'being a Ruler of the Faridkot State was immune from taxation on every source of income.
He could not therefore, by virtue of his sovereignty be treated as an assessee for any purpose under the Act.
It was also contended that the notices under Sec. 34 were time barred.
The Income tax Officer however, rejected these objections and held that though under the 18 International Law the Rulers of Indian States were sovereigns and immune from Municipal Laws of other countries, there was no exemption at far as the personal incomes of the Rulers are concerned from being taxed under the Act.
In that view he held that notices under Sec.
34 were valid and accordingly made an assessment.
The Appeal to the Appellate Assistant Commissioner was without success, though similar contentions were raised before him with particular reference to the privileges which the Rulers enjoyed under International Law both in respect of Civil and Criminal matters.
The assessee appealed against this order to the Income tax Appellate Tribunal where, however,, there was a divergence of view between the two Members and therefore the matter was referred to the President of the Tribunal.
After considering the decisions in regard to the exemption of the sovereign from all Civil and Criminal Laws of another State, the Judicial Member held that no assessment could be made on the assessee under the Act as he was the Ruler of a sovereign State during the assessment years under consideration.
In this view he did not express any opinion on the question of the legality of the proceedings under Sec.
34 of the Act.
The Accountant Member however, after considering the various provisions in the Act whereby exemption was granted to the Rulers in regard to certain types of income and the various decisions held that the assessee was liable to assessment in respect of his personal income arising or accruing to him from British India from his private properties.
He also held that the proceedings under Sec.
34 of the Act were perfectly legal and valid.
In view of the difference of opinion,, the matter was referred to the President of the Tribunal under Sec. 5A(7) of the Act on the following question "Whether on the facts and in the circumstances of the case the assessee was immune from tax under the Indian Income tax Act on his private income viz., dividends and interest income as also the Capital Gains earned in British India.
" The President of the Tribunal held in favour of the assessee by relying on a decision of the Andhra Pradesh High Court in the case of H. E. H. Mir Osman Ali Khan Bahadur Nizam & Raj permukh of Hyderabad vs Commissioner of Income Tax(1), where it was stated thus : "Indisputably, a sovereign ruler enjoys immunity from taxation under International Law and it is only in cases where this rule is superseded by express words that this should be denied to him.
If a legislature wants to depart from these principles and bring such (1) Case No. 35 of 1959.
19 ruler to tax, there must be clear indication in the enactment itself.
In the absence of such express words, the statute must be interpreted in conformity With International Law.
Simply because the Municipal Law did ' not provide for such an exemption, the principles of International Law should not be regarded as having been superseded".
In the aforesaid view the Andhra Pradesh High Court had held that notwithstanding the fact that His Exalted Highness the Nizam had lost the character of a sovereign ruler after 26 10 1950, he is still immune from taxation in respect of the income derived by him prior to that date.
Following this decision the President held that the assessee was immune from taxation under the Act on his private income.
In view of this decision on an application by the Revenue under Sec.
66(1) of the Act the following question was referred to the High Court : "Whether on the facts and circumstances of the case, the assessee was not liable to tax under the Indian; Income tax Act, 1922, in respect of his personal income accruing or arising to him in British India in the two assessment years 1946 47 and 1947 48." The High Court relying upon the decision of this, court in Commissioner of Income tax, Andhra Pradesh vs H. E. H. Mir Osman Ali Bahadur(1), which reversed the decision of the Andhra Pradesh High Court referred to and relied upon by the President of the Tribunal held against the assessee.
It is contended before us that the facts and circumstances in the Nizam 's case are totally different and the decision of this Court is clearly distinguishable.
The learned Advocate contends that in that case the assessments related to the assessment years 1950 51 and 1951 52, the corresponding accounting year for which was the, period between 1st April 1949 and 31st March 1950, and 1st April 1950 and 31st March 1951 respectively, which years being after the inauguration of the Constitution on 26th January 1950, clearly make the Act which was made applicable from 1st April 1950 to all the Part B States, applicable to the assessee.
But it is submitted that in the case before us there could be no ques tion of Act being made applicable to Faridkot State as the assessment years and the accounting years are prior to the inauguration of the Constitution and the application of the Act.
The learned Advocate cited a large number of decisions in support of his contention that the Native States in India had International.
(1) 20 personality and their Rulers had 'immunity similar to those that were accorded to any other Head of a State under International Law.
It was also argued that though these princely States in India may have been 'protected States; it was not necessary for the recognition of the privileges and immunities of the Rulers of such States to possess all the attributes of sovereignty and complete independence in support of which the decisions of Mighall ,vs Sultan of Jahore(1), Duff Development Co. Ltd. vs Govt.
of Kelantan & Anr.(2), Stathem vs Stathem & H. H. the Gaekwad of Baroda(3), were referred to.
It was therefore contended that in this country also the position was the same as that recognised by the Common Law of England for which proposition, decisions were referred to from Punjab Recorder onwards.
A reference was also made to several cases pertaining more specifically to the immunity enjoyed by the Rulers from payment of Income tax on the basis of their status under International Law.
These are : The Patiala State Bank vs Commissioner of Income tax, Bombay(4), Rani Amrit Kunwar vs Commissioner of Income tax, C.P. & U.P.(5), The Accountant General, Baroda State vs Commissioner of Income tax, Bombay City(6), A. H. Wadia, as Agent of the Gwalior Durbar vs Commissioner of Income Tax, Bombay (7), and Maharaja Bikram Kishore of Tripura vs Province of Assam (8).
On behalf of the Revenue reliance is placed on Commissioner of Income tax Andhra Pradesh vs H. E. H. Mir Osman Ali Bahadur(9), to sustain the Judgment under appeal and it is conceded that if this decision was not applicable to the facts and circumstances of this case, the position as contended by the assessee would be that the Indian Rulers prior to the Constitution were granted immunity from taxation, and in any case this was so in respect of the income from the property of the State as, distinct from the private or personal property of the Ruler though there were observations in some of the cases that it was difficult 'to distinguish public or private property owned by a ruler.
At this stage we think it necessary to advert to one argument .adduced on behalf of the assessee namely that the Income tax authorities particularly the Income tax Officer, had accepted the International status of the assessee and the immunity from .taxation of income from public property, but only rejected the claim for such immunity in respect of income from private or Personal property.
It is therefore contended that the status of (1) [1894] I. Q. B. 149.
(3) (1912) Probate 92.
(5) XIV ITR 561.
(7) XVII ITR 63.
(9) 59 I.T.R. (2) (4) XI ITR 617.
(6) XVI ITR 78.
(8) XVII ITR 220.
(9) 59 I.T.R.666 21 the assessee as an international personality is not in issue before.us s, what is in issue is whether his income from private property is exempt from taxation.
We do not think this contention has, validity, because the High Court has specifically While rejecting, the second contention addressed on behalf of the assessee ruled;, that the status of the assessee as a ruler of the Indian State could. ' not be equated with that of a sovereign in international law.
Even the reference to the High Court does not limit or circumscribe the matter for consideration as contended for but on the, other hand enables us to deal with the question whether as an, erstwhile ruling prince the assessee can at all be entitled to the. immunity from taxation.
In considering the question referred to by the Tribunal it,, may be useful to examine briefly the basis and extent of the privilege and immunity enjoyed by Head of State in International Law, particularly having regard to the lengthy arguments.
addressed before us.
In International Law the Head of a State,.
represent* the State as such and not as an individual representing his own rights.
In that capacity he enjoys certain extra, territorial privileges in other States which are friendly and in peace, known as the receiving States, with the State he represents.
These are, ceremonial honours for himself, the Members of his, family and his retinue; special protection to his person, and ' exemption from Criminal jurisdiction; the grant of extra terri toriality, on the basis that one sovereign does not have any powerover the other, such as immunity from filing of suits against him except where he is himself a plaintiff and from.
other civil processes; exemption from taxation rating and other fiscal enactments and the invilobility of immovable property in which he of, the representatives of the State accorded diplomatic immunity.
reside etc.
Some of these privileges and immunities are political and are generally the subject of executive and administrative instructions such as ceremonial honours, Police protection.
exemption from customs in accessability of their residences to officers of Justice, Police or Revenue officials unless consented to by them.
There are yet others in relation to the applicability of the Municipal Laws, the immunity from which are either recognised by the Common Law and which Courts will not enforce as.
in England or are dealt with by those laws themselves by affording the necessary exemption.
There are yet others which may be regulated by Treaties or international covenants.
Whatever may be the various aspects of the immunity and privileges enjoyed by the Heads of the State under the Laws of the Country where questions relating to them arise, what we are concerned with at the very thresh hold of this argument dealing with the immunity is whether the rulers of the erstwhile native States as.
22 they were called enjoyed the same or similar privileges as those ,of the Heads of States recognised as Members of the family of nations ln International Law.
It is clear from the very nature of the native States in 'India that they were subject to the sovereignty and protection of British Crown.
While their relations with the Crown were governed by treaties, though initially on terms of equality, as time went by and the British Crown in India ,became paramount, the relationship between it and the Rulers ,became unequal with the result that these treaties became subject to the reservation that they could be disregarded where the interests of the British Empire or those of the subjects of the native States were involved.
When the Nizam claimed equality with the British Crown, the then Viceroy Lord Reading informed him on 27th March 1926 that "The sovereignty of the British Crown is supreme in India and therefore no Ruler of an Indian State can justifiably claim to negotiate with the British Government on an equal.
footing".
After giving a few illustrations to negative the claim of the Nizam, the Viceroy proceeded to observe "other illustrations could be added no less inconsistent than the foregoing with the suggestion that the Government of your Exhalted Highness and the British Government stand on a plane of equality . (1).
This paramountcy was described by Shah, J, as he then was, as "brazen faced autocracy" in H. H. Maharajadhiraj Madhav Rao Jivaji Rao Bahadur of Gwalior etc.
vs Union of India (2).
What then becomes of the claim of these States or their rulers to recognition.
as International personality.
The answer to this specific question is furnished even towards the end of the 19th Century.
The status of these native States as International personalities was negatived.
in the Notification of the Government published in Gazette of India Part 1, dated 21st August, 1891 at page 485, which was a resolution containing a proclamation regarding the trial of accused persons in Manipur and the regrant ,of the Manipur State.
In this regard the following passage at page 488 is of interest : "The principles of the International law have no bearing upon the relations between the Government of India as representing the Queen Empress on the one hand, and the Native States under the suzerainty of Her Majesty on the other.
The paramount supremacy of the former presupposes and implies the subordination of the latter.
In the exercise of their high prerogative, the Government of India have, in Manipur as in other protected States, the unquestioned right to remove by (1) Vide Appendix I of the White Paper on Indian States.
(2) ; 161. 23 .lm15 administrative order any person whose presence in the State, may seem objectionable.
They also have the right to summon a Darbar through their political representative for the purpose of declaring their decision upon matters connected with the expulsion of the ex Maharaja. through their Officers." After stating that any one resisting the decision and not complying with orders will be liable to arrest, the declaration went on to say "In the opinion of the Governor General in Council any armed and violent resistance to such arrest was an act of rebellion, and can no more be justified by a plea of self defence than could resistance to a police officer armed with a Magistrate 's warrant in British India.
" In the recent case of this Court in H. H. Maharajadhiraja Madhav Rao Jivaji Rao Scindia Bahadur of Gwalior(1), referred to above the majority expressed the view that "the States had no International personality".
Nonetheless the status of these rulers in England was recognised as being on par with other Rulers in the matter of personal immunity from being sued in their Courts.
In so far as British India was concerned these were governed partly by Acts of the Legislatures particularly the provisions contained in Civil Procedure Codes and by Notifications of the executive under taxation laws as well as by executive or administrative instructions relating to their privileges.
It is therefore apparent that in so far as this country is concerned the immunity from legal proceedings which is recognised in the common law has been the subject matter of legislation under which the ruling princes of India, notwithstanding that they were not recognised as International personalities, were however accorded this immunity.
433 of the Code of Civil Procedure of 1882 and subsequently Sections 84 to 87 of the Civil Procedure Code of 1908 deal with these matters.
Gajendragadkar, C.J., in Mirza Ali Akbar Kashani vs United Arab Republic & Anr.(2), cited with approval the observations of Strachey, J, in Chandulal Khushalji vs Awed Bim Umar Sultan Nawaz Jung Bahadur(3), as correctly representing the result of the provisions of Sec.
433 as much as of those contained in Sec.
86(1).
It may be mentioned that Strachey, J, after pointing out that in India before the enactment of Sec.
433 of the Code, the privilege of independent sovereign princes stood on exactly the same footing as in England, observed (1) ; 161.
(2) ; (3) at 371 372. 24 .lm15 "No doubt the question of privilege now depends on the construction of Sec. 433, and I am alive to the danger of pressing too far an analogy between a rule of international law and a specific enactment of the Legislature.
" It is apparent from a perusal of Sec. 86 of the Civil Procedure Code that there is no absolute prohibition against a Ruler of a foreign State being sued in India.
A Ruler can be sued with the consent of the Central Government certified in writing by a Secretary to that Government.
It is also provided that such consent should not be given unless it appears to the Central Government that the Ruler has instituted a suit in the Court against the person desiring to sue him or by himself or another, trades within the local limits of the jurisdiction of the Court, or, is in posses sion of immovable property situate within those limits and is to be sued with reference, to such property or for money charged thereon, or has expressly or impliedly waived the privilege accorded to him by this Section.
In view of these provisions the several cases cited by the learned Advocate for the assessee which deal with immunity from suits against ruling princes under the English law have no application.
In so far as the question whether there exists a rule of international law exempting a State, or the property which it owns, from taxation by a foreign State, is concerned, there seems to be no uniform practice followed by the various States.
It is however suggested that immunity from taxation "appears as a logical accompaniment of the principle of immunity of foreign State owned property from judicial process" and on this basis it is sought to be contended that even personal, private property of the Head of a State is exempt.
It is unnecessary for us to examine this position because even if there was such an immunity the Rulers of an Indian State could only avail of it, if they are recognised as international personalities which, as we have seen, they are not.
Any exemptions which they may be given, must, in our view be under the relevant taxing Acts.
The learned Advocate for the Assessee however points out that if the Rulers of Indian State were not exempted from tax apart from the statute, there was no need to make a provision in Sec. 3 of the Bengal Agricultural Income tax Act IV of 1944, specifically making every Ruler of an Indian State liable to Agricultural Income tax.
On the other hand it would appear to us that this provision would itself militate against the assumption of immunity from taxation of the property of the Rulers and at any rate the legislature may have been acting ex abundanti cautale.
It may however be noticed that in so far as the Income tax Act is 25 concerned exemption of the Income of the Ruters derived from Central Government securities was specifically given under Sec.
60 of the Act which implies that the Rulers were not exempt from other provisions of law.
This position also finds support from a case cited by the learned Author on the "Immunity from taxation on foreign owned Property" in the Americal Journal of International Law XLI at page 239, where the Suppreme Court of Ceylon in the Suprintendent of the Government Soap Factory, Bangalore vs Commissioner of Income tax, held that the profits ade in Ceylon by the Mysore Government Soap Factory could be taxed by Ceylon without violation of international law.
The Ceylon Court held that the State of Mysore had no position in international law and could not,invoke any immunity arising by virtue of international law ' In any case so far as, immunity from taxation of the income from personal property of the Rulers of the Native States is concerned this is now concluded by a decision of this Court in the Commissioner of Income Tax, Andhra Pradesh ',v.
H.E.H. Mir Osman Ali Bahadur(1).
In that case the question directly arose as to whether the Ruler of the Hyderabad State prior to 26th January '50 could claim immunity from taxation under international law, namely whether the assessee enjoyed immunity from taxation under the Act in respect of income which accrued or arose to him, and which was received by him upto 26th January 1950.
The learned Advocate for, the revenue had contended that under the International law, a foreign sovereing was not immune from taxation in respect of his private properties situated in the Taxing State; even if there was such an immunity under the international law, the assessee being under the suzerainty or ,he paramountcy of the British Crown, had never enjoyed the status of a sovereign as understood in the international law and, therefore, was not governed by that law; and that in any event, as on January 26, 1950, the date when he became liable to tax, he was no longer a sovereign and therefore he could not claim exemption under the international law.
Respondent 's Advocate claimed that the assessee was not liable to Income tax on the ground that under the Act, income tax was charged on the assessee 's income received during the accounting year and that as during the accounting year the assessee was a ruling chief, he was exempt from taxation under the international law.
He argued that under the international law, as understood by English Courts, a foreign sovereign was exempt from taxation, that the said interpretation of the law had become the common law of England and that the said common law was the law of India before the Constitution and it continued to have force thereafter reason of Article 372.
(1) 256SupCI/72 26 We have noticed these contentions to show that there is no validity in the submission of the learned Advocate for the assessee, that that question did not directly arise in that case because the Nizam was being assessed in respect of assessment year 1950 1951 and 1951 52, when he was not a ruling prince.
This Court specifically dealt with this matter as can be seen from the observations of Subba Rao J, as he then was at page 670 "International ' law vis a vis the liability of a sovereign to taxation in respect of his private property is in a process of evolution '.
It has not yet become cry stallized." After referring to Halsbury 's Laws of England, 3rd Edition, Volume 20, page, 589 and Oppenheim 's International Law, 8th Edition, Volume 1, page 759 and the Article on immunity from taxation of foreign State owned property in the American Journal of International Law, to which we have already adverted,.
observed "that the question is not free from difficulty and that it requires serious consideration when it directly arises for decision.
Assuming for the purposes of these, appeals that a foreign sovereign who has acquired an international personality has such an immunity from taxation, he proceeded to examine the question whether His Exalted Highness the Nizam had ever acquired international personality.
After examining the position he concluded at page 675 : ".
that Hyderabad State did not acquire international personality under the international law and So its Ruler could not rely upon international.
law for claiming immunity front taxation of his personal properties".
We are not here concerned with the alternative argument in that case, that the Act having applied to the State of Hyderabad , after the inauguration of the Constitution on `6h January '50, the charge as well as the manner of computation of income did not depend on the pre existing law but only upon the provisions of the Act because in these appeals that question does not arise.
in view of this legal position we do not propose to burden this Judgment with any detailed examination.
of the several decisions of the High Courts which were prior to the decision of this Court cited by the learned Advocate in support of the proposition that the ruling chief of an Indian State has the same immunity from taxation as enjoyed by other foreign sovereigns.
Two of 'those cases arose under the where different considerations were applicable (The Patiala State Bank vs C.I.T., Bombay(1), A. H. Wadia, as Agent of the Gwalior Durbar vs C.I.T., Bombay (2).
At any rate in one other case i.e. in Maharaja Bikram Kishore of Tripura vs Province of Assam(3), a distinction was sought to be drawn (1) XI I.T.R. 617.
(2) XVII I.T.R.63.
(3) XVIT I.T.R. 220.
27 between the property of the State and the private property of the ruler.
In that case the question whether the income derived from Chakla Roshanabad Estate was liable to tax under Assam Agricultural Income tax Act, by assessment upon the State of Tripura or by assessment on the ruler of Tripura.
It was held that the Chakla Roshanabad was the State property and not personal property of the then ruling Raja who held it in his capacity as a Ruler.
No doubt in the other two cases refunds were not given for tax deducted at source on the assumption that, the Rulers were not assessees.
In the view we have taken the answer of the High Court to the reference was clearly right and the appeals are accordingly dismissed with costs one set.
S.N. Appeals dismissed.
| In the last general election to the Lok Sabha the appellants were declared elected and the respondents, who were the unsuccessful candidates challenged the validity of the election on the ground that the ruling party had rigged the election.
According to the respondents many ballot papers were chemically treated so that the mechanically stamped marks in favour of the successful candidates by using invisible ink emerged and the mark actually put at the time of polling disappeared after a few days.
It was alleged that this was done as a result.
of conspiracy between the ruling party and the Election Commission, and that the Election Commission took certain unusual steps for facilitating the substitution of chemically treated ballot papers.
There was no direct evidence of the allegations and the respondents sought to probabilise their version by alleging that the colour of a large number of ballot papers was different from the colour of the original ballot papers, and that at the time of counting, it was noticed that the marking was uniform and at an identical spot in each of the ballot papers in favour of the appellants.
The trial Judge permitted inspection of all the ballot papers polled.
In appeal to this Court it was contended that : (1) that the allegations of the respondent were propaganda stunts wholly devoid of truth; (2) that the attention of the Returning Officer was not invited to the alleged strange features at the time of counting, and (3) that the scrutiny of ballot papers could not be allowed as it violates the secrecy of the ballot.
Dismissing the appeals, HELD: (1) Assuming that the allegation made was mere propaganda it was in the public interest that the allegations are required into the propaganda exposed.
Merely because allegations made are difficult to accept they cannot be dismissed summarily.
In all such matters the court 's aim should be to render complete justice between parties.
If the allegations made raise issues of public importance greater care and circumspection is necessary.
The allegation that the electoral process has been fouled is a very serious allegation and is a challenge to the integrity and impartiality of the Election Commission and a challenge to the survival of democratic institutions.
[180 G H; 181 A B; 182 B C] (2) Assuming that the persons concerned did not inform the Returning Officers of what they observed at the time of counting, it does not estop the respondents from taking the pleas in the election petitions.
It is only a circumstance to be considered on the question of value to be attached to the allegation.
Even assuming that the respondents made the allegations as a result of not merely observing certain facts at the time of counting but on the basis of various rumours, that by itself is not sufficient to brush aside the allegations.
[181 G H] (3) No rigid rules have been laid nor can he laid down for allowing inspection of ballot papers.
The overriding test is the interests of justice, depending on the facts of each case.
A judge while deciding the question 178 of inspection of ballot papers must bear in mind the importance of the secrecy of ballot.
Secrecy of ballot is important but doing justice is more important and it would be more so if what is at stake is the interests of society.
The allegations in support of the prayer for inspection must not be vague or indefinite.
They must be supported by material facts and the prayer made must be a bona fide one.
Further, the allegations regarding the chemical treatment of ballot papers in the present case, cannot be proved in any other manner than by inspection.
[182 C D; 184 E G] But the High Court erred in permitting a general inspection of the ballot papers.
It would be sufficient if some substantial number of ballot papers polled by each of returned candidates are selected from different bundles and compared with the ballot papers cast in favour of the respondents.
If the trial Judge thereafter comes to the conclusion that the matter should be further probed into he may take evidence on the points in issue including the evidence of expert witnesses, and thereafter, decide if it was necessary direct a general inspection of the ballot papers.
[185 F H] Ram Sewak Yadav vs Hussain Kamil Kidwai & ors.
, , Dr. Jagjit Singh vs Giani Kartar Singh, A.I.R. and Jitendra Bahadur Singh vs Krishna Behari & Ors., ; , referred to.
|
Appeal No. 1707 of 1967.
422 Appeal under Section 116 A of the Representation of the People Act, 1951 from the judgment and order dated September 19, 1967 of the Punjab and Haryana High Court in Election Petition No. 28 of 1967.
Harder Singh, P. Parmeswara Rao and S.S. Khanduja, for the appellant.
R.K. Garg, S.C. Agarwala, Baldev Singh Khojiand Anil Kumar Gupta, for respondent No. 1.
The Judgment of the Court was delivered by Bhargava, J.
The appellant, who was defeated by respondent No. 1 (hereinafter referred to as "the respondent"), the successful candidate, in the General Election of 1967 to the Punjab Vidhan Sabha from Nakodar Constituency, District Jullundur, challenged the election of the respondent in an election petition inter alia on the ground that he was disqualified from being chosen as a member of the Assembly, because he was holding an office of profit under the State Government at the relevant time.
This was the only ground which was pressed at the trial of the election petition before the High Court of Punjab and Haryana at Chandigarh.
The High Court dismissed the election petition rejecting this contention of the appellant and, consequently the appellant has come up to this Court in this appeal under section 116A of the Representation of the People Act, 1951.
Admittedly, the respondent was the Chairman of a Panchayat Samiti and the ground that he was disqualified from being a candidate was based on Rules 3 to 7 of the Punjab Panchayat Samitis and Zila Parishads, Non official Members (Payment of Allowances) Rules, 1965 (hereinafter referred to as "the Rules") which are as follows : "3.
There shall be paid a monthly consolidated allowance, in lieu of all other allowances, at the following rates.
to the Chairman of a Panchayat Samiti and that of a Zila Parishad, for performing all official duties and journeys concerning the Panchayat Samitis or Zila Parishad as the case may be, within the district, including attending of meeting, supervision of plans, projects, schemes and other works and also for 'the discharge of all lawful obligations and implementation of Government directives : (a) Chairman, Panchayat Samiti .
Rs. 100 (b) Chairman, Zila Parishad .
Rs. 150 4.
The Chairmen, Vice Chairmen and Members shall, for the purpose of rates of mileage and daily allowance admissible to them under these rules, be divided into the following two categories : 423 (i) Category I This shall include Chairmen and Vice Chairmen of the Panchayat Samitis and Zila Parishads.
(ii) Category II This shall include all other Members of the Panchayat Samitis and Zila Parishads.
There shall be paid to the Chairman, Vice Chairman and Member, mileage allowance for journeys performed for any official work outside the district.
Such journeys shall not be undertaken unless authorised by the Panchayat Samiti or the Zila Parishad, as the case may be.
Note : The Power under this sub rule shall not be delegated to any other authority.
(2) The Vice Chairman and the Member shall also be paid mileage allowance, in respect of a journey performed within the district, for (a) attending the meetings; and (b) for any official work or for supervision of a cattle fair held by the Panchayat Samiti: Provided that the Vice Chairman and the Members shall not be entitled to mileage allowance under clause (b) unless the journey for such work or supervision has been approved by the Panchayat Samiti or Zila Parishad, as the case may be, and the number of Members deputed for supervision does not exceed five on any one day.
The payment of mileage allowance to a Chairman, Vice Chairman and Members for the purposes and journeys mentioned in rule 5 shall be regulated as follows : (i) Mileage allowance by rail.
For 'a journey between the stations connected by rail, the Chairman and Vice Chairman shall be entitled to travel by 1st Class and the Members by 2nd Class.
The Chairman, Vice Chairman and the Members shall be enti tled to draw single fare of the Class of accommodation to which he is entitled: Provided that if the journey is performed in lower class, the Chairman, Vice Chairman and Members shall 424 be entitled to the fare actually paid for that class.
(ii) Mileage allowance by bus.
For a journey between the places connected by road, where regular bus service plies, and also for a journey between the stations connected by rail but performed by bus by taking a single seat the Chairman, Vice Chairman and Members shall be paid the fare actually paid.
(iii) Mileage allowance for journeys between the stations partly connected by rail and partly by bus.
For a journey between stations partly connected by rail and partly by bus, the Chairman, ' Vice Chairman and Members shall be paid actual railway fare limited to the class of accommodation to which he is entitled and the bus fare actually paid.
(iv) Mileage allowance by road. (a) The mileage allowance by road shall be admissible, at the rates specified below, for the journeys performed by the Chainnan, Vice Chairman or Members between stations which are neither connected by rail nor by regular bus : Motor Cycle or Ordinary cycle Other means of con Scooter veyance 12 Paise per mile 9 Paise per mile 25 Paise per mile (b) If a Chairman, Vice Chairman or Member performs a journey by Motor Cycle, Scooter, Ordinary Cycle or by other means of conveyance between the stations connected by rail or regular bus, the mileage allowance calculated at the rates prescribed 'above for each kind of conveyance shall be limited to rail or bus fare, had the journey been performed by rail or bus as the case may be.
Notes. ( 1 ) A Chairman, Vice Chairman or Member, using means of locomotion provided at the expense of the Government, Panchayat Samiti, Zila Parishad or any other local authority shall not be entitled to any mileage allowance.
(2) A Chairman, Vice Chairman or Member travelling in a vehicle belonging to any other Member, Vice Chairman or Chairman shall not be entitled to any mileage allowance.
The mileage allowance of the owner of the vehicle shall, however, be regulated under clause (iv).
425 7.
Subject to the provisions of rule 3, (1) the daily allowance to a Chairman, Vice Chairman and Members shall be admissible at the following rates : Category I .
Rs. 6.00 per day.
Category II .
Rs. 4.00 per day.
(2) A Chainnan, Vice Chairman, or Member shall be allowed : (a) full 'daily allowance for the day he.
attends the meeting; (b) full daily allowance for the days of halt in case the halt is for any of the purposes specified in rule 5 above; (c) half daily allowance for the day of departure and half daily allowance for the day of arrival in connection with a journey performed for any of the purposes specified in rule 5: Provided that (i) in the case of a Chairman, Vice Chairman or Member who is treated as a State guest while attending the meeting or while on duty within or outside the district his daily allowance for such days shall be limited to one fourth if he is provided with free board and lodging and to one half, if he is charged either for board or for lodging; (ii) not more than one daily allowance shall be admissible for a day in any case.
(iii) a Chairman, Vice Chairman or Member may, at his option draw one daily allowance in lieu of mileage allowance plus half daily allowance for the day of journey preceding and following the day(s) of halt.
" It was alleged that the office of Chairman of a Panchayat Samiti was an office under the State Government of Punjab and that the allowances paid under these Rules made that office an office of profit.
Two questions, therefore, arose for decision.
The first was whether the payment of the allowances under rules 3 to 7 made the office of Chairman of Panchayat Samiti an office of profit, and the second was whether the office of Chairman of Panchayat Samiti was an office under the State Government.
The learned Judge trying the election petition recorded evidence in the trial of the petition up to 31st July, 1967, and adjourned the case for arguments to 21st August, 1967.
On 19th 426 August, 1967, however, the Governor of Punjab issued Ordinance No. 10 of 1967 to amend the State Legislature (Prevention of Disqualification) Act, 1952, so as to add section 2(b) in that Act as follows : "It is hereby further declared that the office of Chairman of a Panchayat Samiti or Zila Parishad shall be deemed never to have disqualified and shall not disqualify the holder thereof for being chosen as, or for being, a Member of the Punjab State Legislature." In view of the issue of this Ordinance, the appellant was allowed to challenge the validity of the Ordinance without amendment of the election petition, and the learned Judge trying the petition, being of the view that the various questions involved were of considerable importance and should be settled by a larger Bench, referred the petition to a Full Bench.
The Full Bench held on the first two questions against the appellant, so that the petition had to be dismissed on that ground.
Consequently, the Full Bench refrained from expressing any opinion on the third question relating to the validity of the Ordinance and passed an order dismissing the petition with costs.
In this appeal also, the same three questions have been again raised by the .appellant.
We consider that this appeal can be disposed of on the basis of the answer to the first question alone, because, in our opinion, the High Court came to a correct conclusion in holding that the allowances paid under rules 3 to 7 of the Rules did not convert the office of Chairman of a Panchayat Samiti into an office of profit.
The payment to a Chairman, Panchayat Sanuti, under r. 3 is described in the rule as 'a monthly consolidated allowance in ' lieu of all other allowances for performing all official duties and journeys concerning the Panchayat Samiti within the disutility, including attending of meetings, supervision of plans, projects, schemes and other works, and also for the discharge of all lawful obligations and implementation of Government directives.
This provision in very .clear language shows that the allowance paid is not salary, remuneration or honorarium.
It is clearly an allowance paid for the purpose of ensuring that the Chairman of a Panchayat Samiti does not have to spend money out of his own pocket for the discharge of his duties.
It envisages that, in performing the duties, the Chairman must undertake journeys within the district and must be incurring expenditure when attending meetings, supervising plans, projects, schemes and other works and also in connection with the discharge of other lawful obligations and implementation of Government directives.
No evidence has been led on behalf of the appellant to show that a Chairman of a Panchayat Samiti does not have to perform such journeys 427 in the course of his official duties and to incur expenditure in that connection.
The State Government, which was the competent authority, fixed the allowance for a Chairman of a Panchayat Samiti at Rs. 100/ per month, obviously because it was of the opinion that this sum will be required on an average every month to meet the expenses which the Chairman will have to incur in this connection.
In these circumstances, the burden lay on the appellant to give evidence on the basis of which a definite finding could have been arrived at that the amount of Rs. 100/ per month was excessive and was not required to compensate the Chairman for the expenses to be incurred by him in the discharge of his official duties as envisaged in the rule.
That burden clearly has not been even attempted to be discharged by the appellant.
In this connection, the High Court rightly compared rule 3 of the Rules with the earlier provision on the same subject contained in the Punjab Panchayat Samitis and Zila Parishads NonOfficial Members (Payment of Allowances) Rules, 1961.
Under those earlier Rules of 1961, the Chairman was entitled to draw travelling allowance and daily allowance even when travelling within the district.
There were, however, certain limitations, such as that no travelling allowance was to be drawn by a Member, if the journey was performed for attending a meeting held within a radius of five miles from his place of residence or he performed the journey in a transport provided at the expense of the Zila Parishads/Panchayat Samiris or any other local authority or Government.
There were also limitations on the right to draw daily allowance, e.g., the amount of daily allowance was to be limited to 1/4th of the rate provided, if the Chairman was provided free board and lodging officially and.
at 1/2 rate if he was charged either for board or for lodging.
It appears that in the year ' 1965, it was considered desirable that the Chairman of a Panchayat Samiti should not draw travelling allowance and daily allowance while performing duties within the district and should only be entitled to these ,allowances when required to travel outside the district.
Consequently, under r. 3 of the Rules, provision was made for this monthly allowance of Rs. 100/ as a consolidated amount in lieu of the travelling allowance, daily allowance, or any other allowances to which he might have been entitled in order to compensate him for expenses incurred in connection with the discharge of his official duties.
In these circumstances, the High Court was perfectly correct in arriving at the conclusion that this allowance of Rs. 100/ per month did not amount to receipt of any profit or gain by the Chairman and only represented the amount which he was expected to spend on an average every month for the purpose of properly discharging his official duties.
So far as rules 4 to 7 are concerned they only provide for payment of travelling allowance and daily allowance when a Chair 428 man performs a journey in connection with his official duties outside the district.
Clearly, these allowances are also meant to ensure that he does not have to incur expenditure from his own pocket for the purpose of discharging his official duties.
There is again no evidence from which an inference may be drawn that the amount received by a Chairman for travelling allowance or daily allowance is in excess of the amount of expenditure which he would have to incur for 'the purpose of performing the journeys in order to discharge his official duties.
Our attention was drawn by learned counsel to the fact that in rule 7 the persons entitled to daily allowance are divided into two categories and a Chairman of a Panchayat Samiti belonging to Category II is entitled to Rs. 6/ per diem when a Member of the.
.Samiti belonging to Category II is only entitled to Rs. 4/ per diem.
The argument was that there was no explanation for payment at a higher rate to the Chairman and, consequently, it must be held that the Chairman must be making gain out of the payment to him of daily allowance.
We are unable to accept this submission.
The daily allowance is invariably fixed after estimating what extra expenditure in a day the person concerned would have to incur.
A Chairman, it appears, was expected to incur more expenditure per day than a Member, and that seems to be the reason why a higher rate of daily allowance was prescribed for him.
In any case, such a payment is clearly meant only to cover additional expenditure and out of pocket expenses of the Chairman and, while no evidence has been advanced to show that out of the amount received as daily allowance the Chairman will in fact invariably make a saying, it cannot be held that this payment would result in gain so as to make the office an office of profit.
In the course of his submissions, learned counsel tried to urge that the payment of travelling allowance and daily allowance under rules 3 to 7 was in addition to the payment of the consolidated monthly allowance under r. 3 and payment of two sets of aLlowances must necessarily result in profit to 'the payee.
The argument proceeds on a complete misunderstanding of the Rules.
Rule 3 only covers payment to compensate a Chairman for journeys performed by him for his official duties within the district in which the Panchayat is situated, while rules 4 to 7 govern cases where the journey is performed outside the district.
Rule 3, and rules 4 to 7 are, therefore, complementary and exclusive of each other.
In fact, r. 5 makes it clear that the mileage allowance is admissible only for journeys undertaken outside the district, while, in respect of daily allowance, the fact that the right to receive it accrues only when the journey is outside the district is made manifest by laying down that the receipt of this daily allowance is to be subject to the provisions of r. 3.
The submission that the payment under rules 429 4 to 7 is in addition to the payment under r. 3 is, thus, clearly misconceived.
In this connection, learned counsel drew our attention to a decision of this Court in Ravanna Subanna vs G.S. Kaggeerappa(1) where dealing with the provision relating to this disqualification the Court held: "The plain meaning of the expression seems to be that an office must be held under Government to which any pay, salary, emoluments or allowance is attached.
The word "profit" connotes the idea of pecuniary gain.
there is really a gain, its quantum or amount would not be material; but the amount of money receivable by a person in connection with the office he holds may be material in deciding whether the office really carries any profit.
This principle, on the finding arrived at by the High Court and affirmed by us above, is of no assistance to the appellant.
It is clear that the appellant has failed to establish that the allowances payable under rules 3 to 7 of the Rules result in any pecuniary gain to a Chairman of a Panchayat Samiti and, consequently, there is no question of any disqualification arising.
The appeal fails and is dismissed with costs.
R.K.P.S. Appeal dismissed.
(1) A.I.R. 1954 S.C. 653 at p. 656.
| The appellant who was defeated by the first respondent in the General Election of 1967 to the Punjab Vidhan Sabha, challenged the latter 's election on the ground that he was disqualified from being chosen as a member of the Assembly because he was holding an office of profit under the State Government at the relevant time.
It was admired that the respondent was the Chairman of a Panchayat Samiti and it was contended by the appellant that the allowances paid to the Chairman under Rules 3 to 7 of the Punjab panchayat Samitis and Zila Parishads, Non Official Members (Payment of Allowances) Rules, 1965, made that office an office of profit.
The High Court dismissed that election petition and on appeal to this Court, HELD: The High Court came to a correct conclusion in holding that the allowances paid under Rules 3 to 7 did not convert the office of Chairman of Panchayat Samiti into an office of profit.
The payment to a Chairman under r. 3 is described in the rule as a monthly consolidated allowance in lieu of all other allowances for performing all official duties and journeys concerning the Panchayat Samiti within the district.
This provision clearly shows that the allowance paid is not salary, remuneration or honorarium but an allowance paid for the purpose of ensuring that the Chairman of a Panchayat Samiti does not have to spend money out of his own pocket for the discharge of his duties.
The burden which lay on the appellant to show that the allowance of Rs. 100/ per month was excessive and was not required to compensate the Chairman for his actual expenses had not been discharged.
[426 F G, 427 B C] Rules 4 to 7 only provide for payment of traveling allowance and daily allowance when a Chairman performs a journey in connection with his official duties outside the district.
There is again no evidence from which it could be inferred that the amount received by a Chairman was in excess of his actual expenditure.
[427 H 428 B] There was no force in the contention that the payment of traveling allowance under Rules 3 to 7 was in addition to the payment of the consolidated monthly allowance under Rule 3 and payment of two sets of allowances must necessarily result in profit to the payee.
Rule 3 only covers payment to compensate a Chairman for journeys performed by him for his official duties within the district in which the Panchayat is situated, while rules 4 to 7 govern cases where the journey is performed outside the district.
[428 F G] Ravanna Subanna vs G. section Kaggeerappa, A.I.R. 1954 S.C. 653 at p. 656; distinguished.
|
Appeal No. 621 of 1976.
Appeal by Special Leave from the Judgment and Order dated 12.1.1976 of the Allahabad High Court in Civil Misc.
Writ Petition No. 7183 of 1975, Appellant in person.
V.P. Raman, Addl.
and Girish Chandra, for respondent No. 1.
Yogeshwar Prasad, Lalji Sinha and Miss Rani Arora, for respondent No. 5.
The Judgment of the Court was delivered by CHANDRACHUD, J.
Respondent 1, the Union of India, established the Locomotive Component Works at Varanasi in 1956 for manufacturing component .parts of locomotives.
That manufactory merged in 1961 with the Diesel Locomotive Works, The appellant, S.K. Chandan, who was serving with the Westeren Railway as a Chargeman was transferred in 1963 to the Diesel Locomotive Works in the grade of Rs. 375 475 which he was holding at the time of his transfer as a member of the Class III service.
The question which arises in this appeal concerns the claim of the appellant to be promoted to Class II service.
In 1975 the appellant filed the present writ petition in the Allahabad High Court asking for the writs of Certiorari and Mandamus.
We arc now concerned with the grant of the latter writ only by which the appellant prayed, inter alia, that respondent 1 be directed to hold selections to Class II service in accordance with the "Advance Correction Slip 70.
" This particular prayer was rejected by the High Court by 787 its judgment dated January 12, 1976 on the view that rules contained in Slip 70 did not govern the promotion of Class III employees to Class II.
Aggrieved by the aforesaid decision the appellant has filed this appeal by special leave of this Court.
The leave is restricted to the ques tion whether the promotion of Class III employees to Class II is governed by Slip 70.
Paragraph 105 of the Indian Railway Establishment Code (Vol.
I) divides railway services into two categories gazet ted and non gazetted.
Services in Classes 1 and II are gazetted whereas those in Classes 111 and IV and the Serv ices of the Workshop Staff are designated as nongazetted.
Paragraph 157 of the Code confers on the Railway Board "full powers to make rules of general application to non gazetted railway servants under their control.
" Acting in pursuance of this power, the Railway Board has framed rules which are to be found in the "Indian Railway Establishment Manual." Chapter i of those rules deals with questions relating to recruitment, training, confirmation and reemployment.
Chapter II which is headed "Rules governing the promotion of subordinate staff ' consists of two sections, 'A ' and 'B '.
Section 'A ' deals with "Promotion to Class II posts" while section 'B ' contains "Rules governing the promotion of subordinate staff.
Chapter ' III is headed "Rules regulating seniority of non gazetted railway servants." Originally, Chapter III contained rules 301 to 323.
The Advance Correction Slip No. 70, also issued by the Railway Board in exercise of its powers under Paragraph 157 of the Railway Establishment Code, substituted a new rule 301 for the existing rule and it introduced five new rules in Chapter III, namely rules 324 to 328.
The contention of the appellant which requires examination in this appeal is that his promotion to Class II is governed by the rules introduced by Slip No. 70 which came into force on March 11, 1973.
The appellant, who argued his own case before us with quite industry and plausibility, did not dispute that rules 324, 323, 327 328(1) and 328(3) have no application to this case.
Rule 326(2) which prescribes deemed dates of trans fers would apply but has been concededly compiled with, the appellant having no grievance in regard to the fixation of the deemed date of his transfer to the Diesel Locomotive Works.
Keeping these provisions apart, the question boils down to the applicability of rules 301 and 328(2), (4) and (5).
The appellant 's argument that the rules introduced by Advance Correction Slip 70 govern his right to promotion to Class II is plainly misconceived.
In the first place, the rules introduced by Slip No. 70 were made by the Railway Board in exercise of its powers under Paragraph 157 of the Railway Establishment Code which empowers it to make rules of general application to "Non gazetted railway servants" under its control.
Though the Railway Board has the power to make rules governing both gazetted and non gazetted railway servants, the rules expressed to be made under Paragraph 157 cannot in the very 788 nature Of things be intended to apply to gazetted railway servants or to govern the promotion of non gazetted railway servants to gazetted posts.
But this is a small point because if the Railway Board has the power to make rules in regard to both gazetted and non gazetted railway servants, the signification of a limited source of power cannot whit tle down the effective exercise of that power, if the rules can reasonably be construed to cover both the gazetted and non gazetted categories.
The true reason Why it is impossible to accept the appellant 's contention that his promotion to Class II is governed by the rules introduced by Slip No. 70 is that Chapter II, section A, of the Indian Railway Establishment Manual in terms prescribes rules governing the promotion of subordinate staff to Class II posts.
The heading of Chap ter II is: "Rules governing the promotion of subordinate staff" and section A of that Chapter bears (he Sub heading "Promotion to Class II posts." Rule 201 which is the first of the Rules occurring in section A of Chapter II, provides "The following provisions shall apply in respect of promotion of non gazetted class III staff employed on Indian Railways or other Railway administrations to class II posts other than those in Railway Protection Force organization." Rule 202 'prescribes conditions of eligibility, rule 203 deals with the size of panels of selection, rule 204 with the constitution of the 'selection boards, rule 205 with the procedure to 'be adopted by selection boards and rules 206 and 207 with the currency and formation of panels.
These seven rules constitute a Code of rules governing the promo tion of the non gazetted Class III staff to Class II posts.
other than those in the Railway Protection Force.
In view of the fact that the Railway Board has framed these specific rules for the promotion of Class III staff to Class II posts, it seems to us difficult to accept that the rules introduced by Slip No. 70 would also govern the same subject matter.
The Advance Correction Slip No. 70 introduced amendments to Chapter III and not to Chapter II of the Manual.
Chapter III deals with rules regulating seniority of non gazetted railway servants and it is in regard to that class of rail way servants .that the Railway Board made new, provisions through Slip No. 70.
The provisions contained in Chapter III, including the provisions newly introduced by Slip No. 70, are very clearly designed to govern the seniority and promotion of non gazetted servants within the non gazetted categories of posts.
The non gazetted railway service con sists of Class III and IV employees and of the Workshop staff.
Within each of these three classes there may be different grades of railway servants and the rules in Chapter III are intended to govern the inter se seniority and the promotion of a railway employee from one category of non gazetted post to another category of a non gazetted post.
The 789 rules in Chapter HI cannot therefore govern the promotion of non.gazetted railway servants to gazetted posts.
Since the appellant is working as a non gazetted employee in Class III, his promotion to a gazetted post in Class II would be governed by Chapter II, section A, and not by Chapter III of the Railway Establishment Manual.
Rule 301 of Chapter III, as introduced by Slip 70, provides terms that the rules contained in the particular Chapter lay down general principles that may be followed for determining the seniority of non gazetted railway servants and that rules 324 to 328 of that Chapter shall apply for the purpose of determining the seniority and promotion of non gazetted employees of the Diesel Locomotive Works.
The appellant relied very strongly on rule 328(2) which provides that selections and promotions made in the Diesel Locomotive Works from 1 8 1961 to the date on which Slip No. 70 came into force, namely March 11, 1973, shall not be valid.
He urges that this provision casts an obligation on the Railway Board to recall all promotions made from amongst Class III servants to Class H posts from August 1 1961 to March , 1973 and that therefore those who are already promoted to gazetted posts ought to be demoted and a fresh panel must be formed for selection to Class II posts from amongst employees working in Class III posts.
The infirmity of this argument is that Chapter III applies only to non gazetted servants and to their inter se promotion and therefore the words "promotions made in the Diesel Locomo tive Works" which occur in rule 328(2) must be construed as meaning" promotions made in the Diesel Locomotive Works from one category of non gazetted post to another category of non gazetted post".
The same answer would effectively meet the contention of the appellant that the words "promotion to the higher grades" occurring in paragraph 328(4) mean promo tion to a Class II post.
The words "promotion to the higher grades" must in the context mean promotion to any of the higher grades in the non gazetted category.
Rule 123( '3) of Chapter I, Section B, Railway Establishment Manual, defines "grades" as sub divisions of a class, each bearing a differ ent scale of pay.
If the grievance of the appellant who holds a non gazet ted post in Class III, at all is or can be that he has not been promoted to Class II, he must show that the railway administration has violated some provision contained in Chapter II, section A, of the Railway Establishment Manual.
It is useless and irrelevant for him to show that the provisions of Chapter III introduced by Advance Correction Slip No. 70 have not been complied with by the administra tion.
None of the rules introduced by that slip governs the promotion of a Class III employee to a Class II post.
The High Court was accordingly right in refusing to issue a writ of mandamus directing the railway administra tion to apply the provisions of Chapter III in the matter of the appellant 's promotion to a Class II post.
The appellant has filed a civil miscellaneous petition (7990 of 1976) complaining of adverse entries in his Service record and of the 790 fact that he has been superseded in the matter of promotion.
These very grievances were made by him in the High Court but he lost on those points.
While granting special leave to appeal, this Court refused to consider the correctness of the High Court 's findings on those issues.
The leave being restricted to the question as regards the application of rules introduced by Advance Correction Slip No. 70.
the appellant cannot be permitted to raise questions which must be taken as finally decided under the judgment of the High Court.
For these reasons the appeal fails but there will be no order as to costs.
S.R. Appeal dismissed.
| The Assistant Commissioner (Judicial) Sales Tax, Bareil ly, disposed of the respondents ' appeal made against an order of the Sales Tax Officer.
A copy of the order was served on the respondent, but he lost it.
Later, he ob tained another copy and filed a revision petition under sectiOn 10 of the U.P. Sales Tax Act.
The same was opposed as being time barred, but the Judge (Revision) accepted the respondent 's contention that under section 12(2) of the , he was entitled to exclude the time spent in obtaining the second copy of the order, while computing the limitation period.
The question whether such exclusion was permissible, was referred to the High Court which an swered in the affirmative.
The appellant contended that the U.P. Sales Tax Act itself provided for a specific period of limitation; and therefore the was not applicable, and also that, a copy of the order was not required to be filed with the revision petition, and so the time spent in obtaining a second copy could not be excluded in computation of limita tion.
Dismissing the appeal the Court, HELD: (1 ) Where the copy served upon a party is lost and there is no alternative for that party except to apply for a fresh copy in order to be in a position to file revi sion petition, the time spent in obtaining that copy would necessarily have to be excluded under Section 12(2) of the .
State of Uttar Pradesh vs Maharaj Narain & Ors. ; followed.
[688 B C] (2) The provisions of Section 12(2) of the would apply even though the copy mentioned in that Sub section is not required to be filed alongwith the Memorandum of appeal.
The same position should hold good in case of revision petitions ever since of 1963 came into force.
1686 B, D 687 FI J.N. Surty vs
T.S. Chettyar (55 IA 161), The Punjab Co.operative Bank Ltd., Lahore vs The Official Liquidators, the Punjab Cotton Press Co. Ltd. Lahore Series 191, MT.
Lalitkuari vs Mahaprasad N. Singh Panta Series 157, Additional Collector of Customs, Calcutta & Anr.
vs M/s. Best & Co. (AIR S.A. Gaffoor vs Ayesha Beghum & Ors.
(C.A. 2406/1969 decided on 18 8 1970 Unreported Judgment of Supreme Court, 1970 Vol. 2, page 784) followed.
(3) For the purpose of determining any period of limitation prescribed for any application by any special or local law, the provisions contained in Section 12(2), inter alia.
shall apply in so far as, and to the extent to which they are not expressly excluded by such special or local law, and there is nothing in the U.P. Sales Tax Act expressly excluding the application of Section 12(2) of the .
[685 H, 686 A]
|
: Special Leave Petition (Civil) No. 5523 of 1984.
From the Judgment and Order dated 28th November, 1983 of the High Court of Gujarat in Special Civil Application No. 4649 OF 1981.
Vimal Dave for the Petitioner.
The Judgment of the Court was delivered by DESAI, J.
Petitioner is shown to be guilty of suppression of a material fact which would weigh with any employer in giving him employment and therefore, the case of the petitioner does not merit consideration under article 136 of the Constitution and his petition for special leave to appeal against the decision of a Division Bench Of 558 the Gujarat High Court in Special Application No 4649 of 1981 dated November 28,1983 must accordingly fail but this short epistle became a compelling necessity in view of the statement of law appearing in the judgment of the High Court which if permitted to go uncorrected, some innocent person may suffer in future.
That is the only justification for this short order.
The petitioner on his application was recruited in the Sales Tax Department on September 30, 1950 and at the relevant time he was working as Sales Tax Inspector.
By an order dated January, 31 1964 of the Commissioner of Sales Tax, Gujarat State, the petitioner who was at the relevant time working as Sales Tax Inspector was charged with misconduct of gross negligence and acted with gross impropriety in demanding illegal gratification, and as these charges were held proved, the Commissioner of Sales Tax imposed a penalty of removal from service.
This is not in dispute and therefore it can be safely stated that the petitioner was removed from the service of the Sales Tax Department on account of the proved misconduct.
After being removed from the Sales Tax Department, the petitioner joined service in Bhakta Vallabh Dhola College, Ahmedabad ( 'college ' for short) on May 15, 1964.
While continuing his service with the college, the petitioner applied on January 13, 1968 for the post of Head Clerk with Ahmedabad Municipal Corporation.
The application had to be made in the prescribed form, Column No. 14 of which required the applicant to state whether the applicant had been removed from service and if so, reasons for removal and if the applicant had voluntarily left previous service, reasons for leaving the service should be stated.
While answering this column, the petitioner stated that he had served in the Sales Tax Department from September 30, 1950 to January 31,1964 and that he has resigned from service due to transfer.
It thus appeared that the petitioner was guilty of suppressio veri and suggestio false inasmuch as he suppressed the material fact that he was removed from service on the ground of proved misconduct and that he made a false suggestion that he had voluntarily left service because of transfer.
Ultimately when these facts came to light, he was charge sheeted and removed from service.
A petition to the Labour Court was rejected on the ground that the misconduct alleged against the petitioner is proved.
His writ petition to the High Court proved unsuccessful.
Hence he filed this petition for special leave.
559 The High Court while dismissing the petition held that even if A the allegation of misconduct does not constitute misconduct amongst those enumerated in the relevant service regulations yet the employer can attribute what would otherwise per se be a misconduct though not enumerated and punish him for the same.
This proposition appears to us to be startling because even though either under the Certified Standing Orders or service regulations, it is necessary for the employer to prescribe what would be the misconduct so that the workman/employee knows the pitfall he should guard against.
If after undergoing the elaborate exercise of enumerating misconduct, it is left to the unbridled discretion of the employer to dub any conduct as misconduct, the workman will be on tenterhooks and he will be punished by ex post facto determination by the employer.
It is a well settled canon of penal jurisprudence removal or dismissal from service on account of the misconduct constitutes penalty in law that the workmen sought to be charged for misconduct must have adequate advance notice of what section or what conduct would constitute misconduct.
The legal proposition as stated by the High Court would have necessitated in depth examination, but for a recent decision of this Court in Glaxo Laboratories vs The Presiding Officer, Labour Court Meerut & Ors.(1) in which this Court specifically repelled an identical contention advanced by Mr. Shanti Bhushan, learned counsel who appeared for the employer in that case observing as under: "Relying on these observations, Mr. Shanti Bhushan urged that this Court has in terms held that there can be some other misconduct not enumerated in the standing order and for which the employer may take appropriate action.
This observation cannot be viewed divorced from the facts of the case.
What started in the face of the court in that case was that the employer had raised a technical objection ignoring the past history of litigation between the parties that application under Sec.
33A was not maintain able.
It is in this context that this Court observed that the previous action might have been the outcome of some misconduct not enumerated in the standing order.
But the extracted observation cannot be elevated to a proposition of law that some misconduct neither defined nor enumerated and which may be believed by the employer to be misconduct ex post facto would expose the workman to a (1) [1984]1 S.C.R. 230.
560 penalty.
The law will have to move two centuries back ward to accept such a construction.
But it is not necessary to go so far because in Salem Erode Electricity Distribution Co. Ltd. vs Salem Erode Electricity Distribution Co. Ltd. Employees Union,(1) this Court in terms held that the object underlying the Act was to introduce uniformity of terms and conditions of employment in respect of workmen belonging to the same category and discharging the same or similar work under an industrial establishment, and that these terms and conditions of industrial employment should be well established and should be known to employees before they accept the employment.
If such is the object, no vague undefined notion about any act, may be innocuous, which from the employer 's point of view may be misconduct but not provided for in the standing order for which a penalty can be imposed, cannot be incorporated in the standing orders.
From certainty of conditions of employment, we would have to return to the days of hire and fire which reverse movement is hardly justified.
In this connection.
we may also refer to Western India Match Company Ltd vs
Workmen(2) in which this Court held that any condition of service if inconsistent with certified standing orders, the same could not prevail and the certified standing orders would have precedence over all such agreements.
There is really one interesting observation in this which deserves noticing Says the Court: "In the sunny days of the market economy theory people sincerely believed that the economy law of demand and supply in the labour market would settle a mutually beneficial bargain between the employer and the workman Such a bargain, they took it for granted, would secure fair terms and conditions of employment to the workman.
This law they venerated as natural law.
They had an abiding faith in the verity of this law.
But the experience of the working of this law over a long period has belief their faith.
" Lastly we may refer to Workmen of Lakheri Cement Works (1) ; (2) ; 561 Ltd. Associated Cement Companies Ltd(1) This Court repelled the contention that the Act must prescribe the minimum which has to be prescribed in an industrial establishment, but it does not exclude the extension other wise.
Relying upon the earlier decision of this Court in Rohtak Hissar District Electricity Supply Co. Ltd. vs State of Uttar Pradesh & Ors(2) the Court held that everything which is required to be prescribed with precision and no argument can be entertained that something not prescribed can yet be taken into account as varying what is prescribed.
In short it cannot be left to the vagaries of management to say ex post facto that some acts of omission or commission nowhere found to be enumerated in the relevant standing order is none the less a misconduct not strictly falling within the enumerated misconduct in the relevant standing order but yet a misconduct for the purpose of imposing a penalty.
Accordingly, the contention of Mr. Shanti Bhusan that some other act of misconduct which would per se be an act of misconduct though not enumerated in S.O. 22 can be punished under S.O. 23 must be rejected.
It is thus well settled that unless either in the Certified Standing Order or in the service regulations an act or omission is prescribed as misconduct, it is not open to the employer to fish out some conduct as misconduct and punish the workman even though the alleged misconduct would not be comprehended in any of the enumerated misconduct.
The High Court fell into error when is observed that: "The conduct of the petitioner in suppressing the material facts and misrepresenting his past on the material aspect cannot be said to be a good conduct.
On the contrary it is unbecoming of him that he should have deliberately suppressed the material fact and tried to obtain employment by deceiving the Municipal Corporation.
It is clearly a misconduct " After thus holding that the suppressio very and suggestio false would constitute misconduct, the High Court held even if it (1) [1970] 20 Indian Factories & Labour Reports, 243.
(2) ; 562 does not fall in any of the enumerated misconducts, yet for the purpose of service regulation, it would none the less be a misconduct punishable as such.
We are unable to accept this view of law and it has to be rejected.
Having clearly restated the legal position, we reject this special leave petition.
M.L.A. Appeal dismissed.
| In exorcise of the powers conferred by section 29 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (Tamil Nadu Act 18 of 1960), the Government of Tamil Nadu by a Notification No. II (2) H. O. 6060/76 dated 21 t November, 1976 exempted the Buildings owned, inter alia by all the co operative societies from all the provisions of the said Act.
Since the protection available to the petitioners, who wore tenants in a building belonging to respondent No. 2, an Apex Society registered under the Tamil Nadu Co operative Societies Act, 1961 and covered by the said notification.
had been withdrawn and since the petitioners were facing the imminent prospect of suffering eviction decrees against them, they filed the present writ petitions challenging the constitutional validity of the impugned notification on the ground that the same was violative of article 14 of the Constitution.
The petitioners contended that treating the buildings owned by all the co operative societies in the State of Tamil Nadu as falling into one group while exercising the power under sec.
29 of the Act will have to be regarded as a rational classification based on an intelligible differentia but the differentia on which this classification was based had no excuse with the object of curbing the two evils of rack renting and unreasonable eviction for which the power to grant exemption had been conferred upon the State Government under sec.
29 of the Act and since the impugned notification did not satisfy be test of nexus the exemption granted to all such buildings could not be sustained and Will have to be regarded as discriminatory and violative of article 14.
In other words Counsel urged that there was and is up warrant OF any presumption that co operative societies qua landlords will not indulge in rack renting or will not unreasonably evict tenants; in fact they would not be different from other private landlords so far as the two evils sought to be curbed by the Act are concerned and therefore Counsel urged that the exemption granted could not be said to be in conformity with the guidance afforded by the scheme and the previsions of the Act.
417 Dismissing the petitions, ^ HELD: It is true that under sec.
4 of the Tamil Nadu Co operative Societies Act the very object of every co operative society registered thereunder is the promotion of economic interests of its members and sec.
62 of the Act provides for payment of dividends on shares to its members as also for payment of bonus to its members and paid employees.
But these aspects of a co operative society do not mean that it could be likened to any other body undertaking similar activities on commercial lines and to do so would be to miss the very basis on which the co operative movement was launched and propagated and has been making progress in the country during the last several decades.
Indisputably, co operative societies which carry on their activities in various fields do so for the purpose of attaining the social and economic welfare of a large section of the people belonging to the middle class and the rural class by encouraging thrift, self help and mutual aid amongst them, especially by eliminating the middle man.
But the object of promoting the economic interrupts of the members has to be achieved by following co operative principles where the profit motive will be restricted to a reasonable level unlike other commercial bodies where sky is the limit so far as their desire to earn profits is concerned.
Sections 4 and 62 of the Act and Rule 46 of the Rules make it clear that in the matter of distribution of profits by way of payment of dividend to members and payment of bonus to members as well as paid employees restrictions have been placed by law and the same is maintained at a reasonable level and considerable portion of the net profits is apportioned and required to be carried to various kinds of funds, like co operative development fund, co operative education fund, reserve fund etc.
In fact it is such statutory appropriations and restrictions on payment of dividends and bonus which differentiates co operative societies from other bodies undertaking similar activities on commercial lines and therefore, the buildings belonging to such co operative societies are substantially different from the buildings owned by private landlords.
Further it has to be appreciated that these statutory provisions are applicable to all types of co operative societies specified in Rule 14 whatever be their nature or functions.
The profit element being maintained at a reasonable level by provisions of law in all types of co operative societies there is every justification for the assumption that no co operative society will indulge in rack renting or unreasonable eviction.
In this view of the matter if the State Government came to the conclusion that in the case of co operative societies there being no apprehension that they would indulge in either of these two evils exemption from the provisions of the Tamil Nadu Act No. 18 of 1960 should be granted in favour of buildings belonging to such co operative societies it will have to be regarded is a legitimate exercise of the power conferred on it under sec.
29 of the Act the same being in conformity with the guidance afforded by the preamble and provisions of the Act in that behalf.
[422D 5; 424C G] Besides, on the factual side of the issue the facts and circumstances put forward by the State Government in its counter affidavit which have gone unchallenged clearly show that the differentia on the basis of which the classification was made had a clear nexus with the object with which the power to grant exemption has been conferred upon the State and therefore the impugned notification will have to be regarded as valid.
[425E F] 418
|
Writ Petition (Crimi nal) No. 200 of 1989.
(Under Article 32 of the Constitution) C.P. Mittal for the Petitioner.
Anil Dev Singh, Yogeshwar Prasad, Ms. Kitty Kumar Manga lam, Ms. A Subhashini, Anil Malik and D. Bhandari for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This petition under Article 32 of the Constitution challenges the detention of the peti tioner a ,detenu, under section 3(2) of the (hereinafter called 'the Act ').
The petitioner is a bachelor.
He does not own any property.
The order for detention under section 3(2) of the Act was passed on April 15, 1988 by the District Magistrate, Meerut.
In the grounds of detention it is stated that on the night of 2/3rd April, 1988 which was an occasion of "Shabberat" festival, a muslim festival, the religious celebration was going on at Gudfi Chaupala.
At about 11 p.m. in the night on that day, a cow belonging to the muslims of Ismail Nagar came from Sabun Garan towards Chaupal Gudri and was going towards Ismail Nagar and, according to the order of detention, 'some unde sirable elements ' 59 present there did not allow the cow to go on the right way and .she again came towards Chaupala Gudri, and was made to run avoiding the crowd towards Nakaar Chian but near the shop of Haj Dhola, 'some undesirable elements ' stopped the cow and poked a wood piece on her back.
Due to this the cow started pumping and himping and ran inside the celebration.
It is stated that at this the petitioner came to the stage, got excited and spread the rumor that "the police had not made any arrangements".
It was stated that the cow belonged to the Hindus and had been deliberately sent inside the festival and "other provoking" things.
Due to the aforesaid, the people started running and communal feelings got around.
It is stated in the order of detention that in this way the petitioner had committed an act which was prejudicial to the maintenance of public order.
Again on 9th April, 1988 at about 9 p.m. near Transformer at Gudri Chaupala P.S. Kotwa li, the petitioner is alleged to have "provoked some per sons" of the muslim community by saying that "the adminis tration even now has not allowed to get a loud speaker fixed here and all of you are silent, get a loud speaker on the Mosque and we will see.
I am with you.
" It is also stated that the petitioner had also said that on the occasion of Shabberat these Hindus had deliberately "sent their cow on the road" for their festive celebrations and the "people are silent".
He had also said about teaching "them" a lesson.
It was stated that due to the "aforesaid bad act", communal feelings got aroused in the Meerut City and fear and terror got spread, and in this way the petitioner had done an act which was "prejudicial to maintenance of public law and order".
In the aforesaid, it was stated that for the reasons mentioned hereinbefore, there was possibility of the petitioner doing such an act, and therefore in order to restrain the petitioner from doing so, it is necessary to detain him.
Accordingly, the order was passed with conse quential directions and information.
As mentioned hereinbefore, the alleged incidents were on 2/3/4th April, 1988 as well as 9th April, 1988.
The order of detention (hereinafter referred to 'the order ') was made on 15th April, 1988.
The petitioner was arrested pursuant to the said order on 2nd October, 1988.
There was representa tion but the same was rejected and the order of detention was confirmed.
In this petition various grounds have been taken before this Court challenging the order under Article 32 of the Constitution.
Mr. C.P. Mittal, learned counsel for the petitioner, however, urged 60 before us three grounds upon which he contended that the said order be quashed or set aside.
It was submitted by Mr. Mittal that there was inordinate delay in arresting the petitioner pursuant to the order, which indicated that the order was not based on a bona fide and genuine belief that the action or conduct of the petitioner were such that the same were prejudicial to the maintenance of public order and that preventive detention of the petitioner was necessary for preventing him from such conduct.
He .further submitted that delay in the circumstances of this case in arresting the petitioner and or in acting pursuant to the order indi cated that the "so called grounds" were merely make belief and not genuine grounds upon which the satisfaction of the authority concerned was based.
In answer to this contention, on behalf of the Distt.
Magistrate, Meerut, by an affidavit affirmed on 28th August, 1989 and filed in these proceedings, stated that raids on the petitioner 's premises for the service of the order dated 15.4.1988 were conducted.
It was further stated that the respondent authorities had made all efforts to serve the order on the petitioner and for this purpose the house of the petitioner was raided on several occasions and a refer ence was made to the general diary report, details whereof were extracted in the affidavit.
The details indicate that in respect of the order dated 15.4.1988 the first raid was made in the house of the petitioner on 12th May, 1988, followed by eight other attempts up to the end of May, 1988 to arrest the petitioner but he was not available.
There was, however, no attempt in the months of June, July, Au gust ' 88 but on 23, 25 & 29th September, 1988 three attempts were made and as such, it was stated on behalf of the re spondents, the order could not be served before 2nd October, 1988.
According to the District Magistrate, the respondent authorities did not leave any stone unturned to arrest the petitioner.
It was, however, stated that from May, 1988 to September, 1988 the entire police force of Meerut City was extremely busy in maintaining law and order, but the peti tioner was all along absconding in order to avoid the serv ice of the order.
The District Magistrate has further stated that during the period from May to September, 1988 great communal tension was prevailing in the Meerut City and a large number of people were arrested on account thereof.
The question that requires consideration is, whether there was in ordinary delay.
The detention under the Act is for the purpose of preventing persons from acting in any manner prejudicial to the maintenance of public order.
Subsection (2) of section 3 of the Act authorises the Central Govt.
or the State Govt.
, if satisfied with respect to any person that with a view to preventing him from acting in any manner prejudicial to the security of 61 the State, it is found necessary then the person can be detained.
Hence, there must be conduct relevant to the formation of the satisfaction having reasonable nexus with the action of the petitioner which are prejudicial to the maintenance of public order.
Existence of materials relevant to the formation of the satisfaction and having rational nexus to the formation of the satisfaction that because of certain conduct "it is necessary" to make an order "detain ing" such person, are subject to judicial review.
Counsel for the petitioner contends that in the aforesaid facts and the circumstances if the conduct of the petitioner was such that it required preventive detention, not any punitive action, for the purpose of "preventing" the person concerned from doing things or indulging in activities which will jeopardise, hamper or affect maintenance of public order then there must be action in pursuance of the order of detention with promptitude.
Delay, unexplained and not justified, by the circumstances and the exigencies of the situation, is indicative of the fact that the authorities concerned were not or could not have been satisfied that "preventive custody" of the person concerned was necessary to prevent him from acting in any manner prejudicial to the maintenance of public order.
Whether there has been unrea sonable delay, depends upon the facts and the circumstances of a particular situation.
Preventive detention is a serious inroad into the freedom of individuals.
Reasons, purposes and the manner of such detention must, therefore, be subject to closest scrutiny and examination by the courts.
In the interest of public order, for the greater good of the commu nity, it becomes imperative for the society to detain a person in order to prevent him and not merely to punish him from the threatened or contemplated or anticipated course of action.
Satisfaction of the authorities based on conduct must precede action for prevention.
Satisfaction entails belief.
Satisfaction and belief are subjective.
Actions based on subjective satisfaction are objective indication of the existence of the subjective satisfaction.
Action based on satisfaction should be with speed commensurate with the situation.
Counsel for the petitioner submitted that in this case there was no material adduced on behalf of the Govt.
indicating that the petitioner was "absconding".
It was urged that there are no material at all to indicate that the petitioner was evading arrest or was absconding.
It was submitted that section 7 of the Act gave power to the authorities to take action in case the persons were absconding and in case the order of detention cannot be executed.
It is stated that in this case no warrant under section 7 of the Act has been issued in respect of his property or person.
Hence, it was contended that the respondent was not justified in raising the plea that the petitioner was absconding.
We are, howev er unable to accept this contention.
If in a situation the 62 person concerned is not available or cannot be served then the mere fact that the action under section 7 of the Act has not been taken, would not be a ground to say that the detention order was bad.
Failure to take action, even if there was no scope for action under section 7 of the Act, would not be deci sive or determinative of the question whether there was undue delay in serving the order of detention.
Furthermore, in the facts of this case, as has been contended by the Government, the petitioner has no property, no property could be attached and as the Govt. 's case is that he was not available for arrest, no order under section 7 could have been possibly made.
This, however, does not salvage the situation.
The fact is that from 15th April, 1988 to 12th May, 1988 no attempt had been made to contact or arrest the petitioner.
No explanation has been given for this.
There is also no explanation why from 29th September, 1988 to 2nd October, 1988 no attempt had been made.
It is, however, stated that from May to September, 1988 the 'entire police force ' was extremely busy in controlling the situation.
Hence, if the law and order was threatened and prejudiced, it was not the conduct of the petitioner but because of 'the inadequacy ' or 'inability of the police force of Meerut City to control the situation.
Therefore, the fact is that there was delay.
The further fact is that the delay is unexplained or not warranted by the facts situation.
To shift the blame for public order situation and raise the bogey of the conduct of the petitioner would not be proof of genuine or real belief about the conduct of the petitioner but only raising a red herring.
This question was examined by this Court in Nizamuddin vs The State of West Bengal, ; The question involved therein was under section 3(2) of the Internal Security Act, 1971.
There was delay of about two and a half months in detaining the peti tioner pursuant to the order of detention and the Court considered that unless the delay was satisfactorily ex plained, it would throw considerable doubt on the genuine ness of the subjective satisfaction of the Distt.
Magistrate recited in the order of detention.
Mr. Justice Bhagwati, as the learned Chief Justice then was, speaking for the Court observed at page 595 of the report that it will be reasona ble to assume that if the Distt.
Magistrate was really and genuinely satisfied after proper application of mind to the materials before him that it was necessary to detain the petitioner with a view to preventing him from acting in a prejudicial manner, he would have acted with greater promp titude in securing the arrest of the petitioner immediately after invoking of the order of detention, and the petitioner would not have been allowed to remain at large for such a long period of time to carry on his nefarious activities.
It is, however, not the law that whenever there is some delay 63 in arresting the subjective satisfaction of the detaining authority must be held to be not genuine or colourable.
Each case must depend on its own peculiar facts and circum stances.
In this case, from the facts and the circumstances set out hereinbefore we find no reasonable or acceptable explanation for the delay.
In a situation of communal ten sion prompt action is imperative.
It is, therefore, not possible for this Court to be satisfied that the District Magistrate had applied his mind and arrived at "real" and "genuine" subjective satisfaction that it was necessary to detain the petitioner to "prevent" him from wrong doing.
The condition precedent, therefore, was not present.
But as Justice Chinnappa Reddy explained in Bhawarlal Ganeshmalji vs State of Tamil Nadu & Anr., [1979] 2 SCR 633 at page 638 that there must be 'live and proximate link ' between the grounds of detention alleged by the detaining authority and the avowed purpose of detention, and in appropriate cases it is possible to assume that the link is 'snapped ' if there is a long and unexplained delay between the date of the order of detention and the arrest of the detenu.
Mr Yogeshwar Prasad, learned counsel for the State of U.P. drew our attention to the decision of this Court in Indradeo Mahato vs State of West Bengal, [1973] 4 SCC 4.
That was also a case of arrest under the .
It was urged in that case that there was no real or genuine apprehension that the petitioner there was likely to act in a manner prejudicial to the maintenance of public order.
This Court in the facts of that case, was unable to accept the said contention.
The Court held that mere failure to take recourse to sections 87 & 88 of the Criminal Procedure Code would be a warrant to believe that the delay was unrea sonable.
Whether the delay was unreasonable depends on the facts and the circumstances of each case.
We are satisfied, in view of the facts and circumstances of the case mentioned before, that by the conduct of the respondent authorities, there was undue delay, delay not commensurate with the facts situation in this case.
the conduct as aforesaid betrayed that there was no real and genuine apprehension that the petitioner was likely to act in any manner prejudicial to public order.
The order, therefore, is bad and must go.
The next ground urged in support of this application was that the grounds mentioned were not germane to maintenance of 'public order '.
It was submitted that the petitioner has only alleged inefficiency or incompetency of the police either in providing a loud speaker or in ensuring that the cows do not enter into or within the arena of muslim festi vals.
It was submitted that the criticism of the administra tion is not endangering public order.
Mr. Mittal submitted that it was not a question of law and order but public order that is important in 64 this case.
What the petitioner has alleged to have done may have some relevancy to the purpose of securing law and order but there cannot be any rational nexus with the satisfaction regarding the maintenancy of public order.
By the conduct alleged or the saying attributed as mentioned above, public order was not prejudiced.
Criticism of Police does not prejudice public order, it is said.
The Court has to ensure that the order of detention is based on materials before it.
If it is found that the order passed by the detaining au thority was on materials on record, the Court can examine the record only for the purpose of seeing whether the order of detention was based on no material or whether the materi als have rational nexus with satisfaction that public order was prejudiced.
Beyond this, the Court is not concerned.
See the observations of The State of Gujarat vs Adam Kasam Bhaya, ; The difference between public order and law and order is a matter of degree.
If the morale of the police force or of the people is shaken by making them lose their faith in the law enforcing machinery of the State then prejudice is occasioned to maintenance of public order.
Such attempts or actions which undermine the public faith in the police administration at a time when tensions are high, affects maintenance of public order and as such conduct is prejudicial.
See in this connection Indradeo Mahato 's case (supra), Subhash Bhandari vs Distt.
Magistrate, Lucknow & Ors., ; and Kanu Biswas vs State of West Bengal, ; Therefore, we are unable to accept the contention that the grounds were not relevant for the order of detention under the Act.
This contention of Mr. Mittal must, therefore, fail.
The last contention was that the grounds mentioned were vague and unintelligible.
It was not stated, it was urged, that as to what the petitioner said, to whom the rumour was spread as mentioned in ground No. 1 and what "other provok ing things" the petitioner is alleged to have said as al leged in the grounds mentioned before.
It was urged, it is further not clear as to whom the petitioner wanted to teach a lesson.
It has to be borne in mind that if more than one grounds are stated in the grounds then the fact that one of the grounds is bad, would not alter order of detention after the amendment of the Act in 1984 provided the other grounds were valid.
But quite apart from the same, it appears to us that none of the grounds were vague.
The grounds must be understood in the light of the background and the context of the facts.
It was quite clear what the detaining authorities were trying to convey was that the petitioner stated things of the nature and it was to teach Hindus a lesson.
Hence, it was meant to create communal tension.
We find no irrelevancy or vagueness in the 65 grounds.
On this ground the challenge cannot be sustained.
However, in the view taken by us on the first ground the order of detention must be quashed and set aside.
We order accordingly.
Let the petitioner be set at liberty forthwith unless he is required for any other offence under any other Act.
The application is disposed of accordingly.
Y. Lal Petition allowed.
| The Respondent firm imported from Japan, "metallised polyester films" which were in the shape of film rolls several metres long.
The goods were cleared on payment of customs duty as well as additional duty/countervailing duty leviable under section 3 of the Customs Tariff Act.
Thereaf ter the Respondent firm moved three applications claiming refund of the additional duty of customs paid by it.
The claim was made under the terms of a notification of exemp tion issued under section 25(1) of the Customs Act.
Under notification No 228/76 dated 2.8.1976, an exemption from the Customs Tariff Act was granted in respect of "articles made of plastics, all sort but excluding those specified in the Table annexed and failing under Chapter 39 of the First Schedule to the Customs Tariff Act.
The Tribunal accepted the claim of refund made by the ' Respondent.
In so doing it relied on the decisions of the Madras High Court in Precise Impex P. Ltd. vs Collector, , of the Calcutta High Court in Continental Marketing P. Ltd. vs Union, and of the Bombay High Court in A.V. Jain vs Union, WP 2136 of 1986 decided on 30.1.1987.
The Tribunal also referred to its earlier decision in Export India Corporation P. Ltd. vs Collector; and Collector vs Fancy Dying and Printing Works Bombay.
The Tribunal held that the goods imported by the Re spondent were articles made of plastics but they were "films" and thus not one of the Categories of articles mentioned in the Table.
Aggrieved by the decision of the Tribunal, the Collector of Customs has filed these appeals under section 130 E(B) of the . 232 Before this Court the Department contended that the goods are "sheets" or "foils" or other "rectangular or profile shape" and hence liable to duty.
The assesses ' assertion is that the goods are "films" though specie of plastics articles yet they are different from any mentioned in the table.
According to it even if they are treated only as thin sheets of plastic material, they can be described only as "sheetings" and not sheets.
On consideration of the rival contentions advanced by the parties and after making reference to the other relevant notifications granting exemption issued under rule 8(1) of the Central Excise Rules in respect of items falling under Item No. 15A of the Central Excise Tariff Act, this Court dismissing the appeals, HELD: Films made of plastic fall in a category of their own and do not fail within the categories of articles ex cepted by the Table.
Film is a well known, distinct and independent category of plastic article known to commerce.
[235A] The Court agreed with the view of the Bombay High Court that, though for certain purposes there is a distinction between "films", "foils" and "sheets", so far as the article presently in question is concerned it is recognised in trade only as "film".
[238F] The goods under consideration cannot be described either as "foils or sheets".
A film roll of indefinite length and not in the form of individual cut piece can be more appro priately described as "sheetings" rather than ' 'sheets".
[238G ;239A] The expression "other rectangular or profile shapes" in the table is also not appropriate to bring in the items in question.
For one thing, the articles have a distinct name in the market as "films" and therefore they are outside the table.
It will not be possible to accept the contention that articles which have a clear commercial identity as "films" should be brought within the wide and vague expression "other rectangular or profile shapes", because if the film is cut into small pieces each piece will be rectangular in shape.
The items imported do not come in a rectangular shape they are imported as rolls of polyester films.
They are not articles of rectangular shape.
Nor would it be possible to treat them as of other "profile" shape.
The Court was unable to attribute any precise meaning to the expression "profile" shape but it cannot be taken to be comprehensive enough to take in any shape whatever.
If the expression "rectangular" or other "profile" shape in the table is given 233 such wide and unrestricted interpretation then practically any article of plastic can be brought within the meaning of one or other of the expressions used in the Table and thus the entire exemption can be altogether deprived of any content.
The Court took the view that the articles are "films" and, as, this expression does not find specific mention in the table, the assessee is entitled to exemption under the main part of the notification.
[239E H; 240A]
|
minal Appeal No. 210 of 1963.
Appeal by special leave from the judgment and order dated July 27, 1963, of the Madhya Pradesh High Court (Gwalior Bench) in Criminal Appeal No. 83 of 1963 and Criminal Reference No. 4 of 1963.
K. K. Luthra, for the appellant.
I. N. Shroff, for the respondent.
January 24, 1964.
RAGHUBAR DAYAL J. Faddi appeals, by special leave, against the order of the High Court of Madhya Pradesh confirming his conviction and sentence of death under section 302 I.P.C. by the Additional Sessions Judge, Morena.
Jaibai, widow of Buddhu, began to live with Faddi a few years after the death of her husband Buddhu.
Faddi and Jaibai at first lived at Agra, but later on shifted to 314 Morena.
Jaibai had a son named Gulab, by Buddhu.
Gulab was aged 11 years and lived in village Torkheda at the house of his phupa Ramle.
He was living there from Sawan, 1961.
Gulab 's corpse was recovered from a well of village Jarah on January 21, 1963.
It reached the mortuary at Morena at 5 15 p.m. that day.
It is noted on the postmortem report that it had been despatched from the place of occurrence at 1 p.m. Dr. Nigam, on examination, found an injury on the skull 'and has expressed the opinion that the boy died on account of that injury within two or three days of the postmortem examination.
He stated in Court that no water was found inside either the lungs or the abdomen or the larynx or in the middle ear.
This rules out the possibility of Gulab 's dying due to drowning.
As a result of the investigation, the appellant and one Banwari were sent up for trial for the murder of Gulab.
It is interesting to observe the course of the investigation.
The police knew nothing of the offence till 9 p.m. on January 20, 1963, when the appellant himself went to the police station, Saroichhola, and lodged a first information report stating therein that on peeping into the well near the peepul tree of Hadpai on the morning of January 20, 1962, he found his son lying dead in the well.
Earlier, he had narrated the events leading to his observing the corpse and that narration of facts accused Ramle, Bhanta and one cyclist of the offence of murdering the boy Gulab.
It was this information which took the police to the well and to the recovery of the corpse.
The police arrested the persons indicated to be the cul prits, viz., Ramle, Bhanta and the cyclist, who was found to be Shyama, by January 26.
These persons remained in the lock up for 8 to 11 days.
In the meantime, on January 26, the investigation was taken over, under the orders of the Superintendent of Police, by the Circle Inspector, Nazat Mohd. Khan from Rajender Singh, who was the Station Officer of Police Station, Saraichhola.
The Circle Inspector arrested Faddi on January 27.
He other arrested persons were got released in due course.
Faddi took the Circle 3I5 Inspector to the house and, after taking out a pair of shorts of Gulab, delivered them to the Circle Inspector.
Ramle, Bhanta alias Dhanta and Shyamlal have been examined as prosecution witnesses Nos. 15, 4 and 5 respectively.
The conviction of the appellant is based on circumstantial evidence, 'there being no direct evidence about his actually murdering Gulab by throwing him into the well or by murdering him first and then throwing the dead body into the well.
The circumstances which were accepted by the trial Court were these: 1.
Faddi went to the house of Ramle at about noon on 19th January, 1962 and asked Ramle to send the boy with him.
Gulab was at the time in the fields.
After meals, Faddi left suddenly when Shyama arrived and gave a message to Ramle from Gulab 's mother that the boy be not sent with any one.
Faddi caught hold of Gulab from the fields forcibly and took him away.
It may be mentioned here that one Banwari who has been acquitted is also said to have been with Faddi at this time.
Gulab had not been seen alive subsequent to Faddi 's taking him away on the afternoon of January, 19.
His corpse was recovered on the forenoon of January, 21.
Faddi had not been able to give any satisfactory explanation as to how he and Gulab parted company.
Faddi knew the place where Gulab 's corpse lay.
It was his information to the Police which led them to recover the corpse.
His statement that he had noted the corpse floating on the morning of January 20 was untrue, as according to the opinion of Dr. Nigam, the corpse could come up and float in the water approximately after two days.
The witnesses of the recovery deposed that they could not see the corpse floating and that it had to be recovered by the use of angles.
316 4.
The accused 's confession to Jaibai and two other witnesses for the prosecution viz., Jimipal and Sampatti about his killing Gulab.
The pair of shorts recovered was the one which Gulab was wearing at the time he was taken away by Faddi.
The High Court did not rely on the confession and on the recovery of the pair of shorts from the appellant 's posses sion, and we think, rightly.
The evidence about the confes sion is discrepant and unconvincing.
Bhagwan0 Singh and Ramle deposed that the deceased was wearing the pair of shorts recovered, at the time the appellant took him away.
Bhagwan Singh did not go to the test identification.
The accused was not questioned about the deceased wearing these pair of shorts at the time he was taken away from the village.
The High Court considered the other circumstances sufficient to establish that the appellant had committed the murder of Gulab.
It therefore confirmed the conviction and sentence.
Learned counsel for the appellant has taken us through the entire evidence and commented on it.
He has contended that the evidence is unreliable and should not have been accepted by the Courts below.
We have considered hi,,, criticism and are of opinion that the Courts below have correctly appreciated the evidence.
It is not necessary for us to discuss it over again.
It may be mentioned now that the.
appellant denies having gone to Ramle 's house in village Torkheda and to have taken away Gulab from that village forcibly on the afternoon of January 19, but admits his lodging the report, and the recovery of the dead body from the well with the help of the angle.
He however states that he had lodged the report on the tutoring of one Lalla Ram of Utampur.
Ile hag neither stated why he was so tutored nor led any evidence in support of his allegation.
In his report the appellant admitted the prosecution allegations up to the stage of 317 his forcibly taking away Gulab from village Torkheda.
He then stated that Ramle, Bhatta and the third person, viz., Shyamlal threatened him with life, took out the pyjama and half pant from the body of Gulab and taking the boy with them remained sitting on the well near the peepul tree of Hadpai.
The appellant kept himself concealed from their view, nearby.
He heard the sound of something being thrown into the well.
Those three persons then ran away, but he himself remained sitting there throughout the night and then, on peeping into the well next morning, observed the corpse of his son in the well,, He then went to Morena, consulted one Jabar Singh Vakil, and one Chhotey Singh and was advised to lodge the report.
He definitely accused Ramle, Bhatta and the cycle rider with killing his son Gulab by throwing him into the well.
This report is not a confessional statement of the appel lant.
He states nothing which would go to show that he was the murderer of the boy.
It is the usual first information report an aggrieved person or someone on his behalf lodges against the alleged murderers.
The learned Sessions Judge and the High Court considered the appellant 's statements in this report which went to explain his separation from Gulab on account of the conduct of Ramle and others and came to the conclusion that those statements were false.
This was in a way justified as the burden lay on the appellant to account for the disappearance of Gulab when the prosecution evidence showed that the appellant had taken Gulab with him.
Besides, what the appellant had stated in the report, he had given no explanation for the disappearance.
Of course, he had denied that he took Gulab with him.
The evidence about that aspect of the case consists of the statement of Ramle, Shyamlal and Bhagwan Singh which have been accepted by the Courts below.
The High Court also took into consideration the fact that the appellant knew where the deceased 's body was as it was on what he had stated in the report that the police went to the well of village Jarah and recovered the dead body.
The accused gave no explanation in Court as to how he came to know about it.
What he had stated in the report had been considered and found to be untrue and 318 specially in view of the appellant 's own conduct.
It has been rightly stressed that if Gulab had been forcibly taken away from him by Ramle and others, the appellant ordinarily would have gone and taken some action about it, without wasting his time in just following those people.
Even if he felt interested in following them and had heard the sound of something being thrown inside the well and had also seen those persons running away, he had no reason to remain hidden at that spot the whole night.
He should have informed people of what he had observed as he must have suspected that these persons had played mischief with Gulab.
The High Court also took into consideration the in correctness of the appellant 's statement that he observed the dead body floating in the well on the morning of January 20.
It is contended for the appellant that the first information report was inadmissible in evidence and should not have been therefore taken on the record.
In support, reliance is placed on the case reported as Nisar Ali vs State of U.P. (1).
We have considered this contention and do not see any force in it.
The report is not a confession of the appellant.
It is not a statement made to a police officer during the course of investigation.
Section 25 of the Evidence Act and section 162 of the Code of Criminal Procedure do not bar its admissibility.
The report is an admission by the accused of certain facts which have a bearing on the question to be determined by the Court, viz., how and by whom the murder of Gulab was committed, or whether the appellant 's statement in Court denying the correctness of certain statements of the prosecution witnesses is correct or not.
Admissions are admissible in evidence under section 21 of the Act.
Section 17 defines an admission to be a statement, oral or documentary, which suggests any inference as to any fact in issue or relevant fact, and which is made by any of the persons, and under the circumstances, thereafter mentioned, in the Act.
Section 21 provides that admissions are relevant and may be proved as against a person who makes them.
Illustrations (1)[1957] S.C.R. 657. 319 (c), (d) and (e) to section 21 are of the circumstances in which an accused could prove his own admissions which go in his favour in view of the exceptions mentioned in section 21 to the provision that admissions could not be proved by the person who makes them.
It is therefore clear that admissions of an accused can be proved against him.
The Privy Council in very similar circumstances, held long ago in Dal Singh vs King Emperor(1) such first information reports to be admissible in evidence.
It was said in that case at p. 142: "It is important to compare the story told by Dal Singh when making his statement at the trial with what he said in the report he made to the police in the document which he signed, a document which is sufficiently authenticated.
The report is clearly admissible.
It was in no sense a confession.
As appears from its terms, it was rather in the nature of an information or charge laid against Mohan and Jhunni in respect of the assault alleged to have been made on Dal Singh on his way from Hardua to Jubbulpore.
As such the statement is proper evidence against him. .
It will be observed that this statement is at several points at complete variance with what Dal Singh afterwards stated in Court.
The Sessions Judge regarded the document as discrediting his defence.
He had to decide between the story for the prosecution and that told for Dal Singh.
" Learned counsel for the appellant submits that the facts of that case were distinguishable in some respects from the facts of this case.
Such a distinction, if any, has no bearing on the question of the admissibility of the report.
The report was held admissible because it was not a confession and it was helpful in determining the matter before the Court.
(1) L. R. 44 1.
A. 137.
320 In Nisar Ali 's case(1) Kapur J. who spoke for the Court said, after narrating the facts: "An objection has been taken to the admissibility of this report as it was made by a person who was a co accused.
A first information report is not a substantive piece of evidence and can only be used to corroborate the statement of the maker under section 157, Evidence Act, or to contradict it under section 145 of that Act.
It cannot be used as evidence against the maker at the trial if he himself becomes an accused, nor to corroborate or contradict other witnesses.
In this case, therefore, it is not evidence.
" It is on these observations that it has been contended for the appellant that his report was inadmissible in evidence.
Ostensibly, the expression 'it cannot be used as evidence the maker at the trial if he himself becomes accused supports the appellant 's contention.
But it appears to us that in the context in which the observation is made and in the circumstances, which we have verified from the record of that case, that the Sessions Judge had definitely held the first information report lodged by the co accused who was acquitted to be inadmissible against Nisar Ali, and that the High Court did not refer to it at all in its.
judgment, this observation really refers to a first information report which is in the nature of a confession by the maker thereof.
of course, a confessional first information report cannot be used against the maker when he be an accused and necessarily cannot be used against a co accused.
Further, the last sentence of the above quoted observation is significant and indicates what the Court meant was that the first in formation report lodged by Qudratullah, the co accused, was not evidence against Nisar Ali.
This Court did not meanas it had not to determine in that case that a first informa tion report which is not a confession cannot be used as an admission under section 21 of the Evidence Act or as a relevant statement under any other provision of that Act.
We find also that this observation has been understood in this way by the Rajasthan High Court in State vs Balchand(2) and (1) [1957]S.C.R.657.
(2) A.I.R. 1960 Raj 101 321 in State of Rajasthan vs Shiv Singh(1) and by the Allahabad High Court in Allahdia vs State(2).
We therefore hold that the objection to the admissibility of the first information report lodged by the appellant is not sound and that the Courts below have rightly admitted it in evidence and have made proper use of it.
The circumstances held established by the High Court are sufficient, in our opinion, to reach the conclusion that Gulab was murdered by the appellant who was the last person in whose company the deceased was seen alive and who knew where the dead body lay and who gave untrue explanation about his knowing it in the report lodged by him and gave no explanation in Court as to how he separated from the deceased.
We therefore dismiss the appeal.
Appeal dismissed.
| On the first information report lodged by the appellant, the corpse of his step son was recovered.
The police arrested three other persons indicated to be the culprits, but as a result of the investigation, the appellant (1) A.I.R. 1961 Orissa, 131.
313 was sent up for trial for the murder and sentenced to death.
The High Court confirmed the conviction and sentence.
On appeal by special leave it was contended that the first information report was inadmissible in evidence and should not have been, therefore, taken on the record.
Held:There was no force in the contention.
The report was neither confession of the accused nor a statement made to a police officer during the course of investigation.
Section 25 of the Evidence Act and section 162 of the Code of Criminal Procedure do not bar its admissibility.
The report was an admission by the accused of certain facts which had a bearing on the question to be determined by the Court viz., how and by whom the murder was committed or whether the accused 's statement in court denying the correctness of certain statements of the prosecution witnesses was correct or not.
Admissions ire admissible in evidence under section 21 of the Evidence admission of an accused can be proved against him.
Dal singh vs King Emperor, L. R. 44 I.A. 137, applied.
Nisar Ali vs State of U.P. , considered and distinguished.
State vs Balachand A.I.R. 1960 Raj. 101, State of Rajasthan V. shiv Singh A.I.R. 1962 Raj. 3 and Allohdia vs State, 1959 All.
L.J. 340, referred to.
|
ition No. 444 of 1979.
(Under Article 32 of the Constitution) F. section Nariman & Anil B. Dewan, B. D. Barucha, Ravinder Narain and Talat Ansari for the Petitioner.
A. Subhashini for Respondent No. 1 Lal Narain Sinha, Att.
and U.P. Singh for the Respondents Nos.
Soli J. Sorabjee, V. K. Pandita and E. C. Agarwala for R.4.
Subrata Roy Chowdhury, Biswaroop Gupta, Bhaskar Gupta, Surhid Roy Chowdhury & D. N. Gupta for Respondent No. 5.
The Judgment of the Court was delivered by 675 GUPTA, J.
In this petition under Article 32 of the Constitution of India dealer seeks relief from the same sales being assessed to sales tax both under the Central Sales Tax Act and the U.P. Sales Tax Act.
The first petitioner Indian Oil Corporation Limited, IOC for short, are a government company incorporated under the engaged inter alia in the manufacture and marketing of petroleum products.
The second petitioner is the Managing Director and a shareholder of IOC.
Union of India has been impleaded as the first respondent in the petition.
The 2nd respondent is the Assistant Superintendent of Commercial Taxes, Central Circle, Bihar.
The 3rd and 4th respondents are respectively the State of Bihar and the State of U.P.
The 5th respondent Indian Explosives Limited are a company having their registered office at Calcutta; they have a factory at Panki, Kanpur in Uttar Pradesh manufacturing urea fertilizers.
IOC have a refinery at Barauni in the State of Bihar and also a depot at Panki, Kanpur.
In 1966 IOC completed pipeline from their refinery at Barauni in Bihar to Kanpur in U.P. through Patna in Bihar and Mughalsarai and Allahabad both in U.P.
At their Barauni refinery IOC manufacture naphtha which is the principal raw material for production of fertilizers.
On February 9, 1970 an agreement was entered into by and between IOC and the 5th respondent in terms of which IOC were to sell and the 5th respondent were to buy the entire quantity of naphtha required for the 5th respondent 's fertilizer factory at Kanpur.
Below is a summary of the different clauses of the agreement that are relevant for the present purpose; the numbers given to the different paragraphs in this summary follow the numbering of the corresponding clauses of the original agreement: 1.
The agreement shall be deemed to have come into force from September 10, 1969 [when the supply of naphtha commenced] and shall remain in force till December 31, 1980.
It shall continue to be in force thereafter unless terminated by either party giving to the other not less than one year 's prior notice of the intention to terminate the agreement.
The naphtha to be supplied shall be of the specification set out in Schedule I of the agreement.
(i) The quantity of naphtha that the 5th respondent agree to buy and IOC agree to sell shall be 2,50,000 tonnes per annum which is the maximum rate per annum.
(iii) The naphtha shall be supplied against the buyer 's indents in writing addressed to the seller at the seller 's Panki/Kanpur installation.
676 (iv) It is agreed that the buyer 's requirement of naphtha for the first four years shall be 95,000, 1,70,000, 2,00,000 and 2,25,000 tonnes respectively.
(viii) In case the buyer fails to take delivery during any year the quantities of naphtha as stipulated above for reasons other than Force Majeure at their Kanpur plant, the seller shall be entitled to sell the quantity which the buyer has failed to lift.
Similarly if the seller fails to deliver the stipulated quantities of naphtha during any year for reasons other than Force Majeure at their Barauni refinery and/or the transportation system from Barauni to their Panki installation, the buyer shall be entitled to purchase the quantity not delivered in that year from other sources.
The supply of naphtha to the buyer shall be made from the seller 's refinery at Barauni.
The price of naphtha shall be exclusive of transfer charges, excise duty and all other taxes levies which shall be recovered by the seller from the buyer at actual rates prevailing and levied by concerned agencies from time to time.
(i) Naphtha shall be supplied through a pipeline at the fence of the buyer 's fertilizer factory and the pipeline between the buyer 's and the seller 's fences shall be constructed by the buyer at their expense.
(ii) The cost of transferring naphtha by the pipeline from the point of its manufacture to the fence of the buyer 's fertilizer factory shall be borne by the buyer.
The seller shall provide at their cost storage facilities at the seller 's Panki/Kanpur installation of a capacity equivalent to not less than 30 days ' requirement of the buyer.
(iii) Three samples of naphtha for testing will be taken from the seller 's tank at their Panki/Kanpur installation prior to transfer in the presence of buyer 's representatives at such frequency as may be mutually agreed.
According to the 5th respondent, since the commencement of supply of naphtha under the aforesaid agreement IOC went on charging from them sales tax at the rate prescribed by the U.P. Sales Tax Act on the plea that the sales were chargeable under the said Act.
On or about March 16, 1974 the assessing authority under the U.P. Sales Tax Act assessed IOC to sales tax under the said Act on their total turnover for the assessment year 1969 70 including 677 the sales of naphtha to the 5th respondent.
The 5th respondent filed a writ petition in the Allahabad High Court challenging the assessment made on the basis that the sales were local and asserting that they were inter state sales.
Before the writ petition was disposed of the U.P. assessing authority assessed IOC for the assessment year 1970 71 treating the sale of naphtha to the 5th respondent as local sale.
On August 27, 1975 the Allahabad High Court allowed the said writ petition quashing the impugned order of assessment to the extent it sought to levy tax under the U.P. Sales Tax Act on the sales of naphtha to the 5th respondent.
The High Court held that the sales under the agreement dated February 9, 1970 were inter state sales.
IOC preferred an appeal against the order of assessment in respect of the assessment year 1970 71 and although the appeal was on grounds not relevant for the present purpose, it is necessary to refer to it because at a later stage IOC had the scope of the appeal enlarged, induced by the 5th respondent according to IOC, by including a ground that the sales of naphtha under the agreement were interstate sales.
On June 29, 1978 the 2nd respondent levied sales tax under the Central Sales Tax Act on the sales of naphtha by IOC to the 5th respondent for the assessment year 1970 71 treating them as inter state sales.
Under section 9 of the Central Sales Tax Act the tax levied under that Act is collected in the State from which the movement of the goods commenced; in this case the movement commenced from Barauni in Bihar.
IOC preferred an appeal against this order to the appellate authority.
For the assessment year 1971 72 the assessing authority under the U.P. Sales Tax Act treated the sales of naphtha to the 5th respondent as inter state sales presumably in view of the aforesaid judgment of the Allahabad High Court.
This assessment order was challenged by the Commissioner of Sales Tax, U.P. in revision before the appropriate authority.
For the same assessment year the Bihar authority assessed the sales on the basis they were inter state sales.
For the next assessment year 1972 73 the U.P. authority again treated the sales as inter state sales and again the order was challenged in revision by the Commissioner of Sales Tax, U.P.
The Bihar authority also treated the sales for that year as inter state sales.
Thereafter for the assessment years 1973 74 and 1974 75 somewhat surprisingly the U.P. assessing authority went back on the view taken in the immediately preceding two years and again treated the sales as local sales and the 5th respondent preferred appeals from these two orders of assessment.
In this confused situation IOC filed the instant writ petition in this Court on May, 1, 1979.
Meanwhile the appellate authority under the U.P. Sales Tax Act dealing with the appeal preferred by IOC against the order of assessment relating to 678 the year 1970 71 had remanded the case to the assessing authority and the assessing authority by his order dated December 20, 1979 held that the sales were local sales.
The 5th respondent had started several other proceedings to avoid the sale of naphtha to them under the agreement dated February 9, 1970 being assessed to sales tax under the U. P. Act.
On August 29, 1977 they filed a suit in the Calcutta High Court against IOC seeking to restrain IOC from collecting sales tax from them under the U.P. Sales Tax Act.
The 5th respondent also filed two writ petitions in the Allahabad High Court, Nos. 102 and 103 of 1978.
The first petition challenges the assessment order relating to the year 1970 71 made by the U.P. authority.
The second petition is directed against the revisional proceedings started by the Commissioner of Sales Tax, U.P. in respect of the assessment years 1971 72 and 1972 73.
All these proceedings are still pending.
The petitioners ' case in the present writ petition is that the sales of naphtha to the 5th respondent were local sales in Kanpur and as such they were assessable under the U.P. Sales Tax Act and that the assessment orders dated June 29, 1978 and November 30, 1978 respectively for the assessment year 1970 71 and 1971 72 made by the Bihar Sales Tax authority under the Central Sales Tax Act are in violation of the fundamental rights guaranteed under Articles 19 and 31 of the Constitution of India.
The petitioners seek a writ in the nature of certiorari for quashing the aforesaid assessment orders and a writ in the nature of mandamus directing the Bihar sales tax authority to forebear from assessing the sales of naphtha to the 5th respondent on the basis they were inter state sales.
Alternatively the petitioners pray, in the event it is held that "the sales are inter state sales and not intra state sales", for "appropriate reliefs, orders, and directions" directing the State of U.P. not to assess, levy or recover any sales tax on the sales of naphtha to the 5th respondent under the agreement dated February 9, 1970.
Section 3(a) of the provided that "a sale or purchase of goods shall be deemed to take place in the course of inter state trade or commerce if the sale or purchase occasions the movement of goods from one State to another".
It is now well settled by a series of decisions of this Court that a sale shall be an inter state sale under section 3(a) if there is a contract of sale preceding the movement of goods from one state to another and the movement is the result of a covenant in the contract of sale or is an incident of that contract; in order that a sale may be regarded as an inter state sale it is immaterial whether the property in the 679 goods passes in one state or another.
Some of these decisions are: Tata Iron & Steel Co. Ltd. vs section R. Sarkar ; , Kelvinator of India Ltd. vs The State of Haryana ; , Oil India Ltd. vs The Superintendent of Taxes & others ; , Balabhagas Hulaschand vs State of Orissa ; and Union of India and Anr.
vs K. G. Khosla & Co. (P) Ltd. & Ors.
[1979] 3 SCR 453.
In our opinion the terms of the agreement dated February 9, 1970 summarized above make it quite clear that the sales of naphtha to the 5th respondent were inter state sales.
Under clause 4 of the agreement seller is "to make the supply of naphtha to the buyer from its refinery at Barauni".
The source of supply is thus the seller 's refinery at Barauni in Bihar and the destination is the buyer 's factory at Kanpur.
This one clause alone is sufficient to prove that the sales in question were inter state sales.
However, on behalf of the petitioners and the State of U.P. it is contended that the sales were not inter state sales and were local sales within the State of Uttar Pradesh.
It is pointed out from clause 3(iii) that supplies of naphtha are made on the buyer 's indents in writing addressed to the seller at their Kanpur installation and not at their refinery at Barauni which, it is contended, shows that the supplies are made from IOC 's storage at Kanpur to the 5th respondent 's factory also at Kanpur.
It is also contended that the supply of naphtha to the buyer 's factory at Kanpur involves two movements, one from Barauni to Kanpur for storage at the seller 's depot, and the other from the depot to the buyer 's factory.
This contention is based on clause 7(i) of the agreement which states that naphtha shall be supplied at the fence of the buyer 's factory through a pipeline between the buyer 's and the seller 's fences constructed at the buyer 's expense.
It is argued that this stipulation shows that the movement of naphtha from Barauni is arrested at the seller 's Kanpur depot and is followed by another movement from there to the buyer 's factory which proves that the sales are local sales and not inter state because in an inter state sale the movement of goods is the immediate and direct result of the contract of sale.
Clause 3(iii) of the agreement which says that the naphtha shall be supplied against indents in writing addressed to the seller at their installation at Kanpur cannot be read in isolation.
Sub clause (iv) of clause 3 sets out the details of the buyer 's requirement for the first four years and thereafter.
Under clause 8 IOC are bound not only to bring the contractual quantity of naphtha from Barauni to the seller 's Kanpur installation but also to provide at their own cost storage facilities at Kanpur of a capacity equivalent to not less than 30 days ' requirement of the buyer.
The indents are therefore 680 not outside the agreement but are relatable to the buyer 's requirements under the agreement.
It is obvious that the sales under the agreement are not possible without inter state movement of naphtha.
Clause 3 read with clause 8 also proves that really thare are no two movements but only one movement from Barauni to Kanpur pursuant to the contract of sale and the agreement regarding storage facilities provided in clause 8 is only for operational convenience, it is only a mechanism devised to facilitate the transfer of naphtha through the seller 's pipeline to their depot at Kanpur and from there to the Buyer 's factory at Kanpur through the pipeline constructed at the buyer 's cost.
It is relevant in this connection to note that under clause 7(ii) the cost of transferring naphtha from Barauni to the buyer 's fence is to be borne by the buyer.
Each case turns on its own facts and the question is whether applying the settled principle which we have mentioned above to the facts of the present case the sales can be said to be inter state sales.
An attempt to show that some of the factors present in the instant case are present or absent in some case or other in which this Court held the sale to be a local sale or inter state sale hardly serves any useful purpose.
On the facts of the present case the sales are clearly inter state sales and the State of U.P. had therefore no jurisdiction to assess the petitioners to sales tax under the State Act.
As the movement of naphtha commences from Barauni in Bihar, the sales tax payable on the sales of naphtha under the agreement dated February 9, 1970 can be assessed and collected only by the authorities in the State of Bihar on behalf of the Government of India in view of section 9 of the .
On behalf of the State of Bihar a point was taken that the present petition under Article 32 of the Constitution of India complaining of violation of the fundamental right guaranteed by Article 31 of the Constitution was not maintainable after the repeal of Article 31 by the Forty Fourth Amendment of the Constitution with effect from June 20, 1979.
The petition however complains also of infringement of Article 19 and therefore does not cease to be maintainable.
Counsel for the 5th respondent sought to raise a question regarding the justification of treating freight as part of the sale price, but that is not a matter that arises for consideration on the present writ petition filed by IOC.
In the result the alternative prayer made in the writ petition succeeds, the assessment orders for the assessment years 1970 71, 1973 74 and 1974 75 passed by the Sales Tax Officer, U.P. and the revision proceedings initiated by the Commissioner of Sales Tax, 681 U.P. for the assessment years 1971 72 and 1972 73 are quashed and respondent No. 4, the State of Uttar Pradesh, is directed to refund to IOC the sales tax collected from them on the sales of naphtha to the 5th respondent under the agreement dated February 9, 1970 and, further, not to levy sales tax on the sales under the said agreement under the U.P. Sales Tax Act.
The writ petition is allowed as indicated above; in the circumstances of the case we make no order as to costs.
N.K.A. Petition allowed.
| The Indian Oil Corporation was a manufacturer of naphtha with its works at Barauni in Bihar while the 5th respondent was a manufacturer of fertilizers with its factory at Kanpur.
The Indian Oil Corporation supplies naphtha to the 5th respondent 's fertilizer factory at Kanpur through a pipeline.
Both the buyer and the seller have their offices at Kanpur and indents are addressed by the buyer to the seller at their Kanpur office.
The pipeline from Barauni to the petitioner 's depot at Kanpur has been constructed by the petitioner, the pipeline between the buyer 's and the seller 's fences is however constructed by the buyer, the 5th respondent.
On the question whether the sale of naphtha should be taxed under the Central Sales Tax Act or under the U.P. Sales Tax Act, the U.P. authorities insisted that since the indent had been placed by the buyer on the seller at their Kanpur Office the sale was a local sale while the sale tax authorities in Bihar insisted that since there was transfer of goods from one State to another the sale was inter State chargeable to tax under the Central Sales Tax Act.
Allowing the petition, ^ HELD: On the facts of the present case the sales are clearly inter State sales and the State of U.P. had no jurisdiction to assess the petitioners to sales tax under the State Act.
As the movement of naphtha commences from Barauni in Bihar the sales tax payable on the sales under the agreement can be assessed and collected only by the authorities in the State of Bihar on behalf of the Government of India in view of section 9 of the Central Sales Tax Act.
[680E] It is now well settled by a series of decisions of this Court that a sale shall be an inter State sale under section 3(a) if there is a contract of sale preceding the movement of goods from one State to another and the movement is the result of a covenant in the contract of sale or is an incident of that contract; in order that a sale may be regarded as an inter State sale it is immaterial whether the property in the goods passes in one State or another.
[678H 679A] 674 Tata Iron & Steel Co. Ltd. vs section R. Sarkar ; ; Kelvinator of India Ltd. vs State of Haryana ; ; Oil India Ltd. vs Superintendent of Taxes ; Balabhagas Hulaschand vs State of Orissa ; ; Union of India vs K. G. Khosla & Co. (P) Ltd. [1979] 3 SCR 453, referred to.
The terms of the agreement make it quite clear that the sales of naphtha to the respondent were inter State sales.
The source of supply is the seller 's refinery at Barauni in Bihar and the destination is the buyer 's factory at Kanpur.
This clause alone is sufficient to prove that the sales in question were inter State sales.
[679B C] Clause 3(iii) of the agreement which says that the naphtha shall be supplied against indents in writing addressed to the seller at their installation at Kanpur cannot be read in isolation.
Sub clause (iv) of clause 3 sets out the details of the buyer 's requirement for the first four years and thereafter.
Under clause 8 Indian Oil Corporation are bound not only to bring the contractual quantity of naphtha from Barauni to the seller 's Kanpur installation but also to provide at their own cost storage facilities at Kanpur of a capacity equivalent to not less than 30 days ' requirement of the buyer.
The indents are therefore not outside the agreement but are relatable to the buyer 's requirements under the agreement.
It is obvious that the sales under the agreement are not possible without inter State movement of naphtha.
Clause 3 read with clause 8 also proves that really there are no two movements but only one movement from Barauni to Kanpur pursuant to the contract of sale and the arrangement regarding storage facilities provided in clause 8 is only for operational convenience, it is only a mechanism devised to facilitate the transfer of naphtha through the seller 's pipeline to their depot at Kanpur and from there to the buyer 's factory at Kanpur through the pipeline constructed at the buyer 's cost.
It is relevant in this connection to note that under clause 7(ii) the cost of transferring naphtha from Barauni to the buyer 's fence is to be borne by the buyer.
[679G H; 680A C]
|
minal Appeal No. 642 of 1991.
From the Judgment and Order dated 25.4.1991 of the Bombay High Court in Criminal Appeal No. 25 of 1990.
Lalit Chari, Peter D ' Souza and Mukul Mudgal for the Appellant.
J.S. Wad, and Ms. A. Subhashini for the Respondent.
340 The Judgment of the Court was delivered by K. JAYACHANDRA REDDY, J.
The appellant, a German National, has been convicted by the trial court under Section 20(b)(ii) of the ( 'Act ' for short) and sentenced to undergo 10 years R.I. and to pay a fine of Rs. 1 lakh, in default of payment of which to further undergo six months ' R.I.
The appeal filed by the appellant was dismissed by the High Court.
Hence the present appeal.
In brief the prosecution case is that on 29.9.89 the Police Sub Inspector Gaonkar, P.W3 alongwith a police party was patrolling at Calangute Beach near Panjim and they came across the accused who was sitting on a wooden log.
On suspicion they went near him and noticed a chillum (smoking pipe) in front of him lying on the log.
He secured the presence of panch witnesses and searched the accused and recovered a polythene pouch from his pyjama pocket in which there were tobacco, one cigarette paper packet and two cylindrical pieces of 'Charas".
The two pieces of Charas were weighed and found to be 7 gms.
and 5 gms.
respectively.
They were seized under a panchnama and were separately sealed in two different envelopes.
One of the pieces weighing less than 5 gms.
was? sent for chemical analysis and the other piece weighing 7 gms.
was not sent nor part of it by way of sample was sent for chemical analysis.
Maria Caldeira, P.W.1, the Junior Scientific Officer in the Directorate of Health Services carried out the chemical analysis of the substance weighing 4.570 gms.
consisting of three cylindrical pieces sticking together and she deposed that the substance which was examined by her was found to have contained Charas.
P.W.2, a panch witness supported the prosecution case.
The accused when examined under Section 313 Cr.
P.C. denied being in possession of any Charas and said that he had only a pouch containing tobacco and that he was taken to Calangute Police Station and was falsely impli cated.
The trial court relying on the evidence of P.Ws 1 to 3 convicted the accused.
The submissions on behalf of the accused before the trial court as well as the High Court have been that the search conducted on the person of the accused was in contravention of Section 50 of the and that there have been contradictions between the evidence of P.Ws 2 and 3 and that at any rate even if the prosecution case is to be accepted, the 341 accused can be, at the most, held to be in possession of less than 5 gins.
of Charas which is a small quantity and, therefore, is entitled to the benefit of Section 27.
Before us more or less the same submissions are made.
So far as the contentions in respect of seizure and drafting of panchnama and weight are concerned, the question is whether the accused has been told that if he so desires he would be taken to a Magistrate before the search, as provided under Section 50.
Whether this has been complied with or not mostly depends on the evidence and they are only questions of fact.
Both the courts below have considered the entire evidence and have rejected these submissions.
Though these are questions of fact, yet we have also considered the relevant evidence on these aspects and we agree with the findings of the courts below.
The next and most important submission of Shri Lalit Chari, the leaned senior counsel appearing for the appellant is that both the courts below have erred in holding that the accused was found in possession of 12 gins.
of Charas.
According to the learned counsel, only a small quantity i.e. less than 5 gms. has been sent for analysis and the evidence of P.W.1, the Junior Scientific Officer would at the most establish that only that much of quantity which was less than 5 gms.
of Charas is alleged to have been found with the accused.
The remaining part of the substance which has not been sent for analysis can not be held to be also Charas in the absence of any expert evidence and the same could be any other material like tobacco or other intoxicating type which are not covered by the .
Therefore the submission of the learned counsel is that the quantity proved to have been in the possession of the accused would be small quantity as provided under Section 27 of the and the accused should have been given the benefit of that Section.
Shri Wad, learned senior counsel appearing for the State submitted that the other piece of 7 gms.
also was recovered from the possession of the accussed and there was no need to send the entire quantity for chemical analysis and the fact that one of the pieces which was sent for analysis has been found to contain Charas, the necessary inference would be that the other piece also contained Charas and that at any rate since the accused has totally denied, he can not get the benefit of Section 27 as he has not discharged the necessary burden as required under the said Section.
Before examining the scope of this provision, we shall first consider whether the prosecution has established beyond all reasonable 342 doubt that the accused had in his possession two pieces of Charas weighing 7 gms.
and 5 gms.
respectively.
As already mentioned only one piece was sent for chemical analysis and P.W.1, the Junior Scientific Officer who examined the same found it to contain Charas but it was less than 5 gms.
From this report alone it can not be presumed or inferred that the substance in the other piece weighing 7 gms.
also contained Charas.
It has to be borne in mind that the applies to certain narcotic drugs and psychotropic substances and not to all other kinds of intoxicating substances.
In any event in the absence of positive proof that both the pieces recovered from the accused contained Charas only, it is not safe to hold that 12 gms.
of Charas was recovered from the accused.
In view of the evidence of P.W.1 it must be held that the prosecution has proved posi tively that Charas weighing about 4.570 gms.
was recovered from the accused.
The failure to send the other piece has given rise to this inference.
We have to observe that to obviate this difficulty, the concerned authorities would do better if they send the entire quantity seized for chemical analysis so that there may not be any dispute of this nature regarding the quantity seized.
If it is not practicable, in a given case, to send the entire quantity then sufficient quantity by way of samples from each of the packets or pieces recovered should be sent for chemical examination under a regular panchnama and as per the provisions of law.
Section 27 of the reads thus: "27.
Punishment for illegal possession in small quantity for personal consumption of any narcotic drug or psychotropic substance or consumption of such drug or substance whoever, in contravention of any provision of this , or any rule or order made or permit issued thereunder, possesses in a small quantity any narcotic drug or psychotropic substance, which is proved to have been intended for his personal consumption and not for sale or distribution, or consumes any narcotic drug or psychotropic substance, shall, notwithstanding anything contained in this Chapter, be punishable (a) Where the narcotic drug or psychotropic substance possessed or consumed is cocaine, morphine, diacetylmorphine or any other narcotic drug or any psychotropic 343 substance as may be specified in this behalf by the Central Government, by notification i n the Official Gazette, with imprisonment for a term which may extend to one year or with fine or with both; and (b) Where the narcotic drug or psychotropic substance possessed or consumed is other than those specified in or under clause (a) with imprisonment for a term which may extend to six months or with fine or with both Explanation (1) For the purposes of this section "small quantity ' means such quantity as may be specified by the Central Government by the notification in the Official Gazette.
(2) Where a person is shown to have been in possession of a small quantity 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, shall lie on such person." In general possession of any narcotic drug or psychotropic substance has been prohibited by Section 8 of the and any person found in possession of the same contrary to the provisions of the or any rule or order made or permit issued thereunder is liable to be punished as provided thereunder to imprisonment for a term which shall not be less than 10 years and shall also be fined which shall not be less than Rs.1 lakh.
Section 27 of the , however, is an exception whereby lesser punishment is provided for illegally possessing any "smaller quantity ' for personal consumption of any narcotic drug or psychotropic substance, Under this section the following ingredient should be fulfilled: "(a) The person has been found in possession of any narcotic drug or psychotropic substance in "small quantity '; (b) Such possession should be in contravention of any provision of the or any rule of order made or permit issued thereunder; and (c) The said possession of any narcotic drug or psycho 344 tropic substance was intended for his personal consumption and not for sale or distribution.
" The first explanation to this Section lays down that the small quantity means such quantity as may be specified by the Central Government by a notification.
By virtue of the notification issued on 14.11.85 for the purpose of this 5 gms.
or less quantity of Charas shall be the small quantity.
Explanation 2 further lays down that the burden of proof that the substance was intended for the personal consumption and not for sale or distribution, lies on such person from whose possession the same was recovered.
As held above in the instant case the prosecution has proved that the quantity seized from the accused was less than 5 gms.
Therefore, it is within the meaning of 'small quantity" for the purpose of Section 27.
Then the other ingredient that has to be satisfied is whether the substance found in possession of the appellant was intended for his personal consumption and not for sale or distribution.
No doubt as the Section lays down the burden is on the appellant to prove that the substance was intended for his personal consumption.
As to the nature of burden of proof that has to be discharged depends upon the facts and circumstances of each case.
Whether the substance was intended for personal consumption or not has to be examined in the context in which this exception is made.
In the instant case the accused though in general has taken a plea of denial but his examination under Section 313 Cr.
P.C. by the Magistrate reveals that there was such a plea namely that it was meant for his personal consumption.
In the judgment of the trial court it is noted that the accused made an, application on 23.3.90 stating that the piece said to have been recovered from him was less than 5 gms.
and not 12 gms.
as alleged and that the application was written and signed by the appellant himself.
The prosecution case itself shows that he was having this substance in a pouch alongwith a chillum (smoking pipe) and smoking material.
The averments made by the appellant in the application and as extracted by the trial court would themselves show that it was meant for his personal consumption.
The above surrounding circumstances under which it was seized also confirm the same.
The appellant is a foreigner and as a tourist appears to have carried this substance for his personal consumption.
We are aware that the menace of trafficking in narcotic drugs and psychotropic substance has to be dealt with severely but in view of the provisions of Section 27, we are unable to hold that the small quantity found with the appellant was not 345 meant for his personal consumption and that on the other hand it was meant for sale or distribution.
Therefore, the appellant is liable to be punished as provided under Section 27 of the .
From the records it appears that the appellant has been in jail for more than three years but that may not be relevant since the sentence prescribed under Section27 is only six months.
We are only just mentioning it as a fact.
In the result the conviction of the appellant under Section 20(b)(ii) of the and sentence of 10 years R.I. are set aside.
Instead he is convicted under.
Section 27 of the and is sentenced to undergo 6 monghs ' R.I. and to pay a fine of Rs. 1 lac in default of payment of which to further undergo 6 months ' R.I. Subject to the above modifications, the appeal is disposed of N.P.V. Appeal disposed of.
| The appellant, a foreign national, was convicted by the trial court under Section 20(b)(ii) of the and sentenced to undergo ten years ' rigorous imprisonment and to pay a fine of one lakh rupees, and in default, to further undergo rigorous imprisonment for six months.
According to the prosecution, two cylindrical pieces of charas, weighing 7 gms.
and 5 gms.
respectively, were seized from the appellant by a Police Patrol Party and on chemical analysis of one of the pieces, it was found that the substance contained charas.
The trial court, relying on the evidence of PW 1, Junior Scientific Officer of the Director of Health Services, who examined the substance, PW 2, a panch witness and PW 3, the Police Inspector, who was heading the Patrol Party, convicted the appellant.
The High Court dismissed the appellants appeal.
In the appeal before this Court, on behalf of the appellant it was contended that both the courts below had erred in holding that the accused was found in possession of 12 gins.
of Charas; since only a small quantity i.e. less than 5 gms. had been sent for analysis the remaining part of the substance, which had not been sent for analysis, could not be held to be also Charas and, therefore, the quantity proved to have been in the 338 possession of the accused would be small quantity, as provided under Section 27 of the Act and the accused should have been given the benefit of that Section.
On behalf of the State, it was submitted that there was no need to send the entire quantity for chemical analysis, and the fact that one of the pieces which was sent for analysis had been found to contain Charas, the necessary inference would be that the other piece also contained Charas and that, at any rate, since the accused had totally denied, he could not get the benefit of Section 27, as he had not discharged the necessary burden as required under the section.
Disposing of the appeal, this Court, HELD:1.1.
In the absence of positive proof that both the pieces recovered from the accused contained Charas only, it is not safe to hold that 12 gms.
of Charas was recovered from the accused.
In view of the evidence of P.W. 1, the prosecution has proved positively that Charas weighing about 4.570 gms.
was recovered from the accused.
[342C] 1.2.In general, possession of any narcotic drug or psychotropic substance has been prohibited by Section 8 of the and any person found in possession of the same contrary to the provisions of the Act or any rule or order made or permit issued thereunder is liable to be punished as provided thereunder to imprisonment for a term not less than 10 years and a fine not less than Rs. 1 lakh.
However, Section 27 is an exception, whereby lesser punishment is provided for illegally possessing any 'smaller quantity ' for personal consumption of any narcotic drug or psychotropic substance.
By virtue of the notification issued on 14.11.85 under Explanation (1) of the Section, 5 gms or less quantity of Charas has been specified by the Central Government to be the small quantity.
[343E F, 344B] 1.3.
In the instance case, the prosecution has proved that the quantity seized from the accused was less than 5 gms.
Therefore, it is within the meaning of"small quantity ' for the purpose of Section 27.
[344C] 1.4.
No doubt, as Section 27 lays down, the burden is on the appellant to prove that the substance was intended for his personal consumption As to the nature of burden of proof that has to be discharged 339 depends upon the facts and circumstances of each case.
Whether the substance was intended for personal consumption or not has to be examined in the context in which this exception is made.
[344D] 1.5.
The accused though in general has taken a plea of denial,but his examination under Section 313 Cr.
P.C. by the Magistrate reveals that there was a plea that it was meant for his personal consumption.
The trial court has also noted in its judgment that the accused had made an application stating that the piece said to have been recovered from him was less than 5 gms., and not 12 gms.
as alleged.
The prosecution case itself shows that he was having this substance in a pouch alongwith a chillum (smoking pipe) and smoking material.
The averments made by the appellant in the application and as extracted by the trial court would themselves show that it was meant for his personal consumption.
The surrounding circumstances under which it was seized also confirm the same.
[344E G] 1.6.The appellant is a foreigner and as a tourist appears to have carried this substance for his personal consumption.
No doubt, the menace of trafficking in narcotic drugs and psychotropic substance has to be dealt with severely, but in view of the provisions of Section 27, it cannot be held that the small quantity found with the appellant was not meant for his personal consumption.
Therefore, the appellant is liable to be punished as provided under Section 27 of the Act.
[344G H, 345A] 1.7.Accordingly, the conviction of the appellant under Section 20(b)(ii) of the Act and sentence of 10 years ' R.I. are set aside, and he is convicted under Section 27 of the Act and sentenced to undergo 6, months ' R.I. and to pay a fine of Rs. 1 lakh, in default of payment of which to further undergo 6 months ' R.I. [345C]
|
Appeal No. 1046 of 1963.
Appeal from the judgment and decree dated November 17, 1959 of the Bombay High Court in First Appeal No. 484 of 1957 from Original Decree.
section T. Desai, and J. B. Dadachanji, for the appellant.
Sarjoo Prasad, B. P. Singh and Naunit Lal, for respondents Nos.1 and 2.
Ganpat Rai, for respondent No. 4.
SARKAR, C. J. delivered a separate Opinion.
The Judgment of MUDHOLKAR and BACHAWAT JJ. was delivered by BACHAWAT, J. Sarkar C.J.
This appeal arises but of a suit filed by the respondent Vijay Kumar against the appellant on February 9, 1954 to enforce a mortgage.
The plaint stated that the appellant executed the mortgage on December 13, 1934 in favour of Tarabai, the proprietor of the firm of Narayandas Chunilal, and that the amount secured on it became due on December 13, 1943.
Vijay Kumar claimed that he was adopted by Tarabai on July 16, 1948 as a son to her deceased husband Motilal Hirakhanwala and became entitled to enforce the mortgage as her sole heir on her death on April 23, 1952.
After setting out the particulars of the mortgage, Vijay Kumar asked for a decree for foreclosure.
In his written statement the appellant admitted the mortgage but denied that Vijay Kumar had been adopted by Tarabai and stated that she had died leaving as her heirs three daughters, Rajkumari, Premkumari and Mahabalkumari, the mother of Vijay Kumar Besides denying Vijay Kumar 's right to enforce the mortgage.
the appellant took various other defenses to the action to which it is unnecessary for the purpose of this appeal to refer.
190 The learned District Judge who heard the suit, held that the adoption of Vijay Kumar had not been established and on that ground alone he dismissed it, having rejected the other defenses raised by the appellant.
Vijay Kumar appealed against that judgment to the High Court of Hyderabad but that appeal was, on a subsequent reorganisation of States, transferred to the High Court of Bombay.
Thereafter on November 3, 1958, Vijay Kumar made an application in the appeal for an order adding his mother Mahabalkumari as a co plaintiff with him as she was willing to be so added, and her sisters Rajkumari and Premkumari "who were not available for joining in the suit as plaintiffs", as defendants.
He also sought permission to add a new paragraph to the plaint, in which after reiterating his right to enforce the mortgage as the adopted son of Motilal and Tarabai, he stated.
"In case, however, the plaintiff 's adoption is held not to be proved or not to be valid, the estate of Motilal and Tarabai Hirakhanwala and of M/s Narayandas Chunilal will vest in Tarabai 's three daughters, viz., Rajkumari, Premkumari and Mahabalkumari".
The prayers in the plaint were also sought to be amended by asking that the decree sought might be passed in favour of Vijaykumar and Mahabalkumari.
The appellant opposed this application but it was allowed by the High Court.
The records of the appeal were, thereafter, reconstituted by adding Mahabalkumari as an appellant and Rajkumari and Premkumari as respondents and amending the plaint a,.
sought.
Premkumari filed a written statement denying the adoption of Vijay Kumar and his right to enforce the mortgage.
Rajkumari never appeared in the proceedings arising out of the suit.
The appeal was thereafter heard by the High Court and allowed.
The High Court refused to go into the question of adoption and passed a preliminary mortgage decree for foreclosure in favour of Mahabalkumari, Rajkumari and Premkumari and further directed that the suit as brought by Vijay Kumar would stand dismissed.
The present appeal has been brought by the original defendant against this judgment of the High Court under a certificate granted by it.
I think that Mr. section T. Desai for the appellant was right when he said that the order adding parties could not be supported.
The High Court purported to make the order under sub r.
(1) of 0. 1, r. (10) of the Code of Civil Procedure.
We were not called upon by counsel to consider any other provision.
That sub rule, however, cannot justify the order, for it only permits addition of a plaintiff and does not provide for the addition of a defendant while the order directs addition of both a plaintiff and two defendants.
Was it then properly made in solar as it added a plaintiff ? I do not think so.
The addition of Mahabalkumari as a plaintiff could not be made under the sub rule unless it was necessary for the determination of the real matter in dispute.
Now, adding her 191 as a plaintiff would have availed nothing unless Rajkumari and Premkumari were also added as defendants, and that could not be done under the sub rule.
No decree could have been passed in her favour alone if the case of adoption failed, for she would then be entitled to the mortgagee 's right along with her sisters.
The addition of Mahabalkumari as plaintiff only would have been futile; it would not have helped in the decision of any matter in dispute.
Now, sub r.
(2) of 0. 1, r. (10) permits the addition of both plaintiffs and defendants in certain circumstances.
The order however was not sought to be justified under that provision and there was good reason for it.
It was conceded and in my opinion rightly that in view of section 22 of the Limitation Act.
the suit as regards the parties added under this sub rule had to be deemed to have been instituted when they were added.
This was also the view expressed by the High Court.
Now it is not in dispute that a suit filed on the date when the three sisters were added, to enforce the mortgage would have been barred.
We may add that there is authority for the view that even the addition of defendants alone may attract the bar of limitation: see Ramdoyal vs Junmenjoy(1).
Guravayya vs Dattairayaa(2).
I think that the addition of Rajkumari and Premkumari as defendants was of the kind considered in these cases.
Therefore, it would have been futile to add any of the parties under this sub rule.
In view of the bar of limitation, such addition would not have resulted in any decree being passed and, therefore, the addition should not have been ordered.
I am, however, not to be understood as holding that apart from the difficulty created by section 22 the order could have been properly passed under the sub rule.
I have the gravest doubts if it could.
It is unnecessary to discuss the matter further.
The High Court, relying on Ravji vs Mahadev,(3) expressed the view that when a party is added under sub r.
(1) of 0. 1, r. (10), section 22 of the Limitation Act does not apply and no bar of limitation arises.
No other reason was given by the High Court or suggested by counsel in this Court to avoid the bar of limitation imposed by section 22.
If the bar operated, no addition of parties could, of course, be made.
As I am of opinion that the order could not be justified by the terms of that sub rule, it is not really, necessary for me to consider this question of limitation.
I wish however to observe that, as at present advised, I am not at all sure that section 22 does not apply to an addition of parties under sub r.
(1) of r. (10) of 0. 1.
There is no principle to support such a view.
Nor do I think that Ravji 's case(1) clearly expresses it.
All that is held and that too in the judgment of one of the learned Judges only was that when in a suit by a benamidar the real owner is (1) Cal.
(2) (1904) I.L.E. (3) Bom.
192 added, it was really the original suit that was continued.
Obviously, the learned Judge thought that he was dealing with a case where there was no real addition of parties.
It would seem that is not the case where an order under the sub rule is made.
That would be a case like that of a correction of a misdescription of a party for which a resort to the sub rule would not be necessary: Purshotam Umedbhai & Co. vs Manilal & Sons.(1).
Then again Ravji 's case(1) does not seem to have been approved in later Bombay cases: see e.g. Krishnaji, vs Hanmaraddi(2).
Further Ravi 's case(1) would not support the order in hand if my reading of it is correct.
The present is not a case of a continuation of the Original suit.
Here parties were added to press their own rights which are in conflict with and antagonistic to those which were being pressed in the suit as originally framed.
I do not consider it necessary to pursue this matter further on the present occasion.
It was then said that in the present case there was no sub stantial addition of parties as the original suit was in the capacity of a proprietor of the firm of Narayandas Chunilal and all that was done was to add persons who might be the real proprietors.
This was said in order to get out of the bar of limitation by showing that it was the original suit that was continued in spite of the addition of parties.
There seems to be authority for the view that when a suit is filed in a representative capacity, if it turns out to) be doubtful whether that capacity existed or had continued, the proper representative or the owner, as the case may be, might be added even after the date when the suit would be barred.
I will assume that these cases lay down the law correctly, but they do not, in my view, afford any assistance in the present case.
First, a suit by a person claiming to be the sole owner of the properties of a business carried on in a firm name, as Vijay Kumar 's suit was, is not a suit in a representative capacity; he represents no one but himself.
A firm is not a legal entity which could or had to be represented by any one else.
As is well known, a firm means only the partners taken together.
There is no such thing as the capacity of a proprietor of a firm; the capacity of a proprietor of a firm is only the proprietor 's individual capacity.
Secondly, no authority has been brought to our notice which shows that if parties are added with a claim which is antagonistic to the claim of the original plaintiff in the suit, as has happened here, that would still be a case where the original suit should be deemed to have been continued.
It may be that if the suit had initially been filed in the form in which it stood after the amendment, it would have been a good suit, as to which however I do not say anything on the present occasion.
If it were so, that would have been under the other (1) [1961] I S.C.R. 982.
(2) Bom.
(3) (1963)I.L.R. 193 provisions of the Code permitting joinder of parties and perhaps also of causes of action when instituting a suit, none of which was or could be pressed for our consideration.
These provisions are "merely permissive and relate to what the plaintiff might do if he is so minded": Sri Mahant Prayaga Doss vs The Board of Commissioners for Hindu Religious Endowments, Madras.(1) That is not the case where addition of parties is sought under 0. 1, r. (10), sub rr.
(1) and (2); such additions can only be made under the provisions of these sub rules only.
For these reasons, I think that the order adding parties is insupportable.
If that order goes, as it should, the decree which is in favour of the added parties cannot stand, for they are then strangers to the suit.
As there is no decree in favour of Vijay Kumar and as in fact the suit considered as brought by him has been dismissed by both the courts below by the High Court with the tacit approval and there is no appeal by him, this appeal must be allowed.
In this view of the matter, I do not feel called upon to deal with the other grounds advanced by Mr. Desai.
I would allow the appeal and set aside the judgment of the High Court and restore that of the trial Court.
The appellant will not get the costs in any of the courts below or this Court.
Bachawat, J. On December 13, 1934 the appellant executed a mortgage in favour of one Tarabai, widow of Motilal Harakhanwala.
Tarabai had three daughters, Mahabalkumari, Rajkumari and Premkumari.
On July 16, 1948, Tarabai is said to have adopted Vijay Kumar as a son to her deceased husband.
Vijay Kumar is the natural son of Mababalkumari.
On April 23.
1952, Tarabai died.
On February 10, 1954, Vijya Kumar claiming to be the adopted son and heir of Tarabai, instituted a suit for foreclosure of the mortgage executed in her favour.
The appellant contested the suit.
On December 30, 1955, the District Judge, Aurangabad dismissed the suit, holding that Vijay Kumar was not the adopted son and heir of Tarabai.
Vijav Kumar preferred an appeal to the former High Court of Hyderabad.
After the reorganisation of States, the appeal was transferred to the Bombay High Court.
On an application made by Vijay Kumar on November 3, 1958, the High Court on November 4, 1958 made an order for addition of Mahabalkumari as plaintiff and Rajkumari and Premkumari as defendants to the suit and for consequential amendments of the plaint.
After the addition of the parties, the appeal came up for final disposal before the High Court.
At the hearing of the appeal, the respondents submitted that the question whether Vijay Kumar was the adopted son of Tarabai should not be decided in this litigation and a decree should be passed in favour of the added parties on the footing that they were the heirs of Tarabai.
The High Court accepted this submission, set aside the finding of the trial Court on the question of the adoption of (1) Mad.41.
194 Vijay Kumar, dismissed the suit as brought by him and directed the trial Court to pass the usual preliminary decree in favour of Mahabalkumari, Rajkumari and Premkumari.
The High Court held that the mortgage money fell due on February 9, 1943 and the suit being instituted within 12 years from this date, was not barred by limitation.
The appellant now appeals to this Court on a certificate granted by the High Court.
The main question in this appeal is whether the claim of Mahabalkumari, Rajkumari and Premkumari to enforce the mortgage is barred by limitation.
The mortgage deed dated December 13, 1934 provided that the mortgage money would be payable in annual installments within a period of nine Fasli years, and in the event of non payment of five installments, the mortgagee would be entitled to recover the entire mortgage money.
The appellant did not pay any of the installments.
The High Court rightly held that the deed gave the mortgagee an option to enforce the mortgage in the event of non payment of five instalments.
It was open to the mortgagee not to exercise this option.
As the mortgagee did not exercise the option, the mortgage money fell due on the expiry of nine years, that is to say, on February 9, 1943, and limitation commenced to run from this date.
On December 13, 1934 when the mortgage was executed and on February 9, 1943 when the mortgage money fell due, the Hyderabad Limitation Act was in force.
By article 133 of the Hyderabad Limitation Act, the period of limitation for a suit by a mortgagee for foreclosure was thirty years from the date when the money secured by the mortgage became due.
But as from April 1, 1951, the Hyderabad Limitation Act was repealed and the Indian Limitation Act, 1908 was extended to the State of Hyderabad by the Part B States (Laws) Act (Act III of 1951), Prima facie, the Indian Limitation Act, 1908 which was in force on the date of the institution of the suit was the law of limitation applicable to the suit.
On behalf of the respondents, it was argued that by reason of the proviso to section 6 of the Part B States (Laws) Act, 1951, article 133 of the Hyderabad Limitation Act continued to apply to the suit.
There is no substance in this contention.
The respondents had no vested right in the law of procedure for enforcement of the mortgage.
They did not acquire under article 133 of the Hyderabad Limitation Act any right or privilege as contemplated by the proviso to section 6 of the Part B States (Laws) Act, 1951.
No doubt, article 132 of the Indian Limitation Act, 1908 abridged the period of limitation for the enforcement of the mortgage.
But this abridgment did not impair or take away any vested right.
Section 30 of the Indian Limitation Act, 1908 inserted by the Part B States (Laws) Act, 1951 made suitable provision safeguarding vested rights in cases where the period prescribed was shorter than that prescribed by the corresponding law previously in force in the Part B State.
195 It was argued on behalf of the respondents that article 147 of the Indian Limitation Act applied to the suit.
We are unable to accept this contention.
In Vasudeva Mudaliar vs K. section Shriniwas Pillai,(1) the Privy Council held that article 147 applied only to an English mortgage as defined in the Transfer of Property Act before its amendment in 1929, as, in respect of such a mortgage only, the mortgagee could sue for "foreclosure or sale.
" That decision has never been questioned and we see no ground for differing from it.
The deed dated December 13, 1934 created an anomalous mortgage and conferred a right of foreclosure only upon the mortgagee.
The mortgagee had no right to sue for sale in the alternative.
The present suit was for foreclosure only, and was governed by article 132 and not article 147.
The suit would be barred by limitation if it were instituted on November 4, 1958 when Mahabalkumari, Rajkumari and Premkumari were added as parties to the suit.
The question is whether the suit should be regarded as having been instituted on November 4, 1958 having regard to section 22(1) of the Indian Limitation Act, 1908.
Section 22(1) reads: "Where, after the institution of a suit, a new plaintiff or defendant is substituted or added, the suit shall, as regards him, be deemed to have been instituted when he was so made a party.
" Admittedly, the name of the original plaintiff is not a mis description of the names of Tarabai 's daughters.
This is also not a case where a wrong defendant has been sued as representing the estate of a deceased person and subsequently the real representative is added as a defendant.
Nor is this a case where a wrong plaintiff has sued in a representative capacity and the person whom he intended to represent was subsequently added as a plaintiff.
This is a case where the original plaintiff sued in his own right and on his own behalf.
No doubt, Vijay Kumar claimed the right to enforce the mortgage as the legal representa tive of Tarabai.
But he made this claim on his own behalf and not as representing the daughters of Tarabai.
Mahabalkumari must be regarded as a new plaintiff and Rajkumari and Premkumari must be regarded as new defendents and by reason of section 22(1) the suit must as regards them be deemed to have been instituted when they were made parties.
In Moyappa Chetty vs Supramanian Chetty(2), the Privy Council had occasion to consider the similar provisions of section 22 of the Straits Settlements Ordinance No. 6 of 1896, which read: "When, after the institution of a suit, a new plaintiff or defendant is substituted or added, the suit shall as (1) L.R 34 I.A. 186 (2) (1)1916) LR, 43 1 A. 113,121.
196 regards him be deemed to have been instituted when he was so made a party. " Construing this section, Lord Parker of Waddington observed: "Their Lordships are of opinion that section 22 contemplates cases in which a suit is defective by reason of the person or one of the persons in whom the right of suit is vested not being before the Court.
Section 133 of the Civil Procedure Code provides against the defence of a suit on this ground and enables the proper party to be added or substituted.
If A is the right person to sue, it would be clearly wrong to allow him, for the sake of avoiding the Limitation Ordinance, to take advantage of a suit improperly instituted by B." Similarly, in this case the daughters of Tarabai cannot, for the purpose of avoiding the Limitation Act, take advantage of the suit improperly instituted by Vijay Kumar.
In Subodini Devi vs Cumar Ganoda Kant Roy, Bahadur(1), the Calcutta High Court held that there was a difference between substituting a new person as plaintiff under section 27 of the Code of Civil Procedure, 1882 and the addition of a new person as defendant under section 32 of the Code and that the change of parties as plaintiffs did not affect the question of limitation.
This decision was followed by Parsons, J. in Ravji vs Mahadev(2).
But the learned Judges deciding those cases did not refer to section 22 of the Indian Limitation Act, 1877 and they a, ')pear to have completely overlooked that section.
Section 22 males no distinction between sub r.
(1) and sub r.
(2) of 0. 1, r. 10.
The section in express terms applies whenever a new plaintiff or a new defendant is substituted after the institution of a suit.
The Court has power to add a new plaintiff at any stage of the suit, and in the absence of a statutory provision like section 22 the suit would be regarded as having been commenced by the new plaintiff at the time when it was first instituted.
But the policy of section 22 is to prevent this result, and the effect of the section is that the suit must be regarded as having been instituted by the new plaintiff when he is made a party, see Ramsebuk vs Ramlall Koondoo(3).
The rigorous of this law has been mitigated by the proviso to section 21 (1) of the Indian , which enables the Court on being satisfied that the omission to include a new plaintiff or a new defendant was due to a mistake made in good faith, to direct that the suit as regards such plaintiff or defendant shall be deemed to have been instituted on any earlier date.
Unfortunately, the proviso to section 21(1) of the Indian has no application to this case, and we have no (1) (1887) I.J,.
R. 14 caL. 400.
(2) (1897) I.L.R. (3) (1881) I.T,.
R. , 823 824.
197 power to direct that the suit should be deemed to have instituted On a date earlier than November 4, 1958.
It follows that as regards Mahabalkumari, Rajkumari and Premkumari the suit must be regarded as instituted on November 4, 1958.
As far as they are concerned, the suit is barred by limitation and no decree can be passed in their favour.
The decree passed by the High Court in their favour cannot be sustained and must be set aside.
We think that the High Court had power to join Mahabalkumari as a party plaintiff under 0. 1, r. 10 of the Code of Civil Procedure and to join Rajkumari and Premkumari as defendants under 0. 1, r. 10(2) and to allow consequential amendments of the plaint under 0. 6, r. 17.
But having regard to the bar of limitation, the added parties are not entitled to obtain any relief.
So far as Vijay Kumar is concerned, the suit as brought by him was dismissed by the High Court.
There is no appeal by him.
On his behalf, it was not contended that we should exercise in his favour our powers under 0. 41, r. 33 of the Code of Civil Procedure, or that we should set aside the decree of dismissal of the suit against him and remand the case to the High Court for decision of the question whether he is the adopted son and heir of Tarabai.
Even if such prayer were made, on the facts of this case we would not be inclined to exercise our powers under 0.
41, r. 33 and to set aside the decree of the High Court as to the dismissal of the suit against him.
In the result, the appeal is allowed, the decree passed by the High Court in favour of respondents Nos. 2,3 and 4, Mahabalkumari, Rajkumari and Premkumari, is set aside and the decree of the trial Court dismissing the suit is restored.
The suit is dismissed.
We direct that the parties will pay and bear their own costs in this Court and in the Courts below.
Appeal allowed.
| The appellant an advocate who maintained his accounts on the cash system gave up practice when he was elevated to the Bench in 1957.
Certain outstanding professional dues were however received by him in the accounting years 1958 and 1959.
These receipts were shown by him as income in his return for the assessment years 1959 60 and 1960 61 and were assessed by the Income tax Officer.
The appellant then went in revision to the Commissioner of Income tax contending that the said receipts were not income and had been wrongly taxed.
The Commissioner having decided against him the appellant came to this Court under article 136 of the Constitution.
HELD: (i) The receipts in the present case were clearly the fruits of the assessee 's professional activity and fell under the fourth head of section 6 of the Indian Income tax Act 1922.
They were however not chargeable to tax under that head because under the corresponding computing section that is.
section 10.
an income received by the assessee who kept his accounts on the cash basis in an accounting year in which the profession had not been carried on at all is not chargeable.
[297 D F] Commissioner of Income Tax vs Express Newspapers Ltd., , relied on.
(ii) The income could not be taxed under section 12 either.
Section 12 deals with income which is not included under any other preceding heads covered by sections 7 to 10.
If the income is so included, it falls outside section 12.
It follows that if, as in the present case, the income is profits and gains of profession it cannot come under section 12.
[301 E] The heads of income in section 6 are mutually exclusive and it would be incorrect to say that as the receipts could not be brought to tax under the fourth head they could not fall under that head and must therefore fall under the residuary head 'other sources '.
There is no justification for the assumption that an income falling under one head has to be put under another head if it escapes taxation under the computing section corresponding to the former head.
[298 A; 300 E F] The character of the income cannot change merely because the assessee received it at a certain time or adopted a certain sYstem of accounting.
[301 B] Section 4 does not say that whatever is included in total income must be brought to tax.
The income has to be brought under one of the heads mentioned is section 6 and can be charged to tax only if it is so chargeable under the computing section corresponding to L/S5SCI 296 that head.
Income which falls under the fourth head can be brought to tax only if it can be so done under the rules of computation laid down in section 10.
[298 G 299 B] In re: B, M. Kamdar, , not approved.
The United Commercial Bank vs The Commissioner of Income Tax, ; , Salisbury House Estate Ltd., vs Fry.
15 Tax Cases 266 and Commissioner of In tax vs Cocanada Padhaswami Bank Ltd., , relied on.
Probh At Chandra Barua vs King Emperor, 57 I.A. 228, distinguished, Per Bachawat J. (dissenting) The receipts in question were chargeable under section 12.
Any income Chargeable under a specific head can be charged only under that head, and no part of that income can be charged again under section 12.
But any part of a total income of the assessee not me*sable under a specific head is assessable under the residuary head covered by section 12, [305 C] The income in question was not exempt under section 4(3).
The receipts were liable to be included in total income under section 4.
This income could not be included under section 10 owing to the method of accounting adopted by the assessee.
Nor did it fall under any other head.
It followed that the income must fall under the residuary head specified in section 12, This was not a case where the Revenue had taxed or could tax the income under s, 10 and again sought to tax the income under a. 12.
[306 C. G H]
|
Appeals Nos. 170 to 172 of 1959.
Appeals by special leave from the decision dated August 20, 1953/September 3, 1953, and August 30, 36 278 1954, of the Board of Revenue, Bihar at Patna in Reference Cases Nos. 461 and 462 of 1952 and 430 of 4954, respectively.
Veda Vyas and B. P. Maheshwari, for the appellant.
R. C. Prasad, for the Respondent.
April 24.
The Judgment of the Court was delivered by section K. DAS,J.
These three appeals with special leave granted under article 136 of the Constitution have been heard together and this judgment will govern them all.
They raise a common question as to the practice of this Court, which we shall presently state.
But before we do so, we must first set out the facts in so far as it is necessary to state them in order to appreciate the precise nature of the question that has arisen for consideration in these appeals.
The relevant facts are these.
The firm of Messrs. Durga Dutt Chandi Prasad, appellant in these appeals, carried on a business of dealing in several kinds of goods but mostly in raw jute at Sahebganj in Bihar.
It was registered as a dealer under section 4 of the Bihar Sales Tax Act, 1944, with effect from July 1, 1946.
For three periods, commencing from October 1, 1947 and ending on March 31, 1950, it was assessed to sales tax on its turnover of the relevant periods, which consisted inter alia of purchases alleged, to have made on behalf of two other jute mills outside Bihar, namely, the Raigarh Jute Mills and the Bengal Jute Mills, and also of dispatches of jute said to have been made to the dealer 's own firm in Calcutta for sale in Calcutta.
For the assessment period commencing on October 1, 1947 and ending on March 31, 1948 the appellant claimed a deduction of (a) Rs. 6,58,880 5 9 on the ground that the said amount represented purchases made on behalf of the aforesaid two jute mills, and (b) Rs. 1,62,662 13 3 being despatches of jute made to the dealer 's own firm in Calcutta.
Similarly, for the next assessment period commencing on April 1, 1948 and ending on March 31, 1949 the appellant claimed a deduction of certain amounts (the exact amounts being 279 irrelevant for our purpose) on the two grounds mentioned above from the relevant turnover.
The claim of the appellant was that purchases made on behalf of the two jute mills aforesaid and the despatches of jute made to the appellant 's own firm in Calcutta were not `sales ' within the meaning of the Bihar Sales Tax Act, 1947 (hereinafter called the Act).
For the third period of assessment commencing on April 1, 1949 and ending on March 31, 1950 a similar claim was made.
But for this period there was an additional claim with regard to the sale of mustard seed worth Rs. 1,00,513 119 to Messrs. Panna Lal Binjraj for which the appellant claimed a deduction.
On June 7, 1951 the Sales Tax Officer concerned disallowed the claim of the appellant for the first two periods and by an order dated April 17, 1953, the claim for the third period was also disallowed.
The appellant then preferred appeals under the relevant provisions of the Act.
These appeals were heard by the Deputy Commissioner of Commercial Taxes,, Bihar, and were dismissed by him.
Then the appellant filed applications in revision under section 24 of the Act to the Board of Revenue, Bihar.
The Board by its orders dated August 20, 1953, and September 3, 1953, dismissed the petitions of revision relating to the first two periods and by its orders dated April 30, 1954, also dismissed the petition of revision relating to the third period.
Under section 25(1) of the Act the appellant moved the Board to state a case to the High Court of Patna on certain questions of law which, According to the appellant, arose out of the orders passed.
The Board, however, refused to state a case inasmuch as in its opinion no questions of law arose out of the orders passed.
The Board expressed the view that the two questions, namely, (1) whether the despatch of jute outside the State of Bihar was a sale within the meaning of the Act and (2) whether the purchases said to have been made on behalf of the two mills outside Bihar were liable to tax, were both concluded by findings of fact arrived at by the competent authorities on relevant materials in the record and were no longer open to challenge.
The appellant then 280 moved the High Court for requiring the Board to state a case on the questions of law which, according to the appellant, arose out of the orders passed with regard to the first two periods of assessment.
By an order dated November 17, 1954, the High Court dismissed the two applications made to it for requiring the Board to state a case to the High Court with regard to the said two periods.
On a similar application made by the appellant to the High Court with regard to the third period of assessment, the High Court directed the Board of Revenue to state a case on the following question: "Whether the petitioner is entitled to claim a deduction on account of sale of mustard seed to the extent of Rs. 1,00,513 11 9 to Messrs. Panna Lal Binjraj as sales made to a registered dealer under the Schedule to Bihar Finance Act (No. 11) of 1949 read with the Bihar Sales Tax Act (Bihar Act XIX of 1947).
" By an order dated January 21, 1957 the High Court answered the question against the appellant.
The finding of the High Court was thus expressed: "We are satisfied that the petitioner was not entitled to deduction of the amount of the price of mustard seed sold to Messrs. Panna Lal Binjraj for the purpose of manufacture because there is no mention in the certificate of registration granted to Messrs. Panna Lal Binjraj that mustard seed could be sold to them for the purpose of manufacture free of tax.
As the conditions imposed by the proviso to section 5 have not been satisfied in this case, the Sales tax authorities rightly decided that deduction of the price of mustard seed sold to Messrs. Panna Lal Binjraj cannot be granted to the petitioner.
" On February 17,1955, the appellant made an application to this Court for special leave to appeal from the orders of the Board of Revenue passed on the two applications in revision as respects the first two periods.
This Court granted the leave prayed for by an order dated December 23, 1955.
It should be emphasised here that the appellant prayed for and got leave to appeal from the orders of the Board dated 281 August 20, 1953 and September 3, 1953 passed on the two applications in revision.
No application was made for leave to appeal, nor was any leave granted, with regard to the subsequent orders made by the Board refusing to state a case or the orders of the High Court refusing the application of the appellant to direct the Board to state a case.
With regard to the third period of assessment regarding which the High Court had directed the Board to state a case on a particular question of law and had actually answered it, the appellant again made an application for special leave to appeal on April 12, 1955, and this Court granted leave to the appellant by an order dated December 23, 1955, the leave granted being confined to the order of the Board of Revenue dated August 30, 1954, by which the Board decided that no questions of law arose for a reference to the High Court.
Again, the appellant neither asked for nor obtained any leave to appeal from the subsequent orders of the High Court by which the High Court held that only one question of law arose out of the orders passed with regard to the third period of assessment and directed the Board to state a case on that question.
Nor did the appellant move against the judgment and order of the High Court dated January 21, 1957, by which the High Court answered the one question referred to it adversely to the appellant.
On the facts stated above the question which has arisen is whether as a matter of practice of this Court, the appellant is enticed to be heard on merits in the three appeals when special leave was neither asked for nor granted in respect of the subsequent orders of the High Court relating to the assessments in question which have now become final between the parties thereto.
In other words, the question is whether the High Court should be allowed to be by passed in the manner sought to be done by the appellant in these three appeals? The position is quite clear.
With regard to two of the assessment orders the High Court held that no questions of law arose at all; with regard to the third assessment order the High Court held that only one question of law arose and it answered 282 that question against the appellant.
Can the appellant now ignore these orders of the High Court and ask us to consider on merits the orders of the Board of Revenue passed on the two revision applications for the first two periods and the orders of the Board in the reference case holding that no question of law arose out of the assessment order for the third period? This is the question, taken as a preliminary point, which we have to answer in these three appeals.
The question has to be considered with regard to (a) the scope and ambit of article 136 of the Constitution; (b) the practice of this Court; and (c) the question must also be considered in the context of the scheme of the Act under which the assessments were made, appeals and revisions in respect thereof were heard, and the scope and effect of section 25 of the Act under which the Board was asked to refer certain alleged questions of law to the High Court and the High Court was asked to direct the Board to state a case on the questions of law said to arise out of the assessment orders.
It is necessary at this stage to dispose of an initial point taken on behalf of the appellant, before we go to a consideration of the main question.
The point is this.
On behalf of the appellant it has been submitted that leave having been granted by this Court, the preliminary objection taken to the hearing of the appeals should not be entertained now and the appeals should be heard on merits.
We are unable to accept this as correct.
In these cases leave was granted without hearing the respondents, and full materials in the record were not available nor placed before the Court when leave was granted.
In Baldota Brothers vs Libra Mining Works (1) this Court has pointed out that there is no distinction in the scope of the exercise of the power under article 136 at the stage of application for special leave and at the stage when the appeal is finally disposed of, and it is open to the Court to question the propriety of the leave granted even at the time of the hearing of the appeal.
This view is in accord with some of the earlier decisions of this Court to which a reference has been made in Baldota '8 case (1) A.I.R 1961 S.C. 100.
283 (supra).
Therefore, it is open to us to consider now whether leave was properly granted in these appeals and whether the appellant is entitled to be heard on merits consistently with the practice of this Court in similar circumstances.
We proceed now to a consideration of the main question.
As a preface to that discussion it is advisable to refer here to some of the provisions of the Act in order to bring out clearly the scheme and object of the Act.
The charging section is section 4 which says in effect that every dealer whose gross turnover exceeds a particular amount in a year shall be liable to pay tax under the Act on sales taking place in Bihar.
Section 5 lays down the rate of tax.
The assessment section is section 13 which states the various circumstances in which the assessing authority may make the assessment.
Section 24 of the Act provides for an appeal, revision or review of the assessment.
Then come section 25, the scheme of which is analogous to that of section 66 of the Indian Income tax Act, 1922.
Under sub section
(1) of section 25, the dealer or Commissioner who is aggrieved by an order made by the Board under sub section
(4) of section 24 may by application in writing require the Board to refer to the High Court any question of law arising out of such an order; if for reason to be recorded in writing the Board refuses to make such reference, the applicant may under subs.
(2) of section 25 apply to the High Court against such refusal.
If the High Court is not satisfied that such refusal was justified, it may require the Board to state a case and refer it to the High Court.
When a case is referred to the High Court, it decides the question of law raised thereby by a judgment containing the grounds on which the decision is founded.
The Board then disposes of the case according to the decision of the High Court.
This in short is the scheme of section 25.
It is manifest that under this scheme questions of fact ate dealt with by the assessing authorities, subject to appeal and revision; but on questions of law the decision of the High Court is the decision according to which the case has to be disposed of Section 23 of the Act says that save as provided in section 25, no 284 assessment made and no order passed under the Act or the rules made thereunder by the Commissioner or any person appointed under section 3 to assist him shall be called into question in any court and save as provided in section 24, no appeal or application for revision or review shall lie against any such assessment or order.
Clearly enough, sections 23, 24 and 25 of the Act cannot override the provisions of the Constitution, nor affect the power of this Court under article 136 of the Constitution. ' The decision of the High Court under section 25 of the Act is undoubtedly subject to the power of this Court under article 136; so also the deter mination or order of any of the assessing authorities which are tribunals within the meaning of article 136.
That Article reads (omitting what is not relevant for our purpose): "article 136.
(1) Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India.
" The words of the Article are very general and it is stated in express terms that this Court may, in its discretion, grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India.
The question before us is not whether we have the power; undoubtedly, we have the power, but the question is whether in the circumstances under present consideration, it is a proper exercise of discretion to allow the appellant to have resort to the power of this Court under article 136.
That question must be decided on the facts of each case, having regard to the practice of this Court and the limitations which this Court itself has laid down with regard to the exercise of its discretion under article 136.
What are these limitations In Pritam Singh vs The State (1) this Court indicated the nature of these limitations in the following observations: (1) ; 285 "On a careful examination of Article 136 along with the preceding Article, it seems clear that the wide discretionary power with which this Court is invested under it is to be exercised sparingly and in exceptional cases only, and as far as possible a more or less uniform standard should be adopted in granting special leave in the wide range of matters which can come up before it under this Article.
By virtue of this Article, we can grant special leave in civil cases, in criminal cases, in income tax cases, in cases which come up before different kinds of tribunals and in a variety of other cases.
The only uniform standard which in our opinion can be laid down in the circumstances is that the Court should grant special leave to appeal only in those cases where special circumstances are shown to exist. . . . . . .
Generally speaking, this Court wilt not grant special leave, unless it is shown that exceptional and special circumstances exist, that substantial and grave injustice has been done and that the case in question presents features of sufficient gravity to warrant a review of the decision appealed against.
" Pritam Singh 's case (1) was a case of criminal appeal, but the same view was reiterated in Dhakeswari Cotton Mills Ltd. vs Commissioner of Income tax, West Bengal (2), which was an income tax case.
It was there observed: "The limitations, whatever they be, are implicit in the nature and character of the power itself.
It being an exceptional and overriding power, naturally it has to be exercised sparingly and with caution and only in special and extraordinary situations.
Beyond that it is not possible to fetter the exercise of this power by any set formula.or rule.
" We shall deal with this decision in greater detail a little later, when considering the question of the practice of this Court.
It is enough to state here that this Court has uniformly held that there must be exceptional and special circumstances to justify the exercise of the discretion under article 136.
(1) ; 37 (2) ; 286 Are there any such circumstances in the appeals before us? The answer must clearly be in the negative.
Under the scheme of the Act which we had adverted to earlier, it is not open to the appellant to contest now the findings of fact arrived at by the assessing authorities.
As to questions of law the appellant had gone up to the High Court, which held that in respect of two of the assessment orders no ' questions of law.
arose and in respect of the third assessment order, only one question of law arose and this question the High Court answered against the appellant.
As we have pointed out earlier, the decision of the High Court in respect of all the three assessment orders was no doubt subject to an appeal to this Court if this Court gave special leave under article 136.
The appellant did not, however, move this Court for special leave in respect of any of the orders passed by the High Court; those orders have Dow become final and binding on the parties thereto.
What the appellant is seeking to do now is to by pass the High Court by ignoring its orders.
This the appellant cannot be allowed to do.
Far from there being any special cir cumstances in favour of the appellant, there are plenty of circumstances against him.
The appellant is really trying to go behind the orders of the High Court by preferring these appeals directly from the orders of the Board of Revenue, and in one appeal from the orders of the Board refusing to make a reference to the High Court.
The practice of this Court is also against the appellant.
The earliest decision on this point is that of Dhakeswari Cotton Mills Ltd.(1) and learned Counsel for the appellant has relied on it in support of his argument that this Court had in some previous cases interfered with an order of the tribunal in exercise of its power under article 136 even though the assessee had not moved against the order of the High Court.
In Dhakeswari 's case (1) what happened was this.
The assessee having exhausted all his remedies under the Income tax Act, 1922, including that under section 66(2) for the issue of a mandamus to the Tribunal, made an (1) ; 287 application to this Court for special leave to appeal against the order of the tribunal; this Court granted special leave and in the appeal filed in pursuance thereof quashed the order of the Tribunal.
But the decision in Dhakeswari 's case (1) must be read in the light of the special circumstances which existed there.
It was found by this Court that the tribunal had violated certain fundamental rules of just ice in reaching its conclusions, and that the assessee had not had a fair hearing; therefore, it was held that it was a fit case for the exercise of the power under article 136.
The decision proceeded really on the basis that the principles of natural justice had been violated and there was in reality no fair trial.
In the appeals before us no such or similar ground is alleged so as to attract the exercise of our power under article 136.
In Moti Ram V. Commissioner of Income tax (2) the appellant did not make any application under section 66(2) of the Income tax Act, 1922, but obtained special leave of this Court in respect of the order of the Tribunal in the special circumstance that his property was attached and proceeded against for the recovery of the tax.
The question of the propriety of the grant of special leave was not considered, but the appeal was dismissed on merits.
The decision in Jogta Coal Co. Ltd. vs Commissioner of Income tax, West Bengal (3) which is a decision on its own facts, has been open to much debate.
The question which fell for consideration there related to depreciation under section 10(2)(vi) of the Indian Income tax Act, 1922, namely, the amount on which the appellant was entitled to calculate deduction allowance for purposes of depreciation.
The Income tax Officer made an estimate which was accepted by the Appellate Assistant Commissioner.
The matter was taken to the Appellate Tribunal which made its own estimate.
An application under section 66(1) was rejected and an attempt to move the High Court under section 66(2) also proved unsuccessful.
Then, this Court was moved for special leave to appeal from the orders of the (1) [1955]1 S.C R. 941.
(2) [1958]34 I.T.R. 646, (3) [1959]36 I.T.R. 521.
288 Tribunal, and the appeals were brought with special leave granted by this Court.
This Court remitted the case to the Tribunal and directed the latter to refer two questions of law to the High Court under section 66(2).
It is a little difficult to see how on an appeal from the appellate orders of the Tribunal, a direction under section 66(2) could be made.
Perhaps, this fact was not noticed.
In any view, the decision cannot be taken as settling the practice of this Court in favour of the appellant.
In Omar Salay Mohammed Sait vs Commissioner of Income tax, Madras(1) the Tribunal based its findings on suspicions, conjectures or surmises and the principle laid down in Dhakeswari 's case (2) was followed.
The decision in Sardar Baldev Singh vs Commissioner of Income tax, Delhi & Ajmer(1) was also a decision special to its own facts.
There the application to the Tribunal was barred by time in circumstances which were beyond the control of the appellant.
The Tribunal dismissed the application for a reference on the ground of limitation and the High Court had no power to extend the time.
In these circumstances the appellant asked for special leave and condonation of delay.
Special leave was granted by condoning the delay.
More in point is the decision in V. Govindarajulu Mudaliar vs The Commissioner of Income tax, Hyderabad (4) which was concerned with appeals from the decision of the Tribunal by special leave, after an application under section 66(2) had been dismissed by the High Court.
This Court then observed: " We must mention that against the order of the Tribunal the appellant applied for reference to the High Court under section 66(2) of the Indian Income tax Act and the learned Judges of the High Court dismissed that application.
No appeal has been preferred against that at all.
The present appeal is against the decision of the Tribunal itself.
It is no doubt true that this Court has decided in Dhakeswari Cotton Mills Ltd. vs Commissioner of Income tax, West Bengal, 1955(1) S.C.R. 941, that an appeal (1) [1959]37 I.T.R. 151.
(3) (2) ; (4) A.I.R. 1959 S.C. 248, 289 lies under article 136 of the Constitution of India to this Court against a decision of the Appellate Tribunal under the Indian Income tax Act.
But seeing that in this case the appellant had moved the High Court and a decision has been pronounced adverse to him and this has become final, obviously it would not be open to him to question the correctness of the decision of the Tribunal on grounds which might have been taken in an appeal against the judgment of the High Court." In Messrs Chimmonlall Rameshwarlal vs Commissioner Income tax (Central), Calcutta(1) the facts were these.
Four appeals were filed with special leave granted by this Court under article 136 which were directed against the orders of the Appellate Tribunal refusing to state a case on an application made to it under section 66(1).
No appeals were filed against the orders of the Appellate Tribunal under section 33(4), nor against the orders of the High Court under section 66(2)a position which is similar to the one in the appeal before us relating to the assessment for the third period.
In these circumstances this Court observed: "In the present case the circumstance of very great materiality and significance which stares the appellants in the face is that in regard to this very point there is a considered judgment of the High Court delivered by it on the applications made by the appellants to it under section 66(2) of the Act which came to the conclusion that no question of law arose out of the order of the Tribunal, which judgment stands, not having been appealed against in any manner whatever by the appellants.
The result of our going into these appeals before us on the merits would be either to confirm the judgment which has been pronounced by the High Court or to differ from it.
If we did the former, the appellants would be out of Court; if, however, perchance we came to the contrary conclusion and accepted the latter view, namely, that the High Court was wrong in not granting the applications of the appellants under section 66(2) of the Act there would be two (1) , 290 contrary decisions, one by the High Court and the other by us and we would be in effect, though not by proper procedure to be adopted by the appellants in that behalf, setting aside the judgment of the High Court.
This is an eventuality which we cannot view with equanimity.
It is contrary to all notions of comings of Courts and even though we are a Court which could in certain events set aside and overrule the decisions of the High Court concerned, we cannot by pass the normal procedure which is to be adopted for this purpose and achieve the result indirectly in the manner suggested by the appellants.
We, therefore, think that in the circumstances here it would be inappropriate on our part to enter upon an adjudication of these appeals on merits.
We would, therefore, dismiss these appeals without anything more.
" We think that these observations apply with equal force, here.
A careful examination of the previous decisions of this Court shows that whenever the question was considered, this Court said that save in exceptional and special circumstances such as were found in Dhakeswari 's case (1) or Baldev Singh 's case (2) it would not exercise its power under article 136 in such a way as to by pass the High Court and ignore the latter 's decision, a decision which has become final and binding on the parties thereto, by entertaining appeals directly from the orders of a tribunal.
Such exercise of power would be particularly inadvisable in a case where the result may be a conflict of decisions of two courts of competent jurisdiction, a conflict which is not contemplated by sections 23, 24 and 25 of the Act.
On the contrary, the object of these sections is to avoid a conflict by making the decision of the assessing authorities final on questions of fact subject to appeal, revision or review as provided for by section 24 and the decision of the High Court subject to an appeal to this Court, final on questions of law under section 25 of the Act.
To ignore the decision of the High Court on a question of law would really nullify the statutory provisions of section 25 of the Act.
(1) ; (2) ; 291 It remains now to consider one last argument urged on behalf of the appellant.
Learned Counsel for the appellant has drawn our attention to article 133 of the Constitution and has pointed out that when the High Court refuses a certificate under article 133, it is open to this Court to grant special leave to appeal (and this Court has often granted such special leave) from the main decision of the High Court irrespective of the orders of the High Court refusing such a certificate.
It is argued that the same analogy should apply, and in spite of the orders of the High Court under section 25 of the Act, this Court may and should grant special leave to appeal from the orders of the Tribunal.
We do not think that the analogy is apposite.
Firstly, in dealing with an application under article 133 the High Court merely considers whether a certificate of fitness should be given in respect of its own decision; in such a case it does not itself decide any question of law such as is contemplated by section 25 of the Act.
Secondly, there is no likelihood of any conflict of decisions of the kind referred to earlier arising out of an order under article 133, when special leave is granted to appeal from the main decision of the High Court.
The question of two decisions by two different courts or tribunals does not arise, and none of them is by passed by the grant of such special leave.
Moreover ' as we have said earlier the question is not one of the power of this Court; but the question is what is the proper exercise of discretion in granting special leave under article 136 of the Constitution.
In these appeals we have reached the conclusion, for reasons already stated, that the appellant is not entitled to ask us to exercise our power under article 136.
There are no special circumstances justifying the exercise of such power; on the contrary the circumstances are such that it would be wrong both on principle and authority to allow the appellant to by pass the High Court by ignoring its orders.
In our view, special leave was not properly given in these cases and we would accordingly dismiss the appeals with costs, without going into merits.
There will be one hearing fee.
Appeals dismissed.
| The respondent passed an order under section 99A of the Code of Criminal Procedure forfeiting two books written by the appellant as in its opinion they contained matter the publication of which was punishable under section 153A and 295A of the Indian Penal Code.
The order did not state the grounds on which the respondent had formed this opinion as was required by section 99A.
The appellant applied to the High Court under section 99B of the Code to set aside the order.
Section 99D of the Code provided that the High Court shall set aside the order of forfeiture if it was not satisfied that the book contained seditious or other matter of such a nature as was referred to in sub section
(1) of section 99A.
The High Court was of the view that it could not set aside the order under section 99D for the reason that the order did not set out the grounds on which the Government had formed its opinion and that its duty was only to see whether the books in fact came within the mischief of the offence charged.
Upon examining the books for itself the High Court came to the conclusion that their contents were obnoxious and highly objectionable and dismissed the application.
Held (Per Gajendragadkar, Sarkar, Wanchoo and Ayyangar, jj.
Das Gupta, J. contra) that on the failure of the respondent to set out the grounds of its opinion as required by section 99A of the Code the High Court should have set aside the order under section 99D.
It is the duty of the High Court under that section to set aside the order of forfeiture if it is not satisfied that the grounds on which the Government formed its opinion could justify that opinion.
Where no grounds of its opinion are given at all the High Court must set aside the order for it cannot then be satisfied that the grounds given by the Government justified the order.
Arun Ranjan Ghose vs State of West Benaal, (1955) 59 C.W.N. 495, approved.
Premi Khem Rai vs Chief Secretary, A.I.R. (1951) Raj.
II3, N. Veerabrahmam vs State of Andhra Pradesh, A.I.R. (1959) A. Pr.
572 and Baba Khalil Ahmed vs State of U. P., A.I.R. (1960) All. 715, disapproved.
488 Per Das Gupta, J. The High Court had no power to set aside the order on the ground of failure of the Government to set out the grounds of its opinion in the order.
The duty cast on the High Court is not to see whether the grounds stated by the Government for forming its opinion are correct but to see whether the opinion formed is correct; this can only be done by examining the books.
Section 99B has limited the grounds on which relief can be asked for to one and one only, viz., that the books do not contain any objectionable matter.
It was not permissible for courts to add to that ground.
Baijnath vs Emperor A.I.R. (1925) All. 195, Premi Khem Raj vs Chief Secretary, A.I.R. (1951) Raj. 113, N. Veerabrahmam vs State of Andhra Pradesh, A.I. R. 1959 A. Pr.
572 and Baba Khalil Ahmed vs State of U. P., A.I.R. (1960) All. 715, approved.
Arun Ranjan Ghose vs The State of West Bengal, , disapproved.
|
Appeal No. 690 of 1962.
Appeal from the judgment and order dated March 5, 1959, of the Andhra Pradesh High Court in Appeal against order No. 151 of 1955.
section Suryaprakasam and Sardar Bahadur, for the appellants.
The respondent did not appear.
January 20, 1964.
The Judgment of the Court was delivered by SUBBA RAO J.
This appeal by certificate raises the question of the applicability of section 48 of the Code of Civil Procedure, hereinafter called the Code, to the facts of the 253 The relevant facts are as follows: In the year 1928 one Pentapati Venkataramana filed Original Suit No. 3 of 1928 in the Court of the Subordinate Judge, Visakhapatnam, against 29 defendants for accounts of dissolved partnerships and for the recovery of amounts due to him.
On March 30, 1932, the suit was dismissed by the learned Subordinate Judge.
On appeal, the High Court of Madras set aside the decree of the Subordinate Judge and passed a joint and several decree in favour of the plaintiffs and defendants 24 to 27 for a sum of Rs. 54,350 with interest thereon.
On February 15, 1939, the decree holders filed an application for execution of the decree, being E.P. No. 13 of 1939, and prayed for realization of the decretal amount by attachment and sale of 31 items of properties described by them in the schedule (exhibit B 4) annexed thereto.
The judgmentdebtors filed an objection to the attachment of some of the said items, but that was dismissed.
Against the order of dismissal of their objection, the judgment debtors filed an appeal to the High Court, being C.M.A. No. 26 of 1944.
Pending the disposal of the C.M.A., the High Court granted an interim stay of E.P. 13 of 1939.
Later, the appeal was dismissed on April 26, 1945.
After the dismissal of the appeal, when the decree holders sought to proceed with the execution, the judgment debtors filed another application being E.A. No. 575 of 1945, alleging that the decree has been adjusted and for recording satisfaction of the decree.
But the said application was dismissed on December 12, 1945.
The judgment debtors went up on appeal to the High Court against the said order of dismissal and obtained an interim stay of E.P. 13 of 1939.
On September 9, 1947, the High Court allowed the appeal and remanded the case to the trial court for ascertaining whether there was an adjustment of the decree as pleaded by the judgment debtors.
On remand, the executing court again dismissed the application filed by the judgment debtors.
Against the aid order, the judgment debtors again preferred an appeal, being C.M.A. No. 127 of 1948, in the High Court of Madras and obtained an interim stay of the execution.
The interim order was made absolute on November 24, 1948.
As the execution of the decree was stayed by the High Court, the executing court made an order on E.P. 13 of 1939 to the effect that the petition was "closed".
On July 31, 1951, the 254 High Court dismissed C.M.A. 127 of 1948.
On January 21, 1952, the decree holders made an application being E.A. No. 142 of 1952, in E.P. 13 of 1939 for reopening the said execution petition and for proceeding with the execution of the decree.
The learned Subordinate Judge, holding that the previous execution petition was merely "closed", directed the decree holders to file a regular execution petition.
On October 11, 1952, the decree holders filed E.P. No. 58 of 1953 to continue further proceedings in E.P. 13 of 1939 as per the order made in E.A. No. 142 of 1952 passed on October 4, 1952.
In that petition the decree holders prayed that the properties mentioned in the draft proclamation filed in E.P. No. 13 of 1.939 and brought to sale may be sold for he realization of the money due to the decree holders and the proceeds applied for the discharge of the decree debt.
The judgment debtors filed a counter affidavit pleading, inter alia, that the decree sought to be executed was made on September 22, 1938, and that as E.P. No. 13 of 1939 was dismissed on December 28, 1948, the present application, having been filed more than 12 years from the date of the decree, was barred under section 48 of the Code.
The learned Subordinate Judge held that though the decree holders were entitled to continue the previous execution petition, E.P. 58 of 1953 was a fresh application, as in form as well as in details it materially differed from the original execution petition.
On appeal, a division Bench of the Andhra Pradesh High Court took a different view and held that E.P. 13 of 1939 was merely closed for statistical purposes and, there fore, the execution petition filed in 1939 was still pending and the decree holders were entitled to proceed with that petition.
The High Court further observed that the said position was not contested by learned counsel for the res pondents.
We understand this observation only to mean that learned counsel appearing for the respondents therein did not contest the position that if the execution petition was not dismissed but was only closed for statistical purposes, the decree holders were entitled to proceed with that petition.
The High Court remanded the case to the learned Subordinate Judge for disposal according to law after considering the other contentions of the judgment debtors.
Hence the appeal.
255 Mr. Suryaprakasam, learned counsel for the appellants, raised before us the following two points: (1) The previous execution petition was dismissed and, therefore, it was not pending at the time of filing of E.P. 58 of 1953, and, therefore, the later execution petition was a fresh application within the meaning of section 48 of the Code; and (2) even if the previous application was only closed for statistical purposes, and the decree holders could apply for reviving those proceedings, E.P. No. 58 of 1953 was a fresh execution petition because the parties and the properties proceeded against were different and the relief asked for was also different.
Before we consider the question raised, it would be con venient at the outset to look at the material provisions of section 48 of the Code.
It reads: "(1) Where an application to execute a decree not being a decree granting an injunction has been made, no order for the execution of the same decree shall be made upon any fresh application Presented after the expiration of twelve years from (a) the date of the decree sought to be executed." This section corresponds to paras 3 and 4 of section 230 of the Code of 1882.
The relevant part of the section read: "Where an application to execute a decree for the payment of money or delivery of other property has been made under this section and granted, no subsequent application to execute the same decree shall be granted after the expiration of twelve years from any of the following dates: A comparison of the said two provisions shows that the phrase "fresh application" has been substituted for "subse quent application".
This amendment became necessary in order to make it clear that the application mentioned in section 48 of the Code is a fresh substantive application and not an application to revive or continue a substantive application already pending on the file of the court.
256 The question, therefore, is whether E.P. 58 of 1953 is a fresh application within the meaning of section 48 of the Code.
The answer to this question mainly turns upon the question whether the previous application i.e., E.P. 13 of 1939, was finally disposed of by the executing court.
From the narra tion of facts given by us earlier it is clear that the said execution petition was "closed" for statistical purposes.
As the High Court stayed the execution pending the appeal filed by the judgment debtors, the decree holders were not in a position to proceed with the execution petition, and, therefore, it was closed.
Some argument was raised on the question whether the said execution petition was closed for statistical purposes or was dismissed that it was contended that under the Code of Civil Procedure there was no power conferred upon a court to close execution proceedings for statistical purposes, and that even if such an order was made, it must be deemed to be an order dismissing the execution petition.
The actual order dated December 28, 1948 has not been placed before us.
But in E.P. 58 of 1953 in co].
6 thereof it is mentioned that E.P. No. 13 of 1939 was closed on December 28, 1948.
In the counter affidavit filed by one of the judgment debtors it is stated that E.P. 13 of 1939 was dismissed on December 28, 1948 and not merely closed.
After the disposal of the appeal by the High Court and before the filing of E.P. No. 58 of 1953, the decree holders filed E.A. No. 142 of 1952 for reopening E.P. No. 13 of 1939.
On that petition the learned Subordinate Judge made the following order: "The previous E.P. was merely closed.
Petitioner may file a regular E.P. on which proceedings will continue from the stage at which they were left in E.P. 13 of 1939.
" This order discloses that the previous execution petition was only closed.
The Subordinate Judge must have presumably looked into the previous record.
The learned Subordinate Judge proceeded on the assumption that the previous exe cution petition was pending, though he dismissed the present execution petition on another ground.
This factual position was not contested even in the High Court, for the High Court stated that the previous application was merely closed for 257 statistical purposes.
In the circumstances we must proceed on the assumption that the Execution Petition 13 of 1939 was only closed for statistical purposes.
Learned counsel for the appellants contends that the Code of Civil Procedure does not sanction the passing of an order closing an execution petition for statistical purposes and that practice has been condemned by courts.
Under 0.
XXI, r. 17(1) of the Code, the Court may reject an execution application if the requirements of rules 11 to 14 have not been complied with.
Under r. 23 thereof, if the judgment debtor does not appear or does not show cause to the satisfaction of the court why the decree should not be executed, the court shall order the decree to be executed, and where such person offers any objection to the execution of the decree, the Court shall consider such objection and make such orders as it thinks fit.
Under r. 57 thereof, "Where any property has been attached in execution of a decree but by reason of the decree holder 's default the Court is unable to proceed further with the application for execution, it shall either dismiss the application or for any sufficient reason adjourn the proceedings to a future date. .
Relying upon these provisions it is argued that though the power of the court to make an order under 0.
XXI, r. 23 (2) is wide and it can make any order it thinks fit, it can only make one or other of the two orders mentioned in r. 57 when it could not proceed with the execution because of the default of the decree holder.
It is said that in this case the decree holders could not proceed with the execution in view of the stay order of the High Court and, therefore, the executing court could have either dismissed the application or adjourned the proceedings to a future date and it has no jurisdiction to pass an order closing the execution for statistical purposes.
It is further said that an order closing proceedings for statistical purposes is not an order of adjournment, for an order of adjournment implies that the application is on the file, whereas the object of closing is to take it out of the file, though temporarily, and, therefore, the order, in effect and substance, is one of dismissal.
Assuming that the order was made by reason of the decree holder 's default within the meaning of 0.
XXI, r. 57 of the Code, we find it difficult to attribute something to the court which it never intended to 34 159 3 C. 17 258 do.
It is true courts have condemned the practice of exe cuting courts using expressions like "closed", "closed for statistical purposes", "struck off", "recorded" etc., and they also pointed out that there was no provision in the Code of Civil Procedure for making such orders: see Biswa Sonan Chunder Gossyamy vs Binanda Chunder Dibingar Adhikar Gossyamy(1); Vadlamannati Damodara Rao vs The Official Receiver, Kistna(2); Moidin Kutty vs Doraiswami(3).
It is not necessary to express our opinion on the question whether such procedure is sanctioned by the Code of Civil Procedure or not; but assuming that the court has no such power, the passing of such an order cannot tantamount to an order of dismissal, for the intention of the court in making an order is closed" for statistical purposes is manifest.
It is intended not to finally dispose of the application, but to keep it pending.
Whether the order was without jurisdiction or whether it was valid, the legal position would be the same; in one case it would be ignored and in the other, it would mean what it stated.
In either case the execution petition would be pending on the file of the court.
That apart, it is not the phraseology used by the executing court that really matters, but it is really the substance of the order that is material.
Whatever terminology may be used, it is for the court to ascertain having regard to the circumstances under which the said order was made, whether the court intended to finally terminate the execution proceedings.
If it did not intend to do so, it must be held that the execution proceeding were pending on the file of the court.
We have no hesitation, therefore, in agreeing with the High Court that E.P. 13 of 1939 is pending on the file of the executing court and that the present application is only an application to continue the same.
Even so, it is contended that E.P. No. 58 of 1953 is a fresh application.
Learned counsel compared the recitals in E.P. 13 of 1939 and E.P. 58 of 1953 and pointed out that all the respondents in the former execution petition are not respondents in the present execution petition; that legal representatives of some of the defendnts are added to the present execution petition; that the decree holders did not (1) Cal.
(3) A.I.R. 1952 Mad.
51 . 259 seek to proceed against all the properties against which they sought to proceed in the former execution petition; and that one of the reliefs, namely, to attach the amount deposited in court, asked for in the present execution petition is a completely new one and that, therefore, the present execution petition is, both in form and in particulars, completely a different one.
But a comparison of the two execution petitions shows that the parties are the same: the new parties added in the present execution petition are either the legal representatives of the deceased parties or the representative of a party who has become insolvent.
In the present execution petition the decree holders are not proceeding against any property against which they did not seek to proceed in the earlier proceeding; they only omitted some of the properties.
The decree holders cannot be compelled to proceed against all the properties against which at one time they sought to proceed.
The relief by way of attachment of the amount deposited in court had been asked for by the decree holders by a separate petition, namely, E.A. No. 143 of 1962, and that was dismissed and, therefore, nothing turns upon it.
The result is, therefore, in substance tinder both the execution petitions the decree holders seek to proceed against the same parties and against the same properties.
The law on the subject is well settled.
In Bandhu Singh vs Kayastha Trading Bank(1), where a decree holder included new items of property for attachment in an application for execution of his decree filed 12 years after the date of the decree, it was held that the application to attach fresh property was a fresh application within the meaning of section 48 of the Code and, therefore, having been made more than 12 years after the date of the decree, could not be entertained.
In Sri Raja D. K. Venkata Lingama Nayanim vs Raja Inuganti Rajagopala Venkata Narasimha Rayanim(2).
where an application was made for amending a pending execution petition with a view to attach another property not included in the pending application, the court held that the application for amendment could not be allowed, as it was made beyond the period of 12 years from the date of the decree.
In Ippagunta Lakshminarasinga Rao vs Ippagunta (1) All. 419.
(2) I.L.R. 260 Balasubrahmanyam (1), where the execution petition filed beyond 12 years of the decree asked for a new relief not asked for in the earlier execution petition, it was held that the subsequent application, having been filed beyond 12 years, was hit by section 48 of the Code.
In Gajanand Sah vs Dayanand Thakur(2), the decree holder was not allowed to substitute a new property different from the one against which he wished to proceed in the earlier application on the ground that 12 years had expired from the date of the passing of the decree.
The result of the decisions may be summarized thus.
An application made after 12 years from the date of the decree would be a fresh application within the meaning of section 48 of the Code of Civil Procedure, if the previous application was finally disposed of.
It would also be a fresh application if it asked for a relief against parties or properties different from those proceeded against in the previous execution petition or asked for a relief substantially different from that asked for in the earlier petition.
In this case, as we have pointed out, the parties are sub stantially the same in both the proceedings, and the decree holders are only proceedings against properties included in the previous application.
It cannot, therefore, be treated as a fresh application within the meaning of section 48 of, the Code.
It is only an application to continue E.P. No. 13 of 1939 which is pending on the file of the executing court.
That apart, the decree holders filed E.A. No. 142 of 1952 in E.P. No. 13 of 1939 expressly asking for the reopening of the said execution petition and for proceeding with it.
As we have held that the earlier execution petition is still pending on the file of the court, the executing court will be well within its rights in proceeding on the basis of the earlier execution petition even without a new petition.
In the result, we hold that the order of the High Court is right.
The appeal fails and is dismissed.
There Will be no order as to costs.
(1)A.1.R. Appeal dismissed.
(2)(1942) 1.L.R. 21 Pat.
| The decree holders filed an application for execution of the decree being E.P. No. 13/1939.
This execution proceeding had to be stayed .as a result of the stay order of the High Court.
Ultimately the executing court made an order on E.P. 13/1939 to the effect that the Execution Petition was "closed".
On January 21, 1952, the decree holders made an application for reopening the execution E.P. No. 13/1939 and for proceeding with the execution of the decree, The Subordinate Judge, (executing court) holding that the previous execution petition was merely closed" directed the decree holders to file a regular execution petition.
On October 11, 1952 the decree holders filed E.P. No. 58/53 to continue further proceedings in E.P. No. 13/1939.
The judgment debtors filed a counter affidavit pleading, inter alia that the decree sought to be executed was made on September 22, 1938, and that as E.P. No. 13/1939 was dismissed on December 28, 1948, the present application, having been filed more than 12 years from the date of decree, was barred under section 48 of the Code of Civil Procedure.
On these facts the Subordinate Judge held that though the decree holders were entitled to continue previous execution petition, E.P. No. 58/53 was a fresh application as it differed from the original execution petition.
On appeal, the High Court held that E.P. No. 13/1939 was merely closed for statistical purposes, and, therefore, the execution petition filed in 1939 was still pending and the decree holders were entitled to proceed with that petition.
Hence the appeal.
The question for consideration is whether E.P. No. 58/53 is a fresh application within the meaning of section 48 of the Code.
Held: (i) It is true courts have condemned the practice of executing courts using expressions like "closed", "closed for statistical purposes", struck off" "recorded" etc., and they have also pointed out that there is no provision in the Code of Civil Procedure for making such orders.
But assuming that the court has no such power, the passing of such ,in order cannot be tantamount to an order of dismissal, for the intention of the court in making an order "closed" for statistical purposes is manifest.
It is intended not to finally dispose of the application, but to keep it pending.
Whether the order was without jurisdiction or whether it was valid, the legal position would be the same: in one case it would be ignored and in the other it would mean what it stated.
In either case the execution petition would be pending on the file of the court.
It is not the phraseology used by the Executing Court that really 252 matters, but is is really the substance of the order that is material.
Whatever terminology may be used, it is for the Court to ascertain, having regard to the circumstances under which the said order was made, whether the Court intended to finally terminate the execution proceedings.
If it did not intend to do so, it must be held that the execution proceedings were pending on the file of the Court.
In the present case the subsequent application ie.
E.P. No. 58/53 is only an application to continue the previous application i.e. E.P. 13/1939.
Biswa Sonan Chunder Gossyamy vs Binanda Chander Dibingar Adhikar Gossyamy, Cal.
416, Vadlamannati Damodara Rao vs Official Receiver, Kistna, I.L.R. 1946 Mad. 527 and Moidin Kutty vs Doraiswami, A.I.R. 1952 Mad. 51, referred to.
(ii) An application made after 12 years from the date of decree would be a fresh application within the meaning of section 48 of the Code of Civil Procedure, if the previous application was finally disposed of.
It would also be a fresh application if it asked for a relief against parties or properties different from those proceeded against in the previous execution petition or asked for a relief substantially different from that asked for in the earlier petition.
In the present case the parties are substantially the same in both proceedings, and the decree holders are only proceeding against properties included in the previous application ie.
E.P. No. 13/1939.
It cannot, therefore, be treated as a fresh application within the meaning of section 48 of the Code.
Bandhu Singh vs Kayastha Trading Bank, All. 419, Sri Raja D. K. Venkata Lingama Nayanim vs Raja Inuganti Rajagopala Venkata Narasimha Rayanim, I.L.R. [1947] Mad.
525, Ippagunta Lakshminarasinga Rao vs Ippagunta Balasubrahamanyam, and Gajanand Sah vs Dayanand Thakur Pat.
discussed.
|
Appeals Nos. 244 and 245 of 1954.
Appeals from the judgment and order dated August 19, 1952, of the Labour Appellate Tribunal of India (Calcutta) at Allahabad in Miscellaneous Cases Nos, C 91 and 93 of 1952.
919 N. C. Chatterji, H. J. Umrigar, J. B. Dadachanji, section N. Andley and Rameshwar Nath, for the appellant in both appeals.
Purshottam Tricumdas, R. Ganapathy Iyer and B. P. Maheshwari, for respondents in both appeals.
M. C. Setalvad, Attorney General for India, Porus A. Mehta and R. H. Dhebar, for the Intervener.
October 24.
The Judgment of the Court was delivered by BHAGWATI J.
These two appeals :by special leave arise out of an order of the Labour Appellate Tribunal of India, Lucknow Bench, by which it dismissed the application of the appellant under section 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950, hereinafter referred to as the Act for permission to dismiss the respondents from its employ and allowed the application of the respondents under section 23 of the Act for reinstatement.
The respondents are 76 employees of the appellant, a limited company of Sugar Mills, situated in village Chitauni in the district of Deoria and were working in the engineering department of the mills in the mill house, boiling house and the workshop sections.
There were disputes between the appellant and its workmen and, on the date in question, i.e., May 27, 1952, there was pending before the Labour Appellate Tribunal an appeal which was registered as Cal 101/51.
It appears that one Motilal Singh, an employee of the appellant, had been dismissed by it sometime prior thereto and he had been inciting the workmen to make common cause with him, and, at a meeting held the previous night, some sort of action had been decided upon.
When the workmen of the appellant entered the mills on the morning of May 27, 1952, these 76 workmen, though they entered their respective sections of the engineering department, did not commence any work from 7 a.m. as they should have done.
The sectional engineers in charge asked these workmen as to why they did not commence their work and became a ware of their intention to resort 920 to a tools down strike.
They reported the fact to the Chief Engineer who sent a slip to the General Manager informing him that the workers had gone on a tools down strike.
The General.
Manager thereupon personally went to the workshop, mill house and the boiling house and asked these workmen not to resort to such strike but the latter did not pay any heed to his advice.
The General Manager then asked the Chief Engineer to persuade these workmen to commence the work, give them time for about 2 hours till 10 30 a.m. and report to him if, in spite of his persuasions, they did not commence work.
The persuasions of the Chief Engineer and also of the section engineers proved of no avail and the 76 workmen persisted in their attitude with the result that the section engineers made their reports to the General Manager through the Chief Engineer giving the names of the workmen belonging to their respective sections who had resorted to the tools down strike with effect from 7 a.m. that day.
These reports were endorsed by the Chief Engineer and passed on to the General Manager who,in his turn, passed an order at about 10 30 a.m. suspending these 76 workmen till further orders.
The order for suspension was communicated to these workmen through their sectional heads and was also pasted on the notice board of the mills.
There was a recess between 11 a.m. and 1 p.m. and when the gates were opened at 1 p.m. these 76 workmen, in spite of the warnings of the gatekeepers and Jemadar to the contrary, rushed into the mills, entered their respective sections and adopted a threatening attitude.
The sectional engineers made reports to the General Manager in regard to this occurrence and these reports also were endorsed by the Chief Engineer and passed on by him to the General Manager.
The situation which was created by these workmen by forcibly entering their respective sections and continuing there threatening violence was explosive and the management had to call in the police in order to avert violence and damage to the property.
The police came in at 5 p.m. and order appears to have been restored.
There was no untoward incident that day 921 but the management appears to have viewed the situation with, seriousness and approached the Regional Conciliation Officer the next day in order to ask for advice in regard to the dismissal of these workmen.
The Regional Conciliation Officer, however, pointed out to the General Manager that, in view of the pendency of the appeal before the Labour Appel, late Tribunal, he had no jurisdiction to entertain any application for such permission and referred the General Manager to the Labour Appellate Tribunal.
The workmen, on the other hand, got a letter dated May 28, 1952, addressed to the General Manager by the General Secretary of the Chini Mill Mazdoor Sangh to the effect that they had gone to the gates of 'the mills as usual at 7 a.m. that day to attend to their work but they were not allowed to enter the mill pre mises.
They charged the management with the intention to victimise them on the charge of a tools down strike and stated that they had neither struck nor intended to strike but had been prevented from attending to their work and had therefore been advised to go back to their quarters with a view to maintain peace.
The last paragraph of that letter was very significant.
The General Manager was told that if he did not mend his illegal mistakes and did not take the workmen back on duty he would be responsible for any breach of peace.
After receipt of that letter it was evident that the workmen would resort to violent measures in order to attend to their work and a breach of peace was apprehended.
The management evidently continued the police precautions and, after having waited for some time, the General Manager furnished to these 76 workmen on June 2, 1952, a charge sheet wherein he charged them with having committed misconduct within the meaning of cl.
L. I (a) and (b) and wailful insubordination within the meaning of el.
L. I (a), (b) and (w) of the Standing Orders.
He called upon them to show cause within 24 hours of the receipt of the charge sheet why disciplinary action should not be taken against them and gave them intimation that an open enquiry in connection with the said charges 120 922 would be held by him at 8 a.m. on June 6, 1952.
He also intimated that if all the workmen arranged to present themselves earlier than June 6, 1952, he would take up the said enquiry earlier provided, however, an intimation was received to that effect from them or from their Union.
The workmen were to remain suspended till the enquiry was finished.
The workmen addressed uniform letters to the General Manager denying that there was any tools down strike on May 27, 1952, and alleging that the sectional heads and the Chief Engineer bad conspired together "under some mysterious preconceived plans" and stated that no useful purpose would be served by holding an enquiry on the 1 1 th day of their suspension.
They pointed out that such indefinite period of suspension during the pendency of the appeal before the Labour Appellate Tribunal and Reconciliation Board was illegal and unjustified and was in utter disregard of the Standing Orders.
By their further letter dated June 5, 1952, similarly addressed to the General Manager, they voiced their apprehension that they would not get any justice from an enquiry held by the management itself and asked for investigation by an impartial tribunal.
The management, however, held the enquiry as intimated at 8 a.m. on June 6, 1952.
The workmen non co operated and did not present themselves at the enquiry.
The General Manager immediately addressed a letter to these workmen putting on record that in spite of the orders conveyed by him earlier the workmen had disobeyed the.
same and had not appeared at the appointed time and place for the enquiry into the tools down strike.
He pointed out that by not appearing in this manner they had made themselves liable to dismissal for insubordination, and intimated that the management was applying to the proper authorities for permission to dismiss them pending receipt of which the workmen would remain under suspension.
This letter was received by the workmen at 9 a.m. that day and they replied through the General Secretary of the Chini Mill Mazdoor Sangh repeating that a demand had been made for an 923 investigation by an impartial tribunal and in so far as no impartial tribunal had been appointed they were not agreeable to present themselves and submit their defence at the enquiry which was conducted by the management itself.
The appellant thereafter made the necessary application under section 22 of the Act before the Labour Appellate Tribunal of India, Lucknow Bench, for permission to dismiss these 76 workmen.
In the affidavit which was filed in support of that application, all the facts herein before mentioned were set out in extenso and it was pointed out that the management, after giving full consideration to the explanations and offering every possible opportunity to these workmen to explain their conduct coupled with the unreasonable attitude adopted by them, had adjudged them guilty of misconduct under cl.
L. I (a), (b) and (w) of the Standing Orders and considered that any further employment of these workmen would be extremely detrimental to discipline and dangerous in the interests of the industry.
The workmen, in their turn, filed on June 9, 1952, an application under section 23 of the Act for requisite action to be taken against the appellant for having contravened section 22(b) of the Act by inflicting on them the punishment in the shape of harassment by resorting to an illegal lookout for an indefinite period with effect from May 27, 1952, without obtaining the prior permission of the , Labour Appellate Tribunal and "thereby acting contrary to law and resorting to mala fide actions in direct violation of the provisions of the Standing Orders in continuation of the management 's anti trade (Union) activities".
Counter affidavits were made by the workmen as also the management in reply to both the above applications.
The Labour Appellate Tribunal held that the appellant did not act in strict compliance with cl.
L. 12 of the Standing Orders and was, therefore, not entitled to ask for permission to dismiss the 76 workmen.
It accordingly dismissed the appellant 's application under section 22 of the Act.
In regard to the application of the workmen under section 23 of the Act, it held 924 that the wholesale suspension of the 76 workmen and their prevention from resuming work at I p.m. after the lunch hour amounted to a lockout and that this conduct of the appellant amounted to punishment of the workers whether by dismissal or otherwise and was, therefore, in contravention of section 22(b) of the Act.
It accordingly ordered the reinstatement of the workmen if they presented themselves at the office of the General Manager during office hours on any day within 15 days of the order and also ordered payment of half the salary and allowances for the period of non payment, viz., from the date of their suspension up to the date on which they were taken back in service.
Shri N. C. Chatterjee for the appellant before us has strenuously urged that the workmen had resorted to the tools down strike which was an illegal strike and that the appellant was well within its rights in suspending the pending enquiry and also pending the application for permission to dismiss them made before the Labour Appellate Tribunal.
Even if it be held that the appellant had declared a lockout, such a lockout was in consequence of the illegal strike resorted to by the workmen and could not be deemed to be illegal.
He further urged that the management had held an enquiry into the illegal strike which had been resorted to by the workmen and found that the workmen were guilty of misconduct and insubordination within the meaning of cl.
L. I (a), (b) and (w) of the Standing Orders and the appellant rightly came to the conclusion that any further employment of these workmen would be extremely detrimental to discipline and dangerous in the interests of the indus try.
He also contended that the delay in holding the enquiry was not unreasonable and the suspension of the workmen pending enquiry for more than four days was due to sufficient reason, the atmosphere created by the non cooperation of the workers being so tense as not being appropriate for the holding of an enquiry within those four days, that there was no breach of cl.
L. 12 of the Standing Orders and that the Labour Appellate Tribunal was in error when it 925 refused to grant the application under section 22 of the Act.
Civil Appeal No. 245 of 1954 which is directed against the order of the Labour Appellate Tribunal under section 23 of the Act may be disposed of at once.
The Labour Appellate Tribunal was of opinion that the conduct of the appellant in preventing the workmen from continuing work after I p.m. on May 27, 1952, came within the definition of a lockout and the workmen being employed in a public utility concern such lockout would be illegal without a proper notice.
It was further of opinion that this conduct amounted to punishment of a worker whether by dismissal or otherwise and was, therefore, in contravention of section 22(b) of the Act.
This conclusion of the Labour Appellate Tribunal was, in our opinion, based on a misapprehension of the whole position.
The position had been summed up by the Labour Appellate Tribunal in the following words: "As a matter of fact the management never thought of a lockout.
Their idea was to suspend the suspected persons pending enquiry for which they gave a notice".
If this was the correct position, the conclusion reached by the Labour Appellate Tribunal that the conduct of the management came within the definition of a lockout was absolutely unjustifiable.
The Labour Appellate Tribunal recorded its inability to come to a definite finding as to what was the position which obtained on May 27, 1952.
It observed "We have got a number of affidavits in support of the parties ' case and there is oath against oath.
We do not find ourselves in a position to hold definitely as to what was the exact situation.
But it does appear to us that a mountain has been made of a mole hill and conclusions have been arrived at without going deep into the matter".
Even if the parties had made a mountain of a mole hill and had reached conclusions without going deep into the matter, it was certainly the business of the Labour Appellate Tribunal itself to record a finding of fact in regard to the situation as it obtained on 926 that day.
This unfortunately the Labour Appellate Tribunal did not do and it came to record its conclusion, that the conduct of the management came within the definition of a lockout without realizing that such conclusion was inconsistent with what it ' had stated a little earlier that the management as a matter of fact never thought of a lockout.
We have been taken through the whole evidence by the learned counsel for the appellant and there is clear documentary evidence to show that the 76 workmen resorted to a tools down strike from 7 a.m. on May 27, 1952.
The reports which were made by the section engineers and sent to the General Manager through the Chief Engineer were clear and categoric in regard to such tools down strike having been resorted to by the workmen in question and the list of the 76 workmen which was prepared by the General Manager ordering their suspension was based on those reports.
The further reports which were made by the section engineers again sent by them to the General Manager through the Chief Engineer in the afternoon of May 27, 1952, also were clear and categoric in regard to the said workmen having been asked not to enter the workshop, the boiling house and the mill house at 1 p.m. but their having entered the same threatening violence.
A faint attempt was made to charge the section engineers and the Chief Engineer with having conspired "under some mysterious preconceived plans" but the same rested merely on a bare allegation and was not substantiated by any tangible evidence.
Even though there was some conflict of evidence in regard to the time when the notice of suspension was given by the General Manager to these workmen and when the notice in that behalf was pasted on the notice board of the appellant, it is abundantly clear on the documentary evidence above referred to that the 76 workmen resorted to a tools down strike from 7 a.m. on the morning of May 27, 1952, that they were suspended till further orders immediately after the receipt by the General Manager of the first series of reports from the section engineers, that they were prevented from entering the premises 927 at I p.m. but entered the same threatening violence.
If this is the true position it follows that there was no lockout declared by the appellant, much less an illegal lockout.
The workmen bad resorted to an illegal strike and the General Manager rightly ordered that the workmen indulging in such strike should be suspended pending further orders which obviously meant pending enquiry into their conduct and the obtaining of the permission to.
dismiss them as a result of such enquiry if the management thought fit.
If there was thus no illegal lockout at all, the conclusion reached by the Labour Appellate Tribunal in that behalf was absolutely unjustified.
Even if there had been a lockout as concluded by the Labour Appellate Tribunal the same was in consequence of the illegal strike which had been resorted to by these workmen and could not by virtue of section 24(3) of the , be deemed to be illegal.
There is, however, a more fundamental objection that, even if the appellant be held responsible for having declared an illegal lockout, the lockout would not come within the ban of section 22 of the Act.
The Labour Appellate Tribunal had before it an earlier decision of its own in Jute Workers Federation, Calcutta vs Clive Jute Mills(1), in which the same question had beed considered with reference to section 33 of the .
In that case, a lockout had been declared which involved 4,000 workers of the company and a preliminary contention was urged that there was no contravention of the provisions of section 33 of the .
The Labour Appellate Tribunal considered the question whether the lockout had (1) in fact altered the conditions of service of the workmen to their prejudice, or (2) had the effect of discharge, or (3) amounted to punishment of the workmen.
It came to the conclusion that a lockout had not the effect of a discharge, for a lockout does not automatically terminate the services of the workmen.
It did not also amount to punishment, for punishment presup (1) [1951] II L.L.J. 344.
928 poses an offence or misconduct.
A lockout is generally adopted as a security measure and may in certain cases be used as a weapon corresponding to what the employees have in the shape of a strike and that, therefore, a. 33(b) would not be contravened by the company by.
declaring a lockout.
The Labour Appellate Tribunal then considered whether a lockout would attract the operation of section 33(a).
It was of opinion that no automatic termination of the services of the employees was brought about by a lockout and the question was whether any of the conditions of service was altered thereby to their prejudice.
The contention of the Union was that the conditions of service were altered to the prejudice of the workmen because those employees did, not in fact get their pay during the period of the lockout with the possibility of losing it.
This contention was negatived and the Labour Appellate Tribunal was of opinion that the conditions of their service would be altered by the lockout if the employees lost their right to receive their pay during the period of lockout in 'all circumstances but the question whether they would be entitled to get their pay during that period could not be postulated with certainty for that would depend on a variety of considerations.
In the opinion of the Labour Appellate Tribunal to bring a case within section 33(a), the questioned act of the employer must directly and in fact alter the conditions of service to the prejudice of the workmen concerned, that is to say, the moment the lockout was declared.
The possibility that they may or may not get their pay meant that the lockout may or may not alter the conditions of their service to their prejudice.
Section 33(a) would not, therefore, be attracted by the mere fact of a lockout.
The Labour Appellate Tribunal thus came to the conclusion that neither section 33(a) nor section 33(b) would be contravened by the company in de claring the lockout.
This decision of the Labour.
Appellate Tribunal was followed in Colliery Mazdoor Congress, Asansol, vs New Beerbhoom Coal Co. Ltd.(1) and the Labour (1) 11952] L A.C. 219.
929 Appellate Tribunal there held that a lockout did not come within the ambit of section 33 and, therefore, no permission under that section was required for declaring a lockout.
We agree with the reasoning adopted in the above cases and are of opinion that a lockout is neither an alteration to the prejudice of the workmen of the conditions of service applicable to them within the meaning of cl.
(a) nor a discharge or punishment whether by dismissal or otherwise of the workmen within the meaning of cl.
(b) of section 33 of the , or section 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950, and that, therefore, no permission of the Conciliation Officer, Board or Tribunal as the case may be is necessary to be obtained before a lockout can be declared.
If the lockout is legal, no question can at all arise.
If, on the other hand,, the lockout is illegal, a remedy is provided in section 26 of the .
The employees affected by a lock out would in any event be entitled to refer the industrial dispute arising between themselves and the employer for adjudication by adopting the proper procedure in regard thereto.
The Labour Appellate Tribunal was, therefore, clearly in error when it came to the conclusion that the conduct of the appellant came within the definition of a lockout and that it amounted to punishment of the workmen whether by dismissal or otherwise and was, therefore, in contravention of s, 22(b) of the Act.
The application of the respondents under section 23 of the Act was accordingly liable to be dismissed and should have been dismissed by the Labour Appellate Tribunal.
Civil Appeal No. 245 of 1954 will, therefore, be allowed and the order of the Labour Appellate Tribunal reinstating the respondents in the service of the appellant will be set aside.
Coming now to Civil Appeal No. 244 of 1954, the first question to determine is whether the respondents had resorted to an illegal strike.
We have already pointed out the circumstances under which the 76 workmen resorted to the tools down strike from 7 a.m. on May 27, 1952, and recorded the finding 121 930 that they not only resorted to such strike but persisted in their attitude in spite of the persuasions of the Chief Engineer and the General Manager of the appellant.
The appellant having been declared a public utility concern, the workmen were not entitled to resort to such strike without giving to the appellant notice of the strike in terms of section 22(1) of the , and the tools down strike which was resorted to by them was, therefore, an illegal strike.
The fact that the strike was of a short duration viz., from 7 a.m. till 10 30 a.m. would not exculpate the respondents from the consequence" of having resorted to such illegal strike, the avowed intention of the strikers being not to resume work until their pre concerted plan conceived at, the meeting held on the previous night was carried out.
The strike resorted to by the workmen was of an indefinite duration.
and the management, having failed in its attempts to persuade the workmen to resume their work was well within its rights to suspend these workmen pending further orders.
(Vide Buckingham and Carnatic Co. Ltd. vs Workers of the Buckingham ' and Carnatic Co. Ltd.(1)).
The Labour Appellate Tribunal did not decide this issue at all but only considered the alleged non compliance by the appellant of cl.
L. 12 of the Standing Orders as determinative of the whole enquiry before it observing that "although the delay (in holding the enquiry) was not unreasonable, there was no doubt that the management did violate the letter of the rule".
It further observed that there was no sufficient reason indicated for extending the period of suspension beyond the period of four days provided in cl.
L. 12 of the Standing Orders, the tension created by the non co operation of the workers not having been considered sufficient to preclude the management from collecting materials for conducting the enquiry within the said period of 4 days, This reasoning of the Labour Appellate Tribunal was unsound.
Having once come to the conclusion that the delay was not unreasonable, there was no justification for the further (1) ; 931 conclusion reached by the Labour Appellate Tribunal that the tension created by the non co operation of the workers was not a sufficient reason for extending the period of such suspension.
The workmen had forcibly entered the premises of the mills in spite of the warnings of the watchmen and the Jemadar and had also entered the workshop, the boiling house and the mill house and continued to stay there threatening violence.
In their letter dated June 3, 1952, they had also threatened the General Manager that if he did not mend his illegal mistakes and did not take the workmen back on duty be would be responsible for any breach of peace.
This was enough evidence of their mentality and the management naturally enough apprehended breach of peace at the hands of these workmen.
If this was the tense atmosphere created by the non co operation of the workmen, the management was perfectly justified in postponing the enquiry by a few days and continuing the workmen under sus pension.
The delay which was thus caused in furnishing the charge sheets and giving notice of the enquiry to these workmen on June 2, 1952, was, therefore, sufficiently explained and if there was any one responsible for this.
delay it was the workmen and not the management.
It did not then lie in the mouth of the workmen to protest against this delay in the enquiry and trot out their suspension for a period exceeding four day 's as an excuse for abstaining from the enquiry.
As a matter of fact, the management intimated to the workmen that in spite of June 6, 1952, having been fixed as the date for the open enquiry, the management would be prepared to take up the enquiry earlier provided an intimation was received either from the workmen or from their Union to that effect.
Instead of responding to this gesture of the appellant the workmen persisted in asking for an independent enquiry and non co operated with the management in the enquiry which was ultimately held by it as notified at 8 a.m. on June 6, 1952.
We are of opinion that under the circumstances the appellant was not guilty of having contravened el.
L. 12 of the Standing Orders and the Labour Appellate 932 Tribunal was in error when it came to the contrary conclusion and dismissed the application of the appellant under section 22 merely on that ground without making any further enquiry into the circumstances of the case.
It appears that the Labour Appellate Tribunal was driven to take this step because it found itself unable to hold definitely as to what was the exact situation on May 27, 1952.
We shall only observe that if the Labour Appellate Tribunal had really ap plied its mind to the question it would have come to the conclusion that the respondents in fact did resort to the illegal strike from 7 a.m. on May 27, 1952, and that there was no contravention of cl.
L. 12 of the Standing Orders by the appellant.
The next question that falls to be determined is whether the enquiry which was held by the management on June 6, 1952, was a fair enquiry and whether the General Manager observed the principles of natural justice in the conduct of that enquiry Due notice of the enquiry was given to the respondents by the letter of the management addressed to them on June 2, 1952, and if the respondents did not avail themselves of the opportunity of presenting themselves and defending their action at the enquiry they had only themselves to blame for it.
It was within the province of the management to hold such an enquiry after giving due notice thereof to the respondents and to come to its own conclusion as a result of such enquiry whether the respondents were guilty of the charges which had been leveled against them.
If full and free opportunity was given to the respondents to present themselves at the enquiry and defend themselves it could not be said that the enquiry was anything but fair.
No principles of natural justice were violated and the management was at liberty to come to its own conclusions in regard to the culpability of the respondents and also to determine what punishment should be meted out to the respondents for the misconduct and insubordination proved against them.
If the ban which is imposed by section 22 of the Act had not been in existence, the management would have been entitled to impose the punishment on the 933 respondents and dismiss them without anything more, if it honestly came to the conclusion that dismissal of these workmen was the only punishment which should be meted out to them in all the circumstances of the case.
The respondents would no doubt then have been entitled to refer the industrial dispute which arose out of their dismissal for adjudication by adopting the proper procedure set out in the , and the Industrial Tribunal appointed by the Government for the adjudication of such dispute would have been in a position to thrash out all the circumstances and award to them the appropriate relief This course was, however, not open to the appellant by reason of the pendency of the appeal before the Labour Appellate Tribunal and the only thing which the appellant could do, therefore, was, after coming to its own conclusion as a result of such enquiry, to apply to the Labour Appellate Tribunal under s.22 of the Act for permission to dismiss the respondents and this the appellant did on June 8, 1952.
It was not open to the respondents then, having regard to the attitude which they had adopted throughout in relation to the said enquiry, to urge that the enquiry was not fair or impartial or that the principles of natural justice had been violated by the General Manager of the appellant in the conduct of the enquiry.
It was, however, urged on behalf of the respondents that the suspension for an indefinite period beyond the period of four days provided in cl.
L. 12 of the Standing Orders was a punitive measure and the appellant was not justified in imposing that punishment on them without the permission of the Labour Appellate Tribunal.
It was contended that such suspension involved loss of pay by the respondents and being of an indefinite duration inflicted such harassment on them that it could not be deemed to be anything except a punishment.
We do not accept this contention.
It has been rightly held by the Labour Appellate Tribunal that suspension without pay pending enquiry as also pending permission of the Tribunal under the relevant section could not 934 be considered a punishment as such suspension without payment would only be an interim measure and would last till the application for permission to punish the workman was made and the Tribunal bad passed orders thereupon.
If the permission was accorded the workman would not be paid during the period of suspension but if the permission was refused he would have to be paid for the whole period of suspension.
There is nothing like a contingent punishment of a workman and therefore such suspension could not be deemed to be a punishment of the workman at all.
Such suspension would of necessity be of an indefinite duration because to get a written permission of the Tribunal would mean delay and no Tribunal would likely issue any order without notice and without hearing all the parties concerned.
Orders for suspension were meant only as security measures or precau tionary ones taken in the interest of the industry itself or its employees in general.
These measures were sometimes called for immediately after an incident and any delay, however small, might defeat the purpose for which such measures were intended.
It would therefore be necessary to adopt these measures immediately and to suspend the workman pending the enquiry as also the permission to be obtained from the appropriate Tribunal for dismissing him if as a result of the enquiry the, management thought fit to inflict such punishment upon him.
The suspension.
, however, would not be a punishment by itself.
The ordinary dictionary meaning of the word "Punish" is "to cause the offender to suffer for the offence" or "to inflict penalty on the offender" or "to inflict penalty for the offence" (Concise Oxford Dictionary, 4th Ed.).
Punishment can be otherwise defined (Vide Law Lexicon by P.R. Aiyar, 1943 Ed.) as penalty for the transgression.
of law, and the word cc punish" denotes or signifies some offence committed by the person who is punished.
Any action of the employer to the detriment of the workman 's interest would not be punishment so long as no offence was found to have been committed by the workman.
The suspension under such circumstances, therefore, could 935 not be a punishment even though it may be of an indefinite duration and would not attract the operation of section 22 of the Act.
It could not be contended, therefore, that suspension without pay even for an indefinite period pending enquiry or pending the permission of the appropriate Tribunal to dismiss the workman would be a punishment which would require permission under section 22 of the Act before the same could be meted out to the workman.
(Vide Champdany Jute Mills And Certain Workmen(1); Joint Steamer Companies And Their Workmen(2); Assam Oil Co. Ltd. vs Appalswami(3); Standard Vacuum Oil Co. vs Gunaseelan, M. O.(4)).
The scope of the enquiry before the Labour Appellate Tribunal under section 22 of the Act has been the subject matter of decisions by this Court in Atherton West & Co. Ltd. vs Suti Mill Mazdoor Union and Others(5) and The Automobile Products of India Ltd. vs Rukmaji Bala & Others(6).
The Tribunal before whom an application is made under that section has not to adjudicate upon any industrial dispute arising between the employer and the workman but has only got to consider whether the ban which is imposed on the employer in the matter of altering the conditions of employment 'to the prejudice of the workman or his discharge or punishment whether by dismissal or otherwise during tile pendency of the proceedings therein referred to should be lifted.
A prima facie case has to be made out by the employer for the lifting of such ban and the only jurisdiction which the Tribunal has is either to give such permission or to refuse it provided the employer is not acting mala fide or is not resorting to any unfair practice or victimization.
It cannot impose any conditions on the employer before such permission is granted nor can it substitute another prayer for the one which the employer has set out in his application.
If the permission is granted, the ban would be lifted and the employer would be at liberty, if he so chooses thereafter, to deal out the (1) [1952] I L.L.J. 554.
(2) [1954] II L.L.J. 328. ; (4) [1951] II L.L J. 221.
(5) [1954] II L.L.J. 656.
(6) , 936 punishment to the workman.
On such action being taken by the employer the workman would be entitled to raise an industrial dispute which would have to be referred to the appropriate Tribunal for adjudication by the Government on proper steps being taken in that behalf.
When such industrial dispute comes to be adjudicated upon by the appropriate Tribunal, the workman would be entitled to have all the circumstances of the case scrutinized by the Tribu nal and would be entitled to get the appropriate relief at.
the hands of the Tribunal.
If, on the other hand, such permission is refused, the parties would be relegated to the status quo and the employer would not be able to deal out the punishment which he intends to do to the workman.
Even then an industrial dispute might arise between the employer and the workman if the workman was not paid his due wages and other benefits.
Such industrial dispute also would have to be referred to the appropriate Tribunal by the Government and the Tribunal would award to the workman the appropriate relief having regard to all the circumstances of the case.
The Tribunal before whom such an 'application for permission is made under section 22 of the Act would not be entitled to sit in judgment on the action of the employer if once it came to the conclusion that a prima facie case had been made out for dealing out the punishment to the workman.
It would not be concerned with the measure of the punishment nor with the harshness or otherwise of the action proposed to be taken by the employer except perhaps to the extent that it might bear on the question whether the action of the management was bona fide or was actuated by the motive of victimization.
If on the materials before it the Tribunal came to the conclusion that a fair enquiry was held by the management in the circumstances of the case and it bad bona fide come to the conclusion that the workman was guilty of misconduct with which he had been charged a prima facie case would be made out by the employer and the Tribunal would under these circumstances be bound to give the requisite permission to the employer to deal 937 out the punishment to the workman.
If the punishment was harsh or excessive or was not such as should be dealt out by the employer having regard to all the circumstances of the case the dealing out of such punishment by the employer to the workman after such permission was granted would be the subject matter of an industrial dispute to be raised by the workman and to be dealt with as aforesaid.
The Tribunal, however, would have no jurisdiction to go into that question and the only function of the Tribunal under section 22 of the Act would be to either grant the permission or to refuse it.
(Vide Champdani Jute Mills And Shri Alijan(1); R.B section Lachmandas Mohan Lal & Sons Ltd. And Chini Mill Karmachari Union(2) Assam Oil Companies ' case(3)).
In the circumstances of the present case, once the appellant succeeded in establishing that the workmen had resorted to an illegal strike from 7 a.m. on May 27, 1952, that a fair enquiry into the alleged misconduct and insubordination of the workmen had been held by the management without violating any principles of natural justice, that the management had as a result of such enquiry found that the workmen had been guilty of misconduct and insubordination with which they had been charged and that the management had come to the bona fide conclusion that continuing the workmen in its employ was detrimental to discipline and dangerous in the interests of the appellant, the Labour Appellate Tribunal ought to have held that a prima facie case for the dismissal of the workmen had been made out by the appellant and ought to have granted the appellant the permission to dismiss the workmen.
We are, therefore, of opinion that the Labour Appellate Tribunal was clearly in error in rejecting the application of the appellant under section 22 of the Act and refusing it the permission to discharge the respondents from its employ.
Civil Appeal go.
244 of 1954 will, therefore, be allowed and the order of (1) [1952] II L.L.J. 629.
(2) [1952] II L.L.J. 787, (8) 122 938 the Labour Appellate Tribunal dismissing the application under section 22 of the Act will be set aside.
The appellant will be granted permission under section 22 of the Act to discharge the respondents from its employ.
Under the orders of the Court, one half of their salary has been already paid by the appellant to the respondents from May 27, 1952, onwards.
As a result of this decision, the appellant would be entitled to recover the same back from them.
Shri N. C. Chatterjee appearing on behalf of the appellant has, however, stated that the appellant would forego the recovery of that amount and would also keep the respondents on the reserve list to be employed in the mills as and when there were vacancies in their permanent cadre.
We hope that the respondents will take this offer in the true spirit with, which it has been made on behalf of the appellant and behave better in the future.
Shri N. C. Chatterjee has also left the question of costs of both these appeals to us and we do order that, in all the circumstances of the case, it would be proper that each party do bear and pay its own costs of both these appeals.
Appeals allowed.
| The respondent landlord filed a petition for eviction of the appellant, under section 14A read with section 25B of the Delhi Rent Control Act, 1958 on the ground of requirement for personal occupation, in view of the fact that he was forced to pay penal rent of Rs. 1,448 from his Government accommodation as per Government of India notification dated 9 9 1975 and the special order dated 22 1 1976 requiring him to vacate the Government accommodation by 31 12 1975.
After presentation of the eviction petition and service of notice under section 25B of the Act, the appellant filed a petition for grant of leave to defend the main petition and raised several objections in the written statement.
One such objection was that in view of the later circular of the Government dated 14 7 1977, the respondent was not required to vacate the Government accommodation and, therefore, he was not entitled to evict the appellants under the provisions of section 14A of the Delhi Rent Control Act.
The said objection having been disallowed by the Additional Rent Controller the appellant filed Civil Revision Petition before the Delhi High Court, which met with the same fate.
Hence the appeal against that order by special leave.
Dismissing the appeal, the Court ^ HELD: 1.
The respondent landlord is entitled to have recourse to section 14A of the Delhi Rent Control Act, 1958 for evicting the appellants from the premises in question.
[68 A B] 2.
The second notification dated 14 7 1977 of the Government, without taking away the obligation imposed by the first notification dated 9 9 75 on Government employees owning houses in their own names or in the name of any other member of their families, within the limits of their place of posting, vacate the Government accommodation within three months from 1st of October, 1975, has given an option to those employees to continue to occupy the Government accommodation subject to the obligation mentioned in the second notification, namely, that the house owning Government employee will have to pay normal rent for the Government accommodation if the income from his own house does not exceed Rs. 1,000 per mensem half the market rent if the 54 income from his own house exceeds Rs. 1,000 per mensem but does not exceed Rs. 2,000/ per mensem and full market rent if the income from his house is above Rs. 2,000 per mensem with effect from 1 6 1977.
[64 C E] 3.
In the present case, (i) even apart from the first notification dated 9 9 1975 which is general in nature and has been modified by the second notification dated 14 7 1977 there is the special order dated 22 1 1976 which required the respondent to vacate the Government accommodation by 31 12 1975, failing which he is to pay market rent with effect from 1 1 1976: (ii) the market rent/licence fee which the respondent had to pay for the Government accommodation on the date of institution of the Eviction Petition was Rs. 1,448 per mensem and it had been increased to Rs. 1,543 per mensem and further enhanced to Rs. 2,898 per mensem by the letter dated 17/18 7 1981 of the Assistant Director of Estates addressed to the respondent: (iii) there is nothing on record to show that the obligation imposed upon respondent by the first notification to vacate the Government accommodation within three months from 1st of October, 1975 and by the special order dated 22 1 1976 by 31st December, 1975 has been withdrawn; (iv) the respondent has an option to continue to occupy the Government accommodation subject to certain obligations contained in the two notifications without vacating the Government accommodation within a period of three months from 1st of October, 1975 and (v) it is not open to the appellants to compel the respondent to exercise his option and continue to occupy the Government accommodation in order that he may continue to occupy the premises in question as the tenant.
[64 E H, 65 A B] Busching Schmitz Private Ltd. vs P.T. Menghani and Anr., ; referred to.
K.D. Singh vs Shri Hari Babu Kanwal, , overruled.
J.L. Paul vs Ranjit Singh, , approved.
|
Appeal No. 37 of 1952.
Appeal from the Judgment and Decree dated the 24th September, 1948, of the High Court of Judicature at Madras (Menon and Mack, JJ.) in A.A.O.No.
688 of. 1945 arising out of Judgment and Decree dated the 1st October 1945 of the Court of the ' District Judge of Anantapur in Original Petition No. 15 of 1945.
D. Munikanniah (J. B. Dadachandji" with him) for the appellant.
section P. Sinha(M. O. Chinnappa Reddi and K. B. Chowdhury withhim) for the respondents.
October 29.
The Judment of the Court was delivered by BHAGWATI J.
The plaintiff filed 0.
P. No. 15 of 1945 in the Court of the District Judge of Anantapur for setting aside an award the ground inter alia of legal misconduct of the arbitrator.
The trial Court set aside the award.
The High Court appeal reversed the judgment of the trial Court and dismissed the plaintiffs suit.
This appeal has been filed by the plaintiff with the certificate of the High Court against that decision.
One P.Narayanappa died in 1927 leaving him surviving the plaintiff his widow, the defendant I his undivided brother, the defendant 2 a son of his another pre deceased brother, and defedant 3 his son by his pre deceased wife. 'The deceased had purported to make a will dated 1st May, 1927 under which he had made certain provision for her maintenance , and residence, The plaintiff stayed with the family for 121 some time but had to leave the family house owing to disputes which arose between her and the senior wife of defendant 1.
She lived with her mother for eleven years and ultimately filed a suit in forma pauperis 0.
section No. 19 of 1943 in the Court of the District Judge of Anantapur, for maintenance, arrears of maintenance, residence and household utensils as also recovery of some jewels and clothes as her stridhanam properties.
The defendants contested the claim of the plaintiff contending that sufficient arrangement bad been made for her maintenance and residence under the will dated the 1st May, 1927, that she had accordingly been in possession and enjoyment of the property and that her claim was unsustainable.
The defendants also denied her claim for jewels and clothes.
The suit came for hearing and final disposal before the Subordinate Judge of Anantapur.
When the plaintiff was being examined as P.W. 1, in the suit the 27th February, 1945, all the parties filed a petition under section 21 of the Arbitration Act agreeing to appoint Sri Konakondla Rayalla Govindappa Garu as the 'sole arbitrator ' for settling the disputes in the suit and to abide by his decision, and asking the Court to send the plaint, written statement and other records to the arbitrator for his decision.
A reference to arbitration was accordingly made by the Court.
The arbitrator entered upon the reference and the 6th March, 1945, examined the plaintiff and got from her a statement which is Exhibit No. 4 in the record.
He similarly examined the defendant I the 10th March, 1945, and got from him the statement which is Exhibit No. 5 in the record.
After obtaining the two statements, the arbitrator made and published his award the 12th March, 1945.
It was this award that was challenged by the plaintiff.
The legal misconduct which was alleged against the arbitrator was that he examined each party in the absence of the other.
It was contended behalf of 122 the plaintiff that even though the petition for reference to arbitration as also the statements Exhibits Nos. 4 & 5 authorised the arbitrator to settle the disputes according to law after perusing the plaint and the written statements, the arbitrator examined defendant I in the absence of the plaintiff and also perused what was called the settlement of the 1st May, 1927, without giving an opportunity to the plaintiff to have her say in the matter and was thus guilty of legal misconduct.
It was contended the other hand by the defendants that what was done by the arbitrator was merely to obtain from the parties a reiteration of their request contained in the petition that he should give his award the basis of the pleadings, that not a single fact was recorded by the arbitrator from the defendant 1 which did not find a place in his written statement and that therefore the arbitrator was not guilty of legal misconduct.
The petition filed by the parties the 27th February, 1915,did not give any special powers to the arbitrator.
The arbitrator was appointed for settling the disputes in the suit and the parties agreed to abide by his decision.
The plaint, the written, statement and the other records were agreed to be sent to him for his decision, and if the arbitrator was thus directed to make his award after perusing the plaint and the written statements which were give to him by the Court along with the order, we do not see why the arbitrator went to the plaintiff and defendant 1 and recorded their statements.
The statement given by the plaintiff to the arbitrator did not mention anything beyond the request that be should peruse the plaint and written statement and give his decision according to law and justice.
The statement which was obtained from the defendant 1 however did not merely repeat this request but contained several statements of facts, which did not find a place in his written statement.
These statements were as follows: (1)"She felt glad with what was given to her by her husband.
" 123 (2)"It is seen from the Government accounts that as per the settlement made by her husband, the lands given to her have been in her possession." (3)"Just like the plaintiff has her jewels in her possession, the other females in the house have their jewels in their respective possession only.
The undivided family has no manner of right therein." and (4) "Considering the domestic circumstances our elder brother provided maintenance for the third wife, the plaintiff, just as he had provided maintenance for his second wife.
" These statements constituted evidence given by the defendant I in addition to the averments contained in his written statement and it is futile for the defendant 1 to contend that in obtaining the statement Exhibit No. 5 from him the arbitrator merely obtained from him a narration of what was already found in his written statement: This position is confirmed when one turns to the award.
The arbitrator stated that the Court had directed him to make the award after perusing the plaint and the written statements of the plaintiff and the defendants and that it had given him the plaint and the written statements along with the order.
He however proceeded to state that in pursuance of the order he took statements from the plaintiff as well as the defendant I who was the manager of the defendant 's family.
He further stated that he bad perused the settlement which the defendant 1 alleged as having been made Ist May, 1927, in favour of the plaintiff and proceeded to award to the plaintiff 8 acres 17 cents of land bearing Survey No. 507 in addition to the 40 acres of land already given by the deceased to her.
It is clear from the terms of this award that the arbitrator took into consideration not only the plaint and the written statements of the parties but also the statement which he had obtained from the defendant I and the will dated 1st May, 1927.
There is thus no doubt that the arbitrator heard the defendant 1 in the absence of the, plaintiff.
No 124 notice of this hearing was given by the arbitrator to the plaintiff nor had she an opportunity of having the evidence of the defendant I taken in her presence so that she could suggest cross examination or herself cross examine the defendant I and also be able to find evidence, if she could, that would meet and answer the evidence given by the defendant 1.
As was, observed by Lord Langdale M. R. in Harvey vs Shelton(1), "It is so ordinary a principle in the administration of justice, that no party to a cause can be allowed to use any means whatsoever to influence the mind of the Judge, which means are not known to and capable of being met and resisted by the, other party, that it is impossible, for a moment, not to see, that this was an extremely indiscreet mode of proceeding, to say the very least of it.
, It is contrary to every principle to allow of such a thing, and I Wholly deny the difference which is alleged to exist between mercantile arbitrations and legal arbitrations.
The first principles of justice must be equally applied in every case.
Except in the few cases where exceptions are unavoidable, both sides must be heard and each in the presence of the other.
In every case in which matters are litigated, you must attend to the representations made both sides, and you must not, in the administration of justice, in whatever form, whether in the regularly constituted Courts or in arbitrations, whether before lawyers or merchants, permit one side to use means of influencing the conduct and the decisions of the Judge, which means are not known to the other side.
This case of Harvey vs Shelton(1) is the leading case this point and it has been followed not only in England but in India.
(See Ganesh Narayan Singh vs Malida Koer(2).
She had also no opportunity to have her say in the matter of the settlement of the 1st May, 1927.
The course of proceeding adopted by the arbitrator was obviously contrary to the principles of ,natural justice.
(i) ; at P. 462.
(2) (1911) 13 c.
L. J. 399 at pages 401, 402, 125 Shri section P. Sinha however urged before us that no prejudice was caused to the plaintiff by reason of the arbitrator having obtained the statement Exhibit No. 5 from defendant 1 and that therefore the arbitrator was not guilty of legal misconduct.
This contention is unsound.
The arbitrator may be a most respectable man; but even so, his conduct cannot be reconciled to general principles.
"A Judge must not take upon himself to say, whether evidence improperly admitted had or had not an effect upon his mind The award may have done perfect justice: but upon general principles it cannot be supported.
" Per Lord Eldon, Lord Chancellor, in Walker vs Frobisher(1).
To the same effect are the observations of Lord Justice Knight Bruce in Haigh vs Haigh(1): "It is true that he states in his affidavit that he did not allow those explanations to influence him in his report upon the accounts, and I have no doubt he honestly intended this to be the case; but it is impossible to gauge the influence which such statements have upon the mind.
We must hold, without meaning the least reflection the arbitrator, that he was guilty of legal misconduct and that was sufficient to vitiate the award.
Shri section P. Sinha then urged that the plaintiff had waived her right if any to challenge the award the ground of legal misconduct.
No waiver however was pleaded by the defendant I and it was not competent to him to urge this contention at this stage before us.
The result therefore is that the judgment of the High Court cannot stand.
Agent for the respondents M. section K. Aiyangar, (i) (18o1) at page 72.
| In a civil suit the respondent obtained a decree against his employer the appellant company for a sum which included com pensation for wrongful termination of his service, arrears of salary, interest and costs of the suit, and then applied for execution of the decree.
The Income tax Officer served a notice upon the respondent under section 46 of the Indian Income tax Act and applied to the District Judge that the appellant be permitted to deduct at source the income tax, surcharge and super tax on the sum awarded to the respondent and pay the same in the Government Treasury.
The appellant company also moved the executing court for a declaration that they were entitled and bound to deduct the tax due on the amount.
The District judge directed the appellant company to pay the income tax and super tax to the Income Tax Department and pay the balance in Court together with a receipt for the income tax paid.
In appeal the High Court reversed the order of the District judge and directed the execution of the decree as claimed by the respondent.
On appeal by the appellant company, Held, that as no tax was assessed against the respondent the Income Tax Officer could not issue a notice under section 46(5) requiring the appellant company to deduct tax from the decretal amount.
A substantial part of the decretal amount did not represent salary" of the respondent: it consisted of compensation for wrongful termination of the respondent 's service, salary in lieu of six months ' notice, interest and costs of the suit.
It was a judgment debt and no provision for payment of income tax was made in the decree which was liable to be executed as prayed by the respondent.
The appellant company was not therefore entitled or bound to deduct income tax under section 18 sub section
(2) of the Act.
|
Criminal Appeal No. 250 of 1964.
Appeal from the judgment, and order dated March 14, 1963 of the Gujarat High Court in Criminal Revision Application No. 124 of 1961.
R. Ganapathy Iyer and S.P. Nayar, for the appellant.
M.V. Goswami and C.C. Patel, for the respondent.
The Judgment of the Court was delivered by Hidayatullah, J.
In this appeal by certificate under article 134( 1 ) (c) of the Constitution the State of Gujarat appeals against 178 the judgment, March 14, 1963, of the High Court of the State acquitting the respondents of diverse offences under the Forward Contracts (Regulation) Act, 1952.
Originally 31 persons were charged before the Judicial Magistrate, Ahmedabad, who acquitted 14 and convicted the rest.
The present respondents, who are 11 in number (accused 1 to 9, 11 and 12), were convicted under section 20(1)(c) of the Act and fined Rs. 51/ (15 days ' S.1.
in default).
They were also convicted under section 21(b) of the Act but no separate sentence was imposed.
Nine of them (accused 1 to 9) were further convicted under section 21(c) of the Act and fined Rs. 25/ (one week 's S.1.
in default).
The remaining accused were convicted under section 21 (b).
All appealed to the Court of Sessions Judge.
The conviction of accused 1 to 9, 11 and 12 was maintained but conviction under section 20(1)(b) was substituted for that under section 20(1)(c).
The other accused ' were convicted of all the charges.
The High Court was then moved in revision.
All the accused were acquitted of all the charges.
The State Government now appeals.
All respondents are members of the Ghee and Tel Brokers Association Ltd., Ahmedabad.
Nine of them are Directors and two of these are President and Secretary of the Association.
The accused, who are not before us, were brokers and servants of the Association or of the brokers.
The prosecution case is this: The Association has an office where the members and brokers used to enter into contracts for the sale and purchase of groundnut oil.
These contracts were largely speculative.
A large number of contracts used to be entered into but were not performed by actual delivery and payment of price.
They were adjusted on a due date after the expiry of a fixed period.
This period was generally from the 5th of one calendar month to the 25th of the following month and the latter was the due date.
On each Saturday during the period the Association exhibited the prevailing rate and according to that rate cross transactions entered earlier were adjusted and the persons in loss deposited money representing their particular losses with the Association.
On the due date all outstanding.transactions were finally adjusted by cancelling sales against purchases and delivery used to be ordered in respect of the balance which had to be completed by the end of the month of the due date.
During the stated period extensive trading through sales and purchases took place without any delivery.
Each member could enter into as many transactions of either kind as he liked provided that each transaction was in multiple of 50 Bengali Maunds.
Between March 5 and April 25, 1957 the total transactions put through totalled 4,33,600 Bengali Maunds but the actual delivery on the due date was about 5,500 Bengali Maunds only, that is to say, just over 11/4 per cent.
The share of the several operators in these deliveries was insignificant and the deals were really forward 180 any such member, becomes illegal, and the contract itself becomes void, except in the case of a person who has no knowledge that the transaction is prohibited.
We are not concerned with sections 16 and 17 and may omit them from consideration.
Then comes section 18, sub section (1) whereof provides: "18.
Special provisions respecting certain kinds of forward contracts. (1) Nothing contained in Chapter III or Chapter IV shall apply to non transferable specific delivery contracts for the sale or purchase of any goods: Provided that no person shall organise or assist in organising or be a member of any association in any area to which the provisions of section 15 have been made applicable (other than a recognised association) which provides facilities.
for the performance of any non transferable specific delivery contracts by any party thereto without having to make or to receive actual delivery to or from the other party to the contract or to or from any other party named in the contract.
" This sub section read with sections 20 and 21 is at the foundation of :the charge and as section 19 is irrelevant here, we may proceed to read them at once.
We are concerned only with cls.
(b) and (c) of sub section
(1) of section 20 and (b) and (c) of section 21 and will, therefore.
omit the other clauses: "20.
Penalty for contravention of certain provisions of Chapter IV. (1) Any person who (a) (b) organises, or assists in organising, or is a member of, any association in contravention of the provisions contained in the proviso to sub section (1) of section 18; or (c) enters into any forward contract or any option in goods in contravention of any of the provisions contained in sub section (1) of section 15, section 17 or section 19, shall, on conviction, be punishable with imprisonment for a term which may extend to one 'year, or with fine, or with both.
179 transactions in which there was no intention to take or give delivery.
The prosecution, therefore, submitted that these were forward contracts prohibited under the Act and as the Association was not recognised the offences charged were committed.
The High Court having acquitted all the accused the State ' contends now that the acquittal recorded by.
the High Court is wrong and proceeds on a misapprehension of the provisions of the Act and of the facts on which the charges rested.
To consider the submissions of the parties the relevant provisions of 'the Act, which has been passed, among other things, to regulate forward contracts, will have to be seen.
Before we do so we may first glance at some definitions leaving out those attributes of the terms defined in which we are not interested.
"Forward contract" under the Act means a contract which is not a ready delivery contract but a contract for future delivery (section 2(c) ).
A "ready delivery contract" is one in which there is delivery and payment of price either immediately or within a period which is not to exceed 11 days even by consent of parties or otherwise (section 2(1) ).
The expressions "transferable specific delivery contract" and "non transferable specific delivery contract" are defined ' with reference to the latter expression which means a specific delivery contract, the rights or liabilities under which are not transferable (section 2 (f)) and "specific delivery contract ' means a forward delivery contract which provides for actual delivery of specific qualities or types of goods either immediately or during a period not exceeding 11 days at a price fixed thereby or to be fixed in the manner thereby agreed and in which the names of both the buyers 'and sellers are mentioned (section 2(m) ).
The effect of these definitions is clearly to distinguish, firstly, forward contracts from ready delivery contracts by limiting the time in which ready delivery contracts must be completed by delivery and payment of price; secondly, to distinguish between transferable and non transferable specific delivery contracts; and finally to distinguish forward contracts in which there is either no provision for actual delivery or the parties are not named, from a specific delivery contract.
The Act then proceeds to lay down in Chapter III the conditions of recognition of Associations.
Since this Association was admittedly not recognised it is unnecessary to review the provisions of that Chapter.
Chapter IV then makes certain provisions regarding forward contracts and option in goods.
Chapter V then provides for penalties.
The relevant provisions of these two Chapters need to be carefully considered.
Section 15(1) declares illegal forward contracts in notified goods and on the notification so issuing every forward contract in notified goods otherwise than between members of a recognised association or through or with 181 "21.
Penalty for owning or keeping place used for entering into forward contracts in goods.
Any person who (b) without the permission of the Central Government, organises, or assists in organising, or becomes a member of, any association, other than a recognised association, for the purpose of assisting in, entering into or making or performing, whether wholly or in part, any forward contracts in contravention of any of the provisions of this Act, or (c) manages, controls or assists in keeping any place other than that of a recognised association, which is used for the purpose of entering into or making or performing, whether wholly or in part, any forward contracts in contravention of any of the provisions of this Act or at which such forward contracts are recorded or adjusted, or rights or liabilities arising out of such forward ' contracts are adjusted, regulated or enforced in any manner whatsoever, or shall, on contravention, be punishable with imprisonment which may extend to two years, with fine, or with both.
" The respondents were charged under sections 20 (1) (b).
, 20 (1) (c) and 21(a), (b), (c) and (f).
As the State does not press its case under section 21 (a) and (f) they have been left out.
Before we analyse the penalty sections it is necessary to see whether the case fails within section 18 (1) of the Act.
It is established in the case that the Association was unregistered.
It is also clear that the contracts, although they appeared to be non transferable specific delivery contracts were not intended to be completed by delivery immediately or within a period of 11 days from the date of the. contract.
In fact week after week contracts were cancelled by cross transactions and there was no delivery.
Instead of payment of price losses resulting from the cross transactions were deposited by the operators in loss with the Association.
Further, on the due date also, there was no delivery but adjustment of all contracts of sales against all contracts of purchase between the same parties and delivery was of the outstanding balance.
Even this delivery was often avoided by entering into fresh contract at the 182 rate prevailing on the due date, as part of the transactions in the next period.
There is evidence also to establish this.
In other words, the transactions on paper did seem to comply with the regulations but in point of fact they did not and the Association arranged for settlement of the entire transactions (barring an insignificant portion if at all) without delivery.
Turning now to the provisions of sub section
(1) of the 18th section it is clear that the provisions of Chapters III and IV would not have applied to the respondents if their transactions were true non transferable specific delivery contracts.
They would have been so if the nature of the transaction, not on paper, but in actuality was such as the Act contemplates.
This is why the proviso to section 18 has been added to prohibit certain things.
The proviso enacts that no person shall organise or assist in organising or be a member of an association (except a recognised association) which provides facilities for the performance of any specific delivery contract without having to make or to receive actual delivery.
The Legislature contemplates that the first sub section of section 18 might be complied with in the documents evidencing the contract but in actuality the contract might be differently performed and has, therefore, provided for 'the. identical situation which, arises in this case.
Now the difference between the Magistrate and the Sessions Judge arose on the application of the first sub section of section 18 with its proviso.
The Magistrate felt that the transactions were not non transferable specific delivery contracts and the matter fell within the proviso.
Having found this, it is not a little surprising that he did not apply section 20(1)(b), which was clearly attracted.
His reasoning on this point is difficult to appreciate.
He seems to think that as the first sub section of the eighteenth section dealt with non transferable specific delivery contracts, it had no application here.
Therefore, the charge of being members of an association in contravention of the proviso thereto did not survive and hence no offence under section 20(1)(b) was disclosed.
In this the Magistrate was clearly in error.
Section 18( 1 ) speaks of true non transferable specific delivery contracts but the proviso at the same time makes it illegal for an unrecognised association to so arrange matters that non transferable specific delivery contracts will be worked out without actual delivery.
The Magistrate should have seen that the conduct of the members of this unrecognised association was precisely this and was, therefore, prohibited by the proviso and directly punishable under section 20(1 )(b).
An offence under that clause of section 20(1) and also under el.
(c) of that section read with section 15 was made out.
There was no question of considering the matter first under the main part of the first subsection and 'then to put the proviso out of the way because the first sub section did not apply.
The Magistrate, however, con 183 victed the members under section 21 (b) for organising an unrecognised association for the purpose of assisting in or entering into or making or performing, whether wholly or in part, any forward contracts in contravention of the provisions of the Act and further under section 21 (c) for managing, controlling or assisting in keeping a place other than that of a recognised association where forward contracts in contravention of the Act or at which forward contracts are recorded or adjusted or rights or liabilities arising out of such forward contracts are adjusted, regulated or enforced in any manner whatsoever.
When the respondents.
appealed to the Sessions Judge, the conviction under section 21 (b) and (c) was confirmed and the other conviction was altered from section 20(1)(c) to section 20(1)(b).
The Sessions Judge rightly pointed out that the so called non transferable specific delivery contracts were so arranged that they could be resolved after the period of eleven days and without actual delivery.
The Sessions Judge was of the opinion that the respondents had acted in breach of the proviso to section 18 (1 ) and were clearly guilty of the offence.
In a precise and clear judgment the Additional Sessions Judge explained the pertinent sections and rightly held the proviso to section 18(1) and section 20(1)(b) applicable.
The High Court then in revision held that it was not open to the Sessions Judge to alter the conviction from section 20(1)(c) to section 20( 1 )(b) as the acquittal under the latter section by the Magistrate was not appealed against and in an appeal from a conviction there could be no change of finding to convert art acquittal into conviction.
The High Court also held that no offence under section 21 (b) or (c) was made out.
In a fairly long judgment the High Court pointed out that the decision of this Court in The State of Andhra Pradesh vs Thadi Narayana(1) prohibited the alteration of the finding.
The High Court then went further to hold that there could not be a conviction under section 20( 1 ) (c) as the Sessions Judge had acquitted the appellants and there was again no appeal against that acquittal.
The High Court also set aside the conviction under section 21 (b) and (c).
The High Court reached its conclusion on the 'basis of the finding of the Sessions Judge that the contracts entered into were non transferable specific delivery contracts and the appellants were, therefore, not guilty of the offence under section 20(1)(c) of the Act.
The High Court then proceeded to reason that as no part of the Act prohibited performance of non transferable specific delivery contracts otherwise than by making or receiving actual delivery, the acts of the appellants were not offences under the Act.
The learned Judge while dealing with section 18 ( 1 ) proviso observed: (1) 184 "The performance of a non transferable specific delivery contract by a mode other than giving and taking of actual delivery would be contrary to law only if there is some provision of law which prohibits it.
But unfortunately for the prosecution, the Legislature has not chosen to enact any such provision.
The only nearest approximation I could find was the proviso to sub section(1) of section 18 but that proviso does not prescribe that a non transferable specific delivery contract shall be performed by making and receiving actual delivery and that the parties to such a contract shall not perform it otherwise than 'by making and receiving actual delivery.
All that it enacts is that no person shall organise or assist in organising or be a member of any association in any area to which the provisions of section 15 have been made applicable (other than a recognised association) which provides facilities for the performance of any non transferable specific delivery contract by any party thereto without having to make or receive actual delivery to or from the other party to the contract or to or from any other party named in the contract.
What this proviso seeks to achieve is to secure that no Association other than a recognized Association shall provide facilities for performance of a non transferable specific delivery contract by the parties thereto without having to make or receive actual delivery.
But it is a long step in the argument to conclude from the proviso that performance of a non transferable specific delivery contract otherwise than by making and receiving actual delivery is prohibited.
The language of the proviso cannot bear any such extended artificial construction. . " The learned Judge was clearly in error and misunderstood the connection between the first sub section and its proviso.
Distinction is made in the proviso between recognised and unrecognised associations.
Persons can organise and assist in organising or be member of an association which is recognised even if the association provides for performance of non transferable specific delivery contracts without actual delivery.
The prohibition is against persons arranging for avoidance of delivery through an unrecognised association and read with the penalty sections, it is clear that such.
acts are rendered illegal.
If the acts are illegal then non transferable specific delivery contracts by members of unrecognised associations become illegal also.
They are forward contracts and being entered into otherwise than between members of a recognised association or through or with any such member are rendered illegal by section 15. 185 Thus there is no doubt whatever in the case that offences under section 21(b) and (c) were committed.
It is enough to read these clauses to see that they fit the acts of nine respondents (accused 1 9) and their position vis a vis the unrecognised association of which they were directors makes them liable to penalty under section 21 ( 'b) and (c) but the remaining two respondents (accused 11 and 12) being only members are liable to penalty under section 21 (b) only.
As regards the other offences under section 20(1)(b) and (c) we are clear that these offences were also committed.
But as the Sessions Judge acquitted them under cl.
(c) and there was no appeal to the High Court we say nothing about it.
As regards the offence under section 20(1)(b) the Magistrate did not clearly record a finding of acquittal.
However, his reasoning seems to be in favour of holding that the clause did not cover the case as the contracts were not non transferable specific delivery contracts.
His finding was the reverse of the finding of the Sessions Judge.
The question thus remains whether the Sessions Judge could alter the finding in an appeal from a conviction (and the High Court too if it so chose) when it was a question of choosing between two clauses of a penalty section depending on whether the true nature of the contracts was as held by the Magistrate.
The ruling of this Court cited earlier was invoked to suggest that such a course was not possible for the Sessions Judge or the High Court.
We do not pause to consider whether the ruling prohibits such a course and if it does whether it does not seek to go beyond the words and intendment of section 423(1)(b) of the Code of Criminal Procedure.
This is hardly a case in which to consider such an important point.
We, therefore, express no opinion upon it.
It is sufficient to express our dissent from the High Court on the interpretation of the Act and hold the respondents guilty of infractions where the ruling does not stand in the way.
We accordingly set aside the acquittal of the respondent under cls.
(b) and (c) of section 21 and restore their conviction under those clauses as confirmed by the Sessions Judge.
We sentence all the respondents to a fine of Rs. 25 (or one week 's simple imprisonment in default) under section 21(b).
No separate sentence under section 21 (c) is imposed on the respondents who were original accused Nos.
The appeal shall be allowed to the extent indicated.
in this paragraph.
Y.P. Appeal allowed in part.
| The respondent municipal Corporation increased the rateable value of a building assessed the actual rent recovered by Appellant owner, by adding the income derived by the owner under an agreement entitling a Company to display an advertisement on the roof of the building.
The owner successfully filed a complaint against the increase which was upheld by the Small Cause Court to the High Court, and its confirmed the enhancement In appeal, this Court: HELD: The High Court was right in confirming the enhancement of the annual rent.
If a building or a part of it yields an extra income over and above the actual rent derived from it, such income on the terms of, section 154 (i) of the Bombay Municipal Corporation Act, can legitimately be taken into consideration by the assessing authority while determining the annual rent on the ground that a hypothetical tenant would take such extra income into account while considering what rent he can afford to offer for such building.
[553B] The hypothetical tenant includes all persons who might possibly take the property including the persons actually in occupation, even though he happens to be the owner of the property.
The rent is that which he will pay in the "higgling of the market", taking into account all existing circumstances and any relevant future trends.
Therefore, the mere fact that the income from the agreement is not rent but licence fee does not justify on any principle of rating ,or any construction of section 154 of the Act, disregard of it, while estimating the rent which the property would be expected to fetch.
[549B; C; 550G H] Though the owner of the building could not charge rent over and above that which was permissible under the provisions of the Rent Act, there was nothing in that Act which prohibited him from charging an amount from an advertiser in consideration of displaying his advertisement.
[551D] Mahad Municipality vs Bombay S.R.T. Corporation, LXIII Bom bay Law Reporter, 174; Cartwright vs Sculoates Union, ; Robinson Bros. vs Houghton and Chester le Street Assessment Committee, , Taylore vs Overseers of Pandleton, , Wilson vs Tavender , Corporation of Calcutta vs Anil Prakash Basu A.I.R. 1958 Cal. 423, referred to.
|
iminal Appeal No. 186 of 1956.
Appeal by special leave from the judgment and order dated February 18, 1955, of the Punjab High Court in Criminal Appeals Nos. 389 and 406 of 1954, arising out of the judgment and order dated June 16, 1954, of the Court of the Additional Sessions Judge, Ferozepur, in Sessions Case No. 5 of 1954 and Trial No. 5 of 1954.
726 Jai gopal Sethi, Vidya Dhar Mahajan and K. L. Arora, for the appellants.
N.S. Bindra, B. H. Dhebar and T. M. Sen, for the respondent.
December 4.
The Judgment of the Court was delivered by SARKAR, J.
Eight persons were tried ::or offences under sections 148, 307 and 364 both read with sections 149 and 34 of the Indian Penal Code, by the Additional Ses.
sions Judge, Ferozepur.
The learned Sessions Judge acquitted four of the accused, namely, Het Ram, Teja Ram, Manphul and Surja Ram as he did not think that their presence at the occurrence had been proved beyond reasonable doubt.
He convicted the remaining four, namely, Narain, Jot Ram, Gheru and Jalu under sections 307 and 364 read with section 34.
He sentenced Narain, Jot Ram and Gheru to rigorous imprisonment for three years under section 307 and two years under section 364.
He sentenced Jalu to two years ' rigorous imprisonment under each section.
On appeal by the convicted persons the High Court of Punjab maintained the convictions but reduced the sentences passed on Jot Ram and Gheru to one year 's rigorous imprisonment and Jalu to the term of imprisonment already undergone.
It maintained the sentence passed on Narain and dismissed his appeal.
Narain, Jot Ram and Gheru have appealed To this Court from that judgment.
The prosecution case is that one Sultan was the proprietor of a field described in the proceedings as plot No. 97.
Sahi Ram had been a tenant of the land.
The land had not been cultivated in the year preceding the occurrence with which this case is concerned and the owner had thereupon resumed possession of it.
On June 14, 1953, Mani Ram a son of the proprietor, arrived at the field on a tractor accompanied by a Tabourer, Moola Ram, with the object of Ploughing it and found Sahi Ram actually ploughing.
Mani Ram turned Sahi Ram out of the field.
Sahi Ram raised a protest but eventually left abandoning his plough on the field.
Mani Ram then began to plough the field 727 with his tractor.
A little later the tractor developed mechanical trouble and Mani Ram stopped ploughing and started attending to it.
While Mani Ram was so engaged, Sahi Ram arrived at the spot accompanied by seven persons, being the accused earlier named other than Narain, variously armed.
Jalu had come on a horse.
They fell upon Mani Ram and assaulted him.
Moola Ram who ran to his rescue was also assaulted.
Moola Ram then attempted to run away whereupon Sahi Ram and his party chased him.
While Sahi Ram and his party had their attention on Moola Ram, Mani Ram got into his tractor and began to drive away from the field.
At this point of time Narain arrived on a horse with a gun in his hand.
He told the pursuers of Moola Ram to leave him as he was merely a hired man and pointed out that the real culprit Mani Ram was about to escape in the tractor.
The party then turned round and pursued Mani Ram.
Narain on his horse soon overtook Mani Ram and fired at him while he was still on the tractor in the driver 's seat.
Mani Ram fell down from the tractor which, being in motion, proceeded on its own and ran into a tree and stopped.
Narain 's horse fell against the cultivator of the tractor and was injured.
Mani Ram picked himself up and staggered for shelter into the hut of one Mukh Ram, which was nearby.
The pursuers then came up and Jot Ram fired a shot at Mani Ram inside the hut and so did Gheru.
Mani Ram fell down in the hut.
Mukh Ram threw himself on the body of Mani Ram to protect him.
Gheru and Narain then said that they would burn the hut with Mani Ram inside it.
Sahi Ram suggested that it would be better to carry Mani Ram to their house and there kill him and burn his body.
Mukh Ram 'was then dragged away and Mani Ram 's body was put on a horse and Jalu mounted it.
The party then proceeded towards the village by a foot path with Mani Ram, who was then unconscious, as their captive.
After they had gone some distance Raghbir, the younger brother of Mani Ram, having heard of the incident came to rescue Mani Ram.
He met Jalu on the horse with Mani Ram and Sahi Ram walking close behind, 728 the rest of the party being at some distance.
Raghbir asked Jalu to put down Mani Ram on which Jalu threatened to kill, and Sahi.
Ram pointed his sela at Raghbir.
Raghbir then shot at Sahi Ram with the pistol he was carrying and the latter fell down and died soon after.
Jalu got off the horse and ran away.
Before the others could arrive Raghbir carried Mani Ram to the house of one Birbal from where he, was later taken to the hospital.
The defence was that the prosecution case was wholly false and the real facts were as follows: On the date of the occurrence Sahi Ram was ploughing the field when Mani Ram and Raghbir came there and tried to stop him.
There was an altercation.
Jot Ram and Gheru who were in a field nearby came up and advised Sahi Ram not to dispute over the matter with Mani Ram but have it decided by Panchayat.
Sahi Ram, Jot Ram and Gheru then left the field and proceeded towards the village.
While going Jot Ram noticed that Sahi Ram was carrying a pistol and took it away from him to prevent him from using it in his excitement.
Mani Ram and Raghbir also went towards the village but by a different route.
The par.
ties again met at the village Shamlat.
Raghbir abused Sahi Ram and fired a shot at him killing him outright.
Jot Ram apprehending that he might also be shot at, fired the pistol which he had taken from Sahi Ram and might have injured Mani Ram.
There were two unknown persons with Raghbir and Mani Ram at this time and they also used their fire arms.
Mani Ram might have received injuries from these firings also.
The accused denied that any of them except Jot Ram and Gheru were present at the incident.
There were thus two conflicting versions of the same incident and there were two cross cases based on these separate versions.
We are concerned with the case started on the complaint of Mani Ram and concerning the injuries suffered by him and his abduction.
The other case was against Mani Ram, Raghbir, Sultan and Dalip also a son of Sultan and was based on what the defence version of the incident in the present case was.
In that case Raghbir and Mani 729 Ram were charged under section 302 read with section 34 of the Indian Penal Code for having caused the death of Sahi Ram and Sultan and Dalip were charged under section 302 read with section 109 of the same Code in the same connection.
The learned Sessions Judge who heard both the cases, acquitted Mani Ram, Raghbir, Sultan and Dalip of the charges brought against them and convicted the appellants and Jalu in the present case accepting the prosecution version of the incident.
As we have earlier stated, the conviction was upheld by the High Court.
In view of the concurrent findings of fact in the Courts below, the learned Advocate for the appellants confined himself in this Court to a question of law which we now proceed to discuss.
It has to be remembered that we are concerned only with the case in which the appellants had been tried for offences against Mani Ram.
With the other case we are not concerned.
In the trial Court, the prosecution had cited Raghbir as a witness.
Raghbir however refused to give evidence claiming protection under article 20 of the Constitution.
The learned Sessions Judge held that Raghbir could not be compelled to give evidence and rejected the contention of the accused that he was not entitled to the protection.
The prosecution in the end did not offer Raghbir as a witness and dropped him.
When the matter came up before the High Court in appeal, it was said on behalf of the appellants, that the learned Sessions Judge was wrong in holding that Raghbir was entitled to the protection of article 20 and that the trial had been vitiated by this decision as a result of which the accused had been deprived of the benefit of Raghbir 's evidence.
The High Court however held that the fact that Raghbir was not examined did not vitiate the trial in any way.
It is this part of the High Court judgment that has been challenged before us by the learned Advocate for the appellants.
The High Court observed as follows: " We may assume that Raghbir would 92 730 not have supported the prosecution story or that he would have admitted to having shot Sahi Ram.
The fact that he was unwilling to make a statement does not constitute an irregularity in the trial.
Had he been compelled to say something, he would, in all probability, not have told the truth, and the question is how the case would have been affected by his statement? In my view, whatever he had stated would not have rebutted the convincing testimony of the other witnesses in the case and therefore the failure of the Court to examine him does not in any way affect the ultimate decision of the case.
" The learned Advocate contended that the High Court had in view the provisions of section 167 of the Evidence Act though the section was not in terms referred.
We think this is a fair view to take.
The learned Advocate said that what the High Court has done is to say that even assuming that Raghbir 's evidence did not support the prosecution story, that would not have made any difference to the result, because, what ever he stated would not have rebutted the convincing testimony of the other witnesses.
According to the learned Advocate, this view was not justified by section 167.
It seems to us that the expression of the opinion of the High Court on this matter has not been happily worded.
The question under section 167 is not so much whether the evidence rejected would not have been accepted against the other testimony on the record as whether that evidence " ought not to have varied the decision.
" It is clear that if what Raghbir had said in his evidence had gone to support the defence version, then a, serious question would arise as to whether the decision of the trial Court would have been in favour of the accused instead of against them, as it happened to be.
It seems to us however that section 167 does not help the appellants.
It is clear from the record that the prose cution, though it had cited Raghbir as a witness, was not very keen to examine him When Raghbir objected to give evidence, the prosecution dropped him.
Therefore it seems to us that this is not a case in which evidence can be said to have been rejected 731 within section 167 of the Evidence Act.
The prosecution did not in fact tender Raghbir as a witness.
Nor have we any idea as to what he would have said had he given evidence.
Nor is it a case where the defence wanted to call him as a witness.
It is not necessary for us, nor have we been asked, to decide the question whether Raghbir was entitled under article 2o of the Constitution to refuse to give evidence.
It is amply clear from the record that the prosecution did not offer him as a witness upon his claiming protection under article 20.
The learned Advocate for the appellants then argued that in this view of the matter, it must be held that a material witness had been kept out of court by the prosecution and that would give rise to an adverse inference against the prosecution case and cast serious reflection on the fairness of the trial.
We were referred by learned Advocate to Habeeb Mohammad vs The State of Hyderabad (1) in this connection.
We agree that if a material witness has been deliberately or unfairly kept back, then a serious reflection is cast on the propriety of the trial itself and the validity of the conviction resulting from it may be open to challenge, The question then is, was Raghbir a material witness ? It is an accepted rule as stated by the Judicial Committee in Stephen Seneviratne vs The King (2) that " witnesses essential to the unfolding of the narrative on which the prosecution is based, must, of course, be called by the prosecution.
" It will be seen that the test whether a witness is material for the present purpose is not whether he would have given evidence in support of the defence.
The test is whether he is a witness " essential to the unfolding of the narrative on which the prosecution is based ".
Whe ther a witness is so essential or not would depend on whether be could speak to any part of the prosecution case or whether the evidence led disclosed that he was so situated that he would have been able to give evidence of the facts on which the prosecution relied.
It is not however that the prosecution is bound to call all witnesses who may have seen the occurrence and (1) ; (2) A.I.R. (1936) P.C. 289.
732 so duplicate the evidence.
But apart from this,.
the prosecution should call all material witnesses.
Was Raghbir then a witness essential to the unfolding of the prosecution case ? That clearly Raghbir was not.
The prosecution case, as we have seen, was concerned with the injuries caused to Mani Ram and his abduction.
According to the prosecution case, Raghbir arrived after these offences had been committed ; after Mani Ram had been assaulted and shot at and after he had been put on a horse and had been carried some distance.
The prosecution no doubt admits that Raghbir shot Sahi Ram but says that he did so in self defence.
This incident is an entirely separate incident.
It is not necessary to prove it in order to prove the offences with which the appellants were charged.
Raghbir therefore was not a witness whom the prosecution was bound to call to establish its case.
The fact, assuming it to have been so, that Raghbir would have said in his evidence that the incidents did not happen as the prosecution stated, may no doubt have established a good defence.
But if it was so, then he would have been only a witness material for the defence and not a witness essential to the unfolding of the narrative on which the prosecution case is based.
The prosecution is not bound to call witnesses to establish the defence but only witnesses who are material for proving its own case.
Indeed, since according to the prosecution case Raghbir arrived after the alleged offences were committed, he could not have given any evidence about the prosecution case.
We, therefore, think that the contention of the learned Advocate for the Appellants that the prosecution should have called Raghbir to ensure a fair trial or that he was a witness material to the prosecution case, is unfounded.
We do not think that the trial has at all been vitiated by the failure to call Raghbir.
It may be pointed out that the appellants had not sought to produce Raghbir as a witness on their behalf The learned Advocate then addressed us on the question of the sentence passed on Narain.
He said that the High Court passed a higher sentence on him 733 because it was under the impression that he had caused the only grievous injury that was found on the body of Mani Ram.
The learned Advocate pointed out that there was no evidence to show that the grievous injury had been caused by Narain.
It seems to us that this contention is justified.
There is however evidence to show that Narain merited the higher sentence.
It was he who directed the attack against Mani Ram.
He called the other members of the attacking party to desist from pursuing Moola Ram as Mani Ram was the real enemy and should be dealt with.
It is upon that the serious injuries on Mani Ram came to be inflicted.
We, therefore, think that the higher sentence imposed on the appellant Narain was justified.
No other question arises in this appeal.
The result is that the appeal fails and is dismissed.
Appeal dismissed.
| Several persons attacked and seriously injured one M.
After assaulting him the assailants were carrying him away when M 's brother R came to rescue him and in self defence shot dead one of the assailants and carried M away.
For the assault on M eight persons, including the appellants, were tried for offences under (1) C.B.N.S. 161; (1862)133 R.R. 311.
725 sections 148, 307 and 364 both read with sections 140 and 34 Of the Indian Penal Code.
At the trial R was cited as a witness by the prosecution, but R refused to give evidence claiming protection under article 20 Of the Constitution.
The Sessions judge upheld R 's objection and the prosecution gave him up as a witness.
After trial, the Sessions judge acquitted four of the accused but convicted the appellants and one other person.
In appeal before the High Court the appellants urged that the Sessions judge was wrong in holding that R was entitled to the protection of article 2o and that the trial was vitiated by this decision whereby the accused had been deprived of the benefit of R 's evidence.
The High Court was of the view that if R had been compelled to give evidence he would not have supported the prosecution but whatever he would have stated would not have rebutted the convincing testimony of the other witnesses and that therefore the failure to examine R did not in any way affect the ultimate decision of the case.
The High Court apparently had section 167 Of the Evidence Act in view.
In the result the High Court upheld the convictions.
The appellants appealed and contended that the view of the High Court was not justified by section 167 and that the trial was not fair as R, a material witness, had been kept out of Court.
Held, that the trial was not vitiated by the failure of the prosecution to examine R as a witness.
Section 167 did not help the appellants as it was not a case in which evidence could be said to have been rejected within the meaning of that section.
Further, R was not a witness material to the prosecution inasmuch as he arrived on the scene after the assault was over and it was not necessary for the prosecution to examine him to ensure a fair trial.
Where a material witness has been deliberately or unfairly kept back, a serious reflection is cast on the propriety of the trial and the validity of the conviction resulting from it may be open to challenge.
The test whether a witness is material is whether he is essential to the unfolding of the narrative on which the prosecution is based and not whether he would have given evidence in support of the defence.
Habeeb Mohammad vs The State of Hyderabad, [1954] S.C.R. 475; Stephen Seneviratne vs The King, A.I.R. 1936 P.C. 289.
|
Civil Appeal No. 19 of 1961.
Appeal by special leave from the judgment and order dated April 11, 1957, of Bombay High Court, in Special Civil Application No. 3170 of 1956.
K. R. Bengeri and A. G. Ratnaparkhi, for the appellant.
E. Udayaratnam and section section Shukla, for the respondent.
November 29.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
This appeal by special leave arises out of a tenancy case instituted by the appellant against his tenants the respondents in the Court of the Mamlatdar Raver (East Khandesh), in the State of Maharashtra.
The property in suit 702 consists of agricultural lands, Survey Nos. 32 and 38, situated in the village Raipur.
The respondents had executed a rent note in respect of these lands in favour of the appellant on February 5, 1943.
The period for which the rent note was executed was five years and the rent agreed to be paid annually was Rs. 785/ .
In ordinary course the lease would have expired on March 31, 1948.
However, before the lease expired, on April 11, 1946 the Bombay Tenancy Act, 1939 (Bombay Act XXIX of 1939) was applied to the area of the East Khandesh where the lands are situated, and in consequence as a result of section 23 (1) (b) of the said Act the five years period stipulated in the rent note was statutorily extended to ten years; the result was that under the said statutory provision the rent note in favour of the respondents would have expired on March 31, 1953.
During the subsistence of the tenancy thus statutorily extended the Bombay Tenancy and Agricultural Lands Act LXVII of 1948 came into force.
This act repealed the earlier Act of 1939 except sections 3, 3(a) and 4 as modified.
Sections 5 and 14 (2) of this Act are material.
On March 11, 1952 the appellant gave notice to the respondents intimating to them that the period of the rent note executed by them which had been statutorily extended would expire on March 31, 1953 and calling upon them to deliver possession of the lands to him immediately thereafter.
Before the notice could be effectively enforced on the expiration of the period of the lease, however, Bombay Act XXXIII of 1952 came into operation on January 12, 1953.
This Act repealed section 14(2) and amended section 5 and added sub section
(3) to it.
Shortly stated the effect of this amendment was that the tenancy of the respondents, who were till then ordinary tenants as distinct from protected tenants, could not be terminated on the expiry of their tenancy except by giving one year 's notice and that too on the ground that the lands were required by 703 the landlord for bona fide personal cultivation and that the income of the said lands would be the main source of income of the landlord.
The relevant averments about these grounds had to be made by the landlord in issuing the notice to the tenants for terminating their tenancy.
On April 4, 1953 the appellant instituted the present tenancy proceedings for obtaining possession of the lands.
The Mamlatdar who tried the proceedings rejected the appellant 's claim on the ground that he had not terminated the tenancy of the respondents as required by law in that he had not given the statutory notice making the prescribed relevant averments in that behalf.
The appellant then preferred an appeal against the decision of the Mamlatdar but the appellate authority agreed with the view taken by the Mamlatdar and dismissed his appeal.
The dispute was then taken by the appellant before the Bombay Revenue Tribunal by way of a revisional application; and the revisional application succeeded.
The Tribunal held that the relevant amendments on which the Mamlatdar and the appellate authority had relied in dismissing the appellant 's claim were not retrospective and that the appellant was entitled to eject the respondents.
This order of the Revenue Tribunal was challenged by the respondents by a petition filed by them under article 227 of the Constitution in the Bombay High Court.
The High Court has allowed the writ petition and held that the relevant amendments are retrospective in operation and that the appellant is not entitled to eject the respondents.
On that view the order passed by the Revenue Tribunal has been set aside and that of the appellate authority restored.
It is against this decision that the appellant has come to this Court by special leave.
It is necessary at the outset to set out the relevant statutory provisions which fall to be considered in the present appeal.
704 Section 23 (1) (b) of the Bombay Tenancy Act of 1939 which statutorily extended the original contractual five years period of the lease to ten years reads thus: "Every lease subsisting on the said date (that is to say the date on which section 23 came into force) or made after the said date in respect of any land in such area shall be deemed to be for a period of not less than ten years".
We have already noticed that as soon as this act was made applicable to the area where the lands in question are situated the original period of five years agreed to between the parties for the duration of the lease was statutorily extended to ten years.
Then followed the Tenancy Act LXVII of 1948.
Section 5 of the said Act originally stood thus: "5.
(1) No tenancy of any land shall be for a period of less than ten years.
Notwithstanding any agreement, usage or law to the contrary, no tenancy shall be terminated before the expiry of a period of ten years except on the grounds mentioned in section 14: Provided that any tenancy may be terminated by a tenant before the expiry of a period of ten years by surrendering his interest as a tenant in favour of the landlord.
" Section 14, sub section (2) which is relevant reads thus: "In the case of tenant, the duration of whose tenancy is for a period of ten years or more, the tenancy shall terminate at the expiration of such period, unless the landlord has by the acceptance of rent or by any other act or conduct of his allowed the tenant to hold over within the meaning of Section 116 of the ." On January 12, 1953, the amending Act XXXIII of 1952 came into force.
By this amending Act 705 the following proviso was added to sub section
(1) of section 5: "Provided that at the end of the said period and thereafter at the end of each period of ten years in succession, the tenancy shall, subject to the provisions of Sub Sections (2) and (3), be deemed to be renewed for a further period of ten years on the same terms and conditions notwithstanding any agreement to the contrary." The said amending Act repealed section 14 (2) of Act LXVII of 1948 and amended section 5, sub section
(2) in this way: "The landlord may, by giving the tenant one year 's notice in writing before the end of each of the periods referred to in Sub Section (1), terminate the tenancy, with effect from the thirty first day of March in the last year of each of the said period, if he bona fide requires the land for any of the purposes specified in Sub Section (1) of Section 34, but subject to the provisions of Sub Section (2) and (2A) of the said Section, as if such tenant was a protected tenant." A new sub section, sub section
(3) was added to section 5.
This new sub section reads thus: "Notwithstanding anything contained in sub section (1) (a) every tenancy shall, subject to the provisions of sections 24 and 25, be liable to be terminated at any time on any of the grounds mentioned in section 14; and (b) a tenant may terminate the tenancy at any time by surrendering his interest as a tenant in favour of the landlord: Provided that such surrender shall be in writing and shall be verified before the Mamlatdar in the prescribed manner.
" 706 It is common ground that if the provisions of the amending Act XXXIII of 1952 are applicable to the present proceedings the appellant would not be entitled to claim the ejectment of the respondents because he has not given any notice in that behalf as prescribed by the said relevant provisions of the amending statute.
His case, however, is that the technical requirements of a valid notice prescribed by the amending Act do not apply to his claim inasmuch as the relevant provisions of the amending Act are not retrospective in operation.
According to him he has already given notice to the respondents on March 11, 1952, intimating to them unequivocally his intention to eject them from the lands on the expiration of the ten year period of the lease.
The High Court has held that this contention is not well founded and so the appellant 's claim for ejectment has been dismissed.
The question which arises for our decision is whether the appellant is entiled to eject the respondents even without complying with the statutory requirement as to the valid notice prescribed by the amending Act XXXIII of 1952.
It would be noticed that though the lease originally was for five years, before the five years expired the duration of the lease was statutorily extended to ten years by virtue of the provisions of section 23(1)(b) of Act XXIX of 1939.
A somewhat similar, though from the point of view of the appellant a more revolutionary, result followed when a proviso was added to section 5(1) by the amending Act XXXIII of 1952.
By virtue of this amendment the period of the lease gets automatically extended for ten years from time to time.
In other words, before the lease in favour of the respondents could expire on March 31, 1953, by virtue of the proviso to section 5(1) of the amending Act of 1952 it got extended for ten years, and unless it is terminated by a valid notice or a surrender 707 is made by the tenant as specified by the statute the tenancy would be extended from time to time at every stretch for ten years.
Therefore, there can be no doubt that as a result of the amending Act of 1952 the expiration of the lease did not take place on March 31, 1953 as had been anticipated by the appellant when he gave notice on March 11, 1952.
In one sense the amending Act which is undoubtedly a piece of beneficent legislation conferred on the respondents additional rights and these additional rights were conferred on them before the lease in their favour had come to an end.
In order to put an end to the tenancy thus statutorily safeguarded the appellant has to follow the course prescribed by the amending statute and give a valid notice as required by the said statute.
Just as the appellant could not have complained against the extension of the original period of five years to ten years by Act XXIX of 1939 so he cannot complain against the further extensions statutorily granted to the respondents by section 5(1) of the amending Act XXXIII of 1952.
That is one aspect of the matter.
Besides, it is necessary to bear in mind that the right of the appellant to eject the respondents would arise only on the termination of the tenancy and in the present case it would have been available to him on March 31, 1953 if the statutory provision had not in the meanwhile extended the life of the tenancy.
It is true that the appellant gave notice to the respondents on March 11, 1952 as he was then no doubt entitled to do; but his right as a landlord to obtain possession did not accrue merely on the giving of the notice, it accrued in his favour on the date when the lease expired.
It is only after the period specified in the notice is over and the tenancy has in fact expired that the landlord gets a right to eject the tenant and obtain possession of the land.
Considered from this 708 point of view, before the right accrued to the appellant to eject the respondents amending Act XXXIII of 1952 stepped in and deprived him of that right by requiring him to comply with the statutory requirement as to a valid notice which has to be given for ejecting tenants.
In this connection it is relevant to distinguish between an existing right and a vested right.
Where a statute operates in future it cannot be said to be retrospective merely because within the sweep of its operation all existing rights are included.
As observed by Buckley, L. J. in West vs Gwynne retrospective operation is one matter and interference with existing rights is another.
"If an Act provides that as at a past date the law shall be taken to have been that which it was not that Act I understand to be retrospective.
That is not this case.
The question here is whether a certain provision as to the contents of leases is addressed to the case of all leases or only of some, namely, leases executed after the passing of the Act.
The question is as to the ambit and scope of the Act, and not as to the date as from which the new law, as enacted by the Act, is to be taken to have been the law.
" These observations were made in dealing with the question as to the retrospective construction of section 3 of the Conveyancing and Law of Property Act, 1892 (55 & 56 Vict. c. 13).
In substance section 3 provided that in all leases containing a covenant, condition or agreement against assigning, underletting, or parting with the possession, or disposing of the land or property leased without licence or consent, such covenant, condition or agreement shall, unless the lease contains an expressed provision to the contrary, be deemed to be subject to a proviso to the effect that no fine or sum of money in the nature of a fine shall be payable for or in respect of such licence or consent.
It was held that the provisions of 709 the said section applied to all leases whether executed before or after the commencement of the Act; and, according to Buckley, L. J., this construction did not make the Act retrospective in operation; it merely affected in future existing rights under all leases whether executed before or after the date of the Act.
The position in regard to the operation of section 5(1) of the amending Act with which we are concerned appears to us to be substantially similar.
A similar question had been raised for the decision of this Court in Jivabhai Purshottam vs Chhagan Karson in regard to the retrospective operation of section 34(2)(a) of the said amending Act XXXIII of 1952 and this Court has approved of the decision of the full Bench of the Bombay High Court on that point in Durlabbhai Fakirbhai vs Jhaberbhai Bhikabhai.
It was held in Durlabbhai 's case that the relevant provision of the amending Act would apply to all proceedings where the period of notice had expired after the amending Act had come into force and that the effect of the amending Act was no more than this that it imposed a new and additional limitation on the right of the landlord to obtain possession from his tenant.
It was observed in that judgment that "a notice under section 34(1) is merely a declaration to the tenant of the intention of the landlord to terminate the tenancy; but it is always open to the landlord not to carry out his intention.
Therefore, for the application of the restriction under sub section
2(A) on the right of the landlord to terminate the tenancy, the crucial date is not the date of notice but the date on which the right to terminate matures; that is the date on which the tenancy stands terminated".
Mr. Bengeri, for the appellant, fairly conceded that the decision of this Court in Jivabhai 's case was against his contention but he purported to rely 710 on another decision of this Court in Sakharam alias Bapusaheb Narayan Sanas vs Manikchand Motichand Shah.
In that case the Court was called upon to consider the question as to whether the provisions of section 88 of Bombay Act LXVII of 1948 were retrospective in operation or not, and it has been held that the said provisions are prospective.
However, we do not think that the position with regard to the provisions contained in section 88 can be said to be analogous or similar to the position with regard to the relevant provisions of the amending Act XXXIII of 1952 with which we are concerned in the present appeal.
Therefore, we do not think that Mr. Bengeri can make any effective use of the said decision.
In the result the appeal fails and is dismissed with costs.
Appeal dismissed.
| Under a scheme for taking over certain stage carriage services to the complete exclusion of private operators, which was approved and notified by the State of Mysore under the provisions of Ch.
IV A of the , it was provided, inter alia: "The State Transport Undertaking will operate services to the complete exclusion of other persons (i) on all the notified inter district routes except in regard to the portions of inter district routes Lying outside the limits of Mysore District, and also (ii) over the entire length of each of the inter district routes Lying within the limits of Mysore District.
" The appellants who were running stage carriage omnibuses of certain routes, some of which were inter district and inter State, challenged the validity of the scheme on the ground, inter alia, that between the routes which were taken over and some of the inter district and inter State routes which were left to the private operators, there was an overlap in the Mysore District, and that those routes which were not taken over including the portion of the route Lying within the Mysore District should not be affected by the scheme, because "route" meant a notional line running between two termini and following a distinct course. ^ Held, that the scheme of the , is that the word "route" meant not only the notional line but also the actual road over which the omnibuses run.
Under the Act the route or area stand for the road on which the omnibuses run or portions thereof.
Kondala Rao vs Andhra Pradesh State Road Transport Corporation, A. I. R. , relied on.
Kelani Valley Motor Transit Co., Ltd. vs Colombo Ratnapura Omnibus Co., Ltd. [1946] A. C. 338, explained and distinguished.
In the present case, in view of the fact that the scheme reserved all the routes within the Mysore District to the State Transport Undertaking, the private operators would not be able to ply their omnibuses on that sector and even those 718 routes which were inter district open to them would stand pro tanto cut down to only that portion which lay outside the Mysore District.
Nilkanth Prasad vs The State of Bihar, [1962] Supp. 1 section C. R. 717, followed.
|
Civil Appeal No. 3031 of 1987.
From the Judgment and order dated 9.7.1985 of the Karnataka High Court in Writ Petition No. 31533 of 1982 12 S.S. Javali, Ravi P. Wadhwani, M.Rangaswamy, N.D.B. Raju, C. K .
Sucharita and Mrs. C.K. Sucharita for the Appellant K.L. Sharma and M. Veerappa for the Respondents.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
Aggrieved by the levy of additional tax under section 8 of the Karnataka Motor Vehicles Taxation Act, 1957 (hereinafter referred to as 'the Act ') in respect of his motor vehicle, which he has been running as a stage carriage under a permit issued under the provisions of the , the appellant herein questioned the levy of the said additional tax before the High Court of Karnataka in Writ Petition No. 31533 of 1982.
That writ petition was dismissed by the High Court following an earlier decision of a Division Bench of that Court in Noorullha Khan vs State of Karnataka (Writ Petition No. 8302 of 1980 and connected cases decided on 26.6.1985).
The appellant has filed this appeal by special leave against the decision of the High Court dismissing his writ petition The facts of the case are briefly these.
The appellant is the registered owner of the motor vehicle which he has been running as a stage carriage under a permit issued by the Regional Transport Authority under the provisions of the .
He is liable to pay tax in respect of the said motor vehicle under section 3 of the Act which provides that a tax at the rates specified in Part A of the Schedule to the Act shall be levied on all motor vehicles suitable for use or roads.
Item 4 in Part A of the Schedule to the Act, as it stood in the year 1985, which related to the levy of tax on motor vehicles which were used as stage carriages reads thus: Class of vehicles Quarterly tax for vehicle fitted with pneumatic tyres ____________________________________________________________ (1) (2) ____________________________________________________________ "4.
Motor Vehicles other than those mentioned in items 5, 6 and 7 plying for hire and used for transport of passengers and in respect of which permits have been issued under the . 13 (i) Vehicles permitted to carry in all: Rs. p. (a) not more than three persons 40.00 (other than the driver) (b) Four persons (other than 75.00 the driver) (c) Five persons (other than 90.00 the driver) (d) Six persons (other than the driver) 200.00 (ii)(1) Vehicles permitted to carry more than six persons and plying exclusively on routes within the limits of cities and towns notified by the Government and other vehicles not falling under (2) below: (a) For every seated passenger 130.00 (other than the driver and the conductor) which the vehicle is permitted to carry.
(b) For every passenger (other than 45.00 the seated passenger, the driver and the conductor) which the vehicle is permitted to carry.
(2) Vehicles permitted to carry more than six persons and the total mileage of which exceeds 100 kilometers per day: (a) For every seated passenger 160.00 (other than the driver and the conductor) which the vehicle is permitted to carry.
(b) For every passenger (other than 45.00 the seated passenger, the driver and the conductor) which the vehicle is permitted to carry.
" 14 Item 5 of part A of the Schedule to the Act, as it stood during the relevant time.
referred to the tax payable by motor vehicles which were used as contract carriages under permits issued under the .
Item 6 of part A of the Schedule to the Act has been repealed.
Item 7 of Part A of the Schedule to the Act, as it stood during the relevant period, dealt with the tax payable in respect of omnibuses It read thus: ____________________________________________________________ Class of Vehicles Quarterly tax for vehicles fitted with pneumatic tyres ____________________________________________________________ (1) (2) ____________________________________________________________ "7.
Omnibuses, Rs. p. (a) permitted to carry not more than 10 50.00 persons (excluding the driver), for every person which the vehicle is permitted to carry: (b) permitted to carry 11 persons or 100.00 more (excluding the driver), for every person which the vehicle is permitted to carry.
The appellant was liable to pay at the time when he filed the writ petition Rs.160.00 per quarter for every seated passenger (other than the driver and the conductor) which the vehicle was permitted to carry and Rs.45 per quarter for every passengers (other than the seated passengers, the driver and the conductor) which the vehicle WAS permitted to carry.
Section 8 of the Act which provides for payment of additional tax in respect of motor vehicles reads thus: "8.
Payment of additional tax When any motor vehicle in respect of which a tax has been paid is altered or proposed to be used in a such a manner as to cause vehicle to become a vehicle in respect of which a higher rate of tax is payable, the registered owner or person who is in possession or control of such vehicle shall pay an additional tax or a sum which is equal to the difference between the tax already paid and the tax which is payable in respect of 15 such vehicle for the period for which the higher rate of tax is payable in consequence of its being altered or so proposed to be used and taxation authority shall not grant a fresh taxation card in respect of such vehicle so altered or proposed to be so used until such amount of tax has been paid.
It appears that on some stray occasions prior to the institution of the writ petition it had been found that in the motor vehicle which the appellant was operating as a stage carriage there were few passengers in excess of the number of passengers which he was allowed to carry under the permit issued to him under the in respect of the said motor vehicle.
The taxation authority under the Act, therefore, issued a demand for payment of additional tax under the provisions of section 8 of the Act on the ground that the appellant had proposed to use the motor vehicle in such a manner as to cause the vehicle to become a vehicle in respect of which a higher rate of tax was payable following the decision of the High Court in Noorullha Khan 's case (supra).
Aggrieved by the said demand he filed the writ petition.
As mentioned above, that petition having been dismissed, this appeal by special leave has been filed.
Since the judgment of the High Court under appeal is based on the decision in Noorullha Khan 's case (supra) it is necessary to set out briefly the facts in that case.
Noorullha Khan who was the petitioner in that case was the registered owner of a motor vehicle classified as an 'omnibus ' with a seating capacity of 15+ 1 under the provisions of the and was subjected to tax on that basis under item 7(b) of Part A of the Schedule to the Act.
He was liable to pay at the rate of Rs. 100 per seat per quarter under the said provision.
He was, however, called upon by the taxation authority to pay an additional sum by way of tax on two different occasions calculating the tax on the basis of the number of passengers carried in the vehicle on those two occasions.
He challenged the said demands before the Deputy Commissioner for Transport in appeal.
That appeal having been dismissed he filed Writ Petition No. 8302 of 1980, referred to above, on the file of the High Court.
The High Court took the view that the petition in that writ petition having used the vehicle on two occasions for carrying passengers in excess of the number of passengers which he was allowed to carry under the permit he had become liable to pay additional tax for the 'proposed user ' of the motor vehicle in a manner different from the manner in which he was permitted to run it.
In support of its decision the High Court 16 relied strongly on the decision in Payne vs Allcock, 119321 2 K B. 413 in which the conviction of the owner of a motor vehicle in respect of which he had obtained a licence to use it as a private motor car for having used it for the conveyance of goods had been upheld.
The is a central act, which was enacted pursuant to Entry 20 of List III of the Seventh Schedule to the Government of India Act, 1935 corresponding to Entry 35 of List III of the Seventh Schedule to the Constitution of India.
The Act under which a tax is leviable on motor vehicles has been enacted by the Karnataka State Legislature in exercise of its powers under Entry 57 of List II of the Seventh Schedule to the Constitution of India.
Thus the scope of the Act and the scope of the are entirely different Section 42 of the provides that no owner of a transport vehicle shall use or permit the use of the vehicle in any public place whether or not such vehicle is actually carrying any passenger or goods save in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport Authority or the Commission authorities the use of the vehicle in that place in the manner in which the vehicle is being used.
The expression 'permit ' is defined under section 2(20) of the as a document issued by the Commission or a State or Regional Transport Authority authorizing the use of a transport vehicle as a contract carriage, or stage carriage, or authorizing the owner as a private carrier or public carrier to use such vehicle.
Section 2(29) of the defines the expression 'stage carriage ' as a motor vehicle carrying or adapted to carry more than six persons excluding the driver which carries passengers for hire or reward at separate fares paid by or for individual passengers, either for the whole journey or for stages of the journey.
Section 2(j) of the Act provides that the words and expressions used but not defined in the Act, shall have the meanings assigned to them in the .
Section 48(3)(vi) of the provides that the Regional Transport Authority, if it decides to grant a stage carriage permit, may grant the permit specifying the maximum number of passengers that may be carried in the motor vehicle in respect of which the stage carriage permit is issued.
Section 60 of the empowers the Regional Transport Authority to cancel or suspend a permit for such period as it thinks fit on the breach of any of the conditions attached to the permit.
Thus a person who has obtained a stage carriage permit exposes himself to the cancellation of the permit itself under section 60 of the Act if he carries passengers in excess of the 17 maximum number of passengers that he is permitted to carry under the permit.
Under clause (2) of item 4 of Part A of the Schedule to the Act the owner of a vehicle used as a stage carriage the total mileage of which exceeded 100 kilometers per day had to pay for every quarter during the relevant time Rs.160 for every seated passenger (other than the driver and the conductor) and Rs.45 for every passenger (other than the seated passenger, the driver and the conductor) which the vehicle was permitted to carry.
According to the above provision if the owner of a motor vehicle, which is used as a stage carriage, who is permitted to carry, say, 45 person including the driver and the conductor of whom 40 are seated passengers and 3 are standing passengers, he has to pay Rs.6,535 for every quarter.
The question is whether he is liable to pay and additional tax under section 8 of the Act if he carries on any occasion any passengers in excess of the number of passengers he is permitted to carry Let us assume that the registered owner of the motor vehicle in the above case has carried on one occasion in a given quarter 47 passengers (inclusive of the driver and the conductor) and on another occasion in the same quarter 50 passengers (inclusive of the driver and the conductor).
In this illustration the question which arises for consideration is whether the registered owner is liable to pay Rs.6,535 for that quarter or Rs.6,535 plus the additional tax in respect of two more passengers or Rs.6,535 plus the additional tax for five more passengers during that quarter.
Section 8 of the Act PROVIDES that when any motor vehicle in respect of which a tax has been paid is altered or proposed to be used in such a manner as to cause vehicle to become a vehicle in respect of which a higher rate of tax is payable, the registered owner or person who is in possession or control of such vehicle shall pay an additional tax of a sum which is equal to the difference between the tax already paid and the tax which is payable in respect of such vehicle for the period for which the higher rate of tax is payable in consequence of its being altered or so proposed to be used and the taxation authority shall not grant a fresh taxation card in respect of such vehicle so altered or proposed to be used until such amount of tax has been paid.
The crucial words in section 8 of the Act are 'when any motor vehicle . . is altered or proposed to be used in such a manner as to cause the vehicle to become a vehicle in respect of which a higher rate of tax is payable '.
The payment of additional tax arises, therefore, only on two occasions; (i) when the motor vehicle is altered in such a manner as to cause the vehicle to become a vehicle in respect of which a higher rate of tax is payable; or (2) when any motor vehi 18 cle is proposed to be used in such a manner as to cause the vehicle to become a vehicle in respect of which a higher rate of tax is payable.
Admittedly, the vehicle in question has not been altered The question which remains to be considered is whether in the given case the vehicle is proposed to be used in such a manner as to cause the vehicle to become a vehicle in respect of which a higher rate of tax is payable.
The vehicle in question has been used only as a stage carriage even when two or five extra passengers have been carried.
There is no other provision in Part A of the Schedule to the Act which requires a higher rate of tax to be paid in respect of a vehicle which is being used as a stage carriage on the basis of a larger number of passengers that are carried in it.
In order to bring the case within the scope of section 8 of the Act it must be first shown that there is a provision in the Act which makes a stage carriage vehicle which carries a larger number of passengers than what is permitted under the permit issued in respect of it is subject to a higher rate of tax.
The highest rate of tax in respect of a stage carriage that can be levied under the Act is incorporated in clause (2) of item 4.
Sub clause (a) of clause (2) of item 4 of the Schedule to the Act provides that for every seated passengers (other than the driver and the conductor) which the vehicle is permitted to carry the registered owner is liable to pay Rs.160 and for every passenger (other than the seated passenger, the driver and the conductor) which the vehicle is permitted to carry has to pay Rs.45 per passenger per quarter.
In both the sub clauses the liability of the registered owner is governed by the number of passengers that he is permitted to carry under the permit issued in his favour under the and thus his liability is limited by the condition incorporated in the permit.
It would have been possible to levy higher tax on the appellant p only if the words 'which the vehicle is permitted to carry ' in item 4(2) of Part A to the Schedule to the Act had been omitted The Court cannot ignore those words while construing the said item since it relates to the levy of a tax.
Moreover the provision in section 8 is specific.
It says that the additional tax shall be equal to the difference between the tax already paid and the tax which is payable in respect of such vehicle for the period for which the higher rate of tax is payable is consequence of its being altered or so proposed to be used in such a manner as to cause the vehicle to become a vehicle in respect of which a higher rate of tax is payable.
There is another difficulty in applying section 8 to stray cases of overloading.
Additional tax is payable for the period during which the 19 vehicle is proposed to be used for a purpose which will attract a higher rate of tax.
The rate of tax is fixed taking one quarter i.e. 3 months as a unit of time for taxation.
Is it reasonably possible to determine the higher rate of tax payable, if say, on two days in a quarter there has been overloading of the vehicle for a few hours or minutes? The problem of computation of additional tax becomes difficult in such cases There is another important circumstance which persuades us to disagree with the construction placed by the High Court on the relevant provision of taxation in the Act.
The rate of taxation in this case is not based on the number of passengers actually carried during any period in a motor vehicle used as a stage carriage but it is related to the number of passengers which the motor vehicle is permitted to carry under the permit.
If the number of the passengers carried during any period is less than what is permitted, the registered owner of the motor vehicle does not get any rebate He has to pay the tax at the rate determined by the number of maximum passengers mentioned in the permit even when the stage carriage is run without any passengers.
When that is the position there appears to be no justification to hold that the registered owner or whoever is liable to pay the tax should be made to pay the additional tax merely because on some stray occasions the motor vehicle is found to have carried a few more passengers than the number permitted under the permit since the tax is not levied on the basis of the number of passengers actually carried.
The decision in Payne vs Allock, (supra) is clearly distinguishable from the present case.
In that case the appellant had paid the duty under para 6 of the Schedule II to the Finance Act, 1922 which was a residuary clause under which he had to pay 16 for taking out the licence for using his motor vehicle as a private motor car.
But he was found to be using the vehicle for the purpose of carrying goods for a fairly long period which brought the vehicle under the 5th para of that schedule which levied a higher rate of tax.
In the case before us, as we have already pointed out the vehicle could not be subjected to a higher rate of tax under any other item in Part A to the Schedule to the Act The argument urged on behalf of the State Government that the liability of the registered owner to pay tax in respect of a stage carriage depends upon the number of passengers carried in a vehicle on a given date does not appeal to us because in that event the words 20 which the vehicle is permitted to carry in item 4(2) become meaningless and ineffective.
The High Court in Noorullha Khan 's case (supra) overlooked the presence of the words 'which the vehicle is permitted to carry ' which are found in clause (b) of item 7 of the Act also.
It is no doubt true that it is not in the public interest that a registered owner of a motor vehicle should be allowed to carry more passengers than the maximum number of passengers that he is allowed to carry under his permit and such a tendency on the part of any registered owner should be checked That fact, however, cannot be relied upon for the purpose of construing the items in Part A of the Schedule to the Act liberally and in favour of the State Government.
It is needless to say that a law which imposes a tax should be construed strictly.
If the action on the part of the registered owner is contrary to the provisions of the there is sufficient provision in that Act to take appropriate action against him and either to cancel the permit or to suspend it.
In the instant case we feel that when a registered owner of a motor vehicle which is permitted to be used as a stage carriage cannot be asked to pay additional tax under section 8 of the Act merely because he has carried on some occasions more passengers than the maximum number of passengers that he is permitted to carry under the permit.
The tax which he is liable to pay is limited by the maximum number of passengers he is entitled to carry under the permit.
We, therefore, do not agree with the decision of the High Court in Noorullha Khan 's case (supra).
We overrule it The judgment of the High Court against which this appeal is filed is liable to be set aside.
It is accordingly set aside.
The respondents are directed not to levy additional tax on the appellant under section 8 of the Act for carrying more passengers than what he was permitted to carry on some occasions during the period in question.
But we however impress upon the authorities the need to enforce the provision in section 60 of the strictly.
The appeal is accordingly allowed.
No costs S.L. Appeal allowed.
| % The appellant was a registered owner of a motor vehicle run by him as a stage carriage under a permit issued under the .
He was liable to pay tax in respect of the vehicle under section 3 of the Karnataka Motor Vehicles Taxation Act, 1957, which provides that a tax at the rates specified in Part A of the Schedule to the Act shall be levied on all motor vehicles suitable for use on roads, and item 4 in Part A of the Schedule to the Act, as it stood in 1985, relates to the levy of tax on the motor vehicles used as stage carriages.
On some occasions, it was found that the appellants stage carriage was carrying passengers in excess of the number of passengers allowed to be carried under the permit issued to him under the .
The taxation authority under the Karnataka Act above said issued to him a demand for the payment of additional tax under section 8 of the said Act.
The appellant filed a writ petition, challenging the demand for the additional tax.
The High Court dismissed the petition, following its earlier decision in Noorullha Khan vs State of Karnataka (Writ Petition No. 8302 of 1980, etc.
decided on 26.6.85.) The appellant appealed to this Court by special leave against the order of the High Court.
Allowing the appeal, the Court, ^ HELD: The taxation authority levied the additional tax under section 8 of the Karnataka Motor Vehicles Taxation Act, 1957, on the ground that the appellant had proposed to use the vehicle in such a manner as to cause the vehicle to become a vehicle in respect of which a higher rate of tax was payable, in accordance with the decision of the High Court in the Noorullha Khan 's case.
The payment of the additional tax arises as per section 8 on two occasions (i) when the Motor 11 Vehicle is altered in such a manner as to cause the vehicle to become a vehicle in respect of which a higher rate of tax is payable, or (ii) when any motor vehicle is proposed to be used in such a manner as to cause the vehicle to become a vehicle in respect of which a higher rate of tax is payable.
The vehicle in question has not been altered, and it has been used only as a stage carriage, even when two or five extra persons have been carried.
There is no other provision in Part A of the Schedule to the Act which requires a higher rate of tax to be paid in respect of a vehicle which is being used as a stage carriage on the basis of a larger number of passengers that are carried in it.
It would have been possible to levy a higher tax on the appellant only if the words 'which the vehicle is permitted to carry ' in item 4(2) of Part A to the Schedule to the Act had been omitted.
These words cannot be ignored in the construction of the said item since it relates to the levy of tax.
Also, the provision in section 8 is specific.
[17G H; 18A C, F G] The High Court in Noorullha Khan 's case overlooked the presence of the words 'which the vehicle is permitted to carry ', found also in clause (b) of item 7 of the Karnataka Act.
A law which imposes a tax should be construed strictly.
A registered owner of a motor vehicle, which is permitted to be used as a stage carriage cannot be asked to pay additional tax under section 8 of the Act merely because he has carried on some occasions more passengers than the maximum number of passengers that he is permitted to carry under the permit.
The tax which he is liable to pay is limited by the maximum number of passengers he is entitled to carry under the permit.
The Court does not agree with the decisions of the High Court in the Noorullha Khan 's case, which is overruled.
The judgment of the High Court impugned set aside and the respondents directed not to levy the additional tax on the appellant under section 8 of the Karnataka Taxation Act for carrying more passengers than what he was permitted to carry on some occassions during the period in question.
Need impressed upon the authorities to enforce the provision in section 60 of the , strictly.[20A, D F] Payne vs Allock, , referred to.
|
tition Nos. 393 & 549 of 1980.
(Under Article 32 of the Constitution) section Markendaya (Amicus Curiae) for the Petitioner.
M. N. Abdul Khader and Miss A. Subhashini for the Respondents.
KRISHNA IYER J. Is a prison term in Tihar Jail a post graduate course in crime? Such is the poignant issue that emerges from the facts of this case. 'The fundamental human right is not to a legal system that is infallible but to one that is fair ' these great words of Lord Diplock in Maharaj vs Attorney General of Trinidad and Tobago (No.2) trigger our jurisdiction to ensure a fair legal deal to the prisoner whose petition to this Court makes frightening exposures about the insiders of Delhi 's Central Jail.
Kaushik, a 'lifer ' (to use jail jargon), now lodged in the Tihar, Central Jail, has moved this quasi habeas corpus petition wherein he bitterly complains with facts and figures, of the terror and horror, physical and psychic, let loose on him and other jail mates by a crypto criminal combination of senior officials and superior prisoners, thereby making the prison life within that walled world such a trauma and torment the law never meant under the sentence suffered at the hands of the court.
Prison torture is not beyond the reach of this Court in its constitutional jurisdiction and so we appointed Shri Subodh Markandeya as amicus curiae and directed the Superintendent of the Jail to make available for him facilities to meet the prisoner Kaushik and to present, after a brief fact finding enquiry, the facts necessary for taking further action, if any.
Shri Markandeya has, with a gush of gusto, executed his work of assisting this Court and made a report, and we record our appreciation therefor.
What makes law a force is a lawyer with a cause.
932 The Delhi Administration has responded through counsel and traversed the grounds in the petition but Shri Abdul Khader, appearing for the State, has fairly agreed that the Superintendent of the Central jail, far from fighting shy of a probe into the prison management and the shocking aspersions cast on it would welcome a judicial investigation where he could prove his innocence of the foul charges levelled.
Were there a modicum of truth in the disclosures made of vice and violence, overt and covert, in the goings on in Tihar such an institutional outrage would make our constitutional culture blush and our judicial punishment 'guilty ' procedure.
And on the materials placed before us there is ground enough to exercise our exceptional but undoubted jurisdiction to ensure some minimum of social hygiene and banishment of licentious excesses lest the sentence of court be frustrated in its dual ends of deterrence and rehabilitation by prison pathology.
Briefly, the petitioner alleges that his life in jail is subjected to intimidation by overbearing 'toughs ' inside, that he is forced to be party to misappropriation of jail funds by and bribery of officers, that homosexual and sexual indulgence with the connivance of officials are going on, that smuggling in and out is frequent and drug racket common, that alcoholic and violent misconduct by gangs like those involved in Bank Robbery and other notorious cases are a menace to quieter prisoners and the whole goal of reformation of sentences is defeated by this supercrime syndrome.
Maybe, like Oscar Wilde, the petitioner, in flinging allegations, considers that "moderation is a fatal thing.
Nothing succeeds like excess".
Making a large margin for unveracious dilution, still if a fragment of truth survives something is rotten in the state of Denmark '.
This Courts ' writ must remove from Tihar face such indelible stain and incurable wound.
When police and prison torture is escalating in our human rights era, courts owe a duty to society not to ignore such a dangerous reality.
"At this time the lack of law and order is especially of prime concern.
Our courts must bear their share of blame and shame for this condition".
Under our Constitution, deprivation of personal liberty as penal policy is purposive and the Penal Code itself is valid because the imprisonment of the criminal is reasonable, not arbitrary, and is sanctioned as a measure of social defence and individual rehabilitation.
A court sentence does not deprive the prisoner of his fundamental rights as a Constitution Bench., in Sunil Batra 's case recently expounded.
933 To reform and deter the criminal and to work out that process geared to social defence, the convict is cast into prison not to make him more hardened, more brutal, more cunning and dangerous to society.
This raison d 'etre of penological institutions in our Gandhian country, with humanism as basic to the constitutional scheme, cannot be written off without peril.
And so it is that, after reading the fearful circumstances revealed in this case we focussed sharply, right at the outset, the grave issue;, Is a prison term in Tihar Jail a post graduate training in tough crime? Is an invisible 'carser ' mafia in defacto management of this penal institution? Should every sentencing judge, high and low, hang his helpless head in frustration and humiliation because institutional aberrations and personnel perversions have sullied and stultified the justice of his sentence? We have been told by counsel for the State that several hundreds of VIPs have (ceremonially) visited and, of course, complimented the jail management.
These conducted tours cannot, in themselves, contradict the contention that this campus of correction has degenerated into a human zoo.
We keep an open mind and examine the facts but must confess that the Tihar Jail has come up for unhappy judicial notice too often in the past.
We must also stress that the human rights of common prisoners are at a discount and, in our Socialist Republic, moneyed 'B ' class convicts operate to oppress the humbler inmates.
Can there be inequality in prison too on the score of social and financial status? Bank robbers in 'B ' class because they are rich by robbery and nameless little man in 'C ' class because they are only common Indians! Article 14 is suffocated if this classification is permitted, and yet that according to rule itself, is prevalent as this Court has even in earlier cases pointed out.
This Court must act, will act, to restore the rule of law and respect the residual fundamental rights of any harassed petitioner.
We are aware that general charges and sweeping complaints may tarnish innocent officers.
We do not intend to find fault with any until proof is forthcoming.
We are conscious that correctional orientation and cautious humanization have changed the attitudes of many jail officials.
To blame them is beyond our purpose or power but to protect the caged humans from torture, gross or subtle, beyond what the law permits is our function, indeed, our duty.
From this perspective we may rapidly survey the circumstances and mould the reliefs.
Prison Jurisprudence, developed through case law and derived from constitutional law, already exists.
As a jurisdictional matter and background setter we may briefly refer to some of these aspects 934 before we discuss the controversial questions.
In the Sunil Batra Case the Constitution Bench brushed aside the 'hands off prisons ' doctrine, upheld the fundamental rights of prisoners, though circumscribed severely by the reality of lawful custody.
Desai, J., speaking for three of his colleagues and broadly concurring with the fourth clarified two positions (a) that fundamental rights did not forsake prisoners, and (b) that the penological purpose of sentence was, importantly, reformatory, even though deterrent too.
In a later case, Sunil Batra vs Delhi Administration (supra) another bench explained: The court has a continuing responsibility to ensure that the constitutional purpose of the deprivation is not defeated by the prison administration.
In a few cases, this validation of judicial invigilation of prisoners ' condition has been voiced by this Court and finally reinforced by the Constitution Bench in Batra (supra).
The Court need not adopt a "hands off" attitude . in regard to the problem of prison administration.
It is all the more so because a convict is in prison under the order and direction of the Court.
Under the caption "Retention of Authority over Prisoner by Sentencing Judge" (Krantz notes).
As noted by Judge Lay in a Judicial Mandate, Trial Magazine (Nov. Dec. 1971) at p. 15 It should be the responsibility of the court in imposing the sentence to set forth as it would in any equitable decree, the end to be achieved and the specifics necessary to achieve that purpose.
If then, we are to have accountability in the execution of the sentence, courts must make clear what is intended in the imposition of the sentence.
Every sentence should be couched in terms similar to a mandatory injunction.
In this manner, the penology system is to be held to account if the government does not faithfully execute the order.
In other words, the sentencing court should be required to retain jurisdiction to ensure that the prison system responds to the purposes of the sentence.
If it does not, the sentencing court could arguably have the authority to demand compliance with 935 the sentence or even order the prisoner released for non compliance.
Whether inside prison or outside, a person shall not be deprived of his guaranteed freedom save by methods, 'right, just and fair '.
A long discussion covering American rulings, U.N. specifications of the Standard Minimum Rules for Prisons and the implications of articles 21, 19 and 14 read in the light of Maneka Gandhi 's case led this Court in Sunil Batra (supra) to accent on the habilitative value contained in Rule 58.
of the International Standard Minimum Rules: The purpose and justification of sentence of imprisonment or a similar measure deprivative of liberty is ultimately to protect society against crime.
This end can only be achieved if the period of imprisonment is used to ensure, so far as possible, that upon his return to society the offender is not only willing but able to lead a law abiding and self supporting life.
The action oriented conclusion in that judgment, which bind the State, need re emphasis since die hard, practices persist.
We repeat some of them here : Lawyers nominated by the District Magistrate, Sessions Judge, High Court and the Supreme Court will be given all facilities for interviews, visits and confidential communication with prisoners subject to discipline and security considerations.
This has roots in the visitorial and supervisory judicial role.
The lawyers so designated shall be bound to make periodical visits and records and report to the concerned court results which have relevance to legal grievances.
Within the next three months, Grievance Deposit Boxes shall be maintained by or under the orders of the District Magistrate and the Sessions Judge which will be opened as frequently as is deemed fit and suitable action taken on complaints made.
Access to such boxes shall be afforded to all prisoners.
District Magistrates and Sessions Judges shall, personally or through surrogates, visit prisons in their jurisdiction and afford effective opportunities for ventilating legal grievances, shall make expeditious enquiries there into and take suitable remedial action.
In appropriate cases reports shall be made 936 to the High Court for the latter to initiate, it found necessary, habeas action.
XX XX XX No solitary or punitive cell, no hard labour or dietary change as painful additive, no other punishment or denial of privileges and amenities, no transfer to other prisons with penal consequences, shall be imposed without judicial appraisal of the Sessions Judge and where such intimation, on account of emergency, is difficult, such information shall be given within two days of the action.
XX XX XX The State shall take early steps to prepare in Hindi a Prisoner 's Handbook and circulate copies to bring legal awareness home to the inmates.
Periodical jail bulletins stating how improvements and habilitative programmes are brought into the prison may create a fellow ship which will ease tensions.
A prisoners ' wall paper, which will freely ventilate grievances will also reduce stress.
All these are implementary of s.61 of the Prisons Act.
XX XX XX The prisoners ' rights shall be protected by the court by its writ jurisdiction plus contempt power.
To make this jurisdiction viable, free legal services to the prisoner programmes shall be promoted by professional organisations recognised by the Court such as for e.g. Free Legal Aid (Supreme Court) Society.
The District Bar shall, we recommend, keep a cell for prisoner relief.
How far have these directives been implemented, especially to the extent they affect the present petitioner? We will examine it presently, but before that, some materials about this jail and its way of life is needed to appreciate where the truth lies, as between assertions and denials.
In the 2nd Sunil Batra case the Superintendent of the Tihar Jail testified: A number of prisoners in the Tihar Jail are habitual offenders, professional criminals who have been inmates of the Jail from time to time.
It has been noticed that these types of prisoners have been able to develop a certain rapport with some 937 of the lower staff in the jail namely Head Warders, Warders etc.
and obtain certain facilities illegally including smuggling of number of items e.g. drugs etc.
for their use.
It may also submitted that to check smuggling of narcotic drugs against prisoners who indulge in such activities 30 cases of narcotic offences were got registered against the prisoners with the Janakpuri Police Station during this year.
It may also be mentioned that due to paucity of accommodation, the said jail is occupied by double the number of prisoners than it is otherwise authorised.
In that very case, the Court had occasion to observe, on the materials present there: "Since many officers busy themselves with production of prisoners in court, the case of the Superintendent is that the other prisoners "try to do mischief, make thefts of other prisoners who go to work, smuggle things and even resort to assaults.
" The crowning piece is that the jail officials themselves are allegedly in league with the criminals in the cells.
That is, there is a large network of criminals, officials and non officials in the house of corrections Drug racket, alcoholism, smuggling, violence, theft, unconstitutional punishment by way of solitary cellular life and transfer to other jails are not uncommon.
" In that case, Dr. Chitale, who appeared for the prisoner, brought to our notice a literary work written by Shri Kuldip Nayar "In Jail" where the author has recorded : ". one could get as much money as one wanted from outside against a price.
There was a money order and mail service that perhaps was more dependable than what the postal department could offer.
For instance, when a prisoner in my ward wanted two hundred rupees, he sent a note through a warder to his people in old Delhi and in less than twenty four hours he had the money.
He paid sixty six rupees as collecting charges thirty three per cent was the prescribed "money order charges.". .Dharma Teja, the shipping magnate who served his sentence in Tihar, for instance, had thousands of rupees delivered to him, we were told.
And if one could pay the jail functionaries one could have all the comforts one sought.
Teja had all the comforts he had an air cooler in his cell, a radio cum record player set and even the facility of using the 938 phone.
Haridas Mundhra, a business man who was convicted of fraud, was another rich man who spent some time in Tihar.
Not only did he have all the facilities, but he could also go out of the jail whenever he liked, at times he would be out for several days and travel even up to Calcutta.
All this, of course, cost a lot of money.
An even richer prisoner was Ram Kishan Dalmia; he spent most of his jail term in hospital.
He was known for his generosity to jail authorities, and one doctor received a car as a gift.
But more than businessmen it was the smugglers jailed in Tihar who were lavish spenders.
Their food came from Moti Mahal and their whisky from Connaught Place.
They had not only wine but also women. "Babu ji, not tarts but real society girls," one warder said.
The women would be brought in when "the sahiblog" went home for lunch, and their empty offices became "recreation rooms".
Corruption in jail was so well organised and so systematic that everything went like clockwork once the price had been paid.
Jail employees at almost all levels were involved, and everyone 's share was fixed.
There was never a dispute; there has to be the proverbial honour among thieves.
" This backdrop to the Tihar lifestyle is disturbing enough.
(Have other States their Tihars?) The writ jurisdiction of this Court must be equal to the needs of human rights and human wrongs.
Relying upon legal literature in the American jurisdiction especially the crystalised statement in American jurisprudence, this Court has laid down : The writ is not and never has been a static, narrow formalistic remedy.
Its scope has grown to achieve its purpose the production of individuals against erosion of the right to be free from wrongful restraints on their liberty.
Jural perspectives, thus set, make the Court an activist instrument of Jail Justice.
We proceed on this basis to a consideration of the issues raised before us.
But to clothe these issues with flesh and blood and to make abstract poignancies into concrete problems, we may excerpt at random some of the allegations made by the petitioner, perhaps, by mixing fiction with fact.
Even after making a liberal allowance for adulteration and distortion, the miasmatic residue presses upon our judicial conscience to use the court processes and restore basic humanism inside this penal institution where sentences, punitively 939 sent by court, are subjects to unbearable tensions and torments on their physical and moral fibre, thanks to the prison milieu being what it is.
The petitioner states that he had sent to one of the Judges of this Court complaints about "atrociously unwholesome".
treatment in the jail, on September 21, 22 and 24, 1979.
He alleges that he had lodged a complaint against the Superintendent with the vigilance Department of the Delhi State.
His further version is better projected by quoting a few paragraphs from his own petition: That the Superintendent and Deputy Superintendent, under a severe threat of dire consequences and infliction of punitive torture, pressured the petitioner into signing an affidavit, denying having lodged any such complaints in the Supreme Court, the Delhi Administration and the Vigilance Department.
That, judging from the incidents of corruption, torture and drug distribution, there can be no two opinions about the Superintendent and Deputy Superintendent, brought from the adjoining province of Haryana, performing only in a manner of predators.
Torture and drug distribution are merely the means to corruption to achieve their ultimate end.
That there is a foreign convict confined in the Tihar Jail, along with a woman, who he claims to be his wife.
They are both wanted by the Interpol.
This man 's criminal biography has been published in two books, written by foreign authors, wherein the criminal exploits of this criminal are admitted facts.
He performs in the Tihar Jail as though he is the virtual administrator thereof.
He retains a portable tape recorder, strapped of his calf, wherein he has filled incriminating evidence against the Superintendent and the Deputy Superintendent.
By virtue of this black mailing hold upon them he enjoys the following privileges: (a) Free movements all over the jail compound from his own place of confinement in Ward 2.
(b) At least a dozen visits are made by him daily to the B class Ward 14.
Here he holds periodic conferences to plan his furtive strategy in company with three intimate associates all co accused in the six lacs Bank Van Robbery Case.
(c) The petitioner has himself seen the tape recorder kept hidden by him and his B class criminal associates.
940 (d) This foreigner is especially encouraged and protected by the Superintendent and Deputy Superintendent.
He can be seen visiting these officers and holding private conferences in the private retiring rooms at the back of their offices almost daily.
(e) So much so, that the Deputy Superintendent even allows this foreign convict to consummate sexual intercourse in his private back room from time to time the Deputy Superintendent performing as though he were this foreign convict 's pimp.
(f) Naturally, for conceding such and many more extra facilities, both the Superintendent and Deputy Superintendent charge heavy amounts from his foreign convict, who has now struck rich after the publication of his two books. 'B ' Class status for prisoners is, going by averments in the petition, a pampering process much abused by officials and, in a 'class ' culture, obnoxious to the Constitution.
Equality before the law cannot co exist with affluent black guards being looked after with luxury and solicitude and lawly indigents being treated as pariahs inside the prison.
There is reference in the petition to the three dangerous criminals involved in a big Bank Van Robbery Case being lodged in Ward 14 as 'B ' Class VIPs, who have, on top of other advantages, certain facilities like being.
"Specially allowed the privilege of having two young and handsome habitual drug addicts locked in his cell at night, to serve him as passive agents for the appeasement of his homosexual lust, (e) has been provided with a TV set in his cell exclusively for his and his associates ' entertainment, (f) smuggled in alcohol is being regularly consumed by the so locked together several prisoners in his cell, being rich, it is these so locked together associates who finance the drug and alcohol racket.
Another shocking allegation of corruption is that even from sentences undergoing rigorous imprisonment money is collected by high officials "for allotting hard labour (of soft types ?) in the course of serving rigorous imprisonment and placing the convicts in the general barracks or private cells.
" The petitioner further complains of having been physically assaulted and the averments relating to it run thus: 941 That the agents appointed by the Superintendent and Dy.
Superintendent to sell narcotics in the Tihar Jail, (written complaint to this effect lodged with the Superintendent, who passed the matter on far enquiry to the Dy.
Superintendent, who in turn took no disciplinary action) physically assaulted the petitioner on December 25, 1979 and January 6 and February 7, 1980.
However, no action has so far been taken and the culprits, being the agents of the Superintendent and Dy.
Superintendent were skilfully shielded.
In fact, the matter was deliberately suppressed because of the involved personal financial interests of the officers.
Apart from these statements there are serious charges of misappropriation, corruption, bribery and the like and the artful stratagem adopted in that behalf.
Shri Markandeya contended that there was truth in the allegation that mandrex, charas and opium are freely available, thereby trying to establish that the sub culture in the Central Jail, far from being reformatory is de formatory of the morals of the prisoners.
Indeed, many more things are mentioned in support of the petition, including newspaper reports, of the vices of the jail.
But we are/not concerned in these proceedings with a general enquiry into the jail affairs and, therefore, confine ourselves to what has bearing on the ill treatment of the petitioner.
It is basic fairness that we should not come to any conclusion without remembering the fact that detailed counter affidavits have been filed on behalf of the Superintendent and the Dy.
Superintendent with supportive materials calculated to exonerate them.
Even so it is fairly clear that many vices, including drug rackets, occasional violence, smuggling and trafficking in many other impermissible things, have a hospitable home in this penitentiary.
The Administration has conscientious responsibility for the decency and dignity, for correctional obligations and social hygiene inside prison houses and the time is long overdue for a thorough overhaul of the prison management in Tihar.
In an earlier judgment, late in 1979 (W.P. 1009 of 1979), the Supreme Court had, in the strongest terms, stressed the imperative and urgent need for carrying out certain reforms and added the imprimatur of the court 's authority for certain directives contained in Sunil Batra 's case.
Shri Markandeya complained that the injunctions of this Court have not been carried out while a contrary version is given by the Superintendent.
While we express our consternation at the deterioration of the conditions in Tihar Jail despite its being in the capital city of the country, we are disturbed that no major measure of reform has yet taken place in the prison order or, 942 for that matter, in the prison manual.
Such indifference cannot deter the writ of this court running into the prison and compelling compliance, however tough the resistance, however high the officials.
Natural justice and the limitations of court time persuade us to avoid a detailed investigation into the charges and the defences, by us directly.
We, therefore, adopt the alternative and more feasible method of directing a judicial enquiry by the District & Sessions Judge of Delhi who is a member of the Board of Visitors and whose responsibilities in this behalf have been outlined by us in both the Sunil Batra cases.
The petition contains specific grievances of physical assault and psychic torture, of tense atmosphere and delinquent pressure for which some 'B ' class prisoners and superior officers are responsible.
This matter has to be investigated.
Furthermore, in the Sunil Batra case (Supra), precisely to obviate the pernicious potential of prison torture, remedial mechanics had been worked out, formulated and translated into mandates.
Whether these have been complied with, and if not, why not, require to be enquired into.
When this Court issues a writ recusant parties will have to pay the penalty for noncompliance.
This means, the violations and violators will have to be identified after due investigation.
Having regard to all these instructions we make the following directions: (1) The District and Sessions Judge, Delhi, will, within three months from today, hold an open enquiry within the jail premises, into the allegations contained in the petition of the prisoner Kaushik and in the report submitted to this Court by Advocate, Shri Subodh Markandeya.
(2) He will further enquire, with specific reference to the charges of personal assault and compulsion for collaboration in canteen swindle and otherwise made by the prisoner against the Superintendent and the Dy.
Superintendent.
(3) He will go into the question of the directives issued in the concluding portion of Sunil Batra 's case (supra) with a view to ascertain whether these directions have been substantially complied with and to the extent there is shortfall or default whether there is any reasonable explanation therefor.
(4) Being a Visitor of the jail, it is part of his visitorial functions for the Sessions Judge to acquaint himself with the condition of tension, vice and violence and prisoners ' grievances.
He will take this opportunity to enquire into those aspects also with a view to suggest remedial action.
943 The result of this investigation will be crystalised in the shape of findings, followed by specific instructions with a view to see that the petitioner and others like him are not burdened by additional acerbities and harsher pressures than a legal sentence of rigorous imprisonment geared to reformation and intended for deterrence necessarily implied.
The Sessions Judge will also give a specific time to the jail authorities for carrying out his directives, and after the period for compliance is over, will make a fresh visit to verify whether those mandates have been fulfilled.
In the event of non fulfilment, a report will be made to this Court before September 30, 1980 whereupon appropriate action to enforce compliance will be taken by this Court in its jurisdiction.
We may make it perfectly clear that the Sessions Judge will allow any person or official who wants to make any representations to him in the course of his enquiry to meet him publicly or in camera, but outsiders and strangers will not be allowed except Shri Subodh Markandeya or Government 's Counsel.
Of course, it will be open to the Judge if he considers that such a step will advance the interests of justice to allow any other public organisation or legal aid society.
The sessions judge, whom we have charged with the responsibility for enquiry, will make constructive suggestions to protect prisoners ' rights and to promote prisoners ' habilitation and thus disprove Oscar Wilde: This two I know and wise it were If each could know the same That every prison that men build is built with bricks of shame, And bound with bars lest Christ should see How men their brothers main.
* * * * * The wilest deeds like poison weeds Blowm well in prison air: It is only what is good in Man ' That wastes and withers there.
(The Ballad of Reading Gaol) In this context, the focus of the Sessions Judge should not be solely upon the warden and warders of the jail, but also on the medical officers, whose connivance may, perhaps, explain how drugs like mandraix are officially indented.
944 Our immediate concern is to protect the petitioner and others of his ill from physical assaults by fellow prisoner or warders, from moral stress by being forced to assist in falsification and manipulation for canteen sales misappropriation, from discrimination in being subjected to hard labour of a harsh type if he does not oblige the 'B ' class 'bosses ' or senior officer 's, from pressure against transmitting grievances to the Sessions Judge through the Grievance Box or directly to this Court by post.
But remedial perspectives and procedures, to be successful, must be holistic, collective and not individualistic.
So, the human canvas has to be spread wider, the diagnosis has to be deeper and the recipe must senitize the environ.
The crisis in our prisons, the collapse of values in these campuses, the inner tension 'red in tooth and claw ', the corruption that makes for sensual indulgences, the barbarities that harden the convicts and never heal them all these processes can be reviewed and humanization resorted if only if, our philosophy towards crime and punishment change.
If vengeance is the spirit of punishment, violence will be the prison way of life.
That is why Karl Menninger in his "The Crime of Punishment" exposes this folly: . .Punishment is in part an attitude, a philosophy.
It is the deliberate infliction of pain in addition to or in lieu of penalty . .What is gained for anybody when a man who has forged a check for sixty dollars is sentenced to the penitentiary for thirty years. .The judge 's rationalization was that the man had offended in this way twice before (!) and had served shorter sentence without reforming: . .This is not penalization.
This is not correction.
This is not public protection.
This is not reformation.
It is sadistic persecution of the helpless at public expense, justified by the punishment principle.
From this new angle, the hospital setting approach to prisons Gandhiji advocated, the therapeutic touch penologists argue for and the raising of the level of consciousness, institutional and individual, of officials and prisoners all these woven into a composite strategy may well be the highway to higher awareness and socialisation of feeling inside correctional homes.
This technology takes us to method like transcendental meditation, self expression through work, facilities for studies and artistic development.
The warden 's drill the warder 's billy or the VIP 's 'good chit ' cannot work magic.
Shri Markandeya 's further report substantiates the thesis we have set out that prison violence and escalating criminality directly 945 flow from the anti rehabilitative strategies and counter productive life style prevalent in the Tihar.
The VIP criminals in league with other prison toughs are alleged to have organised the beating up of one prisoner.
The part of the prison officials may or may not be direct, but is surely vicarious.
Not until a transformation in the awareness of the top brass, not until new techniques of instilling dignity and mutual respect among the prisoners, not until a hospital setting and curative techniques pervade the staff and the inmates, can there be any human right conscious reformation in the Tihar prison.
All that we need say is that in the enquiry that we have directed the Sessions Judge to hold this perspective will inform his interrogations and investigations.
We have drawn the broad lines indicative of the direction of correction and leave it at that.
The fundamental fact of prison reforms comes from our constitutional recognition that every prisoner is a person and personhood holds the human potential which, if unfolded, makes a robber a Valmiki and a sinner a saint.
S.R. Petition allowed.
| Article 246(1) of the Constitution of India confers upon the Parliament, notwithstanding anything contained in clauses 2 and 3 of that Article, the exclusive power to make laws with respect to any of the matters enumerated in List I of the Seventh Schedule, called the Union List, Clause 2 of Article 246 deals with the power of the Parliament and the State Legislatures to make laws with respect to any of the matters enumerated in the Concurrent List, while clause 3 deals with the power of the State Legislatures to make laws with respect to any of the matters enumerated in the State List.
Entry 23 List II, Schedule VII of the Constitution read with Article 246(3) confers legislative power on the State Legislatures in respect of "Regulation of mines and mineral development" but that power is "subject to the provisions of List I with respect to regulation and development under the control of the Union".
Entry 54 List I enables Parliament to acquire legislative power in respect of "Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest".
Entry 24 List II relates to "Industries subject to the provisions of entries 7 and 52 of List I".
Entry 7, List I, relates to Industries declared by Parliament by law to be necessary for the purpose of defence or for the prosecution of war.
Entry 52, List I, enables Parliament to acquire legislative power in respect of "Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest".
Pursuant to these powers the Parliament enacted the Industries (Development & Regulation) Act, 65 of 1951, the Mines Act 35 of 1952, the Mines and Minerals (Regulation and Development) Act 67 of 1957, the Coking Coal Mines (Emergency Provisions) Act, 64 of 1971, the Coking Coal Mines (Nationalisation) Act, 36 of 1972, the Coking Coal Mines (Nationalisation) Amendment Act, 56 of 1972, the Coal Mines (Taking over of Management) Act, 15 of 1973 and the Coal Mines (Nationalisation) Act 26 of 1973.
Thereafter the Coal Mines (Nationalisation) Amendment Act 67 of 1976 was passed, the objects and reasons being: 1043 "After the nationalisation of coal mines, a number of persons holding coal mining leases unauthorisedly started mining of coal in the most reckless and unscientific manner without regard to considerations of conservation, safety and welfare of workers.
Not only were they resorting to slaughter mining by superficial working of outcrops and thereby destroying a valuable national asset and creating problems of water logging fires, etc.
for the future development of the deeper deposits, their unsafe working also caused serious and fatal accidents.
They were making larger profits by paying very low wages, and by not providing any safety and welfare measures.
Thefts of coal from adjacent nationalised mines were also reported after the commencement of these unauthorised operations which had shown an increasing trend of late.
Areas where illegal and unauthorised operations were carried on, were without any assessment of reserves in regard to quality and quantity of coal which could be made available after detailed exploration work was undertaken and results analysed.
No scientific exploitation of these deposits could be undertaken in the nationalised sector without these details.
It was, therefore, considered that it would not be appropriate either to nationalise these unauthorisedly worked mines after taking them over under the Coal Mines (Taking over of Management) Act, 1973 or to get the concerned mining leases prematurely terminated and regranted to Government Companies under the Mining and Minerals (Regulation and Development) Act, 1957.
In view of the policy followed by the Central Government that the Coal Industry is to be in the nationalised sector, it was decided that the Coal Mines Nationalisation Act, 1973 should be enacted to provide for termination of all privately held coal leases except those held by privately owned steel companies, so that it may be possible for the Central Government, Government Company or Corporation to take mining leases where necessary, after necessary exploration has been made as to the extent of the deposits of coal etc.
" The petitioners who were the lessees of coal mines by the State Government, being aggrieved by the provisions of the Amendment Act 67 of 1976, challenged the competence of Parliament to enact the Amendment Act and also the validity of the Act and contended: (a) Laws made in the exercise of power conferred by Entry 54 must stand the test of public interest because the very reason for the Parliament acquiring power under that entry is that it is in public interest that the regulation of mines and minerals should be under the control of the Union.
In other words, Entry 54 confers a legislative power which is purposive, that is to say, any law made in the exercise of the power under Entry 54 must be designed to secure the regulation and development of coal mines in public interest or else it must fail.
The Nationalisation Amendment Act is not such a law which Parliament can pass under Entry 54 because, that Act not only terminates all leases but it destroys the contracts of service of thousands of workmen, and indeed it destroys all other contracts and all securities for moneys lent without even so much as making a provision for priorities for the payment of debts.
Since the Nationalisation Amendment Act terminates all leases, it is a complete negation of the integrated scheme of taking over the management of mines, acquisition of the rights of lease holders and the running of the mines.
(b) The word 'Regulation ' in Entry 54 does not include 'Prohibition '.
'Regulation ' should not also be confused with the expression 'Restrictions ' occur 1044 ring in Article 19(2) to (6) of the Constitution.
In the very nature of things, there cannot be a power to prohibit the regulation and development of mines and minerals '.
Section 3(4) inserted by the Nationalisation Amendment Act imposes no obligation on the Central Government or any other authority to obtain a mining lease and work the mines, the leases in respect of which stand terminated under the Act.
The words "it shall be lawful" for the Central Government to obtain a lease are words of discretionary power which create no obligation.
They only enable the Central Government to obtain a lease, making something legal and possible for which there would otherwise be no right or authority to do.
Section 3(4) does not confer a power coupled with a duty; it merely confers a faculty or power.
No Court can by a Writ of Mandamus or otherwise compel the Central Government to obtain a lease of a coal mine and to run it under any of the provisions of the Nationalisation Amendment Act.
(c) Where the Legislative power is distributed among different legislative bodies, the Legislature may transgress its legislative power either directly or manifestly, or covertly or indirectly.
In the instant case, the exercise of power by the Parliament is colourable because although in passing the Nationalisation Amendment Act it purported to act within the limits of its legislative power, in substance and in reality it transgressed that power, the transgression being veiled by what appears on proper examination to be a mere pretence or disguise.
(d) In order to tear off the veil or disguise and in order to get at the substance of the law behind the form, the Court must examine the effect of the legislation and take into consideration its object, purpose and design.
Where the legislative entry is purposive, like Entry 54 of the Union List, it is the object or purpose of the legislation which requires consideration.
The purpose for which the Parliament is permitted to acquire legislative power of Regulation and Development of mines must dictate the nature of law made in the exercise of that power because public interest demands that power.
Under the provisions of the Nationalisation Amendment Act, not only is there no obligation on the Central Government to run a mine, but there is no obligation imposed upon it even to carry out prospecting or investigation in order to decide whether a particular mine should be worked at all.
Section 3(4) merely authorises the Central Government to apply for "a prospecting licence or a mining lease in respect of the whole or part of the land covered by the mining lease which stands determined".
A close examination of the Act thus discloses that far from providing for regulation and development of coal mines, it totally prohibits all mining activity even if the State Government wants to run a mine.
It does not impose prohibition as a step towards running the mines since there is neither any obligation to carry out the prospecting or investigation nor to run the mines.
(e) The Nationalisation Amendment Act runs directly counter to the whole policy of the Coal Mines (Nationalisation) Act of 1973, to acquire and run the mines.
The Parent Act becomes a dead letter in regard to several of its provisions as a result of the Amendment Act.
It only adopts a colourable device to amend the Nationalisation Act while completely negativing it in fact.
The Act therefore lacks legislative competence and is, in the sense indicated, a colourable piece of legislation.
1045 (f) Article 31(A)(1)(e) only lifts a restriction on the legislative competence in so far as violation of fundamental rights is concerned.
The most benign motive cannot make a law valid if the legislative competence is lacking.
(g) Under Article 31(1) of the Constitution, no person can be deprived of his property without the authority of law.
Article 31A(1) which exempts the laws mentioned in clauses (a) to (e) from invalidity under Articles 14, 19 and 31 does not dispense with the necessity of the authority of law for depriving a person of his property, because the opening words of Article 31A(1) are ". . no law providing for . ." matters mentioned in clauses (a) to (e) shall be deemed to be void as offending Articles 14, 19 and 31.
(h) The Nationalisation Amendment Act confers no authority to terminate a composite lease for mining coal and fire clay.
The right to mine fire clay is given to the petitioner by law and it can only be taken away by law.
(i) Though the Nationalisation Amendment Act does not in terms prohibit the petitioner from mining fireclay, the effect of the law, in a practical business sense, is to prohibit the petitioner from mining fireclay and, therefore, the position is the same as though the Act had enacted the prohibition in express terms.
The Court must look at the direct impact of the law on the right of the party, and if that impact prohibits him from exercising his right, the fact that there is no express prohibition in the Act is immaterial.
(j) The Nationalisation Amendment Act by making it punishable, to mine coal, in substance and in a practical business sense, prohibits the petitioner from mining fireclay.
For this prohibition the Amendment Act does not provide, and therefore, there is no authority of law for it.
Coal and fireclay are two distinct minerals as shown by Schedule II to the Mines and Minerals (Regulation and Development) Act, 67 of 1957 wherein item 1 is coal and item 15 is fireclay.
The dictionary meanings of coal and fireclay also show that they are two distinct minerals.
(k) The Nationalisation Amendment Act affects, in substance, two kinds of transfers: the transfer of the lease hold interests of the lessees in favour of the lessor, namely the State; and the transfer of the mining business of the lessees in favour of the Central Government.
Since these transfers amount to acquisition within the meaning of Article 31(2), the Act is open to challenge under Articles 14, 19(1)(g) and 31 of the Constitution.
(1) The Nationalisation Amendment Act is open to challenge under Article 14 because lessees who fall within that Act are patently discriminated against in comparison with lessees of other mines, both coking and non coking, who were paid compensation when their property was taken over first for management under the Management Acts and then under the Nationalisation Acts.
(m) The Nationalisation Amendment Act is open challenge under Article 19(1)(g) because the prohibition against lessees from carrying on their business and the transfer of their business, in substance, to the Central Government or a Company is an unreasonable restriction on the right of the lessees to hold their lease hold property and to carry on their business of mining.
(n) The Act is open to challenge under Article 31 because no provision is made for the payment of any amount whatsoever to the lessees whose mining business is taken over under the Act.
No public purpose is involved either in the 1046 termination of the lessees ' interest or in the acquisition of their business.
Expropriation without payment of any amount requires a very heavy public purpose.
(o) Since no provision whatsoever is made for the payment of any amount to the lessees whose leases are terminated, the Nationalisation Amendment Act is not a 'Law ' within the meaning of Article 31(2) and therefore Article 19(1)(f) is attracted.
(p) The Act is not saved from the challenge of Articles 14, 19 and 31 by Article 31A (1) (e) because that Article provides for extinguishment which does not amount to acquisition by the State.
If extinguishment amounting to acquisition was intended to be saved under Article 31A(1) (e), the subject matter dealt with by clause (e) would have been included in clause (a) of that Article.
Dismissing all the Writ Petitions except Writ Petitions Nos. 111, 178, 220, 221, 257, 352, 600 & 1130 1134/77 which are allowed in part, the Court, ^ HELD : (1) The provisions of the Amendment Act 67 of 1976 are not a mere facade for terminating mining leases without any obligation in the matter of regulation of mines and mineral development.
[1071H, 1072A] Grating that Entry 54, List I is purposive since it qualifies the power to pass a law relating to "Regulation of Mines and Mineral Development" by the addition of a restrictive clause, "to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest", the provisions of the Nationalisation Amendment Act show that they are designed to serve progressively the purpose of Entry 54.
[1972 A B] The Coal Mines (Nationalisation) Act was passed in order to provide for the acquisition and transfer of the right, title and interest of the owners in respect of the Coal mines specified in the Schedule to that Act.
This was done with a view to re organising and reconstructing such coal mines so as to ensure the rational, co ordinated and scientific development and utilisation of coal resources consistent with the growing requirements of the country.
The high purpose of that Act was to ensure that the ownership and control of such resources are vested in the State and thereby so distributed as best to subserve the common good.
[1072 D F] The several provisions of the Nationalisation Amendment Act, are, (1) by section 3(3) (a) of the which was introduced by the Nationalisation Amendment Act, no person other than those mentioned in clauses (i) to (iii) can carry on coal mining operations after April 29, 1976, being the date on which section 3 of the Nationalisation Amendment Act came into force; (2) by section 3 (3) (b) all mining leases and sub leases stood terminated except those granted before April 29, 1976 in favour of the Central Government, a Government company or corporation owned, managed or controlled by the Central Government; (3) section 3(3) (c) prohibits the granting of a lease for winning or mining coal in favour of any person other than the Government, a Government company or a corporation of the above description provided that a sub lease could be granted by these authorities to any person if the two conditions mentioned in the proviso are satisfied; and (4) when a mining lease stands terminated under section 3(3), "it shall 1047 be lawful" for the Central Government or the Government company or the corporation owned or controlled by the Central Government to obtain a prospecting licence or a mining lease in respect of the whole or part of the land covered by the mining lease which stands terminated.
Section 4 of the Nationalisation Amendment Act introduced an additional penal provision in the parent Act.
The provisions of Ss. 3 and 4 are not a direct negation of the principles of the parent Act and they do not destroy the integral scheme of taking over the management of mines, of acquiring the rights of lease holders and continuing to run the mines.
On the contrary, the Nationalisation Amendment Act is manifestly in furtherance of the object of nationalisation mentioned in the preamble to the parent Act and effectuates the purpose mentioned in sections 3(1) and 3(2) of that Act by the addition of a new sub section, sub section (3), which terminates all coal mining leases and sub leases except those referred in sub section (3) (b).
The circumstance that the marginal note to section 3 and the title of Chapter II of the Nationalisation Act are not amended by the Nationalisation Amendment Act, despite the addition of a new sub section, is of little or no consequence.
That sub section is a logical extension of the scheme envisaged by the original sub sections (1) and (2) of section 3.
[1073 C H, 1074A B] 2.
Besides, marginal notes to the sections of a statute and the titles of its chapters cannot take away the effect of the, provisions contained in the Act so as to render those provisions legislatively incompetent, if they are otherwise within the competence of the legislature to enact.
One must principally have regard to the object of an Act in order to find out whether the exercise of the legislative power is purposive, unless, of course, the provisions of the Act show that the avowed or intended objects is a mere pretence for covering a veiled transgression committed by the legislative upon its own powers.
Whether a particular object can be successfully achieved by an Act, is largely a matter of legislative policy.
[1074 B D] 3.
The Nationalisation Amendment Act needs no preamble, especially when it is backed up by a statement of objects and reasons.
Generally, an amendment Act is passed in order to advance the purpose of the parent Act as reflected in the preamble to that Act.
Acquisition of coal mines, is not an end in itself but is only a means to an end.
The fundamental object of the Nationalisation Act as also of the Nationalisation Amendment Act is to bring into existence a state of affairs which will be congenial for regulating mines and for mineral development.
In regard to the scheduled mines, that purpose was achieved by the means of acquisition.
In regard to mines which were not included in the Schedule, the same purpose was achieved by termination of leases and sub leases and by taking over the right to work the mines.
Termination of leases, vesting of lease hold properties in the State Governments and the grant of leases to the Central Government or Government Companies are together the means conceived in order to achieve the object of nationalisation of one of the vital material resources of the community.
[1074 D G] 4.
Section 18 of the Mines and Mineral (Regulation and Development) Act 67, 1957 contains a statutory behest and projects a purposive legislative policy.
The later Acts on the subject of regulation of mines and mineral development are linked up with the policy enunciated in section 18.
Therefore, nothing contained in the later analogous Acts can be construed as in derogation of the principle enunciated in section 18 of the Mines and Minerals (Regulation and Development) Act, 67 of 1957, which provides that it shall be the duty of the 1048 Central Government to take all such steps as may be necessary for the conservation and development of minerals in India.
Therefore, even in regard to matters falling under the Nationalisation Amendment Act which terminates existing leases and makes it lawful for the Central Government to obtain fresh leases, the obligation of section 18 of the Act of 1957 will continue to apply in its full rigour.
[1074 G H, 1075 A B] 5.
Entry 54 refers to two things : (1) regulation of mines and (2) mineral development.
It is true that the Entry is purposive, since the exercise of the power under Entry 54 has to be guided and governed by public interest.
But neither the power to regulate mines nor the power to ensure mineral development postulates that no sooner is a mining lease terminated by the force of the statute, then the Central Government must begin to work the mine of which the lease is terminated.
It is possible that after the Nationalisation Amendment Act came into force, there was a hiatus between the termination of existing leases and the granting of fresh ones.
But, the Nationalisation Amendment Act does not provide that any kind of type of mine shall not be developed or worked.
Conservation, prospecting and investigation, developmental steps and finally scientific exploitation of the mines and minerals, is the process envisaged by the Nationalisation Amendment Act.
It is undeniable that conservation of minerals, which is brought about by the termination of existing leases and subleases, is vital for the development of mines.
A phased and graded programme of conservation is in the ultimate analysis one of the most satisfactory and effective means for the regulation of mines and the development of minerals.
[1075 D G] 6.
The Nationalisation Amendment Act is not destructive of the provisions of the Parent Act.
The destruction which the Nationalisation Amendment Act brings about is of the lease or the sub lease and not of its subject matter, namely, the mine itself.
In terminating the lease of a house one does not destroy the house itself.
It may be arguable that prohibiting the use of the house for any purpose whatsoever may, for practical purposes, amount to the destruction of the house itself.
The Nationalisation Amendment Act neither contains provisions directed at prohibiting the working of mines, the leases in respect of which are terminated.
A simple provision for granting sub leases shows that the object of the Nationalisation Amendment Act is to ensure that no mine will lie idle or unexplored.
Interregnums can usefully be utilised for prospecting and investigation.
They do not lead to destruction of mines.
In fact, it is just as well that the Amendment Act does not require the new leases to undertake an adventure, reckless and thoughtless, which goes by the name of 'scratching of mines ', which ultimately results in the slaughtering of mines.
[1075H, 1976A D] Natural resources, however, large are not inexhaustible, which makes it imperative to conserve them.
Without a wise and planned conservation of such resources, there can neither be a systematic regulation of mines nor a scientific development of minerals.
The importance of conservation of natural resources in any scheme of regulation and development of such resources can be seen from the fact that the Parliament had to pass in August 1974 an Act called the Coal Mines (Conservation and Development) Act, 28 of 1974, in order, principally, to provide for the conservation of coal and development of coal mines, Section 4(1) of that Act enables the Central Government, for the purpose of conservation of coal and for the development of coal mines, to exercise such powers and take or cause to be taken such measures as it may be necessary or proper or as may be prescribed.
By section 5(1), a duty is cast on the 1049 owners of coal mines to take such steps as may be necessary to ensure the conservation of coal and development of the coal mines owned by them.
Measures taken for judicious preservation and distribution of natural resources may involve restrictions on their use and even prohibition, upto a degree, of the unplanned working of the repositories of such resources.
[1076 D F, 1077 B] Attorney General for Ontario vs Attorney General for Canada , 363; Municipal Corporation of City of Toronto vs Virgo explained and referred to.
Section 3(4) of the Act uses an enabling or permissive expression in order that regulation of mines and mineral development may be ensured after a scientific prospecting, investigation and planning.
It is doubtless that, in the language of Lord Cairns in Julius (1880) 5 Appeal Cases 214, 222, there is something in the nature of the things which the Nationalisation Amendment Act empowers to be done, something in the object for which it is to be done and something in the conditions under which it is to be done which couples the power conferred by the Act with a duty, the duty being not to act in haste but with reasonable promptitude depending upon the nature of the problem under investigation.
An obligation to act does not cease to be so merely because there is no obligation to act in an ad hoc or impromptu manner.
It is in the context of a conglomeration of these diverse considerations that one must appreciate why, in section 3(4) which was introduced by the Nationalisation Amendment Act, Parliament used the permissive expression "it shall be lawful".
[1078 H, 1079 A C] A broad and liberal approach to the field of legislation demarcated by Entry 54, List I, an objective and practical understanding of the provisions contained in the Nationalisation Amendment Act and a realistic perception of constitutional principles will point to the conclusion that the Parliament had the legislative competence to enact the Nationalisation Amendment Act.
[1079 C D] Julius vs Bishop of Oxford [1880] 5 Appeal cases 214,222 referred to.
The Coking of 1972 and the of 1973 cover the whole field of "Coal" which was intended to be nationalised.
The titles of the two Acts and the various provisions contained therein show that what was being nationalised was three distinct categories of mines: mines containing seams of coking coal exclusively; mines containing seams of coking coal along with seams of other coal; and mines containing seams of other coal.
Though Parliament had power under Article 31A(1)(e) of the Constitution to terminate mining leases without payment of any compensation or 'amount ', it decided to nationalise coal mines on payment of amounts specified in the Schedules to the Nationalisation Acts of 1972 and 1973.
Besides, even when something apart from coking coal mines was acquired, namely, 'coke oven plants ', provision was separately made in section 11 of the Nationalisation Act of 1972, read with the 2nd Schedule, for payment of amounts to owners of coke oven plants.
Thus, whatever was intended to be acquired was paid for.
This scheme is prima facie inconsistent with the Parliament intending to acquire leasehold rights in other minerals, like fireclay, without the payment of any amount.
[1082 B E] Coupled with this is the unambiguous wording of section 3(3)(b) and section 3(3)(c) of the Nationalisation Act of 1973 which were introduced therein by 1050 section 3 of the Nationalisation Amendment Act.
These provisions carry the scheme of the Nationalisation Acts to their logical conclusion by emphasising that the target of those Acts is coal mines, pure and simple.
What stands terminated under section 3(3)(b) is certain mining leases and sub leases in so far as they relate to the winning or mining of coal.
The embargo placed by section 3(3)(c) is on the granting of leases for winning or mining coal to persons other than those mentioned in section 3(3)(a).
[1082 E F, H, 1083 A] The definition of 'coal mine ' in section 2(b) of the has an uncertain import and the scheme of that Act and of the makes it plausible that rights in minerals other than coke and coal were not intended to be acquired under the two Nationalisation Acts.
A comparison of the definition of "coal mine" in section 2(b) of the Act of 1973 with the definition of "coking coal mine" in section 3(c) of the of 1972 makes it clear that whereas in regard to coking coal mines, the existence of any seam of other coal was regarded as inconsequential, the existence of any seam of another mineral was not considered as inconsequential in regard to a coal mine.
The definition of coal mine in section 2(b) of the Act of 1973 scrupulously deleted the clause, "whether exclusively or in addition to" any other seam.
The same Legislature which added the particular clause in the definition of 'coking coal mine ' in the 1973 Act, deleted it in the definition of 'coal mine in the 1973 Act.
In so far as coal mines are concerned, by reason of the definition of coal mine contained in section 2(b) of the Act of 1973, and the definition of coking coal mine in section 3(c) of the Act of 1972 which presents a striking contrast to the definition in section 2(b), composite coal mines, that is to say, coal mines in which there are seams of coal and fireclay do not fall within the scope of the definition of "coal mine" in section 2(b) of the Act of 1973.
[1083 A B, C E, G H] 9.
The lessees of composite mines, therefore, who hold composite mining leases of winning coal and fireclay, cannot continue their mining operations unabated despite the provisions of the Nationalisation Amendment Act.
It is one thing to say that a composite mine is outside the scope of the definition of coal mine in section 2(b) of the Nationalisation Act of 1972 and quite another to conclude therefrom that the other provisions introduced into that Act by the Nationalisation Amendment Act will have no impact on composite leases for winning coal and fireclay.
Section 3(3) (a) which was introduced into the parent Act by the Nationalisation Amendment Act provides expressly that on and from the commencement.
Of section 3 of the Amendment Act, that is, from April 29, 1976, no person other than those mentioned in clauses (i) to (iii) shall carry on "coal mining operation, in India, in any from." These provisions of sections 3(3)(a) and 30(2) of the parent Act will apply of their own force, whether or not the lessee holds a composite lease for winning coal and fireclay and whether or not the mine is a composite mine containing alternate seams of coal and fireclay.
In other words, if a person holding a composite lease can do fireclay mining without mining coal, he may do so.
But if he cannot win or mine fireclay without doing a coal mining operation, that is, without winning or mining coal, he cannot do any mining operation at all.
If he does so, he will be liable for the penal consequences provided for in section 30(2) of the Nationalisation Act of 1973.
The provision contained in section 3(3)(a) totally prohibiting the generality of persons from carrying on coal mining operation in India in any form and the penal provision of section 30(2) 1051 virtually leave with the lessees of composite mines the husk of a mining interest.
That they cannot win or mine coal is conceded and, indeed, there is no escape from that position in view of the aforesaid provisions.
[1084 B H, 1085 A] The lessees of composite mines cannot win or mine fireclay though their composite lease is outside the scope of section 2(b) of the Nationalisation Act of 1973.
The lessees of composite mines will, for all practical purposes, have to nurse their deeds of lease without being able to exercise any of the rights flowing from them.
On their own showing, they will be acting at their peril if they attempt to win fireclay.
If they cannot win fireclay without winning coal, they cannot win fireclay either, even if they hold composite leases under which they are entitled to win coal and fireclay.
[1085 C D] (10).
Though the Parliament provided for the payment of amounts for acquisition of certain interests under the Nationalisation Acts of 1972 and 1973, it did not intent to pay any compensation or amount for the termination of lease hold rights in respect of composite mines.
Mines which have alternate seams of coal and fireclay are in a class by themselves and they appear to be far fewer in number as compared with the coking coal mines and coal mines, properly so called.
The authority of law for the termination of the rights of composite lessees is the provision contained in section 3(3)(a), the violation of which attracts the penal provisions of section 30(2) of the Nationalisation Act of 1973.
The Parliament has deprived composite lessees of their right to win fireclay because they cannot do so without winning coal.
The winning of coal by the generality of people is prohibited by section 3(3)(a) of the Act of 1973.
[1085 E H] This is just as well, because Parliament could not have intended that such islands of exception should swallow the main stream of the Nationalisation Acts.
Obviously, no rights were intended to be left outstanding once the rights in respect of coking coal mines and coal mines were brought to an end.
[1085 G H] 11.
A close and careful examination of the provisions of the and of the amendments made to that Act by Nationalisation Amendment Act makes it clear that by the Nationalisation Amendment Act, neither the petitioners ' right to property has been acquired without the payment of any amount nor they have been unreasonably deprived of their right to carry on the business of mining.
[1087 E F] The nationalised coal mines by providing by section 3(1) that on the appointed day, that is on May 1, 1973, the right, title and interest of the owners in relation to the coal mines specified in the Schedule shall stand transferred to, and shall vest absolutely in, the Central Government free from all incumbrances.
The scheduled mines, 711 in number and situated in reputed coal bearing areas, were the ones which were engaged openly, lawfully and uinterruptedly in doing coal mining business.
Since it was possible to ascertain and verify the relevant facts pertaining to these undertakings, they were taken over on payment of amounts mentioned in the Schedule to the Act, which varied from mine to mine depending upon the valve of their assets, their potential and their profitability.
In the very nature of things, the list of mines in the Schedule could not be exhaustive because there were, and perhaps even now there are, unauthorised mines worked by persons who did not possess the semblance of a title or right to do mining business.
Persons falling within that category cannot cite the Constitution as their charter 1052 to continue to indulge in unauthorised mining which is unscientific, unsystematic and detrimental to the national interest by reason of its tendency to destroy the reserve of natural resources.
But alongside these persons, there could conceivably be mine operators who may have been doing their business lawfully but who were not easily or readily identifiable.
Section 3(2) of the Nationalisation Act, 1973 made provision for taking over the management of such mines by declaring for "the removal of doubts" that if, after the appointed day, the existence of any other coal mine comes to the knowledge of the Central Government, the provisions of the Coal Mines (Taking Over of Management) Act, 1973, shall, until that mine is nationalist by an appropriate legislation, apply to such mine.
Owners of mines whose mines were not included in the Schedule but whose right, title and interest was to vest eventually in the Central Government under "an appropriate legislation" envisaged by section 3(2) of the Nationalisation Act were, by this method, placed on par with the owners of mines of which the management was taken over under the Coal Mines (Taking Over of Management) Act, 1973.
That Act provides by section 7(1) that every owner of a coal mine shall be given by the Central Government an amount in cash for the vesting in it, under section 3, of the management of such mine.
By section 7(2), for every months during which the management of a coal mine remains vested in the Central Government, the amount referred to in sub section (1) shall be computed at the rate of twenty paise per tone of coal on the highest monthly production of coal from such mine during any month in the years 1969, 1970, 1971 and 1972.
The two provisos to that subsection and the other sub sections of section 7 provide for other matters relating to payment of amounts to the owners of coal mines of which the management was taken over.
The Nationalisation Amendment Act carried the scheme of these two Acts to its logical conclusion by terminating the so called leases and sub leases which might have remained outstanding.
[1087 G H, 1088 A G] Thus, the purpose attained by these Acts is (1) to vest in the Central Government the right of management of all coal mines; (2) to nationalise the mines mentioned in the Schedule; (3) to provide for the taking over of management of coal mines the existence of which comes to the knowledge of the Central Government after the appointed day and lastly (4) to terminate all mining leases.
The Management Act and the Nationalisation Act provide for payment of amounts, by no means illusory, to the owners of coal mines whose rights were taken over.
In the normal course of human affairs, particularly business affairs, it is difficult to conceive that owners of coal mines who had even the vestige of a title thereto would not bring to the notice of the Central Government the existence of their mines, when such mines were not included in the Schedule to the Nationalisation Act.
Those who did not care to bring the existence of their mines to the knowledge of the Central Government, even though amounts are payable under the Management Act for the extinguishment of the right of management did not evidently possess even the semblance of a title to the mines.
The claims of lessees, holding or allegedly holding under such owners, would be as tenuous as the title of their putative lessors.
[1088 G H, 1089 A C] 12.
The Nationalisation Amendment Act by section 3(3) (b) undoubtedly terminates all existing leases and sub leases except those already granted in favour of persons referred to in clauses (i) to (iii) of section 3(3)(a).
Similarly section 3(3)(a) imposes an embargo on all future coal mining operations except in regard to the persons mentioned in clauses (i) to (iii).
But the 1053 generality of leases which are alleged to have remained outstanding despite the coming into force of the Management Act and the Nationalisation Act, were mostly precarious, whose holders could at best present the familiar alibi that the origin of their rights or of those from whom they derived title was lost in antiquity.
Neither in law, nor in equity and justice, nor under the Constitution can these lessees be heard to complain of the termination of their lease hold rights without the payment of any amount.
The provision contained in section 3(3)(b) of the Nationalisation Amendment Act was made ex majore cautela so as not to leave any lease of a coal mine surviving after the enactment of the Management Act and the Nationalisation Act.
There was no reasonable possibility of a lawful lease surviving the passing of those Acts; but if, per chance, anyone claimed that he held a lease, that stood terminated under section 3(3)(b).
[1089 C G] 13.
Section 3(3)(b) of the Nationalisation Amendment Act brings about an extinguishment simpliciter of coal mining leases within the meaning of Article 31A(1) (e) of the Constitution.
The termination of the mining leases and sub leases brought about by section 3(3)(b) of the Nationalisation Amendment Act is not a mere pretence for the acquisition of the mining business of the lessees and sub lessees.
The true intent of the Nationalisation Amendment Act was not to "acquire" anyone 's business.
This would be so whether the word 'acquire ' is understood in its broad popular sense or in the narrow technical sense which it has come to possess.
Whatever rights were intended to be acquired were paid for by the fixation of amount or by the laying down of a formula for ascertaining amounts payable for acquisition.
Having provided for payment of amounts for acquisition of management and ownership rights, it is unbelievable that the legislature resorted to the subterfuge of acquiring the mining business of the surviving lessees and sub lessees by the device of terminating their leases and sub leases.
The legislative history leading to the termination of coal mining leases points to one conclusion only that, by and large, every lawful interest which was acquired was paid for; the extinguishment of the interest which survived or which is alleged to have survived the passing of the Management Act and the Nationalisation Act was provided for merely in order to ensure that no loophole was left in the implementation of the scheme envisaged by those Acts.
Persons dealt with by section 3(3)(b) of the Nationalisation Amendment Act are differently situated from those who were dealt with by the two earlier Acts, namely, the Management Act and the Nationalisation Act.
No violation of Article 14 is, therefore, involved.
[1089 G 1090 D H, 1091 A B] 14.
The public purpose which informs the Nationalisation Amendment Act is the same which lies behind its two precursors, the Management Act and the Nationalisation Act.
The purpose is to re organise and re structure coal mines so as to ensure the rational, co ordinated and scientific development and utilisation of coal resources consistent with the growing requirements of the country.
The Statement of Objects and Reasons of the Nationalisation Amendment Act points in the same direction.
Public purpose runs like a continuous thread through the well knit scheme of the three Acts under consideration.
[1091 B D] 15.
Making every allowance in favour of the right to property which was available at the relevant time and having regard to the substance of the matter and not merely to the form adopted for terminating the interest of the lessees and the sub lessees, the Nationalisation Amendment Act involves no acquisition of the interest of the lessees and the sub lessees.
It merely brings about in 1054 the language of Article 31A(1)(e) "the extinguishment" of their right, if any, to win coal.
Whichever right, title and interest was lawful and identifiable was acquired by the Management Act and the Nationalisation Act.
And whichever interest was acquired was paid for.
Tenuous and furtive interests which survived the passing of those Acts were merely extinguished by the Nationalisation Amendment Act.
[1091 F H, 1092 A] The interest of the lessees and sub lessees which was brought to termination by section 3(3)(b) of the Nationalisation Amendment Act does not come to be vested in the State.
The Act provides that excepting a certain class of leases and sub leases, all other leases and sub leases shall stand terminated in so far as they relate to the winning or mining of coal.
There is no provision in the Act by which the interest so terminated is vested in the State; Nor does such vesting flow as a necessary consequence of any of the Provisions of the Act.
Sub section (4) of section 3 of the Act provides that where a mining lease stands terminated under sub section (3), it shall be lawful for the Central Government or a Government Company or a corporation owned or controlled by the Central Government to obtain a prospecting licence or a mining lease in respect of the whole or part of the land covered by the mining lease which stands so terminated.
The plain intendment of the Act, which is neither a pretence nor a facade, is that once the outstanding leases and sub leases are terminated, the Central Government and the other authorities will be free to apply for a mining lease.
Any lease hold interest which the Central Government, for example, may thus obtain does not directly or immediately flow from the termination brought about by section 3(3)(b).
Another event has to intervene between the termination of existing leases and the creation of new interests.
The Central Government etc.
have to take a positive step for obtaining a prospecting licence or a mining lease.
Without it, the Act would be ineffective to create of its own force any right or interest in favour of the Central Government a Government Company or a Corporation owned, managed or controlled by the Central Government.
The essential difference between "acquisition by the State" on the one hand and "modification or extinguishment of rights" on the other, is that in the first case the beneficiary is the State while in the second the beneficiary is not the State.
The Nationalisation Amendment Act merely extinguishes the rights of the lessees and the sublesses.
It does not provide for the acquisition of those rights, directly or indirectly, by the State.
Article 31A(2A) will therefore come into play.
It follows that the Nationalisation Amendment Act must receive the protection of Article 31A(1)(e) of the Constitution, that is to say, that the Act cannot be deemed to be void on the ground that it is inconsistent with or takes away or abridges any of the rights conferred by Articles 14, 19 and 31.
[1092 F H, 1093 A H] Ajit Singh vs State of Punjab ; ; Madan Mohan Pathak vs Union of India & Ors. ; discussed and distinguished.
Dwarkadas Shrinivas vs The Sholapur Spinning & Weaving Co. Ltd. ; , 733 734 applied.
|
Appeal No. 93 of 1959.
Appeal by special leave from the Award dated May 13, 1957, of the Industrial Tribunal, Bombay, in Reference (I.T.) No. 166 of 1955.
R. J. Kolah, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the appellants.
K. B. Chaudhury and Janardan Sharma, for the respondents Nos. 1 and 2. 379 1960.
March 24.
The Judgment of the Court was delivered by WANCHOO, J.
This appeal by special leave raises two questions, namely, (i) bonus for the year 1952 and (ii) retrospective operation of the order of the Industrial Tribunal relating to increase in wages.
The appellant is a company manufacturing barrels and drums at Bombay.
There was a dispute between the appellant and its workmen about a number of matters, which was referred to the tribunal by the Government of Bombay on November 17, 1955.
In respect of the two matters which are now raised in appeal the workmen claimed (i) four months wages including dearness allowance as bonus for the year 1952 and (ii) retrospective operation of the wage scale to be fixed by the tribunal from March 1, 1952.
So far as the increase in wages, is concerned, the appellant agreed to the scale suggested by the tribunal but it opposed the grant of the increased scale retrospectively and also wanted that the increased wages should be linked to some guaranteed production.
The reason for this was that the appellant felt that there had been deliberate slowing down of production by the workmen in the previous years.
The tribunal was of opinion that there was some justification in the appellant 's contention that there had been considerable go slow which had affected production.
Taking that into account it ordered that retrospective effect should be given to its order which was passed on May 13, 1957 from June 1, 1956.
As to the linking of the increased wages to a certain guaranteed production it found it difficult to lay down any norm itself; but it made it clear that the increase in wages was made by it on the basis that the workers would give a certain reasonable production and noted that the workers were agreeable to do that.
It, however, recommended that immediately after the.
award had been given, an expert should be appointed by agreement, if possible, to go into this question.
It also said that in case it was not possible to appoint an expert by agreement it would be open to the appellant to appoint one.
380 The appellant 's contention before us is that the tribunal having found some justification in its contention that there had been considerable go slow should not have given retrospective effect at all to the order relating to the increase in wages.
This matter has been considered fully by the tribunal and it came to the conclusion that increase in wages should be granted from June 1, 1956.
This could hardly be called retrospective considering that the reference was made in November 1955 ; in any case the tribunal rejected the claim of the workmen for retrospective operation for the period of over four years from March 1952 to May 1956 and a good deal of go slow was practised during this period.
In the circumstances we see no reason for interference with the order of the tribunal fixing the date as June 1, 1956, from which the increased wages should come into force.
This brings us to the next question relating to bonus.
The tribunal has awarded five months ' basic wages by way of bonus.
The first contention in this connection is that the workmen had only claimed four months ' basic wages and the tribunal could not have awarded anything more than what the workmen claimed.
This in our opinion is incorrect.
The workmen had claimed four months ' wages including dearness allowance as bonus.
Five months ' basic wages which the tribunal has allowed are admittedly less than the claim put forward (namely, four months ' wages including dearness allowance).
In the circumstances the tribunal certainly had jurisdiction to award what it has awarded to the workmen.
The next question is whether the tribunal was justified in awarding as much as five months ' basic wages on the basis of the Full Bench formula, which is generally applied to these matters.
The gross profit found by the tribunal is not challenged, namely, Rs. 5.05 lacs.
The tribunal has then allowed Rs. 1.36 lacs as depreciation, leaving a balance of Rs. 3.69, lacs.
Deducting income tax from this at seven annas in a rupee (i.e. Rs. 1.61 lacs), we are left with a balance of Rs. 2.08 lacs.
Six per cent.
per annum interest on the paid up capital along with four per cent.
interest on the working capital comes to Rs. 16,000, leaving an available 381 surplus of Rs. 1.92 lacs.
Out of this, the tribunal has allowed five months ' basic wages as bonus which according to its calculations comes to Rs. 91,000, leaving Rs. 1.01 lacs.
There will be a rebate of Rs. 40,000 on this sum, leaving a total of Rs. 1.41 lacs with the appellant.
On these figures, the bonus awarded by the tribunal cannot be interfered with.
The appellant, however, draws our attention to two circumstances in this connection.
In the first place it urges that the tribunal has not taken into account anything for rehabilitation.
But it may be mentioned that the appellant had proved no rehabilitation amount as such.
What it had done was to appropriate Rs. 3.16 lacs towards depreciation, which of course was not the proper amount of notional normal depreciation, which is allowable under the formula.
Our attention is drawn, however, to the figures filed by the workmen in exhibit U 4 in which Rs. 40,000 has been allowed towards rehabilitation.
Even accepting this concession by the workmen and deducting it from the figures given by us above, the appellant would still be left with Rs. 1.01 lacs after paying five months ' basic wages as bonus.
There is thus no reason to interfere with the award of bonus on this ground.
Lastly it is urged that according to the income tax assessment which was actually made in this case sometime after the order of the tribunal, the appellant has been assessed to income tax amounting to Rs. 2.35 lacs.
The appellant claims that it should be allowed this entire amount and not the notional figure calculated by us, namely, Rs. 1.61 lacs as income tax.
We are of opinion that for the purpose of the Full Bench formula, the income tax payable has to be deducted on the figures worked out according to the formula and it is immaterial what the actual income tax paid is whether more or less.
In this particular case, the income tax appears to be more because certain items which were challenged by the workmen but were allowed as proper expense by the tribunal have apparently not been allowed as proper expense by the income tax department.
The industrial tribunal, however, is not concerned directly with what the income 49 382 tax authorities assess as actual income tax in a particular year; it is concerned with working out the Full Bench formula in accordance with its notional calculations and this is what has been done in this case.
There is no ground therefore for interference with the award of bonus for this reason either.
We therefore dismiss the appeal, but in the circumstances pass no order as to costs.
Appeal dismissed.
| In order to put the sugar industry on a stable footing, for which it was necessary to develop the cane area, the Ruler of the erstwhile Gwalior State by an order dated 27 7 1946 sanctioned the levy of cess of one anna per maund on all sugar cane purchased by the respondent company.
When the Government of Madhya Bharat, which was the successor state of the former Gwalior State, made a demand for payment of the cess, the respondent filed a petition before the High Court of Madhya Bharat challenging the legality of the levy on the grounds (1) that the order dated 27 7 1946 was only an executive order and not a law under article 265 of the Constitution of India and that, therefore, there was no authority for the imposition of the cess after January 26, 1950, and (2) that the levy was discriminatory and violated article 14 inasmuch as while the respondent was made liable to pay the cess the other sugar factories in the State were exempt.
It was found that at the time when cess was first levied there was no sugar factory in existence in the Gwalior State other than that of the respondent.
Held, that (i) the Ruler of an Indian State was an absolute monarch in which there was no constitutional limitation to act in any manner be liked, he being the supreme legislature, the supreme judiciary and the supreme head of the executive.
, Consequently, the order dated 27 7 1946 issued by the Ruler of Gwalior State amounted to a law enacted by him and became an existing law under article 372 of the Constitution of India.
The levy of cess was therefore by authority of law within the meaning of article 265; Madhaorao Phalke vs The State of Madhya Bharat, ; , followed.
(2) the levy of cess did not contravene article 14 because (a) the object was cane development in the particular area and a geographical classification based upon historical factors was a permissible mode of classification, and (b) a tax could not be struck down as discriminatory unless it was found that it was imposed with a deliberate intention of differentiating between 620 an individual and individual; and particularly, in the instant case, where when cess was first sought to be levied, there was no other sugar factory existing in the State.
|
ivil Appeals Nos.
2075 & 2076 of 1968.
From the judgment and decree dated the 29th March & 1st April 1968 of the Gujarat High Court in First Appeals Nos. 769 and 1029 of 1960.
A.K. Sen, L.M. Singhvi.
section K. Bagga and Mrs. Bagga, for the appellant.
R.P. Bhatt, B.S. Trivedi H. section Parihar and I.N. Shroff, for the respondent.
The Judgment of the Court was delivered by KHANNA, J.
These two appeals on certificate by Mohatta Brothers plaintiff firm are directed against the judgment of Gujarat High Court whereby that court reversed on appeal the judgment of the trial court awarding a decree for recovery of Rs. 77,286/0 Anna/2 Pies in favour of the plaintiff appellant against the respondent company and dismissed the suit.
The plaintiff is a partnership firm doing business under the name and style of Mohatta Brothers.
The plaintiff firm carried on the business of managing agency of the defendant company up to September 4, 1950.
Sometime before that date, it appears the plaintiff firm expressed an intention of giving up the post of managing agents.
July 31, 1950 Chaturbhujdas on behalf of M/s. Chaturbhujdas, Kharawala Mohatta & Co. submitted scheme exhibit 168 in consultation with the plaintiff.
Paras 5, 6 and 7 of the scheme were as under: "(5) Before our this Scheme is approved by the Company the present Directors shall submit before the Company 1024 the Balance Sheets and the Profit and Loss Account upto the end of the year 1949 and get the same passed, and they shall get the Proforma Balance Sheet upto the date 31 7 50 prepared by the Auditors of the Company and shall hand over the same to us, and this Scheme has been given while understanding that at present everything is according to the list of machinery given to us by the present Agents.
And no one has any kind of charge or debt claimable from the Company till this day excepting the appropriate amount of Rs. 4,77,850/ due to the Agents and their kith and Kin till this day and the list of which is given to us.
We give this Scheme believing the said fact true.
(6) The amounts of the Agents of the Company and their kith and kin which may have been deposited in the Company on the day the date 31 7 50 and which come to about Rs. 4,77,850/ as told by the present Agents are to be kept credited in their accounts and interest thereon is not to be given from the date 1 8 50.
And when our Scheme is approved they have not to take any interest on the said amounts from the Company for five years from the date we start the work of the Mills and they have not to withdraw the said amounts for a period of ten years thereafter but the same are to be kept credited in the Company with interest at six per cent.
But the Company shall return the amount earlier if it so desires.
(7) At present the amount of Rs. 3,46,466 11 8 is due to the Punjab National Bank Ltd. by the Company and the demand of giving bonus to the workers for the year 1949 is outstanding from the Company.
The present Agent states that in both of the said matters payments can be made from the amounts obtained by selling the goods of stores, etc.
which is lying with the Company at present, the list of which is given to us by the present Agents, and from the amounts of E.P.T. deposit and advance payments of the income tax.
On making arrangement accordingly if the debt of the Bank is not fully paid or the liability of bonus is not fully fulfilled and if the Company is found responsible in any way, then the same is to be fulfilled by the present Agent.
But after fulfilling all liabilities accordingly if any amount remains in balance the same shall be treated as assets of the Company and half of the said amount shall be returned to wards the above mentioned amount deposited in the Company and which belongs to the present Agent and their kith and kin.
But on fulfilling completely the liability of the Bank from the sale of goods of the Stores, etc.
if there does not remain sufficient surplus or before getting the amount of E.P.T. deposit and income tax advance payment if the amount of bonus is required to be paid then the present Managing Agents has to give that amount first.
" 1025 On the following day, i.e. August 1, 1950, the following letter was addressed by the plaintiff firm to the Board of Directors of the defendant company : "We Messrs Mohatta Brothers, the Secretaries, Treasurers & Agents of the company hereby beg to tender our resignation as Secretaries, Treasurers and Agents of the Company on condition of the scheme of Sheth Chaturbhujdas Chimanlal dated 31 7 50 duly approved by the Board of Directors, being passed by the share holders of the company in the Extraordinary General Meeting of the company to be held on 4th September, 1950.
FOR MOHATTA BROTHERS Ahmedabad Shivaratan G. Mohatta Chandratan G. Moondhra D.R. Moondhra Brijratan section Mohatta S.R. Mohatta Satyavati Mohatta" A notice was then issued for convening a general meeting of the defendant company on September 4, 1950 for sanctioning the said scheme.
The said scheme was approved by the shareholders on September 4, 1950.
Accordingly, as from that date Messrs Chaturbhujdas Kharawala Mohatta & Co. took over as the new managing agents of the defendant company instead of the plaintiff firm.
The plaintiff 's case was that the liability of the Punjab National Bank was fully discharged by sale of the stores.
No bonus was held to be payable by the Industrial Court to the employees of the company for the year 1949.
It was stated that there was surplus left after discharging the liability of the Punjab National Bank from earmarked assets consisting of excess profit tax deposits, income tax advance amount and the amounts realised from the sale of the stores.
The plaintiff firm claimed half the surplus in terms of clause (7) of the scheme towards the deposit amounts of the plaintiff.
Prayer was made for accounts of the surplus and decree for the amount due as per terms of the scheme with 9 per cent interest.
It may be stated that the plaintiff firm with effect from April 1, 1949 consisted of five partners.
In addition to those five partners, Shashi Kumar, who was a minor and whose mother Satyavati was his guardian, was entitled to four Anna share in a rupee in the profits of the partnership but was not liable for its losses.
Partnership deed exhibit 116 was executed for this purpose on May 19, 1949 and was signed by the five partners and Satyavati.
On October 24, 1949 another partnership deed exhibit 116 was executed wherein Satyavati was shown as a partner of the plaintiff firm instead of her minor son Shashi Kumar.
1026 The suit was resisted by the defendant company.
Besides taking other pleas with which we are not concerned, the defendant contended that the plaintiff firm could not maintain the suit as the constitution of the old firm which acted as managing agents of the defendant company had been changed on October 24, 1949.
From that date, it was stated, the plaintiff firm consisted of six partners, including Satyavati.
The newly constituted firm, according to the defendant company, had not been registered and as such the suit was not maintainable.
The trial court held that the new partnership deed exhibit 116 by which Satyavati became a partner was not acted upon.
As the original partnership mentioned in the partnership deed dated May 19, 1949 had been registered, the plaintiffs suit was held to be not barred by section 69 of the Indian Partnership Act.
It is not necessary to refer to the other issues and the findings of the trial court on those issues.
Suffice it to say that the defendant was held entitled to deduct certain amounts from the amount claimed by the plaintiff.
The trial court accordingly passed the following order : "The plaintiff has filed this suit for account as the account was to be taken of the realisation and expenses of the stores.
But by pursis Exhibit 424 the parties have agreed about the net realisation of the stores and have therefore urged that no Commissioner be appointed and a final decree be passed.
The real account was to be taken of the actual receipts and expenses of the sale of stores.
But now nothing is required to be done and hence there is no necessity of passing any preliminary decree.
The plaintiffs as shown above are entitled to receive Rs. 77,286 0 2, from defendant towards their deposit amount being the net surplus which they are entitled.
Hence defendants are liable to pay the said amount to plaintiff.
The plaintiff should pay the remaining Court fee stamp within a month.
I, therefore, pass the following order.
ORDER Defendants do pay Rs. 77,286 0 2 and the cost of the suit to plaintiff with future interest at 6 per cent from 1st January, 1956.
The plaintiff should pay the remaining Court fees within a month.
Defendants to bear their own cost." Two cross appeals were filed against the judgment and decree of the trial Court.
One appeal was by the defendant company praying for the dismissal of the plaintiff 's suit.
The other appeal was by the plaintiff firm claiming for enhancement of the amount decreed by the trial court.
One of the contentions advanced by the defendant company was as under : "The plaintiff firm was not entitled to file a suit as the plaintiff firm was differently constituted from the firm of Mohatta Brothers as on 31st July 1950, and, in any event, as the minor Shashi kumar had become major in 1953 and had 1027 become a partner of the plaintiff firm Mohatta Brothers, Ahmedabad, and as even the name of Satyavati Devi who was the partner suing did not appear in the entry in the register of firms the present suit was barred under section 69(2) of the Act.
" Dealing with the above contention, the High Court disagreed with the finding of the trial court that partnership deed exhibit 116 dated October 24, 1949 had not been acted upon.
The learned Judges of the High Court held so far as the first part of the above contention is concerned that when a firm is reconstituted by introduction of a new partner, it would remain the same registered firm, and there would be no necessity of fresh registration if the continuing firm was registered with the Registrar of the Firms under section 59 of the Indian Partnership Act.
Dealing with the contention that Shashi Kumar had become major, the High Court found that there was no evidence to show the age of Shashi Kumar and the whole argument in this respect was based on mere conjecture.
On the latter part of the submission, the High Court held that the mandatory condition under section 69(2) of the Indian Partnership Act was not fulfilled in the present case as the name of Satyavati who was a partner of the reconstituted firm and in whose favour a cause of action had accrued was not shown in the register of the firms.
This defect was held to be fatal.
The High Court in this context observed .
"In view of this legal position which we have discussed the second mandatory condition under section 69(2) is not fulfilled in the present case as the name of Satyavati who was partner of the reconstituted firm and in whose favour the cause of action had accrued is not shown in the register of firms.
This defect would be fatal as the first defect of want of registration of the firm itself and in both the cases we would have no option but to dismiss the suit.
In that view of the matter it would be wholly unnecessary to go into any of the other contentions which have been raised in these two appeals and to record any finding on the issues relating to the merits of the case or as regards the other appeal of the plaintiff as well.
Howsoever much we may regret to dismiss the plaintiff 's suit which apparently is well founded by up holding this technical objection of the defendant company, we are bound to dismiss this suit as in law a non compliance of this second mandatory condition is also equally fatal as the non compliance of first condition.
At the same time, however, in the circumstances of the cases while dismissing the plaintiff 's suit we would order both the parties shall bear their own costs all throughout.
" In appeal before us Mr. Sen on behalf of the appellants has assailed the judgment of the High Court in so far as it has disagreed with the finding of the trial court that Satyavati was not a partner of the plaintiff firm and the deed of partnership dated October 24, 1949 had not been acted upon.
Mr. Sen has also questioned the correctness of the view taken by the High Court regarding the construction of section 1028 69(2) of the Indian Partnership Act.
As against that, Mr. Bhatt on behalf of the respondents has canvassed for the correctness of the view taken by the High Court.
both on the question of fact as well as on the question of law.
After hearing the learned counsel for the parties and after having been taken through the relevant material on the record, we are of the opinion that the trial court took a correct view of the matter in so far as it has held that Satyavati did not become a partner of the plaintiff firm and that the deed of partnership dated October 24, 1949 was not acted upon.
The main consideration which prevailed with the High Court in holding that Satyavati became a partner of the plaintiff firm was the execution of deed of partnership dated October 24, 1949.
According to this deed, Satyavati became a partner to the extent of 4 Annas share out of 16 Annas, which had been previously held by her minor son Shashi Kumar.
Shashi Kumar under the deed of partnership of May 19, 1949 was entitled to the share of profits to the extent of four Annas in a rupee and was not liable for the losses which were to be borne by the other five partners.
Satyavati became entitled under the deed of October 24, 1949 not only to the share of profit to the extent of 4 Annas in a rupee but also became liable to share losses to that extent.
The other circumstance relied upon by the High Court was resolution dated January 21, 1950 passed by the Board of Directors of the defendant company.
That meeting was presided over by Shivratan G. Mohatta, partner of the plaintiff firm.
In that resolution there was reference to partnership deeds dated May 19, 1949 and October 24, 1949 which had been received along with letter dated December 1, 1949 from Mohatta Brothers.
The Board of Directors took note of the changes mentioned in the above two partnership deeds and agreed to accept the partners therein mentioned.
The third circumstance relied upon by the High Court is letter dated August 1, which was sent on behalf of the plaintiff firm, Mohatta Brothers, for the purpose of tendering resignation as Secretaries, Treasurers and Agents of the defendant company.
This letter was signed, besides the other partners, by Satyavati.
There was, however, no indication in the letter as to whether Satyavati signed it in her capacity as a partner or as the guardian of her minor son Shashi Kumar.
As against the circumstances relied upon by the High Court, we find that in the register relating to the registration of firms kept under the Indian Partnership Act, an entry was made on May 5, 1952 relating to the registration of the plaintiff firm.
The above entry was plainly in pursuance of application filed on behalf of the plaintiff firm shortly before the making of that entry.
The above entry shows that the position taken up on behalf of the plaintiff firm even in the year 1952 was that there were only five partners of the plaintiff firm and that in addition to that, Shashi Kumar minor was admitted to the benefit of partnership.
The entry thus reveals that even in the year 1952 the stand of the partners of the plaintiff firm was that Satyavati was not a partner of the plaintiff firm and that it was her minor son 1029 Shashi Kumar who was entitled to share in the profits of the partnership.
This entry would be inexplicable if Satyavati had become a partner of the plaintiff firm with effect from October 24, 1949.
Another circumstance which goes to show that Satyavati did not become a partner of the plaintiff firm is the entry in the registers of the defendant company.
According to section 87 of the Indian Companies Act 1913, which was the Act in force at the relevant time, every company shall keep inter alia at its registered office a register d managing agents containing with respect to each of them the following particulars, that is to say, in the case of a firm, the full name, address and nationality of each partner, and the date on which each became a partner.
The entry which was made in the register of the defendant company regarding the partners of its managing agents showed that after April 1, 1949 there were five partners besides Shashi Kumar minor under the guardianship of his mother Satyavati, of the firm of the managing agents Mohatta Brothers.
Although the above entry was made on October 6, 1949, no subsequent entry was made there after showing Satyavati as partner of the firm of Mohatta Brothers.
Had Satyavati in fact become a partner since October 24, 1949 of Mohatta Brothers, it seems unlikely that an entry to that effect would Not be made in the register of the defendant company.
It may also be mentioned in the above context that return has to be sent to the Registrar of Firms under section 87 regarding any change in the particulars required to be contained in the register.
Failure to comply with the above directions entailed imposition of fine.
The third significant circumstance which tends to show that Satyavati despite the execution of the deed of partnership dated October 24, 1949 did not become a partner of the plaintiff firm is evidenced by applications in connection with the registration of that firm which were presented to the income tax authorities under section 26A of the Indian Income tax Act, to 286 are the applications which were filed on behalf of the plaintiff firm for the years 1949 50 to 1956 57.
In all these applications, Shashi Kumar minor under the guardianship of Satyavati was shown entitled to 4 Annas share in a rupee in the plaintiff firm.
Satyavati was not shown in any of these applications as partner of the plaintiff firm.
All these applications which were signed by Satyavati clearly go to show that during these years she did not claim herself to be partner of the plaintiff firm.
on the contrary, she acknowledged that it was her minor son Shashi Kumar who was entitled to 4 Annas share in the profits of the partnership.
Documentary evidence which has been brought on the record, in our opinion, clearly lends support to the statement of Shivratan (PW 1) that partnership deed dated`October 24, 1949 was not acted upon and that Satyavati did not become a partner of the plaintiff firm.
Jivan Das PW, who was an employee or the defendant company, has likewise deposed that Satyavati was never a partner of Mohatta Brothers.
During the hearing of the appeal, affidavit of Satyavati has been filed stating that she was never a partner of Mohatta Brothers and it 1030 was her son Shashi Kumar who was at all material times admitted to the benefit of the partnership.
Mr. Bhatt has objected to this Court taking notice of the contents of the affidavit of Satyavati including her disclaimer of any interest in the plaintiff firm.
In this respect we are of the view that even without the above affidavit, the material on the record clearly goes to show that Satyavati was not a partner of the plaintiff firm.
In addition to what has been pointed out, we find that in the statement of accounts of the plaintiff firm it is Shashi Kumar and not Satyavati who is shown to have 4 Annas share in the plaintiff firm.
Entries show that Shashi Kumar shared the profits as well as the losses in that proportion.
The significant thing which emerges from the account books is that Satyavati was not shown as the person entitled to 4 Annas share in the partnership firm.
Soon after the present suit had been filed, on application filed on behalf of the defendants under order XXX, Rule 2 of the Code of Civil Procedure, names of the partners of the plaintiff firm were declared on behalf of the plaintiff firm.
In the declaration the name of Satyavati was not mentioned as one of the partners of the plaintiff firm.
The question as to who should share the profits of the plaintiff firm and should be otherwise entitled to its assets is essentially a matter for the partners of the plaintiff firm.
The facts of the case disclose that the partners of the plaintiff firm have agreed between themselves that so far as the 4 Annas share in the profits and assets of the plaintiff firm are concerned, it would be Shashi Kumar who would be entitled to the same.
That position is also accepted by Satyavati in the applications in connection with the registration of the firm to the income tax authorities.
It would, in our opinion, be a wholly untenable plea for the defendant from whom money is claimed, to urge that even though Satyavati as well as the other partners claim that it is not she but her son Shashi Kumar who is entitled to 4 Annas share in the partnership, the court should hold that it is Satyavati who is entitled to that share.
The distinction between a plaintiff firm and a defendant firm in the above context should not be lost sight of.
So far as a defendant firm against whom a suit for recovery of money has been filed is concerned, it would be open to the plaintiff to prove that a person is a partner of the defendant firm despite the denial of that fact by that person as well as the other partners of the defendant firm.
The reason for that is that a creditor of a defendant firm can, except in some cases to which it is not necessary to refer, also proceed against the personal assets of each and every partner.
Such a consideration does not hold good when the dispute relates to the question as to who are the partners of the plaintiff firm.
It has been mentioned above that Shivratan stated in the course of his deposition that partnership deed dated October 24, 1949 had not been acted upon.
This statement is against the pecuniary interest of Shivratan.
It is plain that if Satyavati were a partner of the plaintiff firm, Shivratan and other partners would have to bear losses to the extent of 12 Annas in a rupee.
As against that, if Shashi Kumar be entitled to share profits to the extent of 4 Annas in a rupee and be not 1031 liable for the losses, in such an event Shivratan and other partners A would have to bear the losses to the full extent of 16 Annas in a rupee.
If despite that fact, Shivratan has deposed that Satayvati did not be come a partner of the plaintiff firm and the deed of partnership dated October 24, 1949 was not acted upon, his statement in this respect should not, in our view, be rejected, especially when there is over r whelming documentary evidence which lends support to the above statement.
The entire course of dealings shows that despite the execution of the deed of partnership dated October 24, 1949, the said partnership deed was not acted upon and the relations between the partners of the plaintiff firm continued to be governed by the deed of partnership dated May 19, 1949 according to which it was not Satyavati but her son Shashi Kumar who was entitled to four Annas share in the partnership.
The question, to which a reference has been made in the course of arguments, as to when it was decided not to act upon the deed of partnership dated October 24, 1949 is hardly of much importance, the material thing is that the said deed was not given effect to or acted upon by the parties concerned.
The firm which came into existence as per deed of partnership dated May 19, 1949 was admittedly registered under the Indian Partnership Act and its partners were shown in the Register of Firms.
Looking to all the facts we are of the opinion that the trial court took a correct view of the matter in so far as it held that Satyavati had not become a partner of the plaintiff firm and that the deed of partner ship dated October 24, 1949 had not been acted upon.
The High Court, in our opinion, was in error in reversing that finding of the trial court.
In view of this conclusion of ours, it is not necessary to go into the legal question as to, what should be the proper construction of section 69(2) of the Indian Partnership Act.
Learned counsel for the parties are agreed that such question would arise only in case we had marked the finding of the High Court that Satyavati had become a prtner of the plaintiff firm and that the deed of partnership dated October 24, 1949 had been acted upon.
F The High Court did not deal with the merits of the cross appeals filed by the parties in view of its finding on the point as to whether Satyavati had become partner of the plaintiff firm and the construction it placed upon section 69(2) of the Indian Partnership Act.
In the light of the conclusion we have arrived at, it becomes essential to remand the matter to the High Court so that the cross appeals filed by the parties may be disposed of on merits.
We accordingly accept the appeals, set aside the judgment of the High Court and remand the case to it for disposal of the appeals filed by the parties on merits Looking to all the circumstances, we leave the parties to bear their own costs of these appeals.
As the matter has been pending for a long time, the High Court may dispose of the appeals at an early date.
V.P.S. Appeals allowed.
| The appellant, a registered partnership firm, was the managing agent of (he respondent.
After submitting its resignation to the board of directors of the respondent company, the appellant filed a suit claiming a sum of money in accordance with an agreed scheme.
The appellant firm consisted of 5 partners with effect from April 1, 1949, and in addition, a minor was entitled to a 4 anna share in the profits of the partnership but was not liable for the losses.
The minor was represented by his mother as guardian.
On October 24, 1949, another partnership deed was executed wherein the mother was shown as a partner of the appellant firm with a 4 anna share and the minor 's name was omitted.
The respondent contended that the suit was not maintainable.
because the constitution of the old firm had been changed on October 24, 1949, and that the newly constituted firm consisting of 6 partners had not been registered.
The trial court held that the new partnership deed was not acted upon and decreed the suit for a part of the amount claimed.
There were appeals by both sides.
The High Court disagreed with the finding of the trial court that the later partnership deed had not been acted upon and held that the mandatory condition of section 69(2), Indian Partnership Act, was not fulfilled as the name Of the mother.
who was a partner in the reconstituted firm and in whose favour cause of action had accrued, was not shown in the register of firms, and that this defect was fatal to the suit.
Allowing the appellant 's appeal to this Court and remanding the appeal to the High Court for disposal on merits, ^ HELD: The trial court took the correct view of the matter in so far as it held that the later partnership deed was not acted upon and that the mother did not become a partner of the appellant firm.
[1028B] (1) The question as to when it was decided not to act upon the later deed is not material.
The evidence of one of the partners of the appellant firm that it was not acted upon and that the mother was not a partner is admissible and is fully corroborated by the documentary evidence.
It is a statement made by him against his own Pecuniary interest, because, if the mother was a partner, the loss of the other partners would extend only to 12 anna share in the rupee; whereas if she was not a partner then they would have to bear losses to the full extent of 16 annas in the rupee.
[1029G H; 1030H 1031D] (2) In the register relating to the registration of firms kept under the Indian Partnership Act, an entry relating to the registration of the appellant firm dated May 5, 1952.
reveals that even in the year 1952, the stand of the partners of the appellant firm was that the mother was not a partner and that it was only her minor son who was entitled to a share in the profits of the partnership.
[1028G 1029A] (3) In the statement of accounts of the appellant firm it is only the minor that is shown to have a 4 anna share and not his mother.
[1030B C] (4) Applications in connection with the registration of that firm were pre rented to the Income Tax Authorities under section 26A, Indian Income Tax Act, 1922.
All there applications were signed by the mother and they show that the mother never claimed to be a partner of the appellant firm and that, on the contrary.
she acknowledged that it was her minor son who was entitled to the 4 anna share in the profits.
[1029E G] 1023 (5) The directors of the respondent company had passed a resolution in 1950 referring to the two partnership deeds.
But the entry which was made in the register of the respondent company regarding the partners of its managing agents as required by section 87, Indian Companies Act, 1913, shows that after April 1, 1949, there were only 5 partners, besides the minor under the guardianship of his mother of the appellant firm.
If the mother had become a partner since October 24, 1949, it is unlikely that an entry to that effect would not have been made in the register of the defendant company, because, under section 87, a return has to be sent to the Registrar of Firms regarding any change in the particulars required to be contained in the register and non compliance with the requirement would entail imposition of fine.
[1029A E] (6) The letter of resignation sent by the appellant firm was signed by the mother also, but there was no indication whether she signed in her capacity as partner or as the guardian of her minor son.
[1028F G] (7) Soon after the presentation of the suit, on an application under order XXX, r. 2, C.P.C., filed by the respondents, the appellant firm declared the names of its partners and the declaration did not show the mother as one of the partners.
The question as to who should share the profits of the appellant firm and should be otherwise entitled to its assets is essentially a matter for the partners of that firm.
Unlike the case of a defendant firm from which money is claimed where each partner may be personally liable, in the case of the plaintiff (appellant) firm claiming money, it would be a wholly untenable plea for the defendants, from whom money is claimed, to urge that even though the mother as well as other partners claimed that it was not she but her minor son that was entitled to the 4 anna share in the partnership, the Court should hold that it was the mother who was entitled to that share.
[1030C G]
|
N: Criminal Appeal No. 115 of 1975.
Appeal by Special Leave from the Judgment and order dated 10 1 1972 of the Madras High Court in Crl.
Appeal No. 64 No. 657/70.
A. V. Rangam for the Appellant.
A. T. M. Sampath for the Respondents.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
On November 1, 1969, a sample of gingelly oil was purchased by the Food Inspector, Madurai Municipality from the shop of the first respondent, who is now reported to be dead and against whom, this appeal, has, therefore, abated.
At that time respondent No. 2 was attending to the business.
After completing the necessary formalities the Food Inspector arranged to send one part of the sample to the Public Analyst at Madras for analysis.
The sample was analysed by the Public Analyst on November 11, 1969 and it was reported by him that it contained 5.1% of Free Fatty Acid as against the limit of 3.0% permissible under clause A.17.11 of Appendix B to the Prevention of Food Adulteration Rules, 1955.
In his report he also mentioned that the sample was properly sealed, it was air and moisture tight and packed in thick paper so as to be proof against light, and, the Free Fatty Acid content of the oil would, therefore, remain unchanged for several months.
On receipt of the Public Analyst 's report a complaint was filed against the two respondents for an offence under sec.
16(1) (a) and Sec.
7(i) read with sec.
2(i) (L) and Clause A.17.11 of Appendix 'B ' to the Prevention of Food Adulteration Rules.
Both the respondents denied the offence.
The 776 second respondent stated that he signed on the various documents produced by the prosecution as he was asked to do so by the Inspector.
He did not read the contents of those documents.
The brother of the second respondent was examined as a defence witness and he stated that he was in the shop when the Food Inspector came there and purchased the sample and that at the time of the sale the Food Inspector was told that the gingelly oil was not meant to be used as an article of food but was meant for "oil bath".
At the trial a request was made by the respondents that another part of the sample which had been produced by the Food Inspector in the Court might be sent to the Director, Central Food Laboratory, Calcutta, for analysis.
It was sent as desired.
The sample was analysed by the Director, Central Food Laboratory, Calcutta on February 6. 1970.
According to his report the gingelly oil contained 6.2% of Free Fatty Acid and was, therefore, adulterated.
The learned District Magistrate, Madurai acquitted both the respondents observing that the Free Fatty Acid had increased from 5.1% to 6.2% between November 11, 1969 and February 6, 1970 and it was, therefore, likely that the Free Fatty Acid content in the oil might have similarly increased between November 1, 1969 when the sample was taken and November 11, 1969, when the sample was analysed by the Public Analyst, Madras.
On that ground, the District Magistrate held that it was not possible to say that the prosecution had established that on the date when the sample was taken the Free Fatty Acid content of the oil exceeded 3%.
The State preferred an appeal to the Madras High Court against the order of acquittal.
The High Court confirmed the order of acquittal for the same reason as that given by the District Magistrate.
The State has filed this appeal after obtaining special leave of this Court under Art 136 of the Constitution.
Under Sec. 2(i)(L) (before it was amended in 1976) of the , an article of food is deemed to be adulterated "if the quality of purity of the article falls below the prescribed standard or its constituents are present in quantities which are in excess of the prescribed limits of variability".
Paragraph A.17.11 of Appendix 'B ' to the Rules made under the prescribes the standard in the case of Til oil (Gingelly or seasame oil) and to the extent relevant it reads as follows: ["A.17.11.
Til oil (Gingelly or sesame oil) means the oil expressed from clean and sound seeds of Til (Sesamum indicum), black, brown, white, or mixed.
It shall be clear, free 777 from rancidity, suspended or other foreign matter, separated water, added colouring or flavouring substances, or mineral oil.
It shall conform to the following standards: (a) Butyro rafractometer reading at 40oC . 58.0 to 61 (b) Saponification value . 188 to 193 (c) Iodine value . 105 to 115 (d) Unsaponifiable matter .
Not more than 1.5 per cent.
(e) Free fatty acid as Oleic acid.
Not more than 3.0 per cent.
(f) Bellier test(Turbidity temperature Not more than Acetic acid method).
22oC).] .]" Now, a sample of food purchased by a Food Inspector has to be divided by him into 3 parts and each part has to be marked, sealed and fastened separately.
Before the Act was amended in 1976, one part was to be delivered to the person from whom the sample was taken, another part was to be sent for analysis to the Public Analyst and the third part was to be retained with the Food Inspector to be produced by him in case legal proceedings were taken or it became necessary to send it for analysis to the Director of the Central Food Laboratory.
The Public Analyst was required to deliver a report of the result of his analysis and this report was ordinarily the foundation of the prosecution by the Food Inspector.
After the institution of the prosecution, the accused was given the right to request the Court to send the third part of the sample retained by the Food Inspector to the Director, Central Food Laboratory for a certificate.
The Director, Central Food Laboratory was required to send to the Court a certificate specifying the result of his analysis and the certificate of the Director, Central Food Laboratory, thereupon, superseded the Public Analyst 's report.
The Public Analyst 's report, if not superseded by the Certificate of the Director.
Central Food Laboratory and the Certificate of the Director, Central Food Laboratory might be used as evidence of the facts stated therein in any proceeding under the Act with this difference that the certificate of the Director, Central Food Laboratory was to be final and conclusive evidence of the facts stated therein.
In the present case the certificate of the Director showed that the sample of gingelly oil contained 6.2% of Free Fatty Acid whereas the permissible limit was 3% only.
We are not concerned with the Public Analyst 's report since that has been superseded by the certificate of the Director, Central Food Laboratory, and the latter certificate has been made conclusive evidence of the facts mentioned in it.
The sample, it must therefore be found, was adulterated.
778 The sample, as we mentioned earlier, was taken on November 1, 1969, the analysis by the Public Analyst was on November 11, 1969 and the analysis by the Director, Central Food Laboratory was on February 6, 1970.
The learned District Magistrate and the High Court thought that although the Free Fatty Acid content in that part of the sample which was sent to the Director, Central Food Laboratory was 6.2% on the date when the Director analysed the oil it could not be said to have been established that on the date when the sample was taken by the Food Inspector the Free Fatty Acid content exceeded 3%.
According to them it could well be that the Free Fatty Acid content increased due to natural causes.
We are unable to agree with the lower Courts.
There is nothing in the evidence, nor has anything been shown to us from any scientific work which would suggest that the Free Fatty Acid content would so rapidly increase in the space of about three months that what was less than 3% on November 1, 1969, when the sample was taken increased to 6.2% by February 6, 1970, when the sample was analysed by the Central Food Laboratory.
On the other hand in the New Encyclopaedia Britannica Volume 13 (pages 526 527) it is said: "Fats can be heated to between 200o and 250oC without undergoing significant changes provided contact with air or oxygen is avoided.
On exposure to air, oils and fats gradually undergo certain changes.
The drying oils absorb oxygen (dry) and polymerize readily; thin layers form a skin or protective film.
The semidrying oils absorb oxygen more slowly and are less useful as paint oils.
Still, sufficient oxygen is absorbed in time to produce distinct thickening and some film formation.
Oxidation of the drying and semidrying oils is accelerated by spreading the oil over a large surface.
On greasy cloths, for example, oxygen absorption may proceed so rapidly that spontaneous combustion ensues.
The nondrying oils, of which olive oil is typical, do not oxidize readily on exposure to air, although changes do take place gradually, including slow hydroysis (splitting to fatty acids and glycerol) and subsequent oxidation.
This slow oxidation causes a disagreeable smell and taste described by the term rancidity.
779 The chemical reactions involved in oil oxidation have been studied widely, when oils and fats are exposed to air, little change takes place for a period of time that varies from oil to oil depending upon the amount and type of unsaturation and the content of natural antioxidants.
During this so called induction period, there is virtually no change in either odour or chemistry of the oil because of the protective effect of natural antioxidants, especially tocopherol.
Gradually, the effectiveness of the anti oxidant is overcome and there is an accelerating rate of oxidation of unsaturated acids, called autoxidation.
Chemically, the first identifiable oxidation products are hydroperoxides.
These break down into a large variety of low molecular weight aldehydes, esters, alcohols, ketones, acids, and hydrocarbons, some of which possess the pungent, disagreeable odours characteristic of rancid fats.
In soyabean oil exposed to air to the point of incipient rancidity, more than 100 different oxidation products have been identified.
Natural oils such as coconut oil, with very low levels of unsaturation, are very stable to flavour deterioration, but the more highly unsaturated oils such as soyabean oil or safflower oil lose their flavour more quickly.
Sesame oil is unique in its flavour stability because of the presence of several natural antioxidants (sesamin, sesamolin, sesamol).
Synthetic antioxidants such as propyl gallate, butylated hydroxyanisole (BHA), and butylated hydroxytoluene (BHT) have been used to retard the onset of rancidity and increase the storage life of edible fats".
Gingelly (Til or seasame) oil we may mention is a semi drying oil.
From the extract from the Encyclopaedia Britannica it is only after prolonged exposure to air and light that there may be some discernible chemical changes in gingelly (til or seasame) oil.
In fact it is mentioned in the Encyclopaedia Britannica that seasame oil is unique in its flavour stability because of the presence of several natural antioxidants.
There is nothing to indicate that the samples were not packed as required by the rules.
The report of the Public Analyst mentions "The sample has been received properly sealed, to be air and moisture tight and packed in thick paper to be proof against access to light.
Under these conditions the Free Fatty Acid content of oils 780 remains unchanged for several months".
The certificate of the Director, Central Food Laboratory mentions "The seals were intact".
We are, therefore, clearly of opinion that there was no justification for the conclusion of the District Magistrate and the High Court that the Free Fatty Acid content of the oil on the date when the sample was taken might have been less than 3% and therefore, not adulterated.
We set aside the judgments of the District Magistrate and the High Court and convict the second respondent under Sec.
16(1)(a)(i) read with sec.
7(i) and 2(i) (L) of the and sentence him to pay a fine of Rs. 100 in default to undergo simple imprisonment for a period of two weeks.
We are imposing a nominal sentence having regard to the circumstance that we are interfering with a concurrent order of acquittal more than ten years after the commission of the offence.
| M/s. Shethia Mining and Manufacturing Corporation, Calcutta owned three non coking coal mines one of which was New Satgram Coal Mines.
besides a workshop called the New Satgram Engineering Works built on a plot adjacent to the New Satgram Coal Mines in 1964, a building known as the Technical Director 's Bungalow, built somewhere in 1957 58 outside the mining area but adjacent to it, and another building constructed in 1960 61 on the same plot of land, namely the Guest House used for the residence of officers and staff of mines.
The management of the New Satgram Coal Mines along with two other coal mines was taken over by the Central Government under the Coal Mines.
(Taking over of Management) Act, 1973, with effect from January 31, 1973.
Thereafter the was passed and by virtue of section 3(1) thereof, the right title and interest of M/s. Shethia Mining and Manufacturing Corporation vested in the Central Government with effect from May 1973 and subsequently by a notification in the Government company that is, the Coal (India) Ltd.
On May 17, 1973, the Central Government took over possession of the Technical Director 's Bungalow and the Guest House.
The. appellants who had filed two writ petitions challenging the taking over and the Nationalisation Act in the Supreme Court withdrew them and filed a petition under Article 226 of the Constitution in the Delhi High Court for the issuance of a writ or direction in the nature of mandamus in regard to the taking over of New.
Satgram Engineering Works and the dues pertaining to the New Satgram Coal Mines and New Majri Coal Mines.
The High Court partly allowed the petition but declined to go into the question as to whether the Engineering Unit, together with Shethia Bhavan and all its assets etc the Technical Director 's Bungalow and Guest House were or not covered by the definition.
of the term "mine" in section 2(h)(vi), (vii) & (xi) of the Nationalisation Act.
Hence the appeals by special leave one by New Satgram Engineering Works and the other by the Union of India.
Allowing the Government 's appeal and dismissing the appeal of the Engineering Works, the Court ^ HELD: (1) When the facts themselves are seriously controverted, the dispute relating to the properties in question raise a "serious question of title" and the parties must get their rights adjudicated upon in a civil court and not 407 under article 226 of the Constitution.
The question whether the engineering unit, was "situate in, or adjacent to" the new Satgram Coal Mines and was "substantially" used for the purposes of the mine as well as the question whether the Technical Director 's Bungalow and the Guest House were "solely" used for the residence of officers and staff of the mine and! therefore.
fell within the definition of 'mine ' as contained in section 2(h) of the Nationalisation Act, cannot be decided in proceedings under article 226 of the Constitution.
The proper remedy is by way of a suit.
[416H; 418G H] (2) Parliament instead of providing that the word 'mine ' shall have the meaning assigned to it in the , has given an enlarged definition of 'mine ' in section 2(h) so that not merely the colliery but everything connected with the mining industry should vest in the Central Government, that is, not only that part of the industry which consisted of raising, winning and getting coal but also that part of it which consisted in the sale of coal and its supply to customers both of which are a part of an integrated activity.
Parliament by an enlarged definition of mine as contained in section 2(h) of the Act has indicated the nature of the properties that vest, and the question whether a particular asset is taken within the sweep of i. 2(h) depends on whether it answers the description given therein.
[415 H, 416 A D] (3) The language used in section 2(h)(vii) and (xi) of the are different.
Sub clause (vii) used the words "in, or adjacent to, a mine" and "used substantially" for the purposes of the mine or a number of mines under the same management, in relation to workshops.
The use of the word 'and ' makes both the conditions conjunctive.
Sub Clause (xi) used the words "if solely used" for the location of the management, sale or liaison offices, or for the residence of officers and staff of the mine, in relation to lands and buildings.
The difference in language between the two expressions "used substantially" and "solely used" is clear.
A workshop cr a building constructed initially for the purpose of a coal mine cannot by its being diverted to other purposes cease to belong to the mine.
What is of the essence is whether the workshop or the building originally formed a part and parcel of the coal mine.
The subsequent user may not b. very material.
[415 B E] (4) Merely because the land on which a workshop of a coal mine is located bears a different plot number, or even if there is a compound wall between the main office of the coal mine and the workshop, it would not cease to be part of the mine.
The question in such cases will always be whether the workshop is "located in, or adjacent to, a mine" and was "used substantially for the purposes of the mine under the same management".
Further the question whether a workshop is "substantially" used for the purposes of a mine necessarily involves an enquiry as to whether it pertains to, or in substance is, part of the mine.
The value of jobs executed for the mine as against those for others is not really determinative of the question.
If a workshop is, in fact a part of a coal mine, it does not cease to be so merely because its utilisation lies in the production of materials supplied to third parties.
While a workshop may form part of a mine and is substantially used as such, it may be utilised for turning out other products; it all depends upon the circumstances of each case, whether it forms part of a mine or not.
[416F G, 417 D F] (5) Sub sections (3) and (4) of section 19 of the Act are part of an integrated scheme and must be read with sub section (2) of section 18.
According to the provisions of sub sections (3) and (4) of section 19 the Central 408 Government, or the Government company was exclusively entitled to receive monies in question to the exclusion of other persons up to the specified ate and to utilise the same in discharge of the liabilities of the coal mine which could not be discharged by the appointed day.
Under the scheme of the Act, the owner of the coal mine which has vested in the Central Government under sub section (1) of section 3 is entitled to receive, besides the compensation amount as determined under section 8, additional compensation amount under sub section (1) of section 9, simple interest thereon at 40% per annum for the period specified therein, together with "such amount as may become due" to tho owner of the coal mine in relation to the period during which the management of the coal mine remained vested in the Central Government 35 provided by sub section (2) of section 18.
[421 C E] Provisions in sections 8, 9, 18 and 19 make it clear that unless the requirements of section 19 are fulfilled there can be no ascertainment of "such amount as may become due" to the owner of a coal mine, in relation to the period during which the management of the coal mine remained vested in the Central Government, as required under sub section (2) of section 18.
Anr other construction would render sub section (2) of section 18 entirely otiose.
The amounts collected on behalf of the erstwhile owners of coal mines, represent the money of such owners without distinction, and whether they were sale proceeds of coal or realisations from debtors.
the amounts were liable to be spent not only in the discharge of liabilities of the coal mine which could not be discharged by the appointed day, but also were liable to be spent for the purposes of management.
All the rights and liabilities arise from the provisions of the Acts, and the net balance in relation to the management period, means the difference between authorised collections and legitimate liabilities of the erstwhile owners.
It is necessarily this balance which "becomes due in relation to the period during which the management of the coal mines remained vested the Central Government" within the meaning of sub section (2) of section 18.
[423 B E] When there is a payment made by the Central Government under subs.
(2) of section 18, the elaborate procedure provided under sections 20 27 have to be followed.
The owner of a coal mine is entitled to the payment by the Commissioner of Payments, under section 26 of "the balance, if any out of the total amount of money credited to the account of the coal mine" after he has gone through all the stages provided for in Chapter VI.
Such being the scheme, there is no question of the owner of a coal mine, who is divested of his right, title and interest under sub section (1) of section 3 to realise from the Central Government any amount due to a coal mine, which remained to be realised until the specified date, that is, June 30, 1975.
In the instant case, in view of all these provisions of sections 20 to 27 of the Act and particularly, of sub section (1) of section 26 the claims made by the appellants Engineering Works are not proper.
They are certainly not entitled to recover any definite or ascertained sum.
All that they are entitled to under sub section (5) of section 19 is that they should be furnished with a copy of each statement of accounts prepared under section 19, to its being audited under sub section (6) and to the audit being conducted in such manner as the Central Government may direct under sub section (7), and to the payment under sub section (1) of section 26 of the balance, if any, out of the total amount of money credited to the account of a coal mine after all the liabilities have been discharged.
[423F, 424F H, 425A, D E] (6) There is no duty cast on the Central Government to make realisations 409 of any money due to a coal mine if it pertains to a period prior to the appointed, day, and to discharge the liabilities of the coal mine beyond the specified dated that is, June 30, 1975.
The 'appointed day ' under section 2(a) of the Management Act under the Nationalisation Act was January 31, 1973 and May 1, 1973 respectively; while the 'specified date ' for purposes of sub sections (3) & (4) of section 19 was June 30, 1975.
All that vested in the Central Government under sub section (I) of section 3 of the Management Act was the management of all coal mines, as defined in section 2(g) of The Act, which included sundry debts etc.
, pending nationalisation of such mines, with effect from the appointed day, that is, January 31, 1973.
But this was only for the purposes of management, the title all the time remaining in the erstwhile owners of the coal mines.
In the course of management under that Act, all the collections belonged to the owners, and the liabilities also in relation to the mines were the liabilities of the owners. 'The Custodian appointed by the Central Government under section 6 of the Management Act was liable for, the net balance in relation to the management period.
He had the right to collect and also the right to incur expenditure in relation to the management by reason of the provisions of that Act.
[426 C F] (7) The conferral of power upon the Central Government under subsections (3) and (4) of section 19 to make realisation of monies due to the coal mines and from such realisation to discharge the liabilities as well as to incur expenses in relation to the management thereof, was a necessary concomitant of the vesting of such coal mines under sub section (I) of section 3 of the Act.
The Nationalisation Act received the assent of the President on May 30, 1973 but the provisions of sub section (I) of section 3 were brought into force with retrospective effect, that is, with effect from the appointed day, that is, May 1, 1973.
It follows that, although there was a complete extinction of all the rights, title and interest of the owners of coal mines with effect from May 1. ; 1973, there was a fictional extension of the period of management under the Management Act from May 1 to May 30, 1973.
There is, therefore, provision made in section 9 that apart from the amount of compensation provided for by section 8, as mentioned in the Schedule, the owners of every coal mine shall be entitled to receive additional compensation under sub section (I) thereof.
This was to be an amount equal to the amount which would have been, but for the provisions of sections 3, 4 and S payable to such owner for the period commencing on May 1, 1973 and ending on the date on which the Act received P the assent of the President that is, May 30, 1973.
Under sub section (1) of section 11 the Central Government is entitled to exercise all such things as the owner of the coal mine was authorised to do.
[427C, 426G 427B] (8) The definitions of coal mine in section 2(h)(xii) includes the current assets belonging to a mine.
but by reason of the explanation inserted by the Coal Mines Nationalisation (Amendment) Act, 1978, the expression "current assets" appearing therein does not include amounts which had become due before the appointed day, that is, May 1, 1973.
Thus these dues did not vest in the Central Government.
This exclusion of sundry debts under the Nationalisation Act does not apply to the Management Act because there was no similar explanation to section 2(g)(xii) of that Act.
[427 D E] (9) The Management Act was to be followed by the Nationalisation Act and, therefore, the accountability of the Central Government in regard to the management period was provided for in section 19 of the Nationalisation Act.
Although there was vesting of the coal mines in the Central Government under 410 sub section (1) of section 3 of the Act, the accounts had still to be settled Sub sections (3) and (4) of section 19, therefore, extended the period during which the Central Government was authorised to collect monies due to the coal mines and to discharge the liabilities of such coal mines which could not be discharged by the appointed day, that is, May 1, 1973 till the specified date, that is, June 30, 1975.
The liabilities of the coal mines were not taken over under the Management Act.
Section 7 of the Nationalisation Act implies that after the specified date, that is, June 30, 1975 the erstwhile owners of coal mines would have to meet all their liabilities which could not be discharged before the appointed day.
It must result in the inevitable consequence, as a necessary corollary that any amount which could not be realised by the Central Government until the specified date, would be realisable by the owners directly in order to meet their pre existing liabilities.
[427 F 428 B] (10) Provisions of sub section (4) of section 19 of the are in part materia with sub section (3) of section 22 of the .
The subsidy receivable from the erstwhile Coal Board established under section 4 of the Coal Mines (Conservation and Safety) Act, 1952, being a payment "by way of reimbursement" was like any other dues, and, therefore, must be treated as 'any money due to the coking coal mine '.
Therefore, the directions made by the Court requiring the Union of India to pay to the Satgram Engineering Works Rs. 7,28,342 54 which is to be recovered by the erstwhile Coal Board as subsidy, is incorrect.
[428C D] Industrial Supplies Pvt. Ltd., & Anr.
vs The Union of India & Ors.
[1981] 1 SCR p. 375, followed.
|
iminal Appeal No. 62 of 1951.
Appeal by special leave granted by the Supreme Court of India on the 14th May, 1951, from the Judgment and Order dated the 9th August, 1950, of the High Court of Judicature at Bombay (Bavdekar and Vyas JJ.) in Criminal Appeal No. 319 of 1950 arising out of the Judgment and Order dated the 6th January, 1950, of the Court of the Sub Divisional Magistrate F.C., Ratnagiri City, in Criminal Case No. 77 of 1949.
774 M. C. Setalvad, Attorney General for India (G. N. Joshi and P. A. Mehta, with him) for the appellant.
K. B. Chaudhury for the respondent.
March 13.
The Judgment of the Court was delivered by MAHAJAN J.
The respondents were charged with having committed an offence punishable under section 9(2) read with section 4 of the Bombay Building (Control on Erection) Act, 1948, for commencing the work of erection of a cinema theatre without obtaining the necessary permission from the controller of buildings, Bombay.
The sub divisional magistrate, Ratnagiri, held that the Act not having been validly extended to Ratnagiri, no permission of the controller of buildings was necessary for the construction.
He accordingly acquitted them.
On appeal by the State Government, the order of acquittal was maintained by the High Court.
This appeal is before us by special leave from the concurrent orders of acquittal.
Special leave was granted on the Attorney General for India undertaking on behalf of the State Government of Bombay that whatever the decision of the court might be, no proceedings will be taken against the respondents in respect of the subject matter under appeal.
At the hearing of the appeal it was made plain by the learned Attorney General that no adverse consequences will flow to the respondents or to their building being completed, by the acquittal order being pronounced as bad, and that the State Government will not in any way interfere with the respondents when they take steps to complete the building, the construction of which was commenced without the permission of the controller.
The State Government merely wants to have the question of law decided as a test case because the decision of the High Court, if left unchallenged, would have far reaching effects.
The facts giving rise to the prosecution of the respondents, shortly stated, are these: There was in force in the State of Bombay an Ordinance, Bombay 775 Building (Control on Erection) Ordinance, 1948.
It was applicable to certain areas specified in the schedule.
The district of Ratnagiri was not one of the areas therein specified.
Sub section (4) of section (1) of the Ordinance empowered the provincial government by notification in the official gazette to extend to any other area specified in such notification its provisions.
It further empowered the provincial government to direct that it shall apply only in respect of buildings intended to be used for such purpose as may be specified in the notification.
On 15th January.
1948, the Government of Bombay issued the following notification: " In exercise of the powers conferred by sub section (4) of section 1 of the Bombay Building (Control on Erection) Ordinance, 1948 (Ordinance No. I of 1948), the Government of Bombay is pleased to direct that the said ordinance shall also extend to all areas in the province of Bombay other than the areas specified in the schedule to the said Act and that it shall apply to said areas only in respect of buildings intended to be used for the purpose of cinemas, theatres and other places of amusement or entertainment.
" The consequence of this notification was that in the district of Ratnagiri no cinema building could be commenced without the permission of the controller after that date.
Ordinance I of 1948 was repealed by Act XXXI of 1948, The Bombay Building (Control on Erection) ' Act, 1948".
It was made applicable to areas specified in the schedule.
Sub section (3) of section I authorized the provincial government by notification in the official gazette to direct that it shall also extend to any other.
areas specified therein.
It further authorized the provincial government to direct that it shall apply only in respect of buildings intended to be used for such purposes as may be specified in the notification.
By section 15(1) of the Act it was pro vided that `` The Bombay Building (Control on Erection) Ordinance, 1948, is hereby repealed and it is hereby 776 declared that the provisions of sections 7 and 25 of the Bombay General Clauses Act, 1904, shall apply to the repeal as if that Ordinance were an enactment.
" The respondents started constructing a cinema at Ratnagiri on 15th August, 1948, after the commencement of Act XXXI of 1948 without obtaining the permission of the controller of buildings as required by the Act under the impression that the Act had application only to areas specified in the schedule and the district of Ratnagiri not having been specified in the schedule, the provisions of the Act had no application to that area.
As above stated, they were prosecuted for committing an offence under section 9(2) read with section 4 with the results above mentioned.
The order of acquittal was based on the ground that although the notification extended the scope of the ordinance to area, other than those which were mentioned specifically in the schedule thereto, it did not extend to those areas the provision, of the Act in spite of the application of the provisions of section 25 of the Bombay General Clauses Act.
In Judgment, the construction placed by the High Court on the language of section 15 is erroneous and full effect has not been given to its provisions or to the provisions of section 25 of the Bombay General Clauses Act.
We think on a true construction of section 15 of the Act and section 25 of the Bombay General Clauses Act, the notification issued on 15th January, 1948, under the ordinance continued in force under Act XXXI of 1948 and that by it the provisions of the Act stood extended to other areas in the State to the extent indicated in the notification.
Section 25 of the Bombay General Clauses Act, 1904, provides `` Where any enactment is, after the commencement of this Act, repealed and re enacted by a Bombay Act, with or without modification, then, unless it is otherwise expressly provided, any appointment, notification, order, scheme, rule, bye law or form made or issued under the repealed enactment shall, so far as it is not inconsistent with the provisions re enacted, 777 continue in force and be deemed to have been made or issued under the provisions so re enacted unless and until it is superseded by any appointment, notification, order, scheme, rule, bye law or form made or issued under the provisions so re enacted.
" It cannot be contended that the notification was inconsistent with the provisions of Act XXXI of 1948.
It is clearly in accordance with its scheme and purpose.
The High Court did not combat the proposition that in view of the provisions of section 25 of the Bombay General Clauses Act the notification continued in force after the coming into force of the Act.
It, however, held that even if the notification was taken as having been issued under Act XXXI of 1948, the notification merely extended the ordinance to these areas and not the Act.
In the opinion of the High Court, the word "Act " instead of " Ordinance " could not be read in the words of the notification by the force of section 25 of the Bombay General Clauses Act and the notification literally construed, only extended the ordinance to those areas.
It was considered that if the intention was to extend the Act to these areas, such an intention could only be carried out by enacting in Act XXXI of 1948 a proviso like the one enacted in the Cotton Cloth and Yarn (Control) Order, 1945, or by use of language similar to the one used in section 9 of the Bombay General Clauses Act, 1904.
The proviso in the Cotton Cloth and Yarn (Control) Order is in these terms:" Provided further any reference in any order issued under the Defence of India Rules or in any notification issued thereunder to any provision of the Cotton Cloth and Yarn (Control) Order, 1943, shall, unless a different intention appears, be construed as reference to the corresponding provision of this Order.
" We do not find it possible to support this line of reasoning.
It appears to us that the attention of the learned Judges was not pointedly drawn to the concluding words of section 15 (1) of the Act.
It is specifically provided therein that the provisions of 778 sections 7 and 25 of the Bombay General Clauses Act shall apply to the repeal as if the ordinance were an enactment.
The ordinance by use of those words was given the status of an enactment and therefore the word "ordinance" occurring in the notification has to be read accordingly and as extending the Act to those areas, and unless that is done, full effect cannot be given to the 'Concluding words used in section 15(1) of the Act.
The concluding words of section 15(1) of the Act achieve the purpose that was achieved in the Cotton Cloth and Yarn (Control) Order by the "proviso.
" By reason of the deeming provisions of section 15, the language used in the notification extending the ordinance to those areas as a necessary consequence has the effect of extending the operation of the Act to those areas.
When a statute enacts that something shall be deemed to have been done, which in fact and truth was not done, the court is entitled and bound to ascertain for what purposes and between what persons the statutory fiction is to be resorted to and full effect must be given to the statutory fiction and it should be carried to its logical conclusion.
[Vide Lord Justice James in Ex parte Walton : In re Levy(1)].
If the purpose of the statutory fiction mentioned in section 15 is kept in view, then it follows ,that the purpose of that fiction would be completely defeated if the notification was construed in the literal manner in which it has been construed by the High Court.
In East End Dwellings Co. Ltd. vs Finsbury Borough Council(2), Lord Asquith while dealing with the provisions of the Town and County Planning Act, 1947, made reference to the same principle and observed as follows: " If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. .
The statute says that you must imagine a certain state of affairs; it does not (1) , at P. 756, (2) 779 say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs.
" The corollary thus of declaring the provisions of section 25 of the Bombay General Clauses Act applicable to the repeal of the ordinance and of deeming that ordinance an enactment is that wherever the word "ordinance" occurs in the notification, that word has to be read as an enactment.
For the reasons given above we are satisfied that the High Court was in error in holding that the notification only extended the provisions of the ordinance to Ratnagiri district and not the provisions of Act XXXI of 1948 to that area.
It may, however, be observed that the manner adopted by the legislature in keeping alive the notifications issued under the ordinance by use of somewhat involved language in matters where the rights of the citizens regarding the construction of buildings were being affected was not very happy.
It has certainly led three judges to think that the intention of the legislature was not brought out by the language.
People who are not lawyers may well be misled into thinking that the notification issued under the ordinance has terminated with its repeal and not having been re issued under the Act, the provisions of which again in clear language provide that it only extends to areas specified in the schedule and which gives power to extend it, that those areas are excluded from the scope of the Act.
It would have been much simpler if the legislature made its intention clear by use of simple and unambiguous language.
Because of the undertaking given by the learned Attorney General not to proceed any further in this matter, it is not necessary to set aside the acquittal order of the respondents, which will remain as it stands.
A appeal allowed.
Acquittal not set aside.
| The Bombay Building (Control on Erection) Ordinance of 1948 applied to certain areas mentioned in the Schedule to the Ordinance, and in exercise of the powers vested in it by the Ordinance the Government extended its provisions to certain other areas including Ratnagiri in respect of buildings intended to be used for cinemas and other places of entertainment, by a notification of the 15th January,.
This Ordinance was repealed by the Bombay Building (Control on Erection) Act of 1948 the provisions of which were similar to those of the earlier Ordinance.
Section 15(1) of the Act repealed that Ordinance and declared that " the provisions of sections 7 and 25, Bombay General Clauses Act, 1904, shall apply to the repeal as if that Ordinance were an enactment.
" Held, reversing the judgment of the Bombay High Court, that on a true construction of section 15(1) of the above said Act and section 25 of the Bombay General Clauses Act, 1904, the notification issued on the 15th January, 1948, under the Ordinance continued in force under the Act of 1948 and that by it the provisions of the Act stood extended to other areas in the State including Ratnagiri to the extent indicated in the notification.
Ex parte Walton: In re Levy and East End Dwelling Co. Ltd. vs Finsbury Borough Council ([1952] A.C. 109) referred to.
|
: Special Leave Petition (Crl.) 2599 of 1979.
From the Judgment and Order dated 9 7 1979 of the Punjab and Haryana High Court in Crl.
A. 1228/1976.
section K Sabharwal and R.C. Kohli for the petitioner.
The order of the Court was delivered by, KRISHNA IYER, J, A rapist if the concurrent findings of the courts below were correct has chosen to seek special leave to challenge his crime and punishment, and his counsel has attacked the verdict of culpability as wholly unfounded.
Indeed, it is redundant, and absent exceptional circumstances, out of bounds, for this Court, exercising its jurisdiction under article 136, to launch upon an exploration and re appreciation of the evidence, its strengths and weaknesses with a view to sit in judgment over the holdings of the High Court in affirmance of those of the trial Court.
Briefly, we will touch upon one or two circumstances without claiming to be exhaustive in any manner.
One Shashi Bala of Ambala was sleeping, with her mother and other children, outside her house in hot July (1975).
The petitioner, in the company of another (acquitted accused), carried her away under intimidation to a neighbouring godown belonging to one Tilak Raj (another acquitted accused) and in that secluded venue committed rape on the young women.
After subjecting her to these beasteal acts of lust, Shashi Bala, who by then was nearly unconscious, was put back in her cot from where she had been removed.
In the morning, the mother of the victim found blood on the daughter 's salwar and thereupon she complainingly narrated the criminal assault of the previous night.
On the return of the father, P.W. 7, who had been away, the victim went, in his company, to the police station, lodged a report which was followed by investigation and charge sheet.
The Court, after a trial, convicted the present petitioner but, on grounds of benefit of doubt, acquitted the rest.
Medical evidence showed that the raped girl was below 16 years of age.
We are not too happy about the acquittal but since the State has not chosen to come up in appeal against the acquittal, we do not probe the matter further.
Counsel for the petitioner persistently urged that the evidence of the prosecutrix, without substantial corroboration, was inadequate to rest a conviction under section 376 I.P.C. He relied on observations of this Court in Gurucharan Singh vs State of Haryana for the pro 307 position that although a prosecutrix is not an accomplice, her evidence, as a rule of prudence, is viewed by courts unfavourably unless reinforced by corroboration "so as to satisfy its conscience that she is telling the truth and that the present accused of rape on her has not been falsely implicated".
It is true that old English cases, followed in British Indian courts, had led to a tendency on the part of judge made law that the advisability of corroboration should be present to the mind of the Judge "except where the circumstance make it safe to dispense with it".
Case law, even in those days, had clearly spelt out the following propositions: "The tender years of the child, coupled with other circumstances appearing in the case, such, for example as its demeanour, unlikelihood of tutoring and so forth, may render corroboration unnecessary but that is a question of fact in every case.
The only rule of law is that this rule of prudence must be present to the mind of the judge or the jury as the case may be and be understood and appreciated by him or them.
There is no rule of practice that there must, in every case, be corroboration before a conviction can be allowed, to stand." "It would be impossible, indeed it would be dangerous to formulate the kind of evidence which should, or would, be regarded as corroboration.
Its nature and extent must necessarily vary with circumstances of each case and also according to the particular circumstances of the offence charged.
" Observations on probative force of circumstances are not universal laws of nature but guidelines and good counsel.
We must bear in mind human psychology and behavioural probability when assessing the testimonial potency of the victim 's version.
What girl would foist a rape charge on a stranger unless a remarkable set of facts or clearest motives were made out? The inherent bashfulness, the innocent naivete and the feminine tendency to conceal the outrage of masculine sexual aggression are factors which are relevant to improbabilise the hypothesis of false implication.
The injury on the person of the victim, especially her private parts, has corroborative value.
Her complaint to her parents and the presence of blood on her clothes are also testimony which warrants credence.
More than all, it baffles belief in human nature that a girl sleeping with her mother and other children in the open will come by blood on her garments and injury in her private parts unless she has been subjected to the torture of rape.
And if rape has been committed, 308 as counsel more or less conceded, why, of all persons in the world, should the victim hunt up the petitioner and point at him the accusing finger? To forsake these vital considerations and go by obsolescent demands for substantial corroboration is to sacrifice commonsense in favour of an artificial concoction called 'Judicial ' probability.
Indeed, the court loses its credibility if it rebels against realism.
The law court is not an unnatural world.
We are not satisfied that merely because the trial court has ultra cautiously acquitted someone, the higher court must, for that reason, acquit everyone, Reflecting on this case we feel convinced that a socially sensitised judge is a better statutory armour against gender outrage than long clauses of a complex section with all the protections writ into it.
N.V.K. Petition dismissed.
| The Management Tea Co. Ltd. appellant in C. A. 1538/71 retrenched on November 5, 1966, 23 workmen, 16 of whom were paid retrenchment compensation allegedly in terms of section 25F of the Industrial Disputes Act based on wages obtaining prior to Wage Board Award, which came into force on 1 4 66 retroactively and in the order of 'last come, first go ', while the services of other seven were terminated, although on payment of retrenchment compensation, allegedly in breach of Section 25G of the Act, i.e. out of turn.
The dispute that was raised was decided by the Tribunal which upheld the validity of the retrenchment of the 16, but set aside the termination of the other seven.
The High Court agreed with the Tribunal 's Award and hence the appeals both by the workmen and the management after obtaining special leave.
Dismissing both the appeals, the Court ^ HELD: 1.
The plea that the amount paid by way of retrenchment compensation envisaged in Section 25F of the Industrial Disputes Act, not having been computed as per the revised pay scales as per the Wage Board Award, fell short of what was legally due and hence there was non compliance is not tenable because before the Tribunal this contention was neither pleaded nor proved.
There was no hint of it in the Award.
In the High Court this new plea based on the facts was not permitted.
Further the Wage Boards ' Award was subsequent to the retrenchment although retroactively applied and the workmen had accepted the retrenchment compensation on the wages prevalent at the time of the retrenchment.
In the absence of any basis for this new plea Supreme Court cannot reopen an ancient matter of 1966.
But the 16 Workmen, being admittedly eligible for the Wage Board scale, would be paid the difference for the period between 1 4 66 to 5 11 66.
[969 A E] 2.
Section 25G of the Industrial Disputes Act postulates that ordinarily the 'last come, first go ' will be the methodology of retrenchment.
Of course, it is not an inflexible rule and extra ordinary situations may justify variations.
There must be valid reason for this decision, and, obviously, the burden is on the Management to substantiate the special ground for departure from the rule.
Surely, valid and justifiable reasons are for the management to make our, and if made out, section 25G will be vindicated and not violated, varying the ordinary rule of 'last come first go. ' There is none made out here, nor even alleged, except the only plea that the retrenchment was done in compliance 967 with section 25G grade wise.
Absence of mala fides by itself is no absolution from the rule in s.25G.
Affirmatively, some valid and justifiable grounds must be proved by the Management to be exonerated from the 'last come first go ' principle.
The above rule can be applied category wise.
That is to say those who fell in the same category shall suffer retrenchment only in accordance with the principle of last come first go.
[969 E, H, 970 A, B, D F] M/s. Om Oil & Oil Seeds Exchange Ltd., Delhi vs Their Workmen, , followed.
Grading for purposes of scales of pay and like considerations will not create new categorisation.
It is a confusion or unwarranted circumvention to contend that within the same category if grades for scales of pay, based on length of service etc., are evolved, that process amounts to creation of separate categories.
In the instant case, the seniority List is the same which is a telling circumstance to show that they fell in the same category.
[971 C E] 4.
Supreme Court cannot sympathise with a party who gambles in litigation to put off the evil day and when that day arrives prays to be saved from his own gamble.
The Award had given convincing reasons for reinstatement and even reduced the back wages to half.
Still, the workmen were dragged to the High Court and, worse, when worsted there, were driven from Assam to Delhi to defend their pittance.
The logistics of litigation for indigent workmen is a burden the management tried to use by a covert blackmail through the judicial process.
Misplaced sympathy is a mirage justice.
[971 G H, 972 A B]
|
: Civil Appeal No. 708 of 1988.
From the Judgment and Order dated 20.2.
1987 of t he Bombay High Court in S.A. No. 282 of 1985.
Mrs. Shyamla Pappu, K.K. Rai and Mrs. Indira Sawhney f or the Appellant.
G.L. Sanghi and A.K. Sanghi for the Respondent.
The Judgment of the Court was delivered by OZA, J.
This appeal after leave has been filed by the appe l lant 140 wife arising out of a decree under Section 12(1)(d) of t he Hindu Marriage Act (hereinafter referred to as the 'Act '), a decree declaring the marriage a nullity.
The respondent husband instituted a petition on 7 th March, 1984 for a declaration that the marriage of t he respondent with the appellant wife was a nullity under su b section (1) sub clause (d) of section 12 of the Act on t he ground that appellant, the wife at the time of marriage wi th the respondent was pregnant by some one other than t he respondent.
The appellant wife contested the allegations a nd ultimately the IIIrd Joint Civil Judge, Senior Divisi on Nagput granted a decree in favour of the respondent by h is judgment dated 3rd May, 1985 declaring the marriage to be a nullity.
The appellant wife filed a regular civil appeal No. 4 36 of 1985 on 19.7.1985 before the IInd Additional Distri ct Judge, Nagput.
Before this appeal could be filed, the r e spondent husband married one Miss Sarita daughter of Laxma n rao Modak on 27.6.1985, and in the appeal filed by t he appellant, the respondent raised a preliminary objecti on contending that after passing of the judgment and decr ee dated 3.5.1985 by the trial court he has married Sari ta daughter of Laxmanrao Modak on 27.6.1985.
It was furth er alleged in the application that this marriage was solemnis ed on 27.6.1985 when there was no impediment against the r e spondent husband which could come in his way for contracti ng this marriage as the parties were relegated to the positi on as if they were not married and therefore this marria ge performed on 27.6.1985 of respondent with Sarita was leg al and valid and the consequence of this is that the appe al filed by the appellant was not tenable having been render ed infructuous.
The IInd Additional District Judge, Nagpur vi de his order dated 17.8.1985 allowed the objection of t he respondent and dismissed the appeal as infructuous with a direction to the parties to bear their own respective cost section Against this the appellant preferred a second appe al before the High Court.
The High Court by its judgment dat ed 20.2.1987 dismissed the appeal holding that as the appe al was filed by the appellant after the re marriage of t he respondent it has become infructuous.
The learned Judge al so dismissed the application for maintenance pendent elite a nd aggrieved by this judgment of the High Court after obtaini ng leave this appeal is filed in this Court.
It was contended by learned counsel for the appella nt that the language of Sec.
15 clearly goes to show that it refers to a marriage 141 which has been dissolved and it also talks of fight of appeal against the decree.
In view of this language used in Sec.
15 it is not possible to distinguish between a decr ee of nullity under Section 11 or 12 and decree of divor ce under Section 13.
It was contended that the word 'divorc e ' has been used in this provision in a broader sense indica t ing that where the marriage is dissolved or the relationsh ip is brought to an end by decree of court whether it is by declaring the marriage invalid or dissolving it by a decr ee but result is the same and it was contended that it is because of this that in this Act there is neither any sp e cific definition provided for the term 'divorce ' or a decr ee of divorce.
It was also contended that when language of Section 15 refers to a fight of appeal will have to look to the provision providing for an appeal and Sec.
28 of the A ct which provides for appeals against all decrees made by t he court in proceedings under this Act.
It was therefore co n tended that the interpretation put by the lower court on t he basis of judgments of some of the High Courts that Sec.
15 will not apply to a decree under Sec.
12 but would on ly apply when there is a decree under Sec.
13 does not appe ar to be the correct view and on this basis it was contended by learned counsel for the appellant that the courts below we re wrong in coming to the conclusion that the appeal had beco me infructuous because the respondent has married a seco nd time.
Learned counsel also referred to meaning of the wo rd 'divorce ' in Webster 's Third New International Dictiona ry and Shorter Oxford English Dictionary.
Learned counsel in support of her contentions referred to the two decisions of this Court in Chandra Mohini Srivastava vs Avinash Pras ad Srivastava & another; , and Tejinder Kaur vs Gurmit Singh, AIR 1988 SC 839 Although on the basis of the se decisions what was contended was that the provisions of t he Act have to be interpreted broadly.
Learned counsel al so placed reliance on the decision in Vathsala vs N. Manohara n, AIR 1969 Madras 405.
Learned counsel however, conceded th at there are decisions in Mohanmurari vs Smt.
Kusumkumari, A IR 1965 M.P. 194;.
Jamboo Prasad Jain vs Smt.
Malti Prabha a nd Anr., AIR 1979 Allahabad 260 and Pramod Sharma vs Sm t. Radha, AIR 1976 Punjab 355 where the question of Section 15 in relation to a decree under Sec.
12 has been specifical ly considered and decided against the appellant, but learn ed counsel contended that the scope and language of Sec. 15 coupled with the language of Sec.
28 has not been consider ed by any one of these courts.
Learned counsel for the respon d ent on the other hand contended that the language of Sec. 15 refers to "marriage dissolved by decree for divorce" where as in the present case, the mar 142 riage was not dissolved by decree of divorce.
The marria ge was declared as nullity under Sections 11 and 12 of the Ac t. Sections 11 and 12 of the Act, according to the learn ed counsel, talk of annulment of marriage "by decree of null i ty" and it was contended that it is because of this that t he various High Courts have taken a view that Sec. 15 will n ot apply to cases where a marriage is annulled by a decree of nullity in accordance with Sections 11 or 12 of the Ac t. Learned counsel however frankly conceded that so far as Se c. 28 is concerned, the language is so wide that an appeal wi ll lie even against a decree under Section 11 or 12 and if an appeal lies under Sec.
28 even against the order or a decr ee passed under Sections 11 or 12, the phrase 'if there is su ch a right of appeal, the time for filing has expired witho ut an appeal having been presented ' are to be given its mea n ing, it would be clear that Sec. 15 also will apply to decrees by which the marriage is either dissolved or a n nulled i.e. decrees which are passed under Sec.
12 or und er Sec. 13.
Learned counsel in face of this raised anoth er contention pertaining to the application of the Limitati on Act which we will examine later.
In order to understand the meaning of Sec. 15 of the A ct it would be better if we first notice that the words 'decr ee for divorce ' or 'decree for nullity ' has not been defined in any one of the provisions of this Act.
12 clause (1) of the Act reads: "Any marriage solemnized, whether before or after the co m mencement of this Act, shall be voidable and may be annull ed by a decree of nullity on any of the following groun ds namely, Similarly Sec.
13 clause (1) of the Act reads: (1) Any marriage solemnized, whether before or after t he commencement of this Act may, on a petition presented by either the husband or wife, be dissolved by a decree of divorce on the ground that the other party, 143 It is no doubt true that these two sections have differe nt phraseology.
In section 12 it is said that the marriage be annulled by a decree of nullity whereas in Section 13, t he phraseology used is "dissolved by decree of divorce" but in substance the meaning of the two may be different under t he circumstances and on the facts of each case but the leg al meaning or the effect is that by intervention of the cou rt the relationship between two spouses has been severed eith er in accordance with the provisions of Section 12 or in a c cordance with the provisions of Section 13.
Probably it is because of this reason that the phrase 'decree of nullit y ' and 'decree of divorce ' have not been defined.
28 of the Act reads: "28.
Appeal from decrees and orders (1) All decrees made by the court in any proceeding under this Act shall, subject to the provisions of sub section (3), be applicable as decre es of the court made in the exercise of its original civ il jurisdiction, and every such appeal shall lie to the Cou rt to which appeals ordinarily lie from the decisions of t he court given in the exercise of its original civil jurisdi c tion.
(2) Orders made by the Court in any proceeding under th is Act, under Section 25 or Section 26 shall, subject to t he provisions of sub section (3), be appealable if they are n ot interim orders, and every such appeal shall lie to the cou rt to which appeals ordinarily lie from the decision of t he Court given in exercise of its original civil jurisdiction ; (3) There shall be no appeal under this section on t he subject of costs only.
(4) Every appeal under this section shall be preferr ed within a period of thirty days from the date of the decr ee or order. ' ' Under this provision all decrees made by the Court in a ny proceeding under this Act are appealable.
Apparently a ny proceeding under this Act will refer to a proceeding inst i tuted under Section 13 or a proceeding instituted und er Sections 11 or 12 as Sections 11 or 12 talks of 'decree f or nullity ' and Section 13 talks of 'decree for divorce ' but in order to provide an appeal against all decrees Section 28 has used a very wide terminology which include decrees und er Sections 11, 12 and 13 and so far as this is concerned it could hardly be contested as the language of Section 28 itself is so clear.
It is in this context that we 144 analyse the language of Section 15.
It reads: "Divorced persons when may marry again When a marriage h as been dissolved by a decree of divorce and either there is no fight of appeal against the decree or, if there is such a fight of appeal, the time for appealing has expired witho ut an appeal having been presented or an appeal has been pr e sented but has been dismissed, it shall be lawful for eith er party to the marriage to marry again.
" Before we examine the phraseology 'dissolved by decree of divorce ' it would be worthwhile to examine the remaini ng part of this provision, especially 'if there is such a fig ht of appeal, the time for appealing has expired without an appeal having been presented or an appeal has been present ed but has been dismissed '.
If we give narrow meaning to t he term 'dissolved by decree of divorce ' as contended by t he learned counsel for the respondent, it will mean that if it is a decree under Sec. 13 then either party to the procee d ing have to wait till the period of appeal has expired or if the appeal is filed within limitation till the appeal is disposed of and before that it will not be lawful for eith er party to the marriage to marry again.
The phrase 'eith er party to the marriage ' if is co related with the first pa rt of the Section, marriage which has been dissolved by decr ee of divorce will indicate that what was provided in th is Section was that when a relationship of marriage is di s solved by decree of court and either no appeal is filed or if filed, is dismissed then either party to the marria ge which has been dissolved by the process of law by a decr ee are free to marry again.
The only words on the basis of which the narrow meaning has been given to this Section by some of the High Courts is on the basis of the Words 'decr ee of divorce ', it could not be doubted that where the marria ge is dissolved under Sections 11, 12 or 13 by grant of a decree of nullity or divorce, the relationship is dissolv ed or in any way is brought to an end and it would be signif i cant that if the language of Section 15 is interpreted in the light of Section 28 which provides for appeal and co n fers a right of appeal on either party to proceedings whi ch culminate into a decree bringing an end to the relationsh ip of marriage then we will have to infer that the Legislatu re so far as decrees under Section 13 are concerned wanted t he right of appeal to survive but in decrees under Section 11 or 12 the Legislature wanted the right of appeal to be subject to the will of the other party.
As it is appare nt that if what is contended by the learned counsel for t he respondent and held by some of the High Courts is accept ed that Sec.
15 will not apply to cases when a decree is pass ed under Sec.
11 or 12 it will mean that as 145 soon as a decree is passed the party aggrieved may appe al but the other.
party by remarriage would make the appe al infructuous and therefore the right of appeal of one of t he parties to the decree under Sec.
28 will be subject to t he act of the other party in cases where decree is passed und er Sections 11 or 12 but if it were so, the Legislature wou ld have provided a separate provision for appeal when there is a decree under Section 13 and a different provision f or appeal when there is a decree under Sections 11 or 12 as t he right of appeal against a decree under Sec.
11 or 12 cou ld only be a limited right subject to the desire of the oth er party.
The Legislature in its wisdom has enacted Sec. 28 conferring a right of appeal which is unqualified, unr e strictive and not depending on the mercy or desire of a party against all decrees in any proceeding under this A ct which will include a decree under Sections 11, 12 or 13 a nd therefore the only interpretation which could be put on t he language of Sec.
15 should be which will be consistent wi th Section 28.
This phrase 'marriage has been dissolved by decree of divorce ' will only mean where the relationship of marriage has been brought to an end by the process of cou rt by a decree.
It is plain that the word 'divorce ' or 'decree of d i vorce ' have not been defined in this Act.
The meaning of t he word 'divorce ' indicated in Shorter Oxford English Dictio n ary reads: "Divorce 1.
Legal dissolution of marriage by a court or other competent body, or according to forms locally reco g nized.
Complete separation; disunion of things close ly united ME.
That which causes divorce 1607.
" Similarly the meaning of the word 'divorce ' as indicated in Webster 's Third New International Dictionary reads: "Divorce 1: a legal dissolution in whole or in part of a marriage relation by a court or other body having compete nt authority.
In Vathsala 's case the Court had occasion to consider t he effect of an application for setting aside an exparte decr ee which was granted under Sec. 12 and it was contended th at while the application by the husband for setting aside t he exparte decree was pending the wife contracted remarriag e. Will not remarriage have the effect of making the applic a tion to set aside exparte decree infructuous? More or less a similar question is in the present case where it has be en held that by marrying the second time the respondent ma de the appeal filed by the 146 appellant infructuous, and the learned Judge placing rel i ance on the observations made in Chandra Mohini 's case hel d: "That is the principle of Smt.
Chandra Mohini vs Avina sh Prasad; , The principle laid down in th at decision has general application.
The Supreme Court point ed out that on dissolution of marriage, a spouse can lawful ly marry only when there is no right of appeal against t he decree dissolving the marriage or if there is a right of appeal, the time for filing of an appeal has expired or t he appeal presented has been dismissed.
" The question about an appeal to the Supreme Court has als o been considered in a recent decision of this Court in T e jinder Kaur 's case wherein the observations made in Chand ra Mohini 's case have been quoted and it is held that: "In view of this, it was incumbent on the respondent to ha ve enquired about the fate of the appeal.
At any rate, the Hi gh Court having dismissed the appeal on 16th July, 1986 t he petitioner could have presented a special leave petiti on within ninety days therefrom under article 133(c) of the Lim i tation Act, 1963 i.e. till 14th September, 1986.
Till th at period was over, it was not lawful for either party to mar ry again as provided by section 15.
It was incumbent on the respon d ent, as observed in Lila Gupta 's case (ILR 1969) 1 All. 9 2) to have apprised himself as to whether the appeal in t he High Court was still pending; and if not, whether the peri od for filing a special leave petition to this Court had e x pired.
We must accordingly overrule the views expressed in Chandra Mohini 's; , and Lila Gupta, cases (I LR 1969(1) All 92).
We wish to add that in the subseque nt decision in Lila Gupta the Court while dealing with t he effect of deletion of the proviso observed: The net result is that now since the amendme nt parties whose marriage is dissolved by a decree of divor ce can contract marriage soon thereafter provided of course t he period of appeal has expired.
The Court adverted to the word of caution administered by Wanchoo, J. in Chandra Mohini 's case and reiterated: 147 "Even though it may not have been unlawful for t he husband to have marriage immediately after the High Court 's decree for no appeal as of right lies from the decree of t he High Court to this Court, still it was for the respondent to make sure whether an application for special leave had be en filed in this Court and he could not, by marrying immediat e ly after the High Court 's decree, deprive the wife of t he chance of presenting a special leave petition to this Cour t.
If a person does so, he takes a risk and could not ask t he Court to revoke the special leave on that ground," It is no doubt true that in these two decisions, this Cou rt was considering the impact of an appeal against a decr ee under Section 13 itself and not a decree under Section 11 or 12 but as indicated earlier if the impact of the phraseolo gy 'fight of appeal ' occurring in Sec.
15 is to be examined in the light of language of Sec. 28 as discussed earlier the re will be no difference in respect of the fight of appe al whether the decree is under Sections 11, 12 or 13.
The decisions of the High Court on which reliance is placed by courts below and the learned counsel for t he respondent are: i) Mohanmurari ii) Jam boo Prasad Jain, a nd Pramod Sharrna.
In none of these decisions the impact of t he fight of appeal occurring in Sec. 15 in view of the langua ge of Section 28 where the right of appeal is conferred, h as been considered.
In our opinion, therefore the view taken by the High Court is not correct.
What Section 15 means when it uses the phrase 'has been dissolved by decree of divorce '? It only means where the relationship of marriage has be en brought to an end by intervention of court by a decree, th is decree will include a decree under Sections 11, 12 or 13 a nd therefore the view taken by all the courts below is n ot sustainable.
The contention of the learned counsel for t he appellant has to be accepted so far as this question is concerned.
Learned counsel for the respondent contended that as Section 28 sub clause (4) of the Act provides for the lim i tation for preferring an appeal in view of Sec.
29 clau se (3).
Provisions of will not apply and if th ey do not apply as the trial court disposed of 'the matter by a decree dated 3.5.1985 the period of limitation for appe al could only be upto 3.6.1985 as the period for obtaini ng copies as contemplated under Section 12 clause (2) of t he will not be applicable and therefore even if it is held that under Sec.
15 the respondent had to wa it till the period of limitation for appeal expires 148 as he entered into a marriage on 27.6.1985 it was clear ly after the period of limitation has expired and therefo re this marriage apparently made the appeal filed by the appe l lant infructuous.
It is not in dispute that if the peri od for obtaining copy of the judgment and decree is computed as contemplated in Section 12 clause (2) of the Limitation Ac t, the appeal filed by the appellant before the first appella te court was within the time and if Section 12 clause 2 is he ld applicable then this marriage which the respondent perform ed on 27.6.1985 could not be said to be a marriage which he w as entitled to perform in view of language of Section 15 a nd therefore it could not be said that this marriage render ed the appeal filed by the appellant infructuous.
Learn ed counsel for the respondent mainly placed reliance on t he language of Sec.
29 clause 3 of the where as learned counsel appearing for the appellant contended th at Sec.
29 clause 3 talks of suit or proceedings and therefo re the phrase 'proceedings ' used in clause 3 of Sec.
29 cou ld only refer to suits or other original proceedings and it will not apply to appeals as is very clear from the defin i tion of 'suit ' as defined in Section 2(L) of the Limitati on Act.
It was therefore contended that the provisions of t he will be applicable to appeals under Sec.
28 of the Act.
Learned counsel for the appellant placed rel i ance on the decisions in Chander Dev Chadha vs Smt.
Ra ni Bala, AIR 1979 Delhi 22; Smt.
Sipra Dey vs Ajit Kumar De y, AIR 1988 Calcutta 28 and Kanti bai vs Karnal Singh Thaku r, AIR 1978 M.P. 245.
Section 2(L) of the defines the 'suit '.
It reads: "suit" does not include an appeal or an application".
It clearly enacts that suit does not include an appeal or an application.
Sec. 29 of the reads: "29.
Savings (1) Nothing in this Act shall affect Section 25 of the .
(2) Where any special or local law prescribes for any sui t, appeal or application a period of limitation different fr om the period prescribed by the Schedule, the provisions of Section 3 shall apply as if such period were the peri od prescribed by the Schedule and for the purpose of determi n ing any period of limitation prescribed for any suit, appe al or application by any special or local law, the provisio ns contained in Sections 4 to 24 (inclusive) shall apply on ly insofar as, and to the extent to which, they are not 149 expressly excluded by such special or local law.
(3) Save as otherwise provided in any law for the time bei ng in force with respect to marriage and divorce, nothing in this Act shall apply to any suit or other proceeding und er any such law.
(4) Sections 25 and 26 and the definition of 'easement ' in Section 2 shall not apply to cases arising in the territ o ries to which the Indian Easement Act, 1882, may for t he time being extend.
" Clause (2) of this Section provides that where the limit a tion provided by the special or local law is different fr om the period prescribed by the Schedule, the provisions of Section 3 will apply.
In the Hindu Marriage Act, the peri od of appeal is prescribed.
In the schedule under the Limit a tion Act, there is no provision providing for an appe al under the Hindu Marriage Act.
Thus the limitation prescrib ed under the Hindu Marriage Act is different and is not pr e scribed in the Schedule.
Thus the provisions of Section 3 shall apply and therefore it is clear that to an appeal or application the provisions contained in Sections 4 to 24 shall apply, so far and to the extent to which they are n ot expressly excluded by the special or local law and clau se (3) of this Section provides that the provisions of this A ct shall not apply to any suit or other proceedings under a ny marriage law.
It is therefore clear that so far as clau se (3) is concerned, the impact of it will be that the prov i sions of the will not apply so far as a su it or an original proceeding under the Act is concerned b ut clause (3) will not govern an appeal.
The Schedule in the do not provide for an appeal, under the Hindu Marriage Act but it is only provid ed in clause (4) of Sec.
28 of the Hindu Marriage Act.
Thus t he limitation provided in clause (4) of Sec.
28 is differe nt from the Schedule of the .
Accordingly to clause (2) of Sec. 29, provisions contained in Sections 4 to 24 will be applicable unless they are not expressly exclu d ed.
It is clear that the provisions of the Act do not e x clude operation of provisions of Sections 4 to 24 of t he and therefore it could not be said that the se provisions will not be applicable.
It is therefore cle ar that to an appeal under Section 28 of the Hindu Marria ge Act, provisions contained in Section 12 clause (2) will be applicable, therefore the time required for obtaining copi es of the judgment will have to be excluded for computing t he period of limita 150 tion for appeal.
A Division Bench of Delhi High Court in Chandra Dev Chadha 's case held as under: "The Hindu Marriage Act is a special law.
That this "speci al law" prescribes" for an appeal a period of limitation is also evident.
The period of limitation is 30 days.
It is a period different from that prescribed in the First Schedu le to the .
But when we turn to the Fir st Schedule we find there is no provision in the First Schedu le for an appeal against the decree or order passed under t he Hindu Marriage Act.
Now it has been held that the test of a "prescription of a period of limitation different from t he period prescribed by the First Schedule" as laid down in section 29(2), is satisfied even in a ca se where a difference between the special law and Limitati on Act arose by omissions to provide for a limitation to a particular proceeding under the , see, Cana ra Bank, Bombay vs Warden Insurance Co. Ltd. Bombay, AIR 19 (supra) approved by the Supreme Court in Vidyachar an Shukla vs Khubchand, ; (1102).
Once the test is satisfied the provisions of Ss, 3, 4 to 24, would at once apply to t he special law.
The result is that the court hearing the appe al from the decree or order passed under the Hindu Marriage A ct would under section 3 of the have power to dismi ss the appeal if made after the period of limitation of 30 da ys prescribed thereof by the special law.
Similarly under section 5 for sufficient cause it will have the power to condo ne delay.
Likewise under section 12(2) the time spent in obtaining a certified copy of the decree or order appealed from will be excluded.
If it is so, section 12(2) of the is attracted, and the appellants in all the three appeals wi ll be entitled to exclude the time taken by them for obtaini ng certified copy of the decree and order.
The appeals ar e, therefore, within time.
" Similar is the view taken by the Calcutta High Court in Sm t. Sipra Dey 's case and also the M.P. High Court in Kantibai 's case.
It is therefore clear that the contention advanced by the learned counsel for the respondent on the basis of t he also is of no substance.
151 Consequently the appeal is allowed.
The judgment pass ed by the High Court as well as by the first appellate court is set aside.
We remand the matter back to the first appella te court as that court had disposed of the appeal treating it to have been rendered infructuous.
We therefore direct th at the learned lind Additional District Judge, Nagpur befo re whom the appeal was filed, will hear the appeal on meri ts and dispose it of in accordance with law.
A suggestion was made by the counsel for the appella nt about some tests and willingness of the appellant for ge t ting those tests performed which could be used as addition al evidence in respect of the paternity of the child born to the appellant which has been made a ground for declarati on of marriage as nullity.
Without expressing any opinion, it would be appropriate for the lower appellate court to co n sider the matter if parties approach about additional ev i dence.
The appallant shall be entitled to costs of th is appeal.
Costs quantified at Rs.2500.
R.S.S. Appeal allowed.
| A decree in favour of the respondent husband was grant ed by the Trial Court declaring his marriage with the appella nt to be a nullity under section 12(1)(d) of the Hindu Marria ge Act, 1956 on the ground that the wife at the time of ma r riage was pregnant by some one other than the respondent.
In the appeal filed by the appellant, the respondent raised a preliminary objection contending that the appeal was n ot tenable and had been rendered infructuous because he h ad re married before the filing of the appeal.
The Appella te Court allowed the preliminary objection and dismissed t he appeal, and the High Court dismissed the second appeal.
Before this Court it was contended on behalf of t he appellant that (i) the word 'divorce ' has been used in section 15 in a broader sense and, in view of the langua ge used in that section, it is not possible to distingui sh between a decree of nullity under section 11 or 12 a nd decree of divorce under section 13; (ii) the interpretati on put by the lower courts, on the basis of judgments of so me of the High Courts, that section 15 will not apply to a decree under section 12 but would only apply when there is a decree under section 13, does not appear to be correct as the scope and language of section 15 coupled with the la n guage of section 28, had not been considered by any one of these courts; and (iii) even if it is held that section 15 applies to a decree under section 12, the respondent h ad re married after the period of limitation had expired, as the provisions of the will not apply in vi ew of the section 29(3) of that Act, and therefore the period 138 for obtaining copies of the judgment excluded under secti on 12 clause will not be available to the appellant.
Allowing the appeal, it was, HELD: (1) It is no doubt true that section 12 and se c tion 13 have different phraseology.
In section 12 it is sa id that the "marriage may be annulled by a decree of nullit y" whereas in section 13, the phraseology used is "dissolved by a decree of divorce".
Though in substance the meaning of t he two may be different under the circumstances and on t he facts of each case, but the legal meaning or the effect, is that by intervention of the court the relationship betwe en two spouses has been severed either in accordance with t he provisions of section 12 or in accordance with the prov i sions of section 13.
Probably it is because of this reas on that the phrase 'decree of nullity ' and 'decree of divorc e ' have not been defined.
[143A B] (2) Under the provisions of section 28 all decrees ma de by the Court in any proceeding under this Act are appea l able.
In order to provide an appeal against all decre es section 28 has used a very wide terminology which includ es decrees under sections 11, 12 and 13, and so far as this is concerned it could hardly be contested as the language of section 28 itself is so clear.
[143G H] (3) If it is accepted that section 15 will not apply to cases when a decree is passed under section 11 or 12, it will mean that as soon as a decree is passed the par ty aggrieved may appeal but the other party by remarriage wou ld make the appeal infructuous and therefore the right of appeal of one of the parties to the decree under section 28 will be subject to the act of the other party in cases whe re decree is passed under section 11 or 12.
But if it were s o, the Legislature would have provided a separate provision f or appeal when there is a decree under section 13 and a diffe r ent provision for appeal when there is a decree under se c tion 11 or 12 as the right of appeal against a decree und er section 11 or 12 could only be a limited right subject to the desire of the other party.
[144H; 145A B] (4) The Legislature in its wisdom had enacted section 28 conferring a right of appeal which is unqualified, unr e strictive and not depending on the mercy or desire of a party against all decrees in any proceeding under the Ac t.
Hence, the only interpretation which could be put on t he language of section 15 should be that which will be consis t ent with section 28.
Therefore, the phrase 'marriage h as been dissolved 139 by a decree of divorce ' in section 15 will only mean whe re the relationship of marriage has been brought to an end by the process of court by a decree, which will include a decree under section 11, 12 or 13.
The view taken by t he courts below is accordingly not sustainable.
[145C D; 147F ] Chandra Mohini Srivastava vs Avinash Prasad Srivastava Anr.; , ; Tejinder Kaur vs Gurmit Singh, A IR ; Vathsala vs N. Manoharan, AIR (1969) Madr as 405, referred to.
Mohanmurari vs Srnt.
Kusumkumari, AIR (1965) M.P. 19 4; Jamboo Prasad Jain vs Smt.
Malti Prabha, AIR 1979 Allahab ad 260; Pramod Sharma vs Smt.
Radha, AIR (1976) Punjab 35 5, overruled.
(5) So far as clause (3) of Section 29 of the Limitati on Act is concerned, the impact of it will be that the prov i sions of the will not apply so far as a su it or an original proceeding under the Hindu Marriage Act is concerned, but clause (3) will not govern an appeal.
[149E ] (6) To an appeal under section 28 of the Hindu Marria ge Act, provisions contained in section 12 clause (2) of t he will be applicable, and therefore, the ti me required for obtaining copies of the judgment will have to be excluded for computing the period of limitation f or appeal.
[149G H] Chander Dev Chadha vs Smt.
Rani Bala, AIR (1979) Del hi 22; Smt.
Sipra Dey vs Ajit Kumar Dey, AIR (1988) Cal 28 a nd Kantibai vs Kamal Singh Thakur, AIR (1978) M.P. 245, r e ferred to.
|
Special Leave Petition (Civil) No. 6735 of 1983.
From the Judgment and Order dated the 14th April, 1983 of the Bombay High Court in Notice of Motion No. 859 of 1982 in Appeal No. 295 of 1982.
R. K. Garg, U. R. Lalit, R. V. Mehta and B. P. Maheshwari, with them for the Petitioners.
Dr. Y. section Chitale, Raju Ramchandran and D. C. Singhania for the Respondents.
The order of the Court was delivered by CHINAPPA REDDY, J. Asharam M. Jain sought special leave of this Court under article 136 of the Constitution to appeal against the order of the High Court of Maharashtra in Notice of Motion No. 859 of 1982.
The petition for special leave to appeal ran to 84 pages at the foot of the petition, it was stated "drawn and filed by B. P. Maheshwari & Co., Advocates for the petitioner".
Asharam M. Jain filed an affidavit along with the special leave petition affirming that the statement of facts in paragraphs 1 to 67 in the petition for special leave to appeal were true to his knowledge and belief and based on the record of the lower court.
In several paragraphs of the special leave petition, Asharam M. Jain indulged in wild and vicious diatribe against the then Chief Justice of the High Court of Maharashtra.
To illustrate the limits of the invective, we wish to refer to but one paragraph of the petition, In paragraph 26 of the petition, it was stated by Asharam M. Jain: "The petitioner says that having found that they would no longer be justified in continuing to hear the Notice of Motion and appeal for the several true facts set out in the Transfer Application and the affidavits made by the petitioner and briefly hereinabove set about the learned 721 Chief Justice tried by the said order to harm the petitioner as much as he could and made totally false and wrong observations quite unworthy of the head of the judiciary of the State of Maharashtra, and His Lordship, Mr. Justice Pendse supported the learned Chief Justice The said Order, it is clear, has been made with the sole and dishonest object of causing prejudice in the minds of the Judges of the new Bench against the petitioner and depriving the Judges of the new Bench of their right to independently judicially decide the Notice of Motion on merits, and which is proved by subsequent events.
" When the special leave petition was heard on April 27, 1983 by this Court, the outrageous allegations made against the Chief Justice and the other learned Judge of the High Court of Maharashtra were noticed and two of us (A. P. Sen and E. section Venkataramiah, JJ) made the following order: "The special leave petition is dismissed.
Our attention is drawn to paragraphs 6, 10, 11, 13, 16, 19, 20, 26, 27, 28 30, 31, 34, 38, 39, 42, 50, 57, 60, 62 and grounds 5(v), (x), 7 to 10, (z), (mm), (tt), (uu) of the special leave petition.
The learned Judges have also in the course of the order made reference to the conduct of the petitioner in casting aspersions on the former Chief Justice.
Issue notice for contempt to the petitioner why he should not be committed for contempt under the ".
In answer to the notice issued to Asharam M. Jain, he appeared before the court on July 25, 1983 when the following order was made: "Shri Garg, appears along with the contemner.
He prays for two weeks ' time to file an affidavit and states on instruction that his client is not prepared to withdraw the allegations but wants to make amends.
He is allowed two weeks ' time to file an affidavit.
"Issue notice to the Attorney General for India requesting him to appear ann assist the court in the case.
The Registry shall furnish a copy of the special leave 722 petition and the show cause notice to the learned Attorney General.
"The matter be listed on August 22, 1983.
The contemner shall remain present in the court on that date".
When the matter was taken up for hearing on August 22, 1982, Shri R. K. Garg placed before us an affidavit, said to contain the sincere and unconditional apology of Asharam M. Jain and stated that the contemner was placing himself at the mercy of the court.
He submitted that the court should be so gracious as to accept the unqualified apology tendered by the contemner and refrain from sending the contemner to prison.
He invited our attention to In Re: Shri section Mulgaonkar(1) where Krishna Iyer, J. suggested that `a normative guideline for the judges to observe in this jurisdiction ' was "not to be hypersensitive where distortions and criticism overstep the limits, but to deflate vulgar denunciation by dignified bearing, condescending indifference and repudiation by judicial rectitude".
There is never any risk of judicial hypersensitivity.
The very nature of the judicial function makes judges sympathetic and responsive.
Their very training blesses them with `insensitivity ', as opposed to hypersensitivity.
Judges are always seeking good reasons to explain wrong conduct.
They know there are always two sides to a coin.
They neither give nor take offence because they deal with persons and situations impersonally, though with understanding.
Judges more than others realise the foibles, the frustrations, the undercurrents and the tensions of litigants and litigation.
But, as elsewhere, lines have to be drawn.
The strains and mortification of litigation cannot be allowed to lead litigants to tarnish, terrorise and destroy the system of administration of justice by vilification of judges.
It is not that judges need be protected; judges may well take care of themselves.
It is the right and interest of the public in the due administration of justice that has to protected.
We had occasion to point this out in Advocate General Bihar vs M. P. Khair Industries,(2) where we said: "But, on the other hand, it may be necessary to punish as a contempt, a course of conduct which abuses 723 and makes a mockery of the judicial process and which thus extends its pernicious influence beyond the parties to the action and affects the interest of the public in the administration of justice.
The public have an interest, an abiding and a real interest, and a vital stake in the effective and orderly administration of justice, because, unless justice is so administered, there is the peril of all rights and liberties perishing.
The Court has the duty of protecting the interest of the public in the due administration of justice and, so, it is entrusted with the power to commit for Contempt of Court, not in order to protect the dignity of the Court against insult or injury as the expression "Contempt of Court" may seem to suggest, but, to protect and to vindicate the right of the public that the administration of justice shall not be prevented, prejudiced, obstructed or interfered with.
"It is a mode of vindicating the majesty of law, in its active manifestation against obstruction and outrage." "The law should not be seen to sit by limply, while those who defy it go free, and those who seek its protection lose hope.
" So we approach the question not from the point of view of the judge whose honour and dignity require to be vindicated, but from the point of view of the public who have entrusted to us the task of due administration of justice.
Having given our utmost consideration, we have come to the conclusion that it is not open to us to accept the easy and ready solution suggested by Mr. R. K. Garg of accepting the apology and imposing a fine.
We think that a contumacious disregard of all decencies, such as, that exhibited by the contemner in this case can only lead to a serious disturbance of the system of administration of justice, unless duly repaired atones by inflicting an appropriate punishment on the contemner which must be to send him to jail to atone for his misconduct and thereafter to come out of prison a chastened but a better citizen.
We accordingly sentence him to suffer simple imprisonment for a period of two months.
Before we part with the case, we must express our sense of shock at a sad revelation made by Shri R. K. Garg during the course of the hearing.
When we expressed our surprise and disgust that the special leave petition should have been drawn and settled by advocates of this Court, he told us that special leave petitions are 724 often filed over the names of counsel, who receive the papers from counsel outside Delhi and file them in the Registry of the Court as if drawn and settled by them, though they may have never even looked into the papers.
This is hardly proper and surely discourteous to the Court.
We hope this is not a common practice.
H.L.C. Petition dismissed.
| On a reference being made to it concerning the dismissal from service of the appellant who was a Development officer in the Life Insurance Corporation, the Industrial Tribunal upheld a preliminary objection to the maintainability of the reference and ruled that Development officers in the Corporation were not workmen within the meaning of section 2(s) of the .
His petition under article 226 questioning the validity of the Tribunal 's ruling having been dismissed in limine by the High Court, the appellant approached this Court under article 136.
Allowing the appeal, ^ HELD: Development officers in the Life Insurance Corporation are workmen ' within the meaning of section 2(s) of the [821 B] (i) The Act is a legislation intended to bring about peace and harmony between labour and management in industry and, for that purpose, it makes provision for the investigation and settlement of industrial disputes.
It is, therefore, necessary to interpret the definitions of 'industry ', 'workman ', `industrial disputes ' etc., so as not to whittle down, but to advance the object of the Act.
Disputes between forces of labour and management are not to be excluded from the operation of the Act by giving narrow and restricted meanings to expressions in the Act.
Parliament could never be credited with the intention of keeping out of the purview of the legislation small bands of employees who, though not on the managerial side of the establishment, are yet to be denied the ordinary rights of the forces of labour for no apparent reason at all.
[803 D F] Workmen of Indian Standards Institution vs Management of Indian Standards Institution, ; , referred to.
(ii) The words "any skilled or unskilled manual, supervisory, technical or clerical work" in section 2(s) of the Act are not intended to limit or narrow the amplitude of the definition of 'workman '; on the other hand they indicate and emphasize the broad sweep of the definition which is designed to coverall manner of persons employed in an industry, irrespective of whether they are 800 engaged in skilled work or unskilled work, manual work or supervisory work, technical work or clerical work.
Quite obviously, the broad intention is to take in the entire `labour force ' and exclude the 'managerial force '.
[803 B C] (iii) one does not have to be carried away by the appellation 'development officer ' but must look to the nature of his duties to discover what precisely a development officer is.
It is seen from the Life Insurance Corporation of India (Staff) Regulations that development officers, while classified separately from 'Supervisory and Clerical Staff ' are also classified separately from 'officers ' and from the scales of pay prescribed as well as the authorities competent to appoint and take disciplinary action in respect of various categories of officers and staff mentioned therein it is clear that the appellation 'development officer ' is no more than a glorified designation.
Development officers are separated from 'officers ' strictly so called and are generally placed on a par with subordinate and clerical staff.
The nature of the duties of a development officer gathered from the letter of appointment issued to the appellant indicate that he is to be a whole time employee of the Corporation, that his operations are to be restricted to a defined area, that he is liable to be transferred, that he has no authority to bind the Corporation in any way, that his principal duty is to organise and develop the business of the Corporation in an area allotted to him and for that purpose to recruit active and reliable agents and to train them and that even so, he has not the authority either to appoint them or to take disciplinary action against them.
Further, it was admitted that a development officer has no subordinate staff working under him.
It is thus clear that a development officer cannot by any stretch of imagination be said to be engaged in any administrative or managerial work.
[804 D H, 805 A E, 811 B] 2.
Whenever an industrial dispute is referred to a tribunal for adjudication it has become a fashion with all employers to raise three preliminary objections, viz., that there is no industry, that there is no industrial dispute and that the workman is no workman.
It is a pity that when the Central Government, in all solemnity, refers an industrial dispute for adjudication, a public sector corporation which is an instrumentality of the State instead of welcoming a decision by the tribunal on merits so as to absolve itself of any charge of being a bad employer should attempt to evade decision on merits by raising such objections and never thereby satisfied, carry the matter or ten times to the High Court and to the Supreme Court, wasting public time and money.
Public sector corporations must be model employers and model litigants.
They should not attempt to avoid adjudication by raising needless objections or by adopting needless postures or by indulging in luxurious litigation and drag workman from court to court merely to vindicate, not justice, but some rigid technical stand taken up by them.
[801 D H]
|
vil Appeal Nos.
1905 06 (NT) of 1974 and 3414 of 1984.
From the Judgment and Order dated 24.7.73 and 7.9.81 of the Bombay High Court in I.T.R. No. 19 of 1967, 66 of 1964 and 27 of 1972 respectively.
B. Datta, Additional Solicitor General, M.B. Rao and Ms. A. Subhashini for the Appellant.
Soli J. Sorabji, Harish Salve, Mrs. A.K. Verma and Jeel Peres for the Respondents.
The Judgment of the Court was delivered by PATHAK, CJ.
The assessee is a Hindu Undivided Family deriving income from interest on securities, dividends, property and dealing in shares.
In 1941 the assessee pur chased a share of the Shorrock Spinning and Manufacturing Co. Ltd., hereinafter referred to as 181 "the Shorrock Co.", of the face value of Rs. 1,000 for Rs.3,307.
Later this share was split into 10 shares of Rs. 100 each, and from time to time a total of 80 shares of the face value of Rs. 100 each was issued to the assessee by way of bonus shares.
In consequence, on 31 December, 1959 the assessee owned 90 shares in the Shorrock Co. of the face value of Rs. 100 each.
There is another company called the New Shorrock Spin ning and Manufacturing Co. Ltd. to which reference may be made as "the New Shorrock Co.".
It was decided to amalgamate the Shorrock Co. with the New Shorrock Co., and upon peti tions filed under section 39 1 and section 394 of the the Gujarat High Court made an order dated 23 Septem ber, 1960 directing meetings of the share holders of both the companies.
The meetings were held on 27 October, 1960 and the scheme of amalgamation was approved.
On 25 November, 1960 the High Court sanctioned the scheme of amalgamation and declared that the scheme would be binding on members of both the Companies.
Under the scheme of amalgamation, the undertaking and all the property rights and powers as well as all liabili ties and duties of the Shorrock Co. were to stand trans ferred and vest with effect from 1 January, 1960 in the New Shorrock Co. The scheme of amalgamation provided further for an increase in the share capital of the New Shorrock Co. and it permitted the creation of 14,625 new ordinary shares of the face value of Rs. 125 each of the transferee company.
The newly created shares were to rank pari passu with the existing shares of the transferee company in all respects.
Under the scheme the New Shorrock Co., as the transferee company, was directed to allot to members of the Shorrock Co., the transferor company, one share in the transferee company for every two shares of the transferor company held by them.
The order of the Court directed that the Shorrock Co. should file a certified copy of the order with the Registrar of Companies within 14 days for registration, and on such certified copy being delivered the transferor compa ny would stand dissolved and the Registrar of Companies was to place all documents relating to the transferor company on the file relating to the transferee company and the folios relating to the two companies were to be consolidated ac cordingly.
During the assessment proceedings for the assessment year 1961 62, the previous year being the financial year ended 31 March, 1961, the Income Tax Officer, although apprised of the fact of the scheme of amalgamation and of the acquisition by the assessee of 45 shares of the 182 New Shorrock Co. omitted to consider the applicability of section 12B of the Indian Income Tax Act, 1922.
On 21 January, 1964 the Commissioner of Income tax issued a notice under section 33B of the Act to the assessee stating that the receipt of 45 shares of the New Shorrock Co. "in exchange" of his original holding of 90 shares in the Shorrock Co. in December 1960 had resulted in an assessable profit, and this aspect had been overlooked by the Income Tax Officer when making the regular assessment, and, therefore, he proposed a revision of the assessment.
After heating the assessee, the Commis sioner of Income Tax passed an order dated 29 January, 1964 directing the Income Tax Officer to revise the assessment and to include an amount of Rs.49,350 representing the capital gain resulting from the transaction of the acquisi tion of 45 shares of New Shorrock Co. in place of the 90 shares held in Shorrock Co. On appeal by the assessee before the Income Tax Appellate Tribunal, the Appellate Tribunal held that the transaction represented neither an exchange nor a relinquishment and, therefore, section 12B of the Act was not attracted.
At the instance of the Revenue the Appel late Tribunal referred the following questions to the High Court for its opinion: "1.
Whether on the facts and in the circumstances of the case, the sum of Rs.49,350 could be assessed in the hands of the assessee as capital gains as having ac crued to the assessee by exchange or relin quishment as provided for under section 12B of the Act? 2.
If the answer to the above question is in the affirmative, whether the said sum of Rs.49,350 was assessable in the year 1961 62?" Before the High Court the Revenue did not contend that the transaction constituted a sale or a transfer, and the parties confined themselves to the point whether the trans action represented an exchange or a relinquishment for the purposes of section 12B. The High Court took the view that no exchange can be said to have taken place on the allotment of the 45 shares of the New Shorrock Co. under the scheme of amalgamation.
Nor, in the opinion of the High Court, did it constitute a relinquishment.
In the result, the High Court answered both questions in favour of the assessee and against the Revenue.
The relevant portion of section 12B of the Act provides: 183 section 12B(1) Capital gains.
The tax shall be payable by an assessee under the head "Capital gains" in respect of any profits or gains arising from the sale, exchange, relinquish ment or transfer of a capital asset effected after the 31st day of March, 1956, and such profits and gains shall be deemed to be income of the previous year in which the sale, ex change, relinquishment or transfer took place.
The sole question is whether the receipt of the 45 shares of the New Shorrock Co. upon amalgamation by reason of the share holding of 90 shares of the Shorrock Co. can be described as an "exchange" or a "relinquishment" within the meaning of section 12B of the Act.
It seems plain to us that no exchange is involved in the transaction.
An exchange in volves the transfer of property by one person to another and reciprocally the transfer of property by that other to the first person.
There must be a mutual transfer of ownership of one thing for the ownership of another.
In the present case, the assessee cannot be said to have transferred any property to any one.
When he was allotted the shares of the New Shorrock Co. he was entitled to such allotment because of his holding the 90 shares of Shorrock Co. The holding of the 90 shares in the Shorrock Co. was merely a qualifying condition entitling the assessee to the allotment of the 45 shares of the New Shorrock Co. The dissolution of the Shor rock Co. deprived the holding of the 90 shares of that company of all value.
On the question whether there was any relinquishment, the decision must again be against the Revenue.
A relin quishment takes place when the owner withdraws himself from the property and abandons his rights thereto.
It presumes that the property continues to exist after the relinquish ment.
Upon amalgamation, the shares of the Shorrock Co., as has been mentioned earlier, lost all value as that company stood dissolved.
There is no relinquishment.
The connected cases raise similar questions, and are dealt with accordingly.
In the result, we agree with the view taken by the High Court, and dismiss these appeals with costs.
H.L.C. Appeals dis missed.
| The appellant was detained pursuant to an order of detention passed against him under Section 3(1) of the , with a view to prevent him from in dulging in activities prejudicial to the augmentation of country 's foreign exchange resources.
The detaining authori ty on consideration of the material placed before him came to the conclusion that the appellant was indulging in re ceiving and making payments in India unauthorisedly under instructions from a person residing abroad in violation of the provisions of the Foreign Exchange Regulations Act, 1973 and that the said unauthorised and illegal transactions carried on by him and affected adversely the foreign ex change resources Of the country and as such his detention was necessary.
The appellant assailed his detention before the High Court and being unsuccessful filed this appeal.
Before this Court Counsel for the appellant confined his arguments only to the ground of undue delay caused by the Central Government in disposing of the representation made by the detenu which was calculated to be of 40 days.
The Respondents explained the delay in the counter affidavit filed by it but still according to the appellant 's counsel there has been undue and unexplained delay of 11 days be tween the date of submission of the representation by the detenu to the Superintendent of the Central Prison, Bombay for transmission to the Central Government and the date of receipt of the representation by the Ministry of Finance and, he argued, that this unexplained delay has vitiated the order of detention.
416 Allowing the appeal, this Court, HELD: It is neither possible nor advisable to lay down any rigid period of time uniformly applicable to all cases within which period the representation of the detenu has to be disposed of within reasonable expedition but it must necessarily depend on the facts and circumstances of each case.
[419F] Rashid S.K.v.
State of West Bengal, Sabir Ahmed vs Union of India, ; ; Vijay Kumar vs State of Jammu and Kashmir and Others, ; and Raisuddin alias Babu Tamchi vs State of U.P. and Anr.
, ; ; When it is emphasised and re emphasised by a series of decisions of this Court that a representation should be considered with reasonable expedition, it is imperative on the part of every authority, whether in merely transmitting or dealing with it, to discharge that obligation with all reasonable promptness and diligence without giving room for any complaint of remissness, indifference or avoidable delay, because the delay caused by slackness on the part of any authority will ultimately result in the delay of the disposal of the representation which in turn may invalidate the order of detention as having infringed the mandate of Article 22(5) of the Constitution.
[420A B] In the instant case, the supine indifference, slackness and callous attitude on the part of the jail Superintendent who had unreasonably delayed in transmitting the representa tion as an intermediary, had ultimately caused undue delay in the disposal of the appellant 's representation by the Government which received the representation 11 days after it was handed over to the Jail Superintendent by the detenu.
This avoidable and unexplained delay has resulted in render ing the continued detention of the appellant illegal and constitutionally impermissible.
[421D E] Abdul Karim and Others vs State of West Bengal, ; referred to.
|
: Criminal Appeal No. 36 of 1979.
From, the judgement and Order dated 17.11.1978 of the Madhya Pradesh High Court in Criminal Appeal No. 477 of 1973.
A.N. Mulla, Dhruv Mehta, Aman Vachher and S.K. Mehta for the Appellants.
B.Y. Kulkarni and Uma Nath Singh for Respondents.
The Judgment of the Court was delivered by section RATANAVEL PANDIAN, J.
The two appellants, namely, Chandra Mohan Tiwari and Ram Pal Singh Sengar have filed this criminal appeal challenging the correctness and legality of the judgment and order dated 17th of November 1978 of the High Court of Madhya Pradesh at Jabalpur rendered in Criminal Appeal No. 477 of 1973, whereby the High Court has allowed the appeal preferred by the State by setting aside the order of acquittal passed by the Trial Court and convicted the first appellant under Section 302 IPC and the second appellant under Section 302 read with 34 IPC and sentenced each of them to imprisonment for life.
The matrix of the case which has led to the filing of this appeal briefly stated is as follow: PW 6 Ahiwaransingh was at the material time, a compounder in the Veterinary Hospital, Budhni.
He was residing in one of the quarters situated in the compound of the Veterinary Hospital.
On the opposite side of compound there are Government quarters.
One of which was occupied by appellant Ram Pal Singh (Appellant No. 2), who was serving as Gram Sevak in the Block Development office.
He is married and distantly related to PW 6.
The first appellant Chandra Mohan Tiwari was wielding high influence in that locality and was well known to the members of the family of PW 6.
It appears that he contested the election to the Legislative Assembly from Budhni constituency.
The members of the family of PW 6 included PW 5, the Deceased Saroj aged about 16 years, who are PW 6 's wife and eldest daughter respectively.
PW 6 had settled the marriage of his daughter Saroj at Dahiyapur, Etawah District (U.P.).
On 24.5.1970 he along with his deceased daughter, Saroj, left Budhni for Bhopal enroute to Dahiyapur.
At Bhopal he stayed with his relative by name Arjun Singh.
On 25.5.1970 at 318 about 11.00 A.M. PW 6 had gone to the market leaving Saroj alone in the house.
According to the prosecution, the second Appellant came to the house of PW 6 and told Saroj that her father wanted her presence for selection of clothes.
Saroj believing the words of second appellant and without entertaining any doubt on the representation of the second appellant accompanied him in a jeep which was driven by the first appellant.
Then she was taken to a house where she was wrongfully confined for about two and a half months.
During this period both the appellants are stated to have forcibly committed sexual intercourse with Saroj.
PW 6 lost his nerve on the sudden disappearance of his daughter, but he instead of lodging a report with the police, which evidently he thought would adversely affect the future life of his daughter and her impending marriage and also bring the family in disrepute, unsuccessfully made a frantic and intensive search for his daughter.
Then he lodged a report exhibit P/10 on 3.8.1970 at the Police Station of Mangalwara, alleging that he had reason to believe that Saroj might have been kidnapped by both the appellants.
The police did not take any prompt action on the report.
By that time, the appellants, on coming to know of the lodging of the report, devised a plan fore stall any action being taken against them.
The second appellant took Saroj in a taxi to Hoshangabad and left her near the police station with an instruction to lodge a false complaint at the police station that she was kidnapped from Bhopal on 25.5.1970 by one Ramnath and Indrasen and was wrongfully confined by them.
She was also threatened that the appellants would be keeping a watch over her and that in case she divulged the truth, serious consequences would follow.
As instructed by the second appellant, Saroj lodged a complaint exhibit D/15 on 9.8.1970 at Hoshangabad Police Station.
However, when she was taken to the Police Station, Mangalwara in connection with the report, lodged by her father (PW 6) she told the entire truth to the police and her parents.
Even then no progress was made in the investigation on the report of PW 6 at Mangalwara.
So PW 6 made a fervent plea to the then Chief Minister of the State and requested him to take action in the matter.
It was only thereafter, on the instructions of the higher authorities wheels of investigation started moving on.
The police after completing the investigation filed the charge sheet before the Additional District Magistrate (Judicial) Bhopal against both these two appellants for offences punishable under Section 363, 366 and 376 IPC.
The victim Saroj, when examined before the Magistrate on 12.7.1971 stated in her statement exhibit P/25 that she was kidnapped by both the appellants and wrongfully confined and also subjected to sexual inter course and that she lodged the false report exhibit D/15 at the Hoshangabad police station under duress and as instructed by the second appellant 319 herein.
The Magistrate discharged the first appellant, and committed the second appellant alone to take his trial.
On a revision preferred against the order of discharge of the first appellant both the appellants were put up for trial before the third Additional Sessions Judge, Bhopal in Sessions Case Nos. 66 and 95 of 1972 for offences punishable under sections 363, 366 and 376 IPC.
During the said trial both appellants were on bail.
The case was fixed for recording evidence from 21.8.1972 on which date the victim Saroj was to be examined as a prosecution witness.
While the matter stood thus, according to the prosecution, on 20.6.72 Saroj lodged a report exhibit P/7 at Budhni Police Station complaining that the second appellant had forcibly entered into the backyard of her house, but took to his heels when she raised a hue and cry.
In the above background, the present occurrence had occurred on the intervening night of 20/21st August 1972.
The prosecution case is that on that fateful night the first appellant armed with a pistol and the second appellant with a `farsa ' entered into the house of PW 6 through the main door which was kept ajar by PW 5 who went out of the house of answer call of nature inside the compound and that the first appellant fired a shot which hit on the chest of the victim Saroj, who was then in her bed and caused her instantaneous death.
Both PWs 5 and 6 identified the appellants as the assailants.
PW 6 tried to chase the appellants, but he stumbled near the gate of the compound and could not apprehend them.
The distress cries of PWs 5 and 6 attracted the neighbours to the scene.
PW 6 narrated the incident to PWs 1 and 2 by mentioning the name of the appellants as the assailants and requested PW 1 to lodge a report at the police station.
Accordingly, PW 1 lodged the First Information Report exhibit P/1 at 1.30 A.M. PW 18, the investigating officer took up the investigation during the course of which he inspected the scene of the occurrence, held in quest and then sent dead body to the hospital for necropsy.
On the next day i.e. on 21.8.72 both the appellants were arrested when they had come to attend the hearing of the case of kidnaping and rape.
After completing the investigation both the appellants were put up for trial.
The Sessions Judge of Indore found both appellants not guilty of the offence of murder and consequently acquitted them.
Feeling aggrieved by the judgment of the Trial Court, the State preferred the appeal before the High Court, which for the detailed discussion made in its judgment held that the prosecution has satisfactorily established the guilt of both appellants beyond all reasonable doubts, allowed the appeal by setting aside the judgment of the Trial Court acquitting the appellants and convicted the first appellant under section 302 and the second appellant under Section 302 read with Section 34 IPC and sentenced each of them to undergo imprisonment for life.
Hence the present appeal is preferred by the appellants on being aggrieved by the impugned judgment of the High Court.
320 Mr. A.N. Mulla, the learned Sr. Counsel appearing on behalf of the appellants after taking us in detail through the judgment of the courts below, evidence of the prosecution as well as the defence witnesses and in particular exhibit D/15, the First Information Report dated 9.8.70 relating to the offence of kidnaping and rape registered on the basis of the complaint given by the deceased Saroj at Hoshangabad Police Station, vehemently submitted that the prosecution has miserably failed to prove the motive for the occurrence.
The learned counsel perfervidly advanced his argument inter alia contending that the High Court has erred in reversing the judgment of the Trial Court based on well reasoned and considered findings of fact, ignoring the settled principles of law as laid down by this Court as regards the scope of interference of the High Court in an appeal preferred against an order of acquittal, that the evidence of PWs 5 and 6 who had developed rancur and were inimically disposed towards the appellants ought not to have been accepted and implicitly relied upon as their testimony is highly tainted with interestedness, that the contents of exhibit D 15 whereby the deceased had implicated Ram Nath Singh and one Indra Sen as assailants of kidnaping belie the version of PWs 5 and 6 and negative the prosecution story as far as the motive is concerned, that the evidence of PWs 5 and 6 suffers from the vice of discrepancies and incongruities, that the non recovery of any `lota ' (a small vessel) from the place where PW 5 was easing as well as the non marking of the place where the said vessel was kept in the site plan falsify the evidence of PW 5 that she opened the door and went near the compound wall to answer call of nature , that the recovery of two bullets from the scene is an indication of the fact that there should have been two shots, that there was delay in laying the complaint, that the unchallenged claim of the appellants that they were in Bhopal clearly shows that the appellants would not have come to Budhni from Bhopal that too at the odd hours with an anticipation that the door of the scene house would be kept open.
The learned counsel further submits that had the appellants come to the scene house to assassinate the victim Saroj, they would not have exposed themselves without covering their faces so that their identity could not be established and that the life of the girl might have been put to an end by inmates of the said house, particularly her father on account of some conspiracy since the victim girl wanted to have the case of kidnaping and rape not to be proceeded with.
Before adverting to the contentions, urged by the learned counsel, we would like to briefly state the legal position regarding the right of appeal of an accused person sentenced to imprisonment for life by the High Court after reversing the order of acquittal and the scope of interference in such appeal by this court.
The present appeal is under Section 379 321 of the Code of Criminal Procedure of 1973 (hereinafter referred to as the `code ') and Section 2(a) of the of 1970 (hereinafter referred to as `the Act of 1970 ') Section 379 of the Code contemplates that where the High Court has, on appeal, reversed an order or acquittal of an accused person and convicted him and sentenced him to death or to imprisonment for life or to imprisonment for the term of ten years of more, that person may appeal to the Supreme Court.
This section in newly introduced in the Code of 1973 (Act 2 of 1974) on the recommendation of the Law Commission of India in its 41st Report.
Article 134 (1) (a) of the Constitution envisages that an appeal shall lie to the Supreme Court from any judgment, final order or sentence in a criminal proceeding of the High Court in the territory of India if the High Court has on appeal reversed an order of acquittal of an accused person and sentenced him to death.
To say in other words under Article 134 (1) (a) the absolute right of appeal to the Supreme Court is restricted only to cases where the High Court reverses an order of acquittal passed by the Trial Court and awards the sentence of death.
The right of appeal is also extended under Article 134 (1) (b) to cases where the High Court has withdrawn for trial before itself any case from any court subordinate to its authority and has in such trial convicted the accused person and sentenced him to death, which type of cases are rare and infrequent occurrence.
Under clause (c) of the above said Article an appeal lies to the Supreme Court on a certificate under Article 134 A by the High Court certifying that the case is a fit one for appeal to the Supreme Court but, of course, subject to the proviso to Article 134 (1).
In this connection, it is pertinent to note that the Government of Madras (as then called) expressed its view that the limited right of appeal now conferred in case of the persons sentenced to death by clauses (a) and (b) of Article 134 (1) should be enlarged and that in all cases in which the accused persons are sentenced to death, there should be a right of appeal to the Supreme Court without the need of a certificate from the High Court.
This view was rejected by the Law Commission of India in its 14th Report stating that even in cases not covered by clauses (a) and (b) of Article 134 (1) the High Court has the power to certify the case as a fit one for appeal to the Supreme Court under Clause (c) and further there is also the safeguard provided by the wide powers of the Supreme Court under Article 136 which confers a discretionary power on the Court to interfere by granting special leave to appeal in suitable cases including cases where the High court has refused to grant Certificate for appeal under Article 134 (A).
See the decision of the constitution Bench in Tarachand vs State of Maharashtra ; = ; and the later decision in Krishan and others vs State of Maharashtra.
322 To avoid proliferation we are not citing all the decisions on this aspect.
The reason, given by the Law Commission in its 14th Reports (Volume I at page 52) for rejecting the view of the Government of Madras is as follows: "We are not inclined to accept this view.
For over a century such cases have been dealt with by the High Courts subject to the superintendence of the Privy Council under its special leave jurisdiction and there is no reason why the High Courts should not continue to deal with such cases in the same manner.
" In 1968 a Private Member 's Bill was introduced in Parliament which proposed that the limited jurisdiction of the Supreme Court contemplated under Article 134 (1) (a) and (b) should be enlarged to cover cases where the High Court has, after reversing an order of acquittal, sentenced a person to imprisonment for life or for 10 years or more.
Be that as it may in its 41 st Report, the Law Commission expressed its view that the limitation of the right of appeal under Article 134 (1) (a) and (b) applies only to cases of death but not to cases of imprisonment for life awarded by the High Court or appeal against acquittal and that limitation "is too stringent and not easily justifiable and that the convicted persons ought to have a right of appeal in such cases".
The Law Commission, at the same time, was not in favour of extending this right of appeal in which the High Court has on appeal against acquittal sentenced a person to imprisonment for a term of 10 years or more, and proposed a new Section 417 B restricting such appeal to the Supreme Court only in cases of sentence of imprisonment for life.
While so, the Joint Select Committee by its report dated 4th December, 1972 drafted clause 379 (original clause 389) of the Code of Criminal Procedure Bill 1970 (page xxvi) which reads thus: "The amendment has been made to bring the provision of the clause in line with the provisions of the .
Vide the 14th Report of the Law Commission (at page 52) and the 41st Report of the Law Commission (paragraphs 31.65 to 31.69 at pages 281 283).
Section 2 of the Act of 1970 reads thus : 2.
Enlarged appellate jurisdiction of Supreme Court in regard to criminal matters.
Without prejudice to the powers conferred on the Supreme Court by clause (1) of article 134 of the Constitution, an appeal shall lie to the Supreme Court from any judgment, final order of sentence in a criminal proceeding 323 of a High Court in the territory of India if the High Court (a) has an appeal reversed an order of acquittal of an accused person and sentenced him to imprisonment for life or to imprisonment for a period of not less than ten years ; (b) has withdrawn for trial before itself any case from any court subordinate to its authority and has in such trial convicted the accused person and sentenced him to imprisonment for life or to imprisonment for a period of not less than ten years.
" The right of appeal under the above Section to the Supreme Court is an addition to those provided under Article 134 (1) of the Constitution.
In cases which do not come under clauses (a) and (b) of Article 134(1) or under the Act of 1970 or Section 379 of the Code an appeal does not lie as of right to the Supreme Court against any order of conviction by the High Court.
In such cases, appeal will lie only if a certificate is granted by the High Court under sub clause (c) of Article 134 (1) certifying that the case is a fit one for appeal to the Supreme Court or by way of special leave under Article 136 when the certificate is refused by the High Court.
See Mahebub Beg and others vs State of Maharashtra, (S.C.) CR.
A 120/64 dated 19.3.1965 reported in and Babu vs State of U.P. ; = ; The resultant position of law from the conjoined reading of the above provisions of the Constitution, the Act of 1970 and the Code of Criminal Procedure is as follows: (1) Under sub clause (a) of Article 134(1) an appeal lies as of right to the Supreme Court in a case where the High Court has reversed an order of acquittal of an accused person and sentenced him to death.
(2) Under sub clause (b) of Article 134 (1) an appeal lies as of right to the Supreme Court in a case where the High Court has withdrawn the case for trial before itself from any court subordinate to its authority and sentenced him to death.
(3) Under Section 2 (a) of the Act of 1970 an appeal lies as of right to the Supreme Court in a case where the High Court has reversed an order of acquittal of an accused person and sentenced him to imprisonment for life or imprisonment for a period of not less then 10 years 324 (4) Under Section 2 (b) of the Act of 1970 an appeal lies as of right to the Supreme Court in a case where the High Court has withdrawn for trial before itself any case from any court subordinate to its authority and has in such trial convicted the accused person and sentenced him to imprisonment for life or imprisonment for a period of not less than 10 years.
(5) Under Section 379 of the Code, which is now newly introduced in line with the Constitutional provisions of Article 134 (1) (a) and (b) and with Section 2 of the Act of 1970, an appeal lies as of right to the Supreme Court in a case where the High Court has on appeal reversed an order of acquittal of an accused person and convicted and sentenced him either to death or to imprisonment for life or imprisonment for a term of 10 years or more.
(6) In cases not covered by Article 134 (1) (a) and (b) or Section 2 (a) and (b) of the Act of 1970 or by Section 379 of the Code of Criminal Procedure an appeal will lie only either on a certificate granted by the High Court under Article 134 (1) (c) or by grant of special leave to appeal by the Supreme Court under Article 136.
The right of appeal given under Section 379 of the Code is in line with Article 134 (1) (a) and (b) and Section 2 (a) and (b) of the Act of 1970.
This Court in Podda Narayana and others vs State of Andhra Pradesh ; = [1975] (Supp) SCR 8 had an occasion to examine the scope of Section 2 of the Act of 1970 and held thus : "As the High Court had awarded the sentence of life imprisonment after reversing the order of acquittal passed by the Additional Sessions Judge the appeal to the Supreme Court lies even on facts and as a matter of right under Section 2 of the ".
M.H. Beg, J. as he then was, speaking for the Bench in Ram Kumar Pande vs The State of Madhya Pradesh, ; = ; observed as follow. "Strictly speaking, no certificate of the High Court is required for such an appeal where an acquittal has been converted into a conviction under section 302/34 I.P.C. and a sentence of life imprisonment imposed upon an accused person.
The appeal in, such a case, lies as a matter of right to this Court under the Act of 1970.
" 325 This Court in Rajendra Prasad vs State of Bihar, ; = ; while disposing of an appeal preferred under Section 2(a) of the Act of 1970 laid down the following dictum: "Thus when two courts, have come to a different conclusion on the same evidence, we had ourselves to go through the entire evidence carefully in order to see whether the appreciation of the evidence by the Sessions Judge was so unreasonable and unrealistic as to entitle the High Court to interfere with the same.
" In Kishore Singh and another vs The State of Madhya Pradesh, AIR 1977 S.C. 2267 = ; the following view similar to the one taken in Ram Kumar Pande 's case was reaffirmed and it read thus : "The High Court is not right in holding that a certificate is necessary under Article 134 (1) (c) of the Constitution if the appellants have a right of appeal under Section 2 of the Act." In Ram Kumar Pande 's case, the jurisdiction of the Supreme Court to interfere in a judgment of the High Court reversing the acquittal of the Trial Court and convicting the accused person and sentencing him to life imprisonment, in respect of which an appeal to the Supreme Court lies as of right was examined and the following maxim has been laid down.
"The well settled rule of practice in a case of an appeal against an acquittal is that the appellate Court should not interfere with the acquittal merely because it can take one of the two reasonably possible views which favours conviction.
But, if the view of the Trial Court is not reasonable sustainable, on the evidence on record, the Appellate Court will interfere with an acquittal.
If the Appellate Court sets aside an acquittal and convicts, we have to be satisfied, after examining the prosecution and defence case and the crucial points emerging for decisions from the facts of the case, that the view taken by the Trial Court, on evidence on record, is at least as acceptable as the one taken by the High Court, before we could interfere with the High Court 's judgment.
" Kailasam, J. speaking for the Bench in Bhajan Singh and others vs State of Punjab, ; dealing with the scope of the appeal before the Supreme Court filed under Section 2 (a) of the Act of 1970 observed thus : "as a court of appeal this Court has got to go into all the 326 questions of fact and law and decide the case on its merit.
After a right of appeal has been provided under the said section, the question, whether the High Court interfered on sufficient ground or not, will not be material, as this Court has to decide the case on its own merits.
The decisions, regarding the scope of appeal against an acquittal, the powers of the High Court to interfere in an appeal against acquittal by the State, which may be relevant when the Supreme Court is acting under Article 136, are not material in deciding an appeal by a person, whose acquittal has been set aside by the High Court, and who is entitled to prefer an appeal to this Court.
" In Dinanath Singh & others vs State of Bihar, AIR 1980 S.C. 1199 = , an appeal under Section 2 (a) of the Act of 1970 was directed against the judgement of the Patna High Court convicting the appellants therein under Section 302 read with 34 IPC and sentencing them to imprisonment for life by reversing the order of acquittal of the Trial Court.
While disposing the appeal Fazal Ali.
J. speaking for the Bench pointed out thus: "It is now well settled by the long course of decisions of this Court that where the view taken by the trial court in acquitting the accused is reasonably possible, even if the High Court were to take a different view on the evidence, that is no ground for reversing the order of acquittal." This court while disposing an appeal filed under Section 379 of the Code in Pattipati Venkaiah vs State of Andhra Pradesh, affirmed the order of conviction passed by the High Court on the ground that the judgment of the Trial court acquitting the accused was extremely perverse and no other reasonable view was possible than the guilt of the accused.
Reference also may be had to Sita Ram and Others vs State of U.P. [1979] 2 SCC 656 and Rajput Ruda Meha and Others vs State of Gujarat, This Court in a catena of decisions have dealt with the power of the High Court to review evidence and reverse order of acquittal and laid down the guidelines in exercising that power.
Though it is not necessary for us in the present case to deal with all those decisions, the following may be referred to : 327 Roop Singh and others vs State of Punjab. ; = ; ; Dargahi and others vs State of U.P., AIR 1973 S.C. 2695 = ; Barati vs State of U.P., AIR 1974 S.C.839 = ; ; G.B. Patel vs State of Maharashtra; , = ; ; and Kanwali vs State of U.P.
Having regard to the above principle of law, we shall now carefully scrutinize the entire evidence adduced by the prosecution and examine the contentions advanced by Mr. Mulla and decide the case on its merit, independent of the views expressed by the High Court in its impugned judgment : Motive for the murder: There is overwhelming evidence both oral and documentary in clearly establishing a strong motive for the appellants/accused to put an end to the life of the deceased Saroj, who when examined before the Magistrate on 12.7.1991 had deposed under exhibit P/25 that she was kidnapped by both the appellants, wrongfully confined and subjected to sexual intercourse, though she initially lodged a report under exhibit D 15 on 9.8.70 at the Hoshangabad police station against some other persons exculpating these two appellants.
Earlier to her examination before the Magistrate the deceased lodged a report exhibit P 7 on 20.6.1972 at Budhni police station complaining that the second appellant had forcibly entered into the backyard of her house and on her raising a cry he took to his heels.
The trial of the case against both the appellants before the Additional Sessions Judge, Bhopal in Sessions Case Nos. 66 and 95 of 1972 under Sections 363, 366 and 376 IPC was fixed for recording the evidence of the victim in that case, namely, the deceased herein from 21.8.1972.
Both the appellants were on bail in the case of kidnaping and rape during the period of the occurrence in question which occurred on the intervening night of 20/21st August 1972.
The learned counsel for the appellants has submitted that PWs 5 and 6 had sufficient motive to implicate both the appellants in this heinous crime of murder as these two appellants according to both PWs had spoiled the future career of their daughter, deceased Saroj by kidnaping and committing rape on her even if the identity of the real assailant/assailants was or were not known and further there was every possibility of PW 6 falsely implicating these two appellants on strong suspicion.
As stated by Fazal Ali, J. in State of Punjab vs Pritam Singh, "when the motive was equally balanced, the Court had to look to surrounding circumstances in order to find out the truth.
" 328 This is not a case solely based on circumstantial evidence, but on the other hand there are two eye witnesses to the occurrence, namely, PWs 5 and 6.
The several impelling circumstances attending the case namely, the prior incident of kidnaping and rape, the conduct of the deceased Saroj in giving her statement under exhibit P. 25 supporting the case of the prosecution registered on the complaint given by PW 1 at the instance of PW 6, the lodging of the complaint under exhibit P 7 by Saroj on 20.6.72 against the second appellant and lastly the posting of the case for recording the evidence of Saroj on 21.8.72 when taken in conjuction with the evidence of PWs 5 and 6, unevasively and unerringly show that these two appellants had strong motive to snap the life thread of the victim so that she could not give evidence on the next day in the case of kidnapping and rape.
The contents of exhibit D 15 cannot be said to have whittled down the veracity of the prosecution case as regards the motive for the occurrence.
On the other hand, the subsequent statement made by the deceased under, the exhibit P/25 explaining under what circumstances she was forced to give exhibit D 15 would also serve as a corroborating piece of evidence in establishing the motive for the occurrence.
Ocular Testimony : As per the prosecution, due to the above motive the appellants have resorted in perpetrating this dastardly and heinous crime, PWs 5 and 6 though the parents of the victim, are the natural and probable eye witnesses as the incident had occurred in the odd hours inside their house wherein these two witnesses and their 4 daughters including the deceased Saroj were the inmates.
According to these two witnesses by about 12 or 12.30 mid night PW 5 went out of the house by opening the main door to answer call of nature within the compound.
Besides moon light, there was electric light within the compound.
Added to that there was also electric light burning in the residential quarter of Doctor Sahib shedding light inside the compound of the scene house.
PW 5 sighting the two appellants yelled out.
She found the appellant Chandra Mohan Tiwari having a small gun and the second appellant Rampal Singh being armed with a farsa.
On hearing the cry of PW 5, Saroj woke up.
PW 6 who had earlier been awakened by his wife (PW 5) saw both the appellants entering into his house with their respective weapons.
The deceased Saroj on seeing the two appellants hardly uttered `Babaji '.
Suddenly the first appellants fired a shot which hit Saroj.
On receipt of the injury Saroj fell down on her cot.
Thereafter both the appellants fled away.
PW 5 witnessed both the appellants entering into the room and heard the sound of a gun shot and the 329 appellants thereafter running out of the house.
While PW 5 yelled out, PW 6 ran after the appellants up to the compound shouting that the appellants had fired a gun shot at Saroj.
On coming out of the compound, PW 6 fell down.
PWs 1, 2 and others who rushed to the scene on hearing the shrieks and shouts of PWs 5 and 6 lifted PW 6 and brought him inside the house.
PWs 1, 2 and others asked PW 6 as to what had happened.
PW 6 told them that the first appellant had fired a shot at his daughter Saroj and thereafter both the appellants had fled away from the scene.
The victim Saroj by that time was struggling for breathing and gasping.
PW 1 has testified to the fact that he arrived at the scene on hearing the shouting of PW 6 "killed, killed ' and found PW 6 lying down outside the main gate of his compound, that PW 1 and others lifted PW 6 and brought him inside the house, that on being asked PW 6 informed PW 1 and others that Sengar and "Tiwari (referring to both appellants) had shot at his daughter and that PW 6 requested him to lay a complaint at Budhni Police Station.
The Trial Court for the reasons given in its judgment observed that the evidence of PW 5 as regards to the identity of the appellants is "totally unreliable" and that of PW 6 appears to be "absurd and fantastic" and finally concluded thus: ". .
I find the two accused persons had no motive to perpetrate the crime in question, that one Gungasingh and possibly the father of the girl Ahivaransingh might have had stronger motive for perpetrating the murder, that it was impossible for the accused persons to have been present at Budhni at 12.30 that night and that it is most likely that they have been falsely implicated in the murder by the political rivals of the accused Chandra Mohan Tiwari and with the motive of preventing the accused Ram Pal Singh over getting married to Saroj." The entire prosecution as indicated ibid mainly rests on the evidence of PWs 5 and 6 who are the unfortunate parents of the victim and who speak about the motive of the occurrence and give a full detailed account of the entire incident.
In addition to the ocular testimony of PWs 5 and 6 the prosecution also relies upon the evidence of PWs 1 and 2, who came to the scene spot immediately after the occurrence and learnt from PWs 5 and 6 that the appellants were the perpetrators of the crime.
No doubt, it is true that the evidence of PWs 5 and 6 is that of the interested party in that both of them are the parents of the victim and that they had animus towards the appellants.
As dexterously emphasised by the 330 Supreme Court on many occasions that interested witnesses are not necessarily false witnesses though the fact that those witnesses have personal interest of stake in the matter must put the Court on its guard, that the evidence of such witnesses must be subjected to close scrutiny and the Court must assess the testimony of each important witness and indicate the reasons for accepting or rejecting it and that no evidence should be at once disregarded simply because it came from interested parties.
Vide Siya Ram Rai vs State of Bihar, ; Sarwan Singh vs State of Punjab, ; Birbal vs Kedar, AIR 1977 S.C.1 = ; ; Gopal Singh vs State of U.P. AIR 1979 S.C.1822 = ; Hari Obulla Reddy & Others vs State of Andhra Pradesh, [1981]3 SCC 675; and Anvaruddin & Ors.
vs Shakoor & Ors.
[1990]2 Judgements Today S.C. 83.
After carefully scanning the evidence of PWs 5 and 6, we unreservedly come to the conclusion that their evidence cannot be thrown overboard simply on the ground that their evidence is of the interested party because when the occurrence had taken place inside the house, that too at dead of night, it would be futile to expect of the prosecution to produce independent outsiders as witnesses.
It was contended by Mr. Mulla that PWs 5 and 6 could not have identified the assailants since according to PW 6 both assailants had covered their faces so that faces behind the mask could never be known to others and remain mystery for ever.
But a careful reading of the evidence of PW 6 in our opinion does not support the conclusion sought to be arrived at by the learned defence counsel.
What PW 6 had admitted in the cross examination is that both the appellants had tied a towel on their heads, but their identity was visible.
It transpired from the evidence of PWs 1, 2 and 6 that PWs 1 and 2 who immediately came to the scene of the occurrence were informed by PW 6 that the assailants were the two appellants.
The spontaneous declaration to Pws 1 and 2 by PW 6 without premeditation or any deliberation or artifice by naming the appellants as assailants can be admitted as resgestae and acted upon.
It is significant to note in this connection that PW 1 who laid the First Information Report Ex P 1 within an hour from the time of the occurrence has mentioned the names of these two appellants as having been given by PW 6 at the scene immediately after the occurrence.
The FIR has been lodged without any loss of time though it has been hesitatingly stated that there was a delay.
The chronology of events narrated and the factual conspectus recounted by PWs 5 and 6 are unshakable and the intrinsic quality of the evidence of these two witnesses compel 331 this Court to implicitly rely on their testimony and to accept the same.
In spite of the fact that these two PWs have been subjected to intensive and incisive cross examination, nothing tangible has been brought for discarding their testimony.
No doubt, the earlier conduct of the appellants in kidnaping and forcibly raping their daughter, the victim should have inflicted deeper wounds in the minds of these two witnesses, but that cannot in any way destroy the value of their evidence which is cogent and trustworthy.
PWs 3 and 4 who were examined by the prosecution to speak about the movements of the appellants near the scene at or about the time of the occurrence have resiled from their earlier statements and have not supported the prosecution case.
The evidence of Pws 5 and 6 which is corroborated by various other circumstances would in our opinion suffice of record a conviction against the appellants.
The Trial Court appears to have gone wrong in jettisoning the entire evidence in a very scanty and unsatisfactory manner with unsound reasoning.
The non recovery of `lota ' (a small vessel for taking water) and the non marking of the place where the said vessel was kept in the site plan are too tenuous and they do not in any way belittle the veracity of the prosecution case.
The recovery of the pellets below the dead body and the cork, usually fixed on cartridges from the chest of the girl under the Memo exhibit P 4 as spoken by PWs 1 and 18 amply corroborate the evidence of PW 6 and support the prosecution case that the girl was shot dead in close range while she was on her bed.
Being the parents of the victim, they would be the least disposed to falsely implicate the appellants or substitute them in place of the real culprits.
In our considered opinion, whilst the conclusion arrived at by the Trial Court abjuring the unimpeachable and reliable evidence of PWs 5 and 6 on speculative reasons and unreasonable grounds, the contrary conclusion of the High Court based on the evolution of the evidence does not suffer from any illegality or manifest error on perversity nor is it erroneous.
Further, on our independent analysis of the evidence we see absolutely no substantial and compelling reasons to brush aside the testimony of these two eye witnesses and to take a contrary finding to that of the High Court.
Based on the evidence of DW 1, an advocate at Bhopal, who defended the appellants herein in the kidnaping case and who had deposed that on the night of 20.8.72 the first appellant was with him from 9/9.30 P.M. to 12 mid night and who had filed exhibit P30, and application before the court stating that the first appellant was with him, an argument was advanced that the appellants could not have gone to the scene village 332 Budhni from Bhopal, when the distance between the two places is about 40 miles and committed the offence of murder.
In support of the evidence of DW 1 reliance has been placed on the testimony of DWs 2 to 4 of whom DW 3 was the Proprietor of Chetna Lodge, who had testified to the effect that the first appellant was in his lodge from 18th to 21st August as borne out from the entry in exhibit
A similar contention of alibi was also raised before the High Court on the basis of the evidence of the defence witnesses and the High Court after discussing and deeply examining the testimony of the defence witnesses made the following observations: 1.
"It is with regret that we have to say that the testimony of this witness (PW 1) does not inspire any confidence.
"It is surprising that the learned trial Judge should have placed reliance on the testimony of DW 2 Ramakant and D.W.7 Durgaprasad and come to the conclusion that accused Rampalsingh could not have been at the scene of occurrence as he was at Bhopal, forty miles away from the scene of occurrence, at the relevant time.
" Further the High Court was correctly rejected the finding of the Trial Court as an unreasonable one holding: ". .it is most likely that they have been falsely implicated in this murder by the political rivals of the accused Chandramohan Tiwari and with the motive of preventing the accused Rampalsingh ever getting married to Saroj.
" We also after going through the evidence of the defence witnesses are unable to accept the plea of alibi and are in total agreement with the reasons given by the High Court for rejecting not the plea of alibi but also the defence that these appellants were implicated on account of political rivalry.
Medical Evidence: PW 17 who conducted autopsy on the dead body of the deceased found a lacerated wound on the chest just left the mid line at the level of nipple over the third, fourth and fifth inter costal space.
The wound was slightly oval shaped measuring 1 1/2" x 2" deep and opening into thoraic cavity.
The surrounding skin was ecchymost, but no tattooing of gun powder was noticed.
The wound as described by the Doctor is a slit like small lacerated wound on the medial end of clavicle.
On internal examination PW 17 he found comminuted fracture of sternum and second, 333 third ribs of left side chest.
There was a punctured wound on the medial border of left lung near its appex.
He found one rounded pellet (which has been recorded as bullet, but has been clarified in the further chief examination as pellet which receives support from the evidence of PW 19, the ballistic expert) in the left cavity of the chest, embedded in the posterior wall of chest at scapular region at the level of second and third ribs.
The Medical Officer is of the opinion that the death was due to severe fatal injuries to vital organs like left lung and heart resulting in profuse bleeding and shock.
PW 19 after examining the two pellets and two wads marked as Ex.
P1 and P 2 and W1 and W2 respectively gave his opinion that the holes, found on the saree, chader (bed sheet) and the blouse were gun shot holes and there was presence of blackening surrounding the holes on the chader and that the distance of firing should have been within one yard.
The evidence of the Medical Officer (PW 17) and of the Ballistic expert (PW 19) amply corroborates the testimony of PWs 5 and 6 that the assailants whomsoever they had been should have entered into the room and shot at the victim standing within a close range.
Mr. Mulla advanced an argument that the recovery of the two pellets and two wads from the scene place is an indicative of the fact that there would have been two shots, and that the presence of only one injury on the body of the deceased as per the evidence of PW 17 falsifies the present prosecution case that the victim was shot at only once.
The presence of the pellets and two wads, of course, indicate that there ought to have been two shots, but it does not necessarily follow that both the shots, should have hit the victim, probably one of the shots must have missed target.
From the mere absence of two injuries on the body of the deceased, no conclusion would be arrived at that the entire prosecution case is liable to be rejected.
The further submission of the learned counsel that the appellants should not have come at the odd hours anticipating that the main door of the house would have been kept open does not appeal to us.
Probably, the appellants who came there with the intention of putting an end to the life of the victim by any other design should have taken this opportunity to enter into the house and shot at the deceased.
Lastly a feeble argument was put forth by the defence stating that the father of the deceased and other inmates of the house on being aggrieved at the conduct of the victim should have put an end to the life of the girl by conspiring together.
This submission has to be mentioned for 334 simply rejecting the same because had the father and other inmates of the house had already conspired to murder the girl, they would not have waited for such a long time and ultimately killed her by shooting at her chest.
No father, however grave be the provocation at the hands of his daughter would resort, in the normal course to kill his daughter or participate in any conspiracy to murder her.
Moreover, there is no circumstance in the present case even feebly or remotely indicating that the inmates of the house were responsible for the cause of the death of the deceased.
In spite of our best efforts and great deal of pondering over the matter, we find absolutely no reason, much less compelling reason to disagree with the conclusion of the High Court since the organic synthesis of the events, circumstances and facts of the case lead only to one conclusion, namely, that the prosecution has established that this preplanned and cold blooded murder, executed in very cowardly and dastardly manner at a helpless and defenceless young girl was perpetrated by the appellants.
We, quite apart from the reason of the High Court, even on our independent assessment and evaluations of the evidence hold that the finding of the Trial Court is not reasonably sustainable and that the prosecution has satisfactorily proved the guilt of the accused beyond any shadow of doubt and consequently the judgment of the High does not call for any interference.
In the result, the impugned judgment of the High Court is affirmed and the appeal is dismissed.
T.N.A Appeal dismissed.
| The appellant 's contract with Indian Airlines included the construction and fabrication of air craft testing cen tre/engine repair centre in Delhi.
For getting that work done, the appellant entered into a contract with the re spondent 1.
As per the contract, respondent 1 was required to provide performance bond equal to 30 per cent of the total value of contract price, which was to be split up into two performance bonds partly to be released on completion of the project, and the balance upon the expiration of the warran ty, and to furnish a Bank guarantee to secure the mobilisa tion advance of 25 per cent of contract value.
Respondent II, instead of furnishing the two perform ance bonds, wrote a letter for a revised proposal, which was accepted by the appellant.
As the respondent 1 failed to complete the project within the stipulated time, as per contractual specifica tions, despite repeated opportunities, the appellant termi nated respondent 1 's right to continue the project and sought for encashment of the Bank guarantee for Rs. 1,06,12,500, which was issued to the appellant by the Bank.
The respondent I filed a suit for injunction against the appellant and the Bank in the High Court and obtained an ex parte injunction from the Single Judge, restraining the Bank and the appellant from encashing the Bank guarantee.
When the ex parte injunction was vacated, respondent I preferred an appeal to the Division Bench of the High Court.
The Division 413 Bench allowed the appeal, staying the encashment Of the Bank guarantee till the disposal of the respondent 's suit.
On the question, whether the Court was justified in restraining the Bank from paying the appellant under the Bank guarantee at the instance of respondent I, allowing the appeal of the appellant company, this Court, HELD: 1.
In the instant case, the High Court has miscon strued the terms of the Bank guarantee and the nature of the inter rights of the parties under the contract.
The mobili sation advance is required to be recovered by the appellant from the running bills submitted by the respondent.
If the full mobilisation advance has not been recovered, it would be to the advantage of the respondent.
Secondly, the Bank is not concerned with the outstanding amount payable by the appellant under the running bills.
The right to recover the amount under the running bills has no relevance to the liability of the Bank under the guarantee.
The liability of the Bank remained intact irrespective of the recovery of mobilisation advance or the non payment under the running bills.
The failure on the part of the appellant to specify the remaining mobilisation advance in the letter for encash ment of Bank guarantee is of little consequence to the liability of the Bank under the guarantee.
The demand by the appellant is under the Bank guarantee and as per the terms thereof.
The Bank has to pay and the Bank was willing to pay as per the undertaking.
The Bank cannot be interdicted by the Court at the instance of respondent I in the absence of fraud or special equities in the form of preventing irre trievable injustice between the parties.
The High Court in the absence of prima facie case on such matters has commit ted an error in restraining the Bank from honouring its commitment under the bank guarantee.
[421E 422A] U.P. Cooperative Federation Ltd. vs Singh Consultants and Engineers (P) Ltd., , Followed.
|
CIVIL APPEALS Nos. 170 to 176 and 178 to 183 of 1953.
Appeals from the Judgment and Order dated the 22nd August, 1952, of the High Court of Judicature at Madras in Civil Miscellaneous Petitions Nos.
13386, 13388,13390, 7812, 12003, 13188, 13262, 7822, 13123, 13347, 13341, 12997, 12494 of 1950 and Order dated 8th September, 1952, in C.M.P. No. 13936 of 1950.
K. section Krishnaswamy lyengar (K. g.
Champakesa lyengar, with him) for the appellants.
V. K.T. Chari, Advocate General of Madras (R. Ganapathy lyer and V.V. Raghavan, with him) for the respondent (State of Madras) in Civil Appeals Nos. 170 to 176 and 178 to 181.
M. Seshachalapathi for the respondent (State of Andhra) in Civil Appeals Nos. 182 and 183.
February 5.
The Judgment of the Court was delivered by MUKHERJEA J.
I2 95 S.C. I./59 762 MUKHERJEA J.
These consolidated appeals, numbering fourteen in all, are directed against a common judgment of a Division Bench of the Madras High Court dated the 23rd of August, 1952, by which the learned Judges dismissed the petitions of the different appellants made under article 226 of the Constitution.
The appellants are landholders of Madras, holding zamindaries within that State, and in their applications under article 226 of the Constitution they prayed for writs in the nature of mandamus, directing the State of Madras to forbear from notifying and taking over possession of the estates held by them and also to cancel the notifications already issued, in exercise of its powers under the Madras Estates (Abolition and Conversion into Ryotwari) Act, (Act XXVI of 1948).
This Act, the constitutional validity of which has been assailed by the appellants, was passed by the Provincial Legislature of Madras functioning under the Government of India Act, 1935, and it received the assent the Governor General of India on the 2nd of April, 1949.
The avowed object of the Act is to abolish the zamindary system by repealing the Madras Permanent Settlement Regulation of 1802, to acquire the rights landholders in the permanently settled and other ,estates and to introduce the Ryotwari system in all such estates.
After the advent of the Constitution, the Act was reserved for certification of the President and it was certified on the 12th of April, 1950.
In the petitions presented by the appellants, a large number of grounds were put forward by way of attacking the validity of the legislation which was characterised as confiscatory in its character and subversive of the fundamental right of property, which the petitioners had in the zamindaries held by them under the Permanent Settlement Regulation.
Pending the disposal of these petitions, the Constitution (First Amendment) Act of 1951 was passed on 1st of June, 1951, and this amendment introduced two new articles namely, article 31 A and 31 B in the Constitution, apparently with a view to protect the 'various laws enacted for acquisition of estates from being challenged under the relevant articles of Part III of the 763 Constitution.
Article 31 B specifically refers to a number of statutes mentioned in the ninth Schedule to the Constitution and it declares expressly that none of them shall be deemed to be void on the ground that they contravened any of the fundamental rights, notwithstanding the decision of a court or tribunal to the contrary.
It is not disputed that Madras Act XXVI of 1948 is one of the statutes included in this schedule.
It may be remembered that an attempt was made to impeach the validity of the Constitution (First Amendment) Act itself before this court in the case of Shankari Prasad Singh Deo vs Union of India (1).
The attempt failed and after the pronouncement of this court in Shankari Prasad 's case, the grounds upon which the writ petitions of the appellants were sought to be supported became for the most part unavailing.
It appears that at the time of the final hearing of the applications the arguments actually advanced on behalf of the petitioners were aimed not at invalidating the enactment as a whole, but only some of its provisions, firstly on the ground that there was no public purpose behind the acquisition of some of the items of property mentioned therein and secondly, that the provisions for compensation in certain aspects were colourable exercise of legislative powers and constituted a fraud upon the Constitution Act of 1935.
These arguments were sought to be supported entirely on the authority of the majority decision of this court in the case of The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh (2) to the extent that it pronounced two of the provisions of the Bihar Land Reforms Act.
1950 a legislation similar in type to the Madras Act 1948 to be unconstitutional.
These contentions did not find favour with the learned Judges of the High Court who heard the petitions and holding that the principles enunciated by the majority of this court in the Bihar case referred to above were not applicable to the impugned provisions of the Madras Act, they dismissed all the petitions.
Certificates, however, were granted by the High Court to the petitioners (1) ; (2) 764 under article 132(1) of the Constitution and it is on the strength of these certificates that the appeals have ' come before us.
Mr. Ayyangar, appearing in support of these appeals, has taken his stand solely upon the doctrine of ' 'colourable legislation ' as enunciated by the majority of this court in the Bihar case referred to above.
He has very properly not attempted to make any point as to the absence of a public purpose in regard to any of the items of acquisition, since it is clear that according to the majority view of this court, as explained in Narayan Deo vs State of Orissa (1), the existence of a public purpose is not a justiciable issue in case of an enactment which having fulfilled the requirements of clause (4) of article 31 of the Constitution enjoys the protection afforded by it.
The contentions of Mr. Ayyangar, in substance, are that the provisions of 'section 27(i) as well as of section 30 of the impugned Act are colourable legislative provisions which have been enacted in fraud of the Constitution Act of 1935.
It appears that in determining the amount of compensation, that is to be paid under the Act, in respect of an acquired estate, it is necessary, first of all, to ascertain what has been described as the 'basic annual sum ' in regard to that estate.
The ' basic annual sum comprises several items or parts which have been set out in section 27 and the subsequent sections of the Act, and it is upon the amount of the basis annual sum determined in accordance with the provisions of these sections that the total amount of compensation money payable to a proprietor is made to depend.
Mr. Ayyangar contends that section 27(i) of the Act, which lays down that in computing the basic annual sum only one third of the gross annual Ryotwari demand of specified kinds is to be taken into account, is a colourable provision which, ignores altogether the actual income derived from the property and introduces an artificial and an arbitrary standard for determining the income or profits which has absolutely no relation to facts.
Similarly, in computing the net miscellaneous revenue, which is an (x) [1945] S.C.R. A.I.R. x953 8.
G. 375 at P. 380.
765 element in the computation of the basic annual sum, what is to be taken into account under section 30 is not the average of net annual income which the proprietors themselves derived from the sources, mentioned in the Act, when they were in possession of the estates, but which the Government might derive from them in future years after the date of notification. 'Thus if on account of mismanagement or for other reasons the Government does not derive any income from these sources, the proprietor would not have any compensation under this head at all.
It is argued that these are mere devices or contrivances aimed at , confiscation of private property and they neither lay down nor are based upon any principle of compensation.
Whatever the merits of these contentions might be, it appears to us that there is an initial and an insuperable difficulty in the way of the learned counsel 's invoking the authority of the majority decision of this court in the case of The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh(1) to the circumstances of 'the present case.
The Bihar Land Reforms Act, 'which was the subject matter of decision in that case, was a legislation which was pending at the time when the Constitution came into force.
It was reserved for consideration of the President and received his assent in due course and consequently under clause (4)of article 31 of the Constitution it was immune from judicial scrutiny on the ground that the compensation provided by it was inadequate or unjust.
With regard 'to two of the provisions of the Act, however, which were embodied in sections 4 (b) and 23(f) of 'the Act, it was held by the majority of this court that they were void as they really did not come within entry 42 of List III of Schedule VII of the Constitution, under which they purported to have been enacted.
Entry 42 of List III speaks of "principles on which compensation for property acquired or requisitioned for the purposes of the Union or of a State or for any other public purpose is to be determined, and the form and the manner in which such compensation is (1) [1952] s.c.
R. 889.
766 to be given.
" It was pointed out that entry 42 was undoubtedly the description of a legislative head and in deciding the competency of a legislation under this entry, the court was not concerned with the justice or propriety of the principles upon which the determination of the compensation was to be made or the form or manner in which it was to be given.
But even then, the legislation must rest upon some principle of giving compensation and not of denying or withholding it, and a legislation could not be supported which was based upon something which was non existent or was unrelated to facts and consequently could not have a conceivable bearing on any principle of compensation.
The initial difficulty in the way of invoking this doctrine in the present case lies in the fact that the legislation, which is impugned here, was passed by the Madras Provincial Legislature functioning under the Government of India Act, 1935, and ' there was no entry in any of the lists attached to the Act of 1935 corresponding to entry 42 in List I1I of the Indian Constitution.
The only entry relevant to.
this point in the Act of 1935 was entry9 of List I1 which spoke merely of 'compulsory acquisition of land '; and it is clear that a duty to pay compensation or of ' laying down any principle regarding it was not inherent in the language of that entry.
The guarantee for payment of compensation, so far as the Constitution Act of 1935 is concerned, was contained in section 299 clause (2) which was worded as follows: "Neither the Federal Legislature 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 . . 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.
" The appellants could have very well relied upon this guarantee if a bar had not been created in their way by the provision of article 31(6) of the Constitution.
That clause of article 31 stands of follows: 767 "Any law of the State enacted not more than eighteen months before the commencement of this Constitution may within three months from such commencement be submitted to the president for his certification; and thereupon, if the President by public notification so certifies, it shall not be called in question in any court on the ground that it contravenes the provisions of clause (2) of this article or has contravened the provisions of sub section (2) of section 299 of the Government of India Act, 1935.
" It is not disputed that the Madras Act XXVI of 1948 does fulfil all the requirements mentioned above.
Consequently, it is not possible for us to allow the appellants to raise the contentions which the learned counsel on their behalf wants to raise.
The result is that the appeals would stand dismissed, but in the circumstances of this case we shall make no order as costs.
Appeals dismissed.
| The respondent, a manufacturer of cotton Textiles, purchased unginned cotton and paid purchase tax thereon.
The cotton was ginned and pressed by the respondent, the ginned cotton was used in the manufacture of cotton textile while the cotton seeds were sold by it.
The respondent claimed refund of purchase tax paid on the unginned cotton under the Bombay Sales Tax (Exemption, Set off and Composition) Rules, 1954 which was disallowed by the Sales Tax authorities on the ground that r. 6(ii) was not applicable when subsidiary or incidental product alone was ,,old and the main product was used in the manufacture of the goods and looking at the working of the aforesaid Rule, all the products of the unprocessed goods should be sold.
In reference, the High Court allowed the refund of the purchase tax under r. 12(i).
HELD : The respondent was entitled to refund under r. 12(i).
What is necessary under rule 12(i) is that the goods should have been actually used for the purpose specified viz., the production of any of the goods aforementioned for sale.
These conditions have been satisfied in this case because unginned cotton was used for the purpose of producing one of the goods specified in column 2 for sale, namely, cotton seeds.
[672 H]
|
minal Appeal No. 757 of 1985.
From the Judgment and Order dated 6.11.1984 of the Gauhati High Court in Criminal Appeal No. 11 of 1979.
Sunil Kumar Jain, P.D. Tyagi and Vijay Hansaria for the Appellant.
S.K. Nandy for the Respondent.
ANAND, J. Anil Phukan and his brothers Mahendra Phukan and Jojneswar Phukan were tried for an offence under Section 302/34 IPC for the murder of one Trinavan Chandra Baruah on 21.3.1976 at about 8 p.m.
The learned Sessions Judge convicted all the three brothers for the said offence and sentenced each one of them to suffer imprisonment for life 392 An appeal was preferred by all the three brothers against their conviction and sentence in the Gauhati High Court.
A Division Bench of that court vide judgment dated 6.11.1984 upheld the conviction and sentence of all the three.
A Special Leave Petition (Crl.) No. 561/85, was preferred by Mahendra Nath Phukan, and Anil Phukan, the third brother Jojneswar, however, did not file any special leave petition.
On 2.9.1985, the special leave petition as regards Mahendra Nath Phukan was dismissed while notice was issued in the petition as regards Anil Phukan.
Subsequently, on 29.10.1985, special leave was granted to Anil Phukan and on 29.4.1986, he was also directed to be released on bail to the satisfaction of the Chief Judl.
Magistrate, Golaghat, ' Assam.
We are, therefore, at this stage concerned only with the criminal appeal by special leave, of Anil Phukan.
In brief, the prosecution case is that the appellant, Anil Phukan had borrowed a sum of Rs. 450 from Trinayan Chandra Baruah, deceased and had executed two hand notes exhibit 7 and exhibit 8, promising to repay the amount on 21.3.1976.
However, he did not repay the amount, On 21.3.1976, the deceased accompanied by his nephew, Ajoy Baruah PW3, proceeded to the village of the appellant and as he was getting late, Ajoy Baruah PW3 carried with him a torch light.
The distance of the house of the deceased from that of the appellant is about one furlong.
Anil appellant was present in the fields in front of his house and on being asked as to why he had not come to return the money, he asked them to wait there and proceeded towards his house.
Later on, when Anil did not return for some time, the deceased alongwith Ajoy PW3 proceeded towards the house of the appellant when they found all the three brothers coming towards them variously armed.
Mahendra had a crowbar while jojneswar had a crooked dao and Anil a kupi dao.
Ajoy PW3 apprehended some danger from the appellant and his brothers but his uncle told him that since they had done no wrong, they need not be afraid of any assault.
On coming near the deceased and Ajoy PW3, Mahendra, who came first, gave a blow to Trinayan on his head with the crowbar, the other two brothers also allegedly assaulted the deceased thereafter.
Ajoy PW3 pulled the deceased towards his house and implored the accused not to assault him.
At the asking of his uncle, Ajoy PW3 ran away to his house and gave the information to the wife of the deceased PW5 Debayani Baruah, about the occurrence.
He also narrated the occurrence to PW4, Bijoy Baruah.
the wife of the deceased went to PW6, Punaram Gogoi, and after telling him as to what had been told to her by Ajoy PW3, she requested him to accompany her to the place of 393 occurrence.
On reaching the place of occurrence, they found Trinayan lying on the spot with injuries on his person but he was still alive.
Pws Bijoy and Ajoy brought a bullock cart from Sabharam Bora PW7 and after lifting the body of Trinayan with some difficulty brought it to his house and kept it in the verandah.
However, before any medical aid could be provided, the deceased succumbed to the injuries at night.
The first information report was lodged at Golaghat Police Station the next day in the afternoon at 12.30 p.m. by Surendra Nath Gogoi PW2.
During the investigation, some weapons including an axe were seized from the house of Mahendra accused.
On the same day, Mahendra was arrested at about 6.45 p.m.
The other two brothers Anil and Jojneswar surrendered subsequently in the court.
The I.O. prepared the sketch plan of the place of occurrence and sent the body for postmortem examination.
The autopsy revealed that the deceased had two incised injuries on the head besides one swelling and an injury on the inner part of his thigh.
The prosecution in all examined 12 witnesses to connect 'the accused with the crime.
This case primarly hinges on the testimony of a single eye witness Ajoy PW3.
Indeed, conviction can be based on the testimony of a single eye witness and there is no rule of law or evidence which says to the contrary provided the sole witness passes the test of reliability.
So long as the single eye witness is a wholly reliable witness the courts have no difficulty in basing conviction on his testimony alone.
However, where the single eye witness is not found to be a wholly reliable witness, in the sense that there are some circumstances which may show that he could have an interest in the prosecution, then, the courts generally insist upon some independent corroboration of his testimony, in material particulars, before recording conviction.
It is only when the courts find that the single eyewitness is a wholly unreliable witness that his testimony is discarded in toto and no amount of corroboration can cure that defect.
It is in the light of these settled principles that we shall examine the testimony of PW3 Ajoy.
Ajoy PW3, on his own showing, is the nephew of the deceased.
He had accompanied the deceased to the place of occurrence when the later went to recover the loan from Anil appellant.
This witness, therefore, is a relative of the deceased and an interested witness.
Of course, mere relationship with the deceased is no ground to discard his testimony if it is otherwise found to be reliable and trustworthy.
In the normal course of events, a close relation would be the last person to spare the real assailant 394 of his uncle and implicate a false person.
However, the possibility that he may also implicate some innocent person along with the real assailant cannot be ruled out and therefore, as a matter of prudence, we shall look for some independent corroboration of his testimony, to decide about the involvement of the appellant in the crime.
Since, there are some doubtful aspects in the conduct of Ajoy PW3, it would not be safe to accept his evidence without some independent corroboration, direct or circumstantial.
The unnatural conduct of Ajoy PW3 which has come to our notice from the record is that though he was present alongwith the deceased at the time of occurrence, on 21.3.1976, at about 8 p.m., he made no attempt to save his uncle from the assault.
He did not even continue to stay there, though of course according to him, he ran for his life on being advised so by his uncle.
He was not assaulted though both he and his uncle were unarmed.
Even if Mahendra was engaged in assaulting the deceased, Anil, who was also allegedly armed neither made an attempt to assault Ajoy PW3 nor even chased him.
PW3 Ajoy did not himself lodge the FIR.
Of course, he gave information about the occurrence to PW4, PW5, PW7 and others immediately after the occurrence describing the manner of assault and the names of the assailants but why he did not lodge the FIR has not been explained by him.
In his testimony in the court he deposed that after Mahendra accused gave blow with the crowbar on the head of the deceased "other accused also assaulted him".
He did not describe as to on which part of the body of the deceased, had Anil and Jojneswar caused the injuries and made a general vague statement without assigning any particular injury to either of them.
When we look to the medical evidence, we find that the deceased had suffered two injuries on his head and no other injury on any other part of the body.
In all, four injuries were recorded in the post mortem report.
The other two injuries, according to the doctor, could have been the result of a fall and indeed looking to the nature of those injuries, which are in the nature of a swelling on the back of the interscapular region and a lacerated wound on the interior aspect of the right thigh, it is possible to agree with the medical witness PWl Dr. Ganesh Ch.
Buragohain, that those injuries could have been caused by a fall and were not the result of any direct impact with a weapon of assault.
Both the head injuries are almost of the same dimensions.
The possibility, therefore, that both the injuries had been caused to the deceased by Mahendra with the crowbar, who according to PW3 had hit the deceased on the head cannot be ruled 395 out.
In this connection, it would also be relevant to not that according to the testimony of the Investigating Officer, PW11 Abhiram Taye, all the weapons like the crowbar Ex.M5, a dao, an axe and a hand dag were recovered only from the house of Mahendra.
We have it from the testimony of PW3 and the first informant PW2 that all the three brothers lived separately.
No recovery was affected from the house of the appellant Anil at all.
All that was seized from his house were two bonds Ex.7 and Ex.8, undertaking to repay the loan to the deceased.
Unlike Mahendra accused he was not even arrested on the date of the occurrence and the mere ipse dixit of the investigating officer, that Anil had absconded is not acceptable, particularly when the investigating officer is totally silent as to where all he had made the search for the appellant and when.
He was not questioned under Section 313 Cr.
PC about the allegation of absconding either.
The deceased was still alive when his wife and the other co villagers, who have appeared as witness reached the place of occurrence.
The deceased did not name the appellant as his assailant before anyone.
The crowbar exhibit 5 was recovered from the house of Mahendra and according to the testimony of PW3, it was the same weapon with which Mahendra had hit deceased on his head which position also receives corroboration from medical evidence.
The deposition of PW4, who is the sister of PW3 Ajoy to the effect that when Ajoy PW3 came running to the house, he told her that her uncle had been killed by Anil and his brothers does not stand scrutiny because admittedly according to PW3 himself, when he ran from the place of occurrence, the deceased was still alive and as a matter of fact he was alive even when the wife of the deceased and other neighbours reached there and brought him to the house.
It was only at the house while the deceased was kept in the verandah that he succumbed to the injuries.
There could have been, therefore, no occasion for Ajoy PW3 to have told his sister PW4, that her uncle had been 'killed ' by Anil and his brothers.
This also shows that Ajoy PW3 has the tendency to exaggerate matters.
The medical evidence is consistent with the theory that the deceased had been assualted only by one person and not by all the three brothers as alleged by the prosecution.
The possibility, therefore, that Mahendra accused alone had caused injuries on the deceased cannot be ruled out.
May be on account of the recovery of the two bonds Ex.7 and Ex.8 from the house of Anil, he was also implicated.
We cannot be sure.
The origin of the fight is totally in obscure and the prosecution has not explained the genesis of the origin of the fight either.
It is not even the case of the prosecution that Anil had refused to repay the loan or that any hot words 396 or abuses had exchanged between Anil and the deceased when the later had demanded from him the repayment of the loan.
In view of the infirmities pointed out above, it would not be safe to rely upon the testimony of Ajoy PW3, the sole eye witness, without looking for independent corroboration and as already noticed, the corroboration furnished by the prosecution unlike in the case of Mahendra, is negative in character in so far as the involvement of Anil appellant is concerned.
In our considered opinion, therefore, it would not be safe to hold that the prosecution has established its case against Anil appellant beyond a reasonable doubt.
The appellant in our opinion, is entitled to the benefit of doubt and granting him that benefit, we set aside his conviction and sentence for the offence under Section 302/34 IPC and consequently the judgment of the High Court in so far as Anil appellant is concerned, is set aside and he is hereby acquitted.
Anil appellant is on bail.
His bail bonds shall stand discharged.
N.V.K. Appeal allowed.
| Respondent Bank lodged a complaint before the Bar Council of Delhi against the appellant Advocate, alleging that the appellant and two other Advocates of the M/s. Singh and Company, (a Firm of Advocates and solicitors) were guilty of serious professional misconduct, as they failed to discharge their.professional duties and responsibilities entrusted to them.
The case of the Bank was that in 1975, the Bank engaged the Firm to rile a recovery suit for the recovery of Rs. 6,12,164.10 from M/s. Delhi Flooring (P) Ltd. and handed over the case rile containing original and valuable documents.
The Firm submitted a bill for riling the recovery suit which included the professional fees and other miscellaneous charges.
On 15.11.1975 the Bank paid a sum of Rs. 11,475 which included 1/3rd of the professional fee and the miscellaneous charges.
It did not inform the Bank whether the suit was filed or not.
On 5.12.1975 the Bank wrote a letter to the Firm to send a copy of the plaint before 8.12.1975 or the Bank would be compelled to withdraw the case from the Firm.
On 15.12.1975, one of the partner of the firm informed the Bank the suit was filed on 15.12.1975 in the High Court.
Thereafter the Bank was kept in the dark about the fate of the case.
Hence the Bank engaged the services of one Mr. Arora, Advocate, in order to find out as to what happened to the suit.
On 23.1977, the Bank was informed by Mr. Arora, Advocate that 489 suit was filed on 15.12.1975 in the High Court and on 31.1.1976, it was returned by the Original Branch to the Registry with objections.
Mr. Arora, Advocate further informed the Bank on 31.3.1977 that the entire suit paper book was returned to Mr. Singh, Advocate of the Firm on 27.7.1976 for removing the object ions and thereafter the suit was not refiled.
The respondent Bank, therefore, claimed before the Bar Council of Delhi that the appellant and his associates misappropriated the money paid to them for court fee, miscellaneous expenses and one third of the professional fee.
The Disciplinary Committee of the Bar Council of Delhi transferred the case of the Bar Council of India, as the case was pending for more than one year.
The Bar Council of India issued notices returnable on 2.11.1980.
The appellant and his associates were not present on that date.
Therefore fresh notices were issued for 20.12.1980.
The appellant did not present on 20.12.1980and ex parte proceedings were ordered.
The case was posted for 23.1.1981 for the evidence of the complainant.
On 23.1.1981 the appellant moved an application for setting aside the ex parte order dated 20.12.1980, which was allowed and the case was adjourned to 27.2.1981.
The case was adjourned from time to time and finally fixed for evidence on 22.8.1981.
On 22.8.1981, the appellant 's application for adjournment was rejected.
The evidence was concluded, ar guments were heard and the order was reserved.
(The complainant had given up its case against one Ms. V.Singh, Advocate an associate of the appellant, and the Bar Council of India did not proceed against her.
One Mr. B.Singh, Advocate the other associate of the appellant, was also proceeded against.
Notice to him was returned with the postal endorsement "refused" and ex parte proceeding were ordered.) The Disciplinary Committee of the Bar Council of India held that the case against the appellant and his associate was proved beyond reasonable doubt.
Their names were removed from the rolls of Advocates of the Bar Council of Delhi and the Sanads granted to them were ordered to be withdrawn.
490 The appellant riled the appeal before this Court, while his associate, riled a review petition before the Bar Council of India, which was still pending.
The Bar Council of India granted him stay of the order dated 24.10.1981 in the review proceeding.
The appellant contended that the suit was filed by the appellant on 15.12.11975 but the record of the suit file was misplaced/lost by the Registry of the High Court; that by his letter dated 20.8.1977, he informed the Bank about the suit rile being not traceable; and that the record of the suit was to be structured and refiled.
Dismissing the appeal, this Court, HELD : 1.01.
The letter dated August 20,1977 was not produced, before the Bar Council of India.
It has been placed before this Court for the first time.
Apart from the ipse dixit of the appellant and Mr.
B.Singh in the said letter, there is no evidence on the record to show that the suit rile was misplaced or lost by the High Court Registry.
On the other hand, there is cogent and reliable evidence on the record to shows that the Delhi High Court Registry returned back the papers to, Mr. B. Singh for removing the objections raised by it.
[494D E] 1.02.
Both the reports of Mr.R.P.Arora, Advocate have been proved on the record of the Bar Council of India as evidence.
The Bar Council of India on appreciation of the evidence before it came to the conclusion that the charge against the appellant and Mr.
B.Singh was proved beyond doubt.
There is no ground to interfere with the order of the Bar Council of India.
[495H, 496D]
|
Civil Appeal 1277 of 1968.
(Appeal by special leave from the order No. 2674 of 1967 of the Ministry of Finance, Government of India) Hardev Singh, Ishwar Chand Jain and R. section Sodhi; for the Appellant.
section N. Prasad and section P. Nayar, for respondents.
The Judgment of the Court was delivered by BHAGWATI, J.
This appeal by special leave raises a short question as to what is the correct amount of import duty chargeable on pot motors when imported separately from Rayon Spinning frames: do they fall within Item 72(3) or Item 73(21) of the First Schedule to the Indian Customs Tariff? The facts giving rise to the appeal are few and may be briefly stated as follows: Some time in 1956 a licence for setting up a plant for manufacture of Rayon was granted to one Kesoram Industries & Cotton Mills Ltd. under the Industries Development and Regulation Act, 1951.
Since the machinery and equipment required for setting up the plant were not available in India, Kesoram Industries and Cotton Mills Ltd. applied for an import licence and on the basis of this application, import licence was granted to them for importing "complete continuous filament Rayon plant with spares and accessories" of the CIF value of Rs. 5.50 crores from general currency area excluding South Africa.
491 It appears that Kesoram Industries & Cotton Mills Ltd. imported, on the strength of this import licence, Rayon Spinning frames, excluding pot motors, from Japan, but so far as pot motors were concerned, they authorised the appellants to import from Germany 4000 of these motors for initial installation of the Spinning frames.
Pursuant to the authority so given, the appellants placed orders for 4000 pot motors with manufacturers in Germany and imported the same in seven different consignments under the Import licence of Kesoram Industries & Cotton Mills Ltd. These seven consignments arrived at Calcutta port between September and December 1961.
The appellants claimed before the Customs authorities at the time of assessment of import duty on these seven consignments that pot motors imported by them fall within Item 72(3) of the First Schedule to the Indian Customs Tariff and were chargeable to import duty under that item at the rate of 15 percent of their accepted value.
This claim was accepted by the Customs authorities and these seven consignments were allowed to be cleared on payment of import duty under Item 72(3).
However, within a short time thereafter, the Assistant Collector of Customs issued seven separate notices of demand in respect of these seven consignments claiming that customs duty at the rate of 15 per cent had been short levied, because pot motors were assessable at the rate of 20 per cent and requiring the appellants to pay up the difference within 15 days from the date of demand under section 39 of the .
The appellants sent representations against these notices pointing out that and we are quoting here from the representation dated 8th December, 1961 which is: "These pot motors are vital component part of the Rayon Spinning machines already imported and are not in excess of the quantity required for the first installation of the said plant.
The pot motors are required for 24 Spinning frames having 2 sides each.
On each side of these frames, 66 motors are connected.
Hence total initial requirement of pot motors for running 24 frames is 3168.
In view of general experience with this type of plant approximately 25% additional motors are required for trial runs and commissioning 4000 Nos.
Of not motors should, there fore, be supplied for first installation of the Rayon plant.
These pot motors are of very high speed and are specially designed for use in spinning frames for manufacturing rayon thread.
They run at 7700 RPM and are designed for a rated voltage of 130 V. at 130 cycles per second for use in circuits of less than 10 amps.
As such, these motors can in no circumstances be used for any other purpose excepting as stated above.
The accessories of these motors are specially designed to suit particular size of spinning pots as well as spinning chambers.
The smooth running of these motors is achieved after a great research by using flexible elastic and hollow shaft, special rubber bushings for support as well as specially designed bearings, to take care of severe stresses, 492 which are normally encountered by these motors during operation.
Hence, it is inevitable that any deviation in the design of the above component parts would mean defeating the purpose for which these motors are meant.
In view of the above, these motors cannot be classified other than an integral part of the Rayon Spinning plant.
We, therefore, claimed as assessment of duty under proviso 72(3) at the time of clearing.
" The appellants did not receive any reply from the Assistant Collector in regard to these representations for a period of about three years and hence they thought that their representations had been accepted and the demand for differential duty had been dropped.
This, however, turned out to be a vain hope, for seven communications dated 19th January, 1965 were received by the appellants from the Assistant Collector stating that the demand for differential duty in respect of each of the seven consignments was confirmed and would be enforced in due course if the differential duty was not paid by the appellants.
Each of those seven communications contained an intimation that "an appeal against this decision lies to the Appellate Collector within three months hereof".
The appellants, however, did not prefer an appeal to the Collector and instead tried to persuade the Assistant Collector to change his opinion by pointing out the relevant facts.
It appears that in the meantime the Assistant Collector recovered the aggregate amount of the differential duty from the deposit account of the appellants.
The appellants once again made a representation to the Assistant Collector and requested him to refund the amount of differential duty collected by him but the representation did not meet with any favourable response from the Assistant Collector.
The appellants ultimately filed a representation to the Collector on 15th July, 1965 setting out their case in regard to the assessment of customs duty and pointing out that the original assessment of customs duty made under Item 72(3) was correct and that the differential duty had been wrongly recovered from them.
This representation was treated by the Collector as a revision application against the orders of the Assistant Collector and on this application, the Collector made an order which was conveyed to the appellants by the Assistant Collector by his letter dated 23rd December, 1965.
The Assistant Collector pointed out that the Collector had: " examined the merits of the case in question and it is his consideration that the duty was correctly chargeable because the Spinning Machinery excluding the pot motors were being imported under one contract from Japan and the pot motors were being imported under another contract from Germany.
Separate importation under a separate contract from a separate country would not justify treatment of the two consignments as one article, when the goods are not specified 493 in the Tariff as one article.
Therefore, he does not see any reason to revise the Assistant Collector 's order concerning the demands.
" The appellants thereupon preferred a revision application to the Government of India, but by a short and pithy order dated 23rd September, 1967, the Government of India rejected the revision application stating that they had carefully considered the revision application B but saw no reason to interfere with the order passed by the Collector.
This led to the filing of the present appeal against the order of the Government of India with special leave obtained from this Court.
Though the appellants, initially, when the hearing of the appeal commenced, raised two or three contentions against the validity of the order of the Government of India confirming the demand for differential duty, they ultimately pressed only one contention and that related to the category in which the pot motors imported by the appellants fell.
The Assistant Collector originally assessed these pot motors to customs duty at the rate of 15 per cent of their accepted value under Item 72(3), but later, demanded differential duty from the appellants on the footing that these pot motors were really assessable at the rate of 20 per cent of their accepted value under Item 73(21) D. and this demand was confirmed by the Collector in revision and on further revision, by the Government of India.
The appellant disputed the correctness of these orders and contended that the original assessment made by the Assistant Collector was proper and the demand for differential duty was unjustified, because the correct item under which those pot motors were assessable was Item 72(3), and not Item 73(21).
Item 72(3), as it stood at the material time, was in the following terms: "72(3) Component parts of machinery as defined in Item Nos. 72, 72 ( 1 ) and 72 (2) and not otherwise specified, essential for the working of the machine or apparatus and have been given for that purpose some special shape or quality which would not be essential for their use for any other purpose but excluding small tools like twist drills and reamers, dies and taps, gear cutters and hacksaw blades: provided that articles which do not satisfy this condition shall also be deemed to be component parts of the machine to which they belong if they are essential to its operation and are imported with it in such quantities as may appear to the Collector of Customs to.
be reasonable.", while Item 73(21) comprised "Electric motors, all sorts, and parts thereof.
" The competition was between these two Items and the question is which of them covered pot motors imported by the appellant.
Now, pot motors imported by the appellants were clearly component parts of Rayon Spinning machines and this was not and indeed could not be disputed on behalf of the respondents.
Since Rayon Spinning machines were admittedly textile machinery as defined in Item 72(1), these pot motors were covered by the opening part of 494 Item 72(3), namely, "component parts of machinery as defined in Item Nos.
72 ( 1 ) ".
Moreover, these pot motors were clearly and indubitably essential for the working of the Rayon Spinning machines and, as pointed out by the appellants in their representation dated 8th December, 1961, they were "specially designed for use in spinning frames for manufacturing rayon thread" and for the purpose, they were given special shape and quality which was not only not essential for their use for any other purpose but actually rendered them incapable of being used for any other purpose.
This position, as pointed out by the appellants in their representation dated 8th December, 1961, was not disputed either by the Assistant Collector in his communication dated 19th January, 1965 or by the Collector in his order dated 23rd December, 1965 rejecting the representation of the appellants and the Government of India also did not controvert this position in its order dated 23rd September, 1967.
If the Assistant Collector or the Collector or the Government of India did not accept the facts set out in the representation of the appellants dated 8th December, 1961, we should have expected a clear statement to that effect in the orders of these authorities.
The Assistant Collector maintained sphinx like silence and preferred not to give any reasons for confirming the demand for differential duty.
The Collector was a little less reticent.
He briefly gave a reason for confirming the orders of the Assistant Collector, but that reason had nothing to do with the nature, quality or condition of the pot motors.
What it said was this, namely, that the pot motors were imported under a separate contract from Germany while the Spinning machinery excluding pot motors were imported from Japan and that did not "justify the treatment of two consignments as one article.
" The Government of India also did not articulate its reasons while rejecting the revision application of the appellants, but since it confirmed the order of the Collector, we may presume that the same reason which prevailed with the Collector appealed to the Government of India.
It will, therefore, be seen that at no stage was the factual position in regard to The pot motors, as set out in the representation of the appellants dated 8th December, 1971, disputed by the Assistant Collector of Customs or the Collector or the Government of India.
The pot motors, therefore, clearly fell within the description given in Item 72(3), The respondents, however, leaned heavily on the words "not otherwise specified" in item 72(3) and contended that even if the pot motors were component parts of Rayon Spinning machines, they were not covered by Item 72(3), since they were otherwise specified in item 73(21).
The argument of the respondents was that if any component parts of machinery were specifically dealt with in any other item, they would go out of Item 72(3) and since pot motors were electric motors within Item 73(21), they were not covered by Item 72(3).
This argument is clearly unsustainable.
It seeks to read the words "not otherwise specified" as qualifying "component parts" but that is plainly incorrect as a matter of both grammar and language.
Structurally, the conjunction 'and ' joins the two clauses "as defined in Item Nos. 72, 72(1) and 72(2)" and "not otherwise specified" and since the former qualifies 'machinery ', the latter also must be read as 495 doing the same duty.
What Item 72(3) contemplates are component parts of that machinery which is defined in Item Nos. 72, 72(1) and 72(2) and which is `not otherwise specified.
The words 'not otherwise specified ' do not qualify "component parts": they qualify machinery '.
Otherwise, the conjunction 'and ' would have no meaning.
In fact, the sentence would become ungrammatical if the words "not otherwise specified" were read to govern "component parts".
This construction also receives support from the description of the component parts which follows the words 'not otherwise specified '.
This description starts with the word `namely ', which shows that it is intended to be a complete description of the component parts covered by this item and that would not contextually fit in with "component parts not otherwise specified".
There can be no doubt that on a plain grammatical construction, the words "not otherwise specified" qualify "machinery" and not "component parts" and, there fore, the pot motors imported by the appellants, which satisfied the other requirements of Item 72(3) could not be held to fall outside that Item, because they were otherwise specified in Item 73(21).
Item 72(3) is a specific Item which covers these pot motors as against Item 73(21)which is a general item and hence it must be held that these pot motors were assessable under Item 72(3) and not under Item 73(21).
The original assessment of these pot motors made by the Assistant Collector was, in the circumstances, correct and the subsequent, demand of differential duty made by the Assistant Collector and confirmed by the Collector in revision and by the Government of India on further revision, was unjustified.
The orders made by the Assistant Collector, the Collector and the Government of India confirming the demand for differential duty would, therefore, have to be quashed and set aside and the amount of differential duty recovered from the appellants pursuant to these orders would have to be refunded to the appellants.
Before we part with this appeal, we must express our regret at the manner in which the Assistant Collector, the Collector and the Government of India disposed of the proceedings before them.
It is incontrovertible that the proceedings before the Assistant Collector arising from the notices demanding differential duty were quasi judicial proceedings and so also were the proceedings in revision before the Collector and the Government of India.
Indeed, this was not disputed by the learned counsel appearing on behalf of the respondents.
It is now settled law that where an authority makes an order in exercise of a quasi judicial function it must record its reasons in support of the order it makes.
Every quasi judicial order must be supported by reasons.
That has been laid down by a long line of decisions of this Court ending with N. M. Desai vs The Testeels Ltd. & Anr.
( ') But, unfortunately, the Assistant Collector did not choose to give any reasons in support of the order made by him con firming the demand for differential duty.
This was in plain disregard of the requirement of law.
The Collector in revision did give some sort of reason but it was hardly satisfactory.
He did not deal in his order with the arguments advanced by the appellants in their representa (1) C. A.245 of 1970 decided on 17th December.
496 tion dated 8th December, 1961 which were repeated in the subsequent representation dated 4th June, 1965.
It is not suggested that the Collector should have made an elaborate order discussing the arguments of the appellants in the manner of a court of law.
But the order of the Collector could have been a little more explicit and articulate so as to lend assurance that the case of the appellants has been properly considered by him.
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 so 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.
Then alone administrative authorities and tribunals exercising quasi judicial function will be able to justify their existence and carry credibility with the people by inspiring confidence in the adjudicatory process.
The rule requiring reasons to be given in support of an order is, like the principle of audi alteram partem, a basic principle of natural justice which must inform every quasi judicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirement of law.
The Government of India also failed to give any reasons in support or its order rejecting the revision application.
But we may presume that in rejecting the revision application, it adopted the same reason which prevailed with the Collector.
The reason given by the Collector was, as already pointed out, hardly satisfactory and it would, therefore, have been better if the Government of India had given proper and adequate reasons dealing with the arguments advanced on behalf of the appellants while rejecting the revision application.
We hope and trust that in future the Customs authorities will be more careful in adjudicating upon the proceedings which come before them and pass properly reasoned orders, so that those who are affected by such orders are assured that their case has received proper consideration at the hands of the Customs authorities and the validity of the adjudication made by the Customs authorities can also be satisfactorily tested in a superior tribunal or court.
In fact, it would be desirable that in cases arising under Customs and Excise laws an independent quasi judicial tribunal, like the Income tax Appellate Tribunal or the Foreign Exchange Regulation Appellate Board, is set up which would finally dispose of appeals and revision applications under these laws instead of leaving the determination of such appeals and revision applications to the Government of India.
An independent quasi judicial tribunal would definitely inspire greater confidence in the public mind.
We accordingly allow the appeal, set aside the orders passed by the Assistant Collector, the Collector and the Government of India demanding differential duty from the appellants and direct the Government of India to refund to the appellants the amount of differential duty recovered from the appellants in respect of the seven consignments of 4000 pot motors imported by them.
The respondent will pay the costs of the appeal to the appellant.
P.B.R. Appeal allowed.
| Under item 72(3) of the First Schedule to the Indian Customs Tariff, component parts of machinery as defined in item nos.
72, 72(1) and 72(2) aand not otherwise specified are chargeable to customs duty.
Item 73(21) comprises of "electric motors, all sorts, and parts thereof".
On the strength of a licence for importing "complete continuous filament Rayon Plant with spares and accessories" certain spinning frames excluding pot motors were imported from Japan but not motors were imported from Germany by the appellants.
The customs authorities accepted the claim of the appellants that the consignment of pot motors fell within item 72(3) and charged import duty accordingly.
Sometime later, the Assistant Collector of Customs, claiming that customs duty on pot motors was short levied as they fell within item 73(21) called upon the appellants to pay the difference, against which the appellants made a representation to the Assistant Collector.
But the Assistant Collector held against the appellants without giving any reasons.
The appellants thereafter filed a representation to the Collector but he held that since the spinning frames and the pot motors were imported under separate contracts from separate countries the two consignments could not be treated as one article and hence rejected the representation.
The appellants thereupon applied to the Government of India in revision but the revision application was also rejected.
Allowing the appeal to this Court.
^ HELD: (1) (i) Item 72(3) is a specific item covering pot motors as against item 73(21) which is a general item.
Pot motors were, therefore, assessable under the former and not under the latter.
The original assessment of the Assistant Collector was correct and the subsequent demand of differential duty which was confirmed by the Collector and the Government of India was unjustified (ii) Pot motors fell within the description given in item 72(3).
They were specially designed for use in spinning machines for manufacturing rayon thread.
and they were indubitably essential for the working of the rayon spinning machines and were incapable of being used for any other purpose.
They were, therefore, clearly component parts of the rayon spinning machines.
[495 D, 494A] (2 ) The argument of the respondents that if any component parts of machinery were specifically dealt with in any other item, they would go out of item 72(3) and since pot motors were electric motors within item 72(21) they were not covered by item 72(3) was clearly unsustainable.
As a matter of both grammar and language the words "not otherwise specified" cannot be read as qualifying "component parts".
They qualify "machinery".
Otherwise the conjunction "and" would have no meaning.
The sentence would become ungrammatical if the words "not otherwise specified" were read to govern "component parts".
The description of the component parts which follows the words "not otherwise specified" starts with the words "namely" which shows that it is intended to be a complete description of the component parts covered 490 by this item and that would also not actually fit in with component parts "not otherwise specified".
Therefore, pot motors could not be held to fall outside that item because they were otherwise specified in item 73(21).
[494H] (3)(a) Where an authority makes an order in exercise of a quasi judicial function it must record its reasons in support of the order it makes.
Every quasi judicial order must be supported by reasons.
[495G] M. M. Desai vs The Testeels Ltd. & Anr.
CA 245 of 1976, decided on 17th Dec. 1975, referred to.
(b) If courts of law were to be replaced by administrative authorities and tribunals and with the proliferation of administrative law, they may have to be so 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.
The rule requiring reasons to be given in support of an order is like the principal of audi alteram partem, a basic principle of natural justice which must inform every quasi judicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirement of law.
[496B D] In the instant case the Assistant Collector did not give any reasons in support of his order which was in plain disregard of the requirement of law.
The reason given by the Collector was hardly satisfactory.
His order could have been a little more explicit and articulate so as to lend assurance that the case had been properly considered by him.
The Government of India too failed to give any reasons in support of its order rejecting the revision application.
[496 H] [The Court expressed the view that it would be desirable that in cases arising under customs and excise laws an independent quasi judicial tribunal is set up which would finally dispose of the appeals and revision applications under these laws instead of leaving the determination of such appeals to the Government of India.
An independent quasi judicial tribunal would inspire greater confidence in the public mind.] [496F]
|
minal Appeal No. 398 of 1984.
From the Judgment and Order dated 16.11.83 of the Himachal Pradesh High Court in Crl.
A. No. 32 of 1983.
Ms. Kusum Choudhury and Ms. Bina Gupta for the Appellant.
Dr. N.M. Ghatate and S.V. Deshpande for the Respondent.
20 The following Order of the Court was delivered: On special leave being granted, the State of Himachal Pradesh has preferred this appeal against the judgment and order dated 16.11.1983, acquitting the respondent of an offence under Section 376, IPC earlier recorded by the learned Sessions Judge.
Briefly stated the prosecution case is that on 2.8.1982, the prosecutrix, Raksha Devi PW4 alongwith her father Nikkoo Ram PW5 and an elder sister by name Samti were in their fields.
It started to rain all of a sudden and the prosecutrix, her father and her sister, ran towards their house.
The prosecutrix got separated from her father and elder sister and was following them when the respondent Raghubir Singh, then aged about 16 years, came to her and caught hold of her hand and took her under a mango tree.
The prosecutrix, who was 7/8 years old at that time was wearing a frock and having a shawl with her.
The respondent spread the shawl on the ground and making the prosecutrix lie on that shawl committed rape on her.
Since, the prosecutrix had not reached her home, Nikkoo Ram her father after waiting for about half an hour returned towards the field and saw the respondent lying on top of the prosecutrix, Raksha Devi, under the mango tree.
He raised alarm and the respondent ran away carrying with him his underwear.
The prosecutrix was crying and was bleeding per vagina.
The occurrence took place at about 2.30 p.m. and the First Information Report exhibit PE was lodged at the Police Station at 5.50 p.m.
The prosecutrix was got examined by the doctor, who found her hymen ruptured and slight bleeding coming out of the vaginal edges.
Blood clott was also present and the external genitals of the prosecutrix were found to be tender and red.
The vagina admitted one finger with difficulty, which got smeared with blood.
The doctor who had examined the prosecutrix, namely, Dr. Urmil Gupta, Medical Officer, Rural Hospital Nalagarh at about 7 p.m. on the same day, appearing as PWI at the trial had also testified that when the prosecutrix was brought to her by her father, he had also brought with him a shawl, which was found to be having some mud and bloodstains.
According to the opinion of Dr. Urmil Gupta PWI, the prosecutrix had been subjected to sexual intercourse and the probable duration of the injuries on her private parts.
, including the vagina, was about 6 to 12 hours.
During the cross examination, a suggestion was put to the doctor that the injuries found on the prosecutrix could have been caused by a fall on some bushes or on the stem of a 'beree ' tree but the doctor had categorically denied the suggestion.
It was also suggested to her that the venginal in jury could also be caused by inserting 21 a finger in the vagina.
The X Ray, the skiagrams and the examination of her teeth by Dr. Subhash Chandra Aggarwal PW2 established the age of the prosecutrix to be between 6 to 8 years.
The respondent was also examined by doctor C.L. Sharma PW3, medical officer at the Rural Hospital, Nalagarh.
He had found the respondent to be potent and capable of sexual intercourse.
He denied the suggestion that injuries would necessarily be caused to the penis in case of sexual intercoures by a grown up male with a virgin when during the act her hymen gets torn.
The father of the prosecutrix Nikkoo Ram PW5, the prosecutrix Raksha Devi PW4 and Taru PW7, who had rushed to the scene of occurrence on hearing the alarm and had also seen the respondent running away therefrom carrying with him his underwear supported the prosecution case in its totality.
The learned Sessions Judge after a careful appraisal of the evidence on record found that the respondent had committed the offence of rape and sentenced him to suffer R.I. for a period of five years for the offence under Section 376 IPC.
While awarding the sentence, the learned Sessions Judge took into account the age of the prosecutrix, the age of the accused and the other attending circumstances and directed that it would be appropriate if the accused was kept in the open air jail in Bilasput during the term of five years R.I.
The respondent appealed to the High Court of Himachal Pradesh and on 16.11.1983.
The High Court acquitted him.
We have heard learned counsel for the parties at length and have gone through the evidence on the record.
The statement of the prosecutrix, Raksha Devi PW4 is clear, cogent and specific.
The learned Sessions Judge before recording her statement was conscious of her age and had, therefore, taken all the precautions required by law to ascertain whether she was capable of giving evidence or not and on being satisfied that she was so capable, recorded her, statement.
She narrated the occurrence in a simple and straight forward manner.
The prosecution case as noticed in the earlier part of the judgment was fully supported by her during her statement and nothing has been brought out in the cross examination from which any doubt could be caused about her veracity.
Her statement receives ample corroboration from the testimony of Nikkoo Ram PW5, her father who even otherwise would be the last person to come forward with a false accusation of the type of rape on his young unmarried daughter.
22 His testimony has impressed us and we find him to be a truthful and reliable witness.
The medical evidence of Dr. Urmil Gupta has supported the prosecutrix in all material particulars.
She has also testified to the presence of mud and blood stain, , on the shawl.
The evidence of Taru PW7 who had also seen the accused running away from the scene of crime carrying his underwear, further lends credence to the prosecution version.
The learned Sessions Judge, in our opinion, was therefore justified in relying upon the prosecution evidence and recording an order of conviction against the respondent for an offence under Section 376 IPC.
His findings were based on proper appreciation of evidence and were not unreasonable much less perverse.
The learned single Judge of the High Court in our opinion, without appreciating or properly discussing the evidence set aside the findings recorded by the Sessions Judge.
The High Court appears to have embarked upon a course to find some minor contradictions in the oral evidence with a view to disbelieve the prosecution version.
In the opinion of the High Court, conviction on the basis of uncorroborated testimony of the prosecutrix was not safe.
We cannot agree.
There is no legal compulsion to look for corroboration of the evidence of the prosecutrix before recording an order of conviction.
Evidence has to be weighed and not counted.
Conviction can be recorded on the sole testimony of the prosecutrix, if her evidence inspires confidence and there is absence of circumstances which militate against her veracity.
In the present case the evidence of the prosecutrix is found to be reliable and trustworthy.
No corroboration was required to be looked for, though enough was available on the record.
The medical evidence provided sufficient corroboration.
The High Court, however, while dealing with the medical evidence observed as follows: "Lady doctor Urmil Gupta PW1, who had examined the prosecutrix, had admitted in so many words towards the end of her cross examination that the injury found on the private part of the prosecutrix and which is the only injury found in the instant case, could be caused by insertion of a finger by a grown up person like the parents of the prosecutrix It is true that normally no parents would not do so but in the peculiar circumstances of this case, this possibility may not be ruled out altogether.
In any case the mere fact that the hymen of the prosecutrix had been found ruptured, would not prove the prosecution version 23 and connect the appellant with the offence charged against him.
" The above approach to say the least was highly improper.
What were the 'peculiar circumstances ' of the case from which the learned single Judge of the High Court thought that the possibility could not be ruled out that the parents of the prosecuted would have themselves caused injury to the prosecutrix by inserting finger in her vagina rupturing her hymen is not at all understandable.
There is no suggestion that on account of any enmity, the parents of the girl would go to that length to falsely implicate the respondent.
Dr. Ghatate, the learned senior counsel was also unable to point out any such 'circumstances ' from the record which could show that there was any possibility of the hymen of the prosecutrix having been ruptured in the manner suggested by the High Court or any reason to falsely implicate the respondent.
In fairness to Dr. Ghatate it must be recorded that he did not support the observations of the High Court noticed above.
The learned single Judge of the High Court also drew an inference against the prosecution from the fact that only two blood stains had been found on the shawl by the Chemical Examiner and doubted the prosecution version on that account.
According to the learned single Judge: "In natural course if this shawl had been used under the prosecutrix at the time of the alleged offence, the same should have been drenched with blood in the meddle.
Moreover, this shawl should have been full of mud as it remained lying on the ground under the prosecutrix for such a long time and when it had rained throughout.
" In making the above observations, obviously the High Court ignored the testimony of Doctor Urmil Gupta who had found the presence of blood stains and the mud on the shawl and who had opined that the bleeding from the edges of the vagina was slight and that some amount of clotted blood was also present.
The prosecutrix was a girl of tender age and on account of the rape committed on her, there was bleeding from her vagina but to expect that the shawl should have got "drenched with blood" as if the large blood arteries had been cut, is letting the imagination run wild and ignoring the circumstances of the case.
The absence of spermatoza on the vaginal slide, which was also pressed into aid by the High 24 Court to acquit the respondent, was not based on proper scrutiny of the evidence.
The prosecution case itself was that on being surprised while the respondent was in the act of committing sexual intercourse on the prosecutrix, he ran away carrying his underwear.
The absence of spermatoza under the circumstances could not be said to be a circumstance in favour of the respondent at all.
The judgment of the High Court, in our opinion, is based more on surmises and conjectures than on proper appreciation of evidence.
It exposes the insensitivity of the learned Judge to the serious crime committed against human dignity.
We are not impressed by the manner in which the High Court dealt with the case.
Courts must be wary, circumspect and slow to interfere with reasonable and proper findings based on appreciation of evidence as recorded by the lower courts, before upsetting the same and acquitting an accused involved in the commission of heinous offence of rape of hapless girl child.
Dr. Ghatate, learned senior counsel for the respondent submitted, by reference to Rahim Beg & Anr.
vs State of U.P., , that the absence of injuries on the penis of the respondent should be treated as sufficient to the negative prosecution case.
We are afraid we cannot agree.
Inferences have to be drawn in every case from the given set of facts and circumstances.
There is no inflexible axiom of law which lays down that the absence of injuries on the male organ of the accused would always be fatal to the prosecution case and would discredit the evidence of the prosecutrix, otherwise found to be reliable.
The presence of injuries on the male organ may lend support to the prosecution case, but their absence is not always fatal.
Rahim Beg 's case (supra) was based on its peculiar facts and the observations mate therein were in a totally different context and cannot advance the case of the respondent.
The observations in Rahim Beg 's case (supra) cannot be mechanically pressed into aid in every case regardless of the specific circumstances of the crime and absence of the fact situation as existing in that case.
Every case has to be approached with realistic diversity based on peculiar facts and circumstances of that case.
Doctor Sharma who had examined the respondent had found him to be capable of sexual intercourse and according to his opinion the absence of injury on his male organ was not suggestive of the fact that he had not indulged in sexual intercourse with the prosecutes then of tender years of age.
His evidence was not at all challenged on this aspect by the defence.
Thus, considered on the whole.
we are of the opinion that the 25 judgment of the High Court is based on conjectural findings and cannot be sustained.
The same deserves to be set aside and is hereby set aside.
The reasoning given by the learned Sessions Judge and the findings recorded by him on appreciation of evidence have appealed to us and we find no reason to take a view different than the one taken by the learned Sessions Judge.
We, accordingly, set aside the acquittal of the respondent and hold him guilty of the offence under Section 376 IPC for having committed rape on the prosecutrix, Raksha Devi, on the date and in the manner alleged by the prosecution.
Having recorded the conviction of the respondent for the offence under Section 376 IPC, the next question is about the awarding of proper sentence.
The occurrence took place on 2.8.1982, more than a decade ago.
The learned Sessions Judge after recording the conviction under Section 376 IPC had sentenced the respondent to suffer RI for five years.
The State did not move the High Court for any enhancement of the sentence.
We, therefore, feel that the ends of justice would be met if the sentence to be imposed on the respondent is confined to five years RI as was awarded by the learned Sessions Judge for cogent reasons recorded by him.
We may emphasise that though for such an offence a more severe sentence would have been desirable but we have restricted ourselves to the maintenance of the sentence as imposed by the learned Sessions Judge for the reason that the State did not seek any enhancement of the sentence by filing an appropriate petition in the High Court or in this Court and for over a period of seven years, while the case has remained pending here, no notice had been issued to the acquitted respondent to show cause as to why in the event of his acquittal being set aside, a more deterrent sentence, than the one imposed by the Sessions Judge, be not imposed upon him and without putting him on such a notice, the Court cannot enhance the sentence.
If the notice were to issue now, it would further delay the disposal of the case and we do not consider that to be a proper course to be adopted.
The more stringent minimum sentence prescribed for an offence under Section 376 IPC was also incorporated in the Code by an amendment only with effect from December, 1982, after the offence in the present case had been committed.
The appeal is consequently allowed and the judgment of the High 26 Court is set aside.
The respondent is held guilty of an offence under Section 376 IPC and sentenced to suffer rigorous imprisonment for a period of five years.
The respondent shall be taken into custody to suffer the term of imprisonment.
R.P. Appeal allowed.
| The appellant retired in 1977 after putting in 23 years of service.
But he was not given pension on the ground that throughout his service he was working on officiating basis and was never appointed substantively to any of the posts held by him.
The appellant challenged the denial of pension to him before the Central Administrative Tribunal.
The Tribunal held that since the appellant retired from service without holding lien on any substantive post, he was not entitled to pension under Rule 13 of the Central Services (Pension) Rules, 1972.
The application of the appellant was disposed of ex parte by the Tribunal and his application for restoration and hearing was also rejected.
Against these orders of the Tribunal appellant preferred the present appeals.
The Respondents contested the appeals on the ground that the Departmental Promotion Committee did not recommend the appellant 's confirmation since two departmental enquiries were initiated against him, resulting in deduction of Rs. 4,000 from his gratuity, by way of punishment.
Allowing the appeals, this Court, HELD: 1.
Admittedly the findings in the two enquiries were never communicated to the appellant during the period of his service.
Those were served on him only after retirement The question of his confirmation which was due in the year 1967 could not have been linked with the enquiries which were initiated at a much later stage.
The Departmental Promotion Commit60 61 tee should have considered the appellant for confirmation on the basis of the record of the appellant as existed in the year 1967/1968.
There is no material on record to show that the service record of the appellant prior to 1970 was adverse in any manner.
Even the Departmental Promotion Com mittee found the confidential reports of the appellant for the last three years as good.
On the availability of a permanent post of Chief of Police on June 14, 1967 the appellant was entitled to be confirmed against the said post.
It was wholly arbitrary on the part of the respondents to have deferred the question of confirmation of the appellant on the ground that there were no Recruitment Rules.
The appellant having served the respondents for about thirteen years, on June 14, 1967 when the post of Chief of Police was made permanent and there being nothing adverse against him at that point of time, he was entitled to be confirmed in the said post.
In that view of the matter the appellant was a confirmed employee when he retired from service on July 31,1977.
[63D G] 2.
The respondents are directed to treat the appellant as having been retired as a confirmed employee and fix his pension and other post retiral benefits on that basis.
The respondents are further directed to complete the pension case of the appellant within three months and pay him all the arrears of the pension within two months thereafter alongwith 12% interest on the said arrears.
[63H; 64A]
|
Civil Appeal No. 468 of 1987.
768 From the Judgment and Order dated 19.7.
1985 of the Delhi High Court in Second Appeal No. 374 of 1980.
Madan Bhatia, N.D.B. Raju and Vineet Kumar for the Appellant.
Dr. L.M. Singhvi, K.B. Rohtagi, Praveen Jain and Baldev Atreya for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This appeal by special leave is from the judgment and order of the High Court of Delhi dated 19th of July, 1985.
The appellant had.
made an application on or about 15th of July, 1976 before the Rent Controller to let out the premises for a period of two years under section 21 of the Delhi Rent Control Act, 1958 (hereinafter called 'the Rent Act ').
The Rent Controller after recording the statements of the appellant and the respondent made an order permitting creation of limited tenancy only for a period of two years for residential purposes to which the respondent had agreed upon.
It may be material to refer to the fact that the appellant in his application under section 21 of the Rent Act had stated as follows: "1 do not require the premises for a period of two years from 15.7.76.
The purpose of letting shall be residential only and the premises are shown in the site plan exhibit A 1.
The proposed agreement is exhibit A 2.
Limited tenancy under section 21 of the Act may be allowed to be created for the said period.
" The respondent agreed to the aforesaid statement and stated as follows: "I have heard the statement of the petitioner and I accept it as correct.
I have no objec tion.
I shall vacate the premises after the expiry of two years from 15.7.76.
The purpose of letting shall be residential only".
Upon this the Rent Controller passed the following order: "This is an application filed under section 21 of the Act for permission to create limited tenancy for a period of two years from 15.7.76.
The purpose of letting shall be 769 residential only and the premises is shown in the site plan exhibit A 1.
The proposed agreement is exhibit A 2.
From the perusal of the statements of the parties I am satisfied that as at present the petitioner does not require the premises.
Therefore, limited tenancy is al lowed to be created for a period of two years from 15.7.76.
" The appellant filed an application on 6th November, 1978 for eviction of the respondent as the respondent had refused to vacate the premises in spite of his statement made before the Rent Controller.
The appellant filed an application on the said date under section 21 of the Rent Act on behalf of himself and his family members claiming possession of the premises for their bona fide need and use.
The appellant contended that he (the appellant) was a retired official and was living in a rented house while the respondent was a rich man doing business in jewellery and was also owning a house in Delhi.
In the application made under section 21 of the Rent Act the appellant had stated that the appellant owned a newly built house in the New Friends Colony comprising of dining, drawing, three bed rooms with attached bath rooms, a study room, family lounge and a garage.
The appellant had further stated that he did not require the premises for the personal residence for a period of two years.
The appellant had also stated in that application, that the appellant had agreed to let it out to the respondent for the first time on the terms and conditions set out in the proposed lease deed for a period of two years.
It was stated that the respondent had heard the statement and recorded that he had no objec tion and would vacate the premises after expiry of two years.
Subsequently, when the second appeal was pending in the Delhi High Court, the appellant had filed an application for early hearing in which he had stated that when the construction of the house in question was completed the appellant 's father R.B. Nanak Chand, advocate, was old and alone (the appellant 's mother had died earlier and other brother and sister being away from Delhi) and in view of his father 's ailing health the appellant was living with him in the rented premises at 4 Flag Staff Road, Delhi to look after his old and ailing father.
It was in those circum stances that the appellant had decided to let out the suit premises for a limited period of two years only.
It may be mentioned that the appellant 's father died two months after the Rent Controller had granted permission.
The Rent Controller after hearing both the parties on the 4th of January, 1980 held, rejecting the contention of the respondent, that section 21 of the Rent Act was not ultra vires.
Furthermore, he was 770 satisfied that a limited tenancy had been created and as such he granted permission for eviction.
Aggrieved by the aforesaid order the respondent preferred an appeal to the Rent Control Appellate Tribunal.
The Rent Control Appellate Tribunal upheld the eviction order.
On or about the 19th of July, 1985, being further ag grieved, the respondent preferred a second appeal before the High Court of Delhi.
The High Court of Delhi by the impugned judgment allowed the appeal on the ground that there was no ground stated in the application under section 21 of the Rent Act as to why a limited tenancy was intended to be made.
The High Court held that the order under section 21 of the Rent Act was a mindless order inasmuch as the respondent before it had not disclosed as to how the demised premises were being dealt with before creating the said alleged tenancy and why the respondent before it did not require the demised premises for the alleged period of two years and as to why the same would be required by him after the period of two years.
The High Court relying on the decision in the case of S.B. Noronah vs Prem Kumari Khanna, ; , held that the order in question in this case was a mindless order and in that view of the matter the order passed under section 21 of the Rent Act was not valid.
The High Court was of the view that there was no inquiry for the Controller to come to the conclusion on the basis of the material that the premises for which the permission was sought for creating a limited tenancy was in fact available for being let for a limited period only and in the absence of that, this was a mindless order.
The appellant has come up in appeal before this Court from the said decision.
The question, therefore, that arises for consideration of this Court is whether in view of the requirements of section 21 of the Rent Act, was the permission invalid? The main points upon which the High Court has relied are: first ly, on the materials put forward before the Rent Controller for sanction under section 21 of the Rent Act, no reason had been stated as to why the premises in question was not required for a limited period; secondly, it was not stated as to how the premises in question was dealt with; thirdly, the High Court was of the view that there was no writing and no lease registered after the permission was granted.
So far as the second ground, namely, as to how the premises in question was dealt with prior to the letting out in the 771 instant case the High Court was obviously and factually incorrect.
It was stated in the application for permission that it was agreed to be let out 'for the first time ' and secondly, it was stated that the appellant owned 'newly built house '.
Therefore two facts were clearly stated name ly, this was a 'newly built ' premises and further that there was no prior letting.
In the aforesaid facts and circum stances of the case therefore, it cannot be denied that how the premises in question was dealt with before the letting out had been clearly stated.
It is true however, that why the premises in question was stated by the appellant not to be required for a limited period had not been 'specifically ' stated at the time of seeking permission under section 21 by the appellant.
The appellant had stated that he did not require the premises in question for a period of two years.
He had not stated as to why he did not require the said premises for the said limit ed period of two years.
The question therefore is was it necessary to seek a valid order under section 21 to state that reason and if permission was granted on satisfaction of the Rent Controller on other conditions without being satis fied as to why the landlord did not require the premises in dispute for a limited period, the order would suffer from the vice of being a mindless order.
Such an order if other wise the conditions are satisfied would not be an invalid order.
In order to determine that question it is necessary to bear in mind the parameters and the purposes of section 21 of the Rent Act.
The Delhi Rent Control Act like other Rent Control Legislations had been passed to provide for the control of rent and eviction.
The Rent Acts all over the country came in the Wake of partition and explosion of population in metropolitan and new urban cities.
There are acute shortages of accommodation.
Very often these shortages and the demand for accommodation led to rack renting as well as unreasonable eviction of the tenants.
To meet that situa tion and to facilitate proper letting the Rent Acts were passed all over the country ensuring fair return to the landlords and giving the landlords the right of eviction for limited purposes and at the same time protecting the tenant from unreasonable eviction by the landlords.
This led to a series of litigations leading to long delays resulting specially in metropolitan cities like Delhi, Calcutta and Bombay in reluctance of many landowners who had vacant premises for letting out only for limited period either because of the family conditions or official commitments as they did not require the premises immediately and at the same time who were reluctant to part with the said premises on rent because of the long delay and the procedure that had to be followed to recover possession of those premises.
772 Section 21 of the Rent Act was an attempt to meet that reluctance.
Section 14 of the Rent Act controls the eviction of tenants and gives protection to the tenants against eviction.
It stipulates that notwithstanding anything to the contrary contained in any other law or contract, no order or decree for the recovery of possession of any premises shall be made by any court or Controller in favour of the landlord against a tenant unless certain specified conditions were fulfilled.
Those conditions were laid down in different sections and provisos thereof.
It is not necessary to set these out in detail.
As mentioned hereinbefore that led to a good deal of reluctance on the part of the landlords to part with the possession of the premises in their occupation because of the time and expenses consuming process involved for recovery of possession.
In order, therefore, to induce reluctant/potential landlords to create tenancies, section 21 was enacted for the benefit of the capital city of Delhi.
This is a new provision the unique provision made for the metropolitan city of Delhi.
Section 21 of the Rent Act reads as follows: "21.
Where a landlord does not require the whole or any part of any premises for a par ticular period, and the landlord, after ob taining the permission of the Controller in the prescribed manner, lets the whole of the premises or part thereof as a residence for such period as may be agreed to in writing between the landlord and the tenant and the tenant does not, on the expiry of the said period, vacate such premises, then notwith standing anything contained in section 14 or in any other law, the Controller may, on an application made to him in this behalf by the landlord within such time as may be pre scribed, place the landlord in vacant posses sion of the premises or part thereof by evict ing the tenant and every other person who may be in occupation of such premises.
" An analysis of this section makes it clear that in order to attract section 21, the first condition is that the landlord does not require the whole or part of any premises for a particular period.
If that condition is fulfilled then the said landlord after obtaining the permission of the Controller in the prescribed manner lets the whole of the premises or part thereof as a residence for such period as may be agreed to in writing between the landlord and the tenant and the tenant does not on the expiry of the said period, vacate such premises, then notwithstanding anything contained in section 14 or in any other law, the Controller may, on an application made to him in this behalf by the landlord 773 within such time as may be prescribed, order the eviction of the tenant.
Therefore the first condition must be that the landlord must not require the premises either in whole or part of any premises for a particular period.
Secondly, the landlord must obtain the permission of the Controller in the prescribed manner.
Thirdly, letting of the whole or part of the premises must be for residence.
Fourthly, such letting out must be for such period as may be agreed in writing.
Therefore, there must be an agreement in writing, there must be a permission of the Controller for letting out for a limited period, the landlord must not require the premises for a particular period and letting of the premises must be as a residence.
These and these alone are the conditions which are required to be fulfilled.
In Nagindas Ramdass vs Dalpatram Ichharam, ; ,the question was whether a compromise decree for evic tion could be passed because the Rent Act enjoined the eviction only on the satisfaction of the court.
The respond ent landlord in that case instituted a suit under the Bombay Rent Act, 1947 for possession against the tenant on two grounds, namely, arrears in payment of rent and bona fide requirement of the premises for personal use and occupation.
A compromise decree was passed.1 When the appellant applied for execution of the decree the tenant contended that the compromise decree had been passed by the Rent Court without satisfying itself as to the existence of grounds of eviction under the Act and hence being a nullity was not executable.
It was held by this Court that the public policy permeating this Act was the protection of tenants against unreasonable eviction.
Construing the provisions of sections 12, 13 and 28 of the Act in the light of the said policy, it should be held that the Rent Court under the Act was not competent to pass a decree for possession either in invitum or with the consent of the parties on a ground which was de hors the Act or ultra vires the Act.
The existence of one of the statut ory grounds mentioned in sections 12 and 13 was a sine qua non to the exercise of jurisdiction by the Rent Court.
Par ties by their consent could not confer jurisdiction on the Rent Court to do something which, according to the legisla tive mandate, it could not do.
But if at the time of the passing of the decree there was some material before the Court on the basis of which the Court could prima facie be satisfied about the existence of a statutory ground for eviction, it would be presumed that the court was so satis fied and the decree for eviction,though passed on the basis of the compromise would be valid.
Such material may be in the form of evidence recorded or produced or it may partly or wholly be in the shape of express or implied admissions made in the compromise agreement.
Sarkaria, J. speaking for the 774 Court held that admissions if true and clear were by far the best proof of the facts admitted especially when these were judicial admissions admissible under section 58 of the Evidence Act.
In that case the Court found because of the admission to pay the arrears of rent and mesne profits at the 'contractual rate and the withdrawing of his application for fixation of standard rent, that there was no dispute with regard to the amount of standard rent and there was an admission that the rent was in arrears.
The Court observed at pages 552 to 553 of the report as follows: "From a conspectus of the cases cited at the bar, the principle that emerges is, that if at the time of the passing of the decree, there was some material before the Court, on the basis of which, the Court could be prima facie satisfied, about the existence of a statutory ground for eviction, it will be presumed that the Court was so satisfied and the decree for eviction, though apparently passed on the basis of a compromise, would be valid.
Such material may take the shape either of evidence recorded or produced in the case, or, it may partly or wholly be in the shape of an express or implied admissiOn made in the compromise agreement, itself.
Admissions if true and clear are by far the best proof of the facts admitted.
Admissions in pleadings or judicial admissions, admissible under section 58 of the Evidence Act, made by the parties or their agents at or before the hearing of the case, stand on a higher footing than evidentiary admissions.
The former class of admissions are fully binding on the party that makes them and constitute a waiver of proof.
They by them selves can be made the foundation of the rights of the parties.
On the other hand, evidentiary admissions which are receivable at the trial as evidence, are by themselves, not conclusive.
They can be shown to be wrong." The aforesaid principle must be borne in mind in order to judge the invalidity of the order passed under section 21 of the Act which was based on the statements made by the appellant and the respondent.
The facts of the case upon which great deal of reliance was placed by the High Court in the judgment under appeal and upon which the appellant relied very heavily are mentioned in the case of S.B. Noro nah vs Prem Kumari Khanna (supra).
There this Court reiter ated that section 21 of the Rent Act carved out a category for special treatment.
While no landlord could evict without compliance with sections 775 14, 19 and 20 of the Act, a liberal eviction policy could not be said to under lie in section 21.
The Court observed that the Parliament was 'presumably keen on maximising accommodation available for letting, realising the scarcity crisis.
One source of such spare accommodation which is usually shy is potentially vacant building or part thereof which the landlord is able to let out for a strictly limited period provided he had some credible assurance that when he needed it he would get it back.
The law sought to persuade the owner of the premises available for letting for a par ticular period by giving him a special assurance that at the expiry of that period the appointed agency would place the landlord in vacant possession.
Section 21 confined the special remedy to letting for residential uses only.
Parlia ment had the wholesome fear that if the section were not controlled by many conditions it might open the floodgates for wholesale circumvention of the rent control legislations by ingenious landlords exploiting the agonising need of houseless denizens.
Section 21 of the Act over rides section 14 precisely because it was otherwise hedged in with drastic limitations and safe guarded itself against landlords ' abuses.
The first condition was that the landlord did not require the demised premises 'for a particular period ' only.
That meant that he must indicate to the authority before which sanction was sought for letting what was the particular period for which he could spare the accommodation.
The Controller exercised an important regulatory function on behalf of the community.
The fact that a landlord and a potential tenant together apply, setting out the formal ingredients of section 21, did not relieve the Controller from being vigilant to inquire and satisfy himself about the requisites of the landlord 's non requirement 'for a particular period ' and the letting itself being 'as a resident '.
A fraud on the statute could not be permitted especially because of the grave mischief that might be perpetrated in such event.
The Court highlighted that it would be a terrible blow to the rent control law if section 21 were freely permitted to subvert the scheme of section 14.
Every landlord would insist on a tenant going through the formal exercise of section 21, making ideal averments in terms of that section.
The consequence would be that both the Civil Procedure Code which prescribed suits for recovery of possession and the Delhi Rent Control Act which prescribed grounds for eviction would be eclipsed by the pervasive operation of section 21.
Neither grounds for eviction nor suits for eviction would thereafter be needed, and if the landlord moved the Court for a mere warrant to place the landlord, through the Court process, in vacant possession of the premises, he 776 would get it.
No court fee, no decree, no execution peti tion, no termination of tenancy wish for possession and the Court was at your command.
The Court observed that such a horrendous situation would be the negation of the rule of law in this area.
When the application under Section 21 is filed by the landlord and/or tenant the Controller must satisfy himself by such inquiry as he may make, about the compulsive re quirements of that provision.
If he makes a mindless order, the Court.
when challenged at the time of execution will go into the question as to whether the twin conditions for sanction have really been fulfilled.
Of course, there will be a presumption in favour of the sanction being regular, but it will still be open to a party to make out his case that in fact and in truth the conditions which make for a valid sanction were not present.
The sanction granted under section 21, if it has been procured by fraud and collusion cannot withstand invalidity because, otherwise, high public policy will be given as hostage to successful collusion.
The doctrine of estoppel cannot be invoked to render valid a proceeding which the legislature, has on grounds, of public policy subjected to mandatory conditions which are shown to be absent.
As be tween unequals the law steps in and as against statutes there is no estoppel, especially where collusion and fraud are made out and high purpose is involved.
Law that non performs stultifies the rule of law and hence the need for strict compliance.
Or else, the sanction is non est.
Collusion between the strong and the weak cannot confer validity where the mandatory prescriptions of the law are breached or betrayed.
An analysis of this judgment which has been applied in the various cases would indicate that section 21 only gives sanction if the landlord makes a statement to the satisfac tion of the court and the tenant accepts that the landlord does not require the premises for a limited period; this statement of the landlord must be bona fide.
The purpose must be residence.
There must not be any fraud or collusion.
There is a presumption of regularity.
But it is open in particular facts and circumstances of the case to prove to the satisfaction of the executing court that there was collusion or conspiracy between the landlord and the tenant and the landlord did not mean what he said or that it was a fraud or that the tenant agreed because the tenant was wholly unequal to the landlord.
In the instant case none of these conditions were fulfilled.
There is no evidence in this case that when the landlord 777 stated that he did not require the premises in question for a particular period, he did not mean what he stated or that he made a false statement.
There was no evidence in this case at any stage that the tenant did not understand what the landlord was stating or that he did not accept what the landlord stated.
There was no evidence that either the tenant was in collusion or perpetrating any fraud with the landlord or the tenant was unequal to the landlord in bar gaining powers.
It is manifest that there is no evidence to show that the Controller did not apply his mind.
If that is so then on the principle enunciated by this Court in Noro nah 's case, this sanction cannot be challenged.
It is not necessary to state under section 21 the reasons why the landlord did not require the premises in question for any particular period.
Nor is there any presumption that in all cases the tenants are the weaker sections.
The presumption is, on the contrary, in favour of sanction, it is he who challenges the statement and the admission of.
the landlord or the tenant who has to establish facts as indicated in Nagindas 's case.
In V.S. Rahi and another vs Smt.
Ram Chambeli; , , this Court on the facts found that the permission under section 21 of the Act had been obtained by her on the basis of wrong statement, but for which the permission would not have been accorded.
These statements which were in the nature of half truths were apparently made in order to make good the plea that there was only a temporary necessity to lease out the building for a short period and that there was a bona fide anticipation that there would be a pressing necessity to reoccupy the premises at the end of the period.
which were the two crucial factors governing an order under section 21 of the Act.
It was stated that the appellants, in that case, who were the weaker of the two parties did not question the truth of the statements made by the respondent ,when the permission was granted.
But such collusion, if any, between the two unequal parties did not confer any sanctity on the transaction in question.
The observations of this Court in that case must be understood in the light of the facts mentioned by this Court.
It was found in Rahi 's case that there were wrong statements made by the appellant when he approached the Rent Controller.
It was admitted before this Court that it was a wrong statement.
These were mentioned in pages 295 296 of the Report.
What was urged was that the appellants being the tenants had colluded with the respondent.
It was reiterated by this Court, it is always open to the weaker of the two parties to establish that the transaction was only a camouflage used to cover its true nature.
When one party could dominate over the will of the other, it would not be a case of collusion but one of com pulsion.
The Court relied on the observations of Lord Ellen borough in Smith vs Cuff, 778 ; at 165 that it can never be predicted as pari delicto where one holds the rod and the other bows to it.
See the observations of this Court at pages 297 and 298 of the Report.
There is no evidence in this case that there was any wrong or incorrect statement made by the landlord nor is there any evidence that the tenant respondent herein was the weaker side of the bargain.
In that view of the matter the respondent cannot get much assistance from this decision of this Court.
This question was again considered by this Court in J.B. Vohra vs India Export House Pvt. Ltd. and another; , where Tulzapurkar, J. referring to Noronah 's case observed that section 21 carved out tenancies of particular category for special treatment and provided a special proce dure that would ensure to the landlord vacant possession of the leased premises forthwith at the expiry of the fixed period of tenancy, evicting whoever be in actual possession.
Such being the avowed object of prescribing the special procedure, service of a prior notice on the tenant upon receipt of the landlord 's application for recovery of pos session and inviting his objections followed by an elaborate inquiry in which evidence might have to be recorded would really frustrate that object.
It will be vitiated because it is procured by fraud practised by landlord for creating a limited tenancy.
If it is found that the initial order granting permission to create limited tenancy was vitiated by fraud practised by the appellant inasmuch as he had suppressed the fact that an earlier application for such permission had been declined on the ground that premises had been let out for commercial cum residential purposes and then there would be no executable order pursuant to which any warrant for possession could be issued under section 21 of the Act.
In the instant case, there is no such collusion and therefore, the principle of Noronah 's case would not be applicable.
The ratio of that decision must be understood in its proper light.
Section 21 of the Rent Act was examined by this Court in Smt.
Dhanwanti vs D.D. Gupta, [1986] 3 S.C.C. 1.
There was observed by Pathak, J. as the learned Chief Justice then was, that it was possible for the owner of a premises, on looking to the immediate future, to find that for certain reasons he was unable to occupy the premises forthwith himself but that he may do so later in the not very distant future.
The mere fact that the owner has let out the prem ises after obtaining permission under section 21 of the Act for a limited period, and thereafter on the expiry of that period has found it necessary to obtain permission to let out the premises again for another limited 779 period cannot necessarily lead to the inference that from the very beginning the premises were available for letting out indefinitely.
The Rent Controller and the Rent Control Tribunal should have examined the circumstances prevailing on each occasion when an application was made under section 21.
It was observed that assumption would not be justified where there is no positive material to indicate ' that from the very beginning there was never any intention on the part of the landlord to occupy the premises himself.
There was no such material in that case.
On the contrary there was mate rial showing that the landlady had expectation that her son and his family would be in Delhi after two years ' period of tenancy.
This is significant for the present issue.
There is nothing to show that the permission of the Rent Controller Was obtained by practising fraud or that it could be regard ed as a nullity or that material facts were concealed.
The principle of that decision will apply much more in this case.
It is observed in that decision that it seems to have been ignored altogether that it is perfectly possible for the owner of a premises, on looking to the immediate future, to find that for certain reasons, he is unable to occupy the premises forthwith himself but that he may do so later in the not very distant future.
It is not always that a man can plan his life ahead with any degree of definiteness.
Pre vailing uncertainty in the circumstances surrounding him may not permit clear sighted vision into the future.
The circum stances might justify his envisioning his need for the premises two or three years later, and therefore applying for permission under section 21 of the Act to let out the premises accordingly.
The facts are more stronger and clearer in support of the instant case.
Here there was no permission previously.
This was first letting out.
There was nothing which indicat ed that any statement was made which was incorrect.
We are of the opinion that sanction under section 21 in the instant case was not a nullity.
The onus was on the tenant to show that it was so.
He did not make any attempt to dislodge the presumption in favour of the permission.
Learned counsel for the appellant also stressed before us that section 21 of the Rent Act was a complete code by itself.
The order was under section 21 of the Rent Act.
No further question of lease or registered lease arose thereaf ter.
This question has been settled by series of decisions of the Delhi High Court upon which people have.
acted for long.
See the decision in Kasturi Lal vs Shiv Charan Das Mathur, [1976] Rent Control Reporter Vol.
8703 where at pages 708 709, Misra, J. of the Delhi High Court 780 had clearly indicated numerous cases where it was held that section 21 was a code by itself.
The order of the permission is itself an authority; no lease was necessary and if that is the state of law in Delhi, it is too late in the day to hold otherwise.
See the observations of this Court in Raj Narain Pandey and others vs Sant Prasad Tewari & others; , , where this Court observed that in the matter of the interpretation of a local statute, the view taken by the High Court over a number of years should nor mally be adhered to and not to be disturbed.
A different view would not only introduce an element of uncertainly and confusion but it would also have the effect of unsettling transactions which might have been entered into on the faith of those decisions.
In Delhi transactions have been complet ed on the basis of permission and it was never doubted that there was any requirement of any lease or any agreement subsequent to the order and the same required registration.
It must be observed that in Noronah 's case there was no admission on oath nor was there any question of registered lease.
Numerous other decisions were cited before us but in the view we have taken on the two basic points that the permis sion was valid and the order permitting limited tenancy was not a mindless order but one passed after application of the mind taking the two relevant facts under section 21 of the Act into consideration, it is not necessary to discuss these decisions any further.
In view of the fact that section 21 is a code by itself, there was no question of any further agreement in writing which has to be registered arises.
There is no merit in the contention of the respondent.
There is another aspect of the matter which has to be borne in mind.
The tenant not only failed to establish any fact impeaching the order, he waited for the full term to take this point and did not contest when the permission was obtained on a misrepresentation.
It was submitted by Shri Bhatia that in Delhi most of the transactions have been done under section 21 on the assumption that after order of the court no further or separate document or lease was required to be executed or that such document or lease had to be registered.
It was submitted that numerous transactions have taken place on that basis.
It was urged that if it is now found that is not the correct position and the correct position in law is that there should be a lease containing the terms of the lease being for 11 months, such enunciation of law should only be made applicable prospectively.
Counsel for the appellant contended that otherwise it would have disastrous conse 781 quences of unsettling numerous decisions and unsettling many settled transactions between the parties.
He drew our atten tion to the decision of this Court in 1.
C. Golak Nath & others vs State of Punjab and another; , If we had any doubt on the scope and ambit of section 21, we might have considered this submission urged on behalf of the appellant provided we were sure, factually that large number of transactions had been completed on the assumption that no further lease was required after the permission under sec tion 21.
Our attention was also drawn to the decision of the Privy Council and the observation of Lord Blanesburgh in the case of Dhanna Mal and others vs Rai Bahadur Lala Moti Sagar, A.I.R. 1927 Privy Council 102.
If we were inclined to the view that section 21 was not a code by itself but re quired separate lease to follow it up then perhaps we might have considered the effect of the aforesaid decision and observations.
In aid of the submission that in order to be entitled to eviction under section 14 of the Rent Act, the court had to be satisfied itself that the statutory ground for eviction existed and that application of satisfaction of the court could not be by passed and circumvented by a compromise decree, reliance was placed on certain observations on a decision in Ferozi Lal Jain vs Man Mal and another, In view of the facts of the particular case, we are of the opinion that it is not necessary to discuss the said decision in detail.
Numerous decisions of the Delhi High Court were placed before us in support of or in respect of contentions of the parties specially in support of con tention that the Delhi Rent Act required a separate lease.
The scope and ambit of the Delhi Rent Act after the decision of Noronah 's case came up for consideration before a divi sion bench of the Delhi High Court in Vijay Kumar Bajaj vs Inder Sain Minocha, [1982] 2 Rent Control Reporter 392.
In that decision, in the light of section 21, the following questions were posed: (1) Whether the permission under section 21 of the Act is invalid in view of Supreme Court judgment in S.B. Noro nah 's case (supra), if reasons for not requiring the prem ises by the landlord for a particular period are not dis closed in his application or his statement before the Con troller? (2) Whether before or after permission execution of any agreement in writing to let the premises for the fixed period is necessary, if so, whether such a document requires registration? (3) Whether the proposed agreement of tenancy in writing sub 782 mitted along with the application under Section 21 of the Act, in this appeal required registration? The questions were answered by the High Court as follows: (1) Not necessarily.
The landlord or the tenant may be able to show that cogent reasons did exist or were within the knowledge of the parties as to why the landlord did not require the whole or a part of his premises for a specified period.
(2) No registration is necessary.
The agreement in writing may be entered into either before or after grant of permission.
(3) An agreement in writing submitted along with the application under section 21 of the Act is really a proposed agreement.
It comes into effect only after the grant of permission under section 21 of the Act.
It does not require registration.
We are in agreement with the views of the Delhi High Court.
Large number of decisions of this Court were cited in support of the contention that eviction decree passed in contravention of the statutory conditions or passed without consideration whether the statutory conditions are fulfilled or not are not binding and cannot be enforced.
See Bahadur Singh and another vs Muni Subrat Dass and another, and Kaushalya Devi and others vs Shri K.L. Ban sal; , We are, however, of the opinion that in view of the facts found in the instant appeal before us, these decisions are not of any relevance.
Similarly, our attention was drawn to the observations of this Court in Mansaram vs S.P. Pathak and others; , and State of Maharashtra vs Narsingrao Gangaram Pimple, 1, In the view we have taken and the real controversy in this case, this contention is no longer open.
On the unregistered lease question, our attention was drawn to a decision of the Delhi High Court in Jagat Taran Berry vs Sardar Sant Singh, A.I.R. 1980 Delhi 7.
As we have held that section 21 was a code by itself and no further document was required, it is not necessary to pursue the matter any further.
783 Similarly, our attention was drawn to a division bench judgment of the Calcutta High Court in the case of Ram Abatar Mahato vs Smt.
Shanta Bala Dasi and others, A.I.R. 1954 Calcutta 207 on the question of the terms and extent of section 107 of the Transfer of Property Act and whether a document in performance of an agreement had to be registered or not.
As mentioned hereinbefore in the view we have taken, it is not necessary for us to pursue this aspect any further as to the question whether oral evidence should be intro duced to explain the terms of a document embodied in writ ing.
Our attention was drawn to certain observations of this Court in State of Uttar Pradesh vs Singhara Singh and oth ers, [19641 4 S.C.R. 485 but the same are not relevant for our consideration in the present controversy in the light in which we have understood it.
Equally same is the decision in respect of the observations of Fazal Ali, J. of the Jammu and Kashmir High Court in Ishwar Dutt and another vs Sunder Singh and others, and the observa tions of this Court in Sri 5 Sita Maharani and others vs Chhedi Mahto and others, A.I.R. [1955] S.C. 328.
In the aforesaid light we are of the opinion that the High Court was in error in the view it took in setting aside the decision in the second appeal.
The appeal is, therefore, allowed and the order and judgment of the High Court of Delhi dated 19th of July, 1985 are set aside and the order and judgment of Rent Control Tribunal dated 28th of August, 1980 are restored.
The appellant is entitled to the costs of this appeal.
P.S.S. Appeal allowed.
| The respondent holding a Middle Management Grade Scale II post in the appellant Bank was found not fit for promo tion to Grade Scale III by the Selection Committee in the year 1979 and superseded.
His case was again considered in the years 1980, 1981 and 1983 but denied promotion.
He filed a writ petition in the High Court in 1984 for the issue of a direction to the management to promote him to the higher post with effect from 1979 with the assertion that he was fully eligible for such promotion.
The Single Judge noticed that in respondent 's confiden tial reports for the years 1977 78, 1979 80 and 1980 81 it had been recorded that his service was 'satisfactory ' and that there were no adverse remarks against him.
He, there fore, took the view that there was nothing which disentitled the respondent to promotion and that the action of the management in not promoting him was arbitrary, and accord ingly issued a direction to the appellants to promote the respondent with effect from 1.8.1979 when his batch mates were promoted.
The Division Bench dismissed the appeal filed by the appellants.
In this appeal by special leave it was contended for the appellants that the promotion to Middle Management Grade Scale III posts depended not merely upon the eligibility but on merit and such promotion was accorded only after a proper evaluation by the Selection Committee of the service re cords, performance appraisal and potentiality of the officer concerned to assume higher responsibilities, that the mere 533 absence of adverse remarks did not entitle an employee to promotion to the next higher grade automatically when promo tion was by selection.
that after applying the relevant tests laid down by the management for promotion to the Middle Management Grade Scale III it was found from time to time that the respondent was not entitled to be promoted, and that in any event the High Court was not right in issu ing a direction to the management to promote the respondent to the higher post particularly in the absence of any plea of mala fides.
Allowing the appeal, HELD: The High Court was not right in directing the appellants to promote the respondent to the Middle Manage ment Grade Scale 111 with effect from 1979.
[538C] If promotion has been denied arbitrarily or without any reason ordinarily the Court can issue a direction to the management to consider the case of the officer concerned for promotion but it cannot issue a direction to promote the officer concerned to the higher post without giving an opportunity to the management to consider the question of promotion.
This is because the Court is not by its very nature competent to appreciate the abilities, qualities or attributes necessary for the task, office or duty of every kind of post which is to be filled up by selection.
The duties of such posts may need skills of different kinds scientific.
technical, financial, industrial, commercial, administrative, educational etc.
The evaluation of the abilities should, therefore, in the public interest ordi narily be left to be done by the individual or a committee consisting of persons who have the knowledge of the require ments of a given post.
[536E H] Whenever promotion to a higher post is to be made on the basis of merit no officer can claim promotion to the higher post as a matter of right by virtue of seniority alone with effect from the date on which his juniors are promoted.
It is not sufficient that in his confidential reports it is recorded that his services are 'satisfactory '.
An officer may be capable of discharging the duties of the post held by him satisfactorily but he may not be fit for the higher post.
Before any such promotion can be effected it is the duty of the management to consider the case of the officer concerned on the basis of the relevant materials.
Of course, the process of selection adopted by them should always he honest and fair.
It is only when the process of selection is vitiated on the ground of bias, mala fides or any other similar vitiating circumstances other considerations will arise.
[536C E; H; 537A] 534 State of Mysore and Anr.
vs Syed Mohmood and ors.
, [1968]3 S.C.R. 363, applied.
In the instant case at all relevant times the case of the promotion of respondent has been considered in accord ance with law by the selection committee constituted by the appellant Bank and it did not find him fit for promotion on all such occasions.
There is no allegation of bias or mala fides urged against the members of the selection committee or the management.
The appellants, therefore, cannot be said to have committed any error is not promoting the respondent. ]538B C] The appellants are directed to consider the case of the respondent for promotion within four months from the date of the judgment.
and if found fit to promote him forthwith.
[538E]
|
Appeal No. 154 of 1976.
(From the Judgment and Order dated 16 12 1975 of the Judicial Commissioner 's Court, Goa, Daman and Diu in Election petition No. 2/74).
V.M. Tarkunde and Shri Natgin for the Appellant.
Hardayal Hardy, S.K. Mehta and P.N. Puri for the Respondent.
The Judgment of the Court was delivered by KHANNA, J.
This appeal by Dr. Wilfred D 'Souza is against the judgment of learned Judicial Commissioner Goa whereby be dismissed.
election petition filed by the appel lant to declare the election of Francis Menino Jesus Ferrao respondent to the Goa Legislative Assembly to be void and to declare instead the appellant to be duly elected.
The appellant and the respondent were the two candi dates who sought election to the Goa Legislative Assembly from Benaulim Assembly constituency in the by election caused by the death of Vassuudev Garmalkar.
Polling took place on June 9, 1974 and the counting of votes on June 10, 1974.
After the first count, the Returning Officer found that the total number of valid votes cast in favour of the appellant was 4,656 and of those cast in favour of the respondent was 4,654.
234 ballot papers were rejected.
The respondent then applied for recounting of the votes and the said application was granted.
As a result of recounting, it was found that the appellant had secured 4,651 valid votes, while the respondent had secured 4,652 valid votes.
Seven ballot papers were rejected.
It may be mentioned that at the time of recounting 234 votes which had been earlier rejected in the first count were not taken into account.
Soon after the recount the appellant made an application for a second recount.
This application was granted and the recount took place on the following day, i.e., June 11, 1974.
As a result.of the second recount the appellant was found to have secured 4,650 valid votes while the respondent was found to have secured 4,652 votes.
One ballot paper was rejected.
At the time of second recount the ballot papers which had been rejected at the time of the initial counting and the first recount were not taken into account.
In the result the respondent was declared elected.
The appellant thereafter filed the present petition on July 15, 1974.
Besides the ground with which we are concerned in this appeal, the appellant challenged the election of the re spondent on the following two grounds: "(1) that in the first and second recount the Returning Officer illegally accepted .in favour of the returned candidate, some votes which he ought to have rejected, and rejected some votes in favour of the appellant which he ought to have accepted under law; (2) that the failure of the Returning Officer to re scrutinize the rejected votes in the first and second recounts is illegal" In respect of the above two grounds, objec tion was taken by the respondent that there was non compliance with the statutory require ments of section 83(1)(a) of the Representa tion of the People Act, 1951 (hereinafter referred to as the Act) inasmuch as the appel lant had not set out the material facts re garding those allegations.
Learned Judicial Commissioner as per order dated March 22, 1975 held that the appellant had failed to give material particulars in respect of the said two grounds.
The petition in that respect was held to have not disclosed a cause of action.
It was also held that the appellant was not entitled to an order of the court for re counting the polled votes.
The appellant, it may be stated, filed a petition seeking spe cial leave of this Court against the above order but that petition was dismissed on July 31, 1975.
The only ground which survives and with which we are concerned in this appeal is given in para 9 of the petition.
The same reads as under: "The petitioner further submits that the scrutiny and counting of the tendered votes is absolutely necessary in this case, consid ering the fact that the respondent has been declared the returned candidate after securing in his favour only 2 votes more than the petitioner and the fact that the tendered votes are 10, and that the non counting of such votes may materially affect the result of the election, in so far as it concerns the respondent, by the improper reception of votes originally polled by persons other than those who tendered their votes.
The petitioner, therefore, submits that the votes initially and improperly received should be removed and the tendered votes should be accepted and counted instead.
" The appellant accordingly asserted that the result of the election of the respondent had been materially affected by the improper reception, refusal and rejection of votes.
Prayer made by the appellant was that the 'election of the respondent be declared void and the appellant be declared to be duly elected.
The petition was resisted by the respondent, and in reply to para 9 of the petition the respondent submitted that no recount was justified 945 or required in law merely because of the returned candidate having secured only two votes more than the defeated candi date.
The respondent denied that the tendered votes were cast by genuine voters.
Issue No. 7 which is the only issue relating to the allega tion in para9 reads as under: "Whether the petitioner proves that the vote or votes were initially improperly received, and should be removed and in their place tendered vote or votes should be taken into account.
" The Judicial Commissioner in his order dated March 22, 1975, while holding that no material particulars had been given in the petition in respect of the other two grounds of the election petition, found that regarding the allegation about tendered votes material facts had been given and a cause of action had been disclosed.
An application was filed on April 4, 1975 after the above order on behalf of the appellant praying for a direc tion to the District Election Officer to send all the papers mentioned in rule 92 of the Conduct of Election Rules, 1961 to the court.
In reply to that application the respondent stated that the court should, before sending for the said papers, call upon the appellant "to make out a prima facie case by undertaking to examine all the persons who have cast the tendered votes and producing some of them and proving that they had cast the tendered votes and that they are the true votes." Learned Judicial commissioner after refer ring to the case of Rameshwara Nand vs Madho Ram(1) and some other cases, passed order dated September 11, 1975, the material part of which reads as under: "In the present case the tendered votes are only ten and I see no reason why the petitioner should be allowed to break the principle of secrecy, particularly because the necessity of knowing for whom the voters have cast their vote does not arise now.
The petitioner will have to establish his case before he succeeds in this petition.
He will have, therefore, to produce all his evidence before the counting is done.
I therefore order that the petitioner shall produce before the Court all the evi dence on which he relies.
I also order that the District Election Officer be asked to produce the election papers mentioned in rule 92(2) of the Conduct of Election Rules, 1961 before this Court.
" The appellant thereafter examined two witnesses, Joa quine Rodrigoes (PW 1) and Vina Farnandes (PW 2).
These two witnesses, according to the appellant, had marked tendered ballot papers at the time of polling.
Trunks containing election papers were also sent to the court by the Election Registration Officer.
As the keys of those trunks were not available, those trunks were broken open in the presence of the parties.
A Panchnama of the packets contained in those (1) A.I.R. 1968 Punjab 173.
trunks was then prepared.
Some of the packets having connection with the tendered ballot papers were opened after the conclusion of the evidence of the two witnesses examined by the appellant.
The case was thereafter argued and the election petition was dismissed.
In the judgment under appeal, learned Judicial Commissioner examined the evidence of the two witnesses produced by the appellant.
According to the testimony of these two witnesses, when they went to the polling booth, they were told that someone else had already cast their votes.
When these witnesses stated that they had not .voted, they were each given a paper for marking in favour of the candidate of their choice.
They then marked that paper and handed over that paper to the persons present there.
Learned Judicial Commissioner took the view that the evidence of these witnesses did not relate to tendered ballot papers but to the ordinary ballot papers.
The appel lant as such was held to have failed to prove his case.
In the result, the election petition was dismissed.
In appeal before us, Mr. Tarkunde on behalf of the appellant has argued that the evidence of the two witnesses examined on behalf of the appellant relates to the tendered ballot papers marked by them and that the finding of the Judicial Commissioner to the contrary is not correct.
As against that, Mr. Hardy on behalf of the respondent has canvassed for the correctness of the view taken by the Judicial Commissioner.
Before dealing with this aspect of the matter, we think it opposite to deal with the legal position relating to tendered votes.
Rule 42 of the Conduct of Election Rules, 1961 relates to tendered votes and reads as under: "42.
Tendered votes. (1) If a person repre senting himself to be a particular elector applies for a ballot paper after another person has already voted as such elector, he shall, on satisfactorily answering such ques tions relating to his identity as the presid ing officer may ask, be entitled, subject to the following provisions of this rule, to mark a ballot paper (hereinafter in these rules referred to as a 'tendered ballot paper ') in the same manner as any other elector.
(2) Every such person shall, before being supplied with a tendered ballot paper, sign his name against the entry relating to him in a list in Form 15.
(3) A tendered ballot paper shall be the same as the other ballot papers used at the polling except that (a) such tendered ballot paper shall be serially the last in the bundle of ballot papers issued for use at the polling sta tion; and 947 (b) such tendered ballot paper and its counterfoil shall be endorsed on the back with the words 'tendered ballot paper ' by the presiding officer in his own hand and signed by him.
(4) The elector, after marking a ten dered ballot paper in the voting compartment and folding it, shall, instead of putting it into the ballot box, give it to the presiding officer, who shall place it in a cover spe cially kept for the purpose." Perusal of the above rule makes it clear that the occasion for marking tendered ballot paper would arise if a person representing himself to be a particular elector applies for a ballot paper after another person has already voted as such elector.
The person so applying would then be ques tioned regarding his identity by the presiding officer and, in case he gives satisfactory answer, he would be supplied a tendered ballot paper which would then be marked by the aforesaid person.
Such person is also required to sign his name against the entry relating to him a list in form 16.
The tendered ballot papers shall be the same as other ballot papers used at the polling, except that it would be serially the last in the bundle of ballot papers issued for used at the polling station.
The words "tendered ballot paper" have to be endorsed on the back of the tendered ballot paper and its counterfoil by the presiding officer in his own hand and has to be signed by him.
The tendered ballot paper, it is further provided, is not to be put in the ' ballot box but is to be kept in a separate cover.
According to clause (6) of rule 56 of the Conduct of Elec tion Rules, no cover containing tendered ballot papers shall be opened at the time of the counting of the votes and no such tendered ballot papers shall be counted.
The Represen tation of the People Act, 1951 as well as the above rules are, however, silent on the point as to what use would be made of the tendered ballot papers and how they would affect the result of the election.
Learned counsel for the parties are, however, agreed that such tendered ballot papers, even though excluded from consideration at the time of counting of votes after the poll, can be taken into account in proceedings to challenge the validity of the election of the returned candidate provided certain conditions are fulfilled.
We agree with the learned counsel for the parties in this respect, and find that this position of law is supported by two English decisions, Borough of St. Andrews(1) and The Stepney Divi sion of the Borough of Tower Homlets(2) as also by.two Indian decisions, Kalicharan Singh vs Ramcharitar Rai Yadava & Ors(3) and A.K. Subbarava Gounder vs
G. Palanisami Gounder & Ors.(4) Before, however, a tendered ballot paper can be taken into account during the proceedings of election peti tion, evidence would have to be led on the following two points: (1) The person who cast the initial vote as a voter on a particular serial number in the electoral roll was someone other than the genuine voter mentioned at that number.
(1)4 Omelly & Hardcastle 32, (2) Omelly & Hardcastle 34.
(3) (4) (2) It was such genuine voter who marked the tendered ballot paper.
So far as the first point is concerned, the evidence of the genuine voter that he had not cast such initial vote would normally and in the absence of any circumstance casting doubt regarding its veracity be sufficient.
Once the above two points are proved, the following consequences would follow: (a) The court would exclude the vote initially cast by the person other than the genuine voter from the number of votes of the candidate in whose favour it was cast; and (b) The court would further take into account the tendered ballot paper in favour of the candidate in whose favour it is duly marked.
It may also be mentioned that the proper occasion for scrutinising tendered ballot papers would normally arise only when the difference between the number of votes polled by the candidate declared elected and his nearest rival is so small that there is a possibility of that difference being wiped out and the result of election being thus materially affected if the court takes into account the tendered ballot papers and excludes from consideration the corresponding votes which were cast by persons other than the genuine voters.
The present election petition would have to be decided in the light of the legal position set out above.
We have been taken through the evidence on record and are of the view that the evidence of the two witnesses examined by the appellant is sufficient to prove that their evidence relates to tendered ballot papers.
Each of these witnesses has deposed that when she arrived at the polling booth, she was told that someone else had cast her vote.
When these witnesses persisted that they had not cast their votes, each of them was supplied with a paper which she marked.
Both the witnesses were emphatic that they had not.
put their votes in the ballot box and that they handed them over to the persons present at the polling booth.
A very significant circumstance which shows that the evidence of these witnesses relates to tendered ballot papers and not to the ordinary ballot paper is the fact that there is actual reference to them in Form No. 15 which relates to list of tendered votes.
The packet containing Form No. 15, it needs to be mentioned, was opened after the close of the evidence of these two witnesses.
The name of Joaquina Rodrigues is mentioned in Form No. 15.
The fact that the name mentioned in the electoral roll is Rodrigues Joaquina Domingos and not Joaquina Rodrigues is not very material because the name of the father of the witness is Domingos.
So far as Vina Fernandes (PW 2) is concerned, Form No. 15 does not mention her name but only gives the serial number of the tendered ballot paper.
The counterfoil of the tendered ballot paper however, makes it clear that it re lates to serial No. 244 of electoral roll, part No. 12.
The said serial number of the electoral roll pertains to Vina Fernandes.
It 949 appears that some of the formalities which were required to be observed in connection with tendered ballot papers were not complied with by the presiding officer, e.g., he did not note on the back of the counterfoil of the tendered ballot paper that it related to tendered ballot paper.
The parties, however, cannot be made to.
suffer because of any such omission on the part of the presiding officer.
The evidence of the two witnesses examined on behalf of the appellant can also not be discarded on the ground that they have not deposed about their having affixed two thumb impressions instead of one thumb impression.
As mentioned above, the reference to those two voters in Form No. 15 relating to tendered ballot papers goes a long way to show that it were these two witnesses who marked the tendered ballot papers.
Their evidence also shows that they did not cast the initial votes which were cast in their names.
Learned Judicial Commissioner in this case did not record any evidence on behalf of the respondents and pro ceeded to decide the cast after the evidence of the witness es of the appellant had been recorded and after the box containing the relevant necessary papers had been opened and those papers were examined.
In view of the fact that the appellant has adduced prima facie proof in respect of two of the ten dered ballot papers, the Judicial Commission er, in our opinion, should now call upon the respondent to adduce his evidence.
The evidence of the respondent would be confined not merely to the two tendere ballot papers in respect of which the appellant has adduced evidence but can also relate to some or all of the other eight tendered ballot papers in respect of which the appellant has not adduced any evidence After the said evidence is examined, learned Judicial Commissioner would decide the matter in the light of the legal position relating to tendered ballot papers as set out above.
We accordingly accept the appeal, set aside the judgment of the learned Judicial Commissioner and remand the case to him for fresh decision after recording the evidence of the respondent in accordance with law as ex plained above.
The parties in the circumstances shall bear their own costs of the appeal.
We are conscious of the fact that the election matters should be dis posed of as soon as possible and that the remand of the case would have the effect of further prolong ing the matter, yet looking to the face of the case, we find no escape from the conclusion of remand.
Learned Judicial Commissioner, we are sure, would try to expedite the dispos al of the case.
| Rule 42, Conduct of Election Rules, 1961, shows that the occasion for marking tendered ballet paper would arise if a person representing himself to be a paticular elector ap plies for a ballot paper after another person has already voted as such elector.
The person so applying, would then be questioned by the presiding officer regarding his identi ty, and in case he gives a satisfactory answer, he would be supplied a tendered ballot paper which would then be marked by such person.
has to sign his name against the entry relating to him in a list in Form 15, prescribed under the Rules.
The tendered ballot paper shall be the same as other ballet papers used at the polling, except that it would be serially the last in the bundle of ballot papers issued for use at the polling station.
The words 'tendered ballot paper ' have to be endorsed on the back of the ten dered ballot paper and its counterfoil by the presiding officer in his own hand and has to be signed by him.
The tendered ballot paper is not to.
be put in the ballot box, but is to be kept in a separate cover.
According to r. 56(6) no cover containing tendered ballot papers shall be opened or counted at the time of the counting of the votes.
But even though the tendered ballot papers are thus excluded at the time of counting they can be taken into account in proceedings to challenge the validity of the election of the returned candidate provided, ( 1 ) the person who cast the initial vote as a voter on a particular serial number in the electoral roll was someone other than the genuine voter mentioned at that number; (2) it was such genuine voter who marked the tendered ballot paper; and (3) the difference between the number of votes polled by the candidate declared elected and his nearest rival is so small that there is a possibility of that difference being wiped out and the result of the election being materially affected.
In such a case, the Court would exclude the vote initially cast from the number of votes of the candidate in whose favour it was cast; and take into account the tendered ballot paper in favour of the candidate in whose favour it is duly marked.
In the present case, the appellant and respondent were two candidates for election to a Legislative Assembly, and the respondent was declared elected having secured just two votes more than the appellant.
The appellant challenged the respondent 's election and contended that there were ten tendered votes and that they should be counted, after remov ing the votes initially and improperly cast.
At the trial of the election petition, the appellant examined on his behalf two witnesses, who had, according to the appellant, marked tendered ballot papers at the time of the polling.
The trial court however, took the view that the evidence of the two witnesses did not relate to tendered ballot papers but related to ordinary ballot papers, and dismissed the election petition.
Allowing the appeal to this Court, and remanding the case to the trial Court HELD: (1) The evidence of the two witnesses of the appellant is sufficient to prove that their evidence relates to tendered ballot papers.
Even though some of the formal ities which were required to be observed in connection with the tendered ballot papers were not complied with by the presiding officer, as for example, he did not note on the back of the counterfoil of the tendered ballot paper that it related to tendered ballot paper, the parties cannot 943 be made to suffer for such an omission.
The evidence of the two witnesses cannot also be discarded on the ground that they have not deposed about their having affixed two thumb impression instead of one.
[948 F G] (2) In view of the fact that the appellant has adduced prima facie proof in respect of the two tendered ballot papers the trial court should now call upon the respondent to adduce his evidence.
The respondent 's evidence need not be confined to the two tendered ballot papers but may relate to some or all of the other eight tendered ballot papers in respect of which the appellant has not adduced evidence.
The trial court should thereafter decide the matter in the light of the legal position.
[949 D] Borough of St. Andrews (4 Orielly & Hardcastle 32), The Stepney Division the Borough of Tower Homlets (4 Orielly & Hardcastle 34), Kalicharan Singh vs Ramcharitar Raj Yadava & Ors.
and .4.
K. Subharava Gounder vs
G. Pala nisami Gounder & Ors.
referred to.
|
Appeal No. 276 of 1956.
Appeal from the judgment and decree dated October 15, 1954, of the Allahabad High Court in Execution First Appeal No. 224 of 1951.
section P. Sinha and Tiryugi Narain for the appellants.
G. C. Mathur, for respondent No. 1. 1961.
February 20.
The Judgment of the Court was delivered by DAS GUPTA, J.
This appeal raises a question of limitation in execution proceedings.
The decree sought to be executed was made by the Civil Judge, Kanpur, on September 2, 1938, in a suit for partition brought by two brothers Jumna Prasad and Devi Prasad and two minor sons of Jumna Prasad, against Gajju Lal, his son Jawala Prasad, the four minor sons of Jawala Prasad Sharda Prasad, Dharam Pal, Ram Pal and Krishna Pal, and one Smt.
Sundari.
By the decree one of the properties, a house formerly bearing No. 36/22 and now 36/58, Etawa Bazar, Kanpur, was awarded along with other properties to the defendants in the suit.
The present application for execution was made by the four brothers, Sharda Prasad, Dharam Pal, Ram Pal and Krishna Pal on Novem ber 23, 1949.
The prayer was that these applicants may be delivered possession over this Etawa Bazar house along with Gajju Lal, Jawala Prasad and Smt.
Sundari on dispossession of Jumna Prasad and Devi Prasad.
It is stated in the application that all these applicants had " up till now been minors and one of them is still a minor and so no question in respect of time arises.
" This ' it is important to note, was the first application for execution of the ' partition decree.
A number of objections were raised but the principal objection and the only one with which we are concerned in this appeal was that the application was barred by time.
The decision of this question depended on the answer to the question raised on behalf of the opposite parties that Jawala Prasad one of the persons entitled jointly 'with these applicants to make an application for the execution of the decree could have 877 given a discharge of the liability under the decree without the concurrence of his minor sons and so time ran under section 7 of the Limitation Act against them also from the date of the decree.
The Trial Court did not feel satisfied that Jawala Prasad could give a valid discharge and held accordingly that the application was within time.
on appeal the High Court held that Jawala Prasad as the Karta of the Hindu joint family could act on behalf of the entire joint family in taking possession of the house allotted to the defendants and delivery of such possession could discharge the liability qua the entire joint family and held accordingly that the application was barred by limitation.
The High Court however granted a certificate under article 133(1)(c) of the Constitution and on that certificate this appeal has been filed by the applicants for execution.
Two contentions were raised on behalf of the appellants in support of the plea that the High Court erred in holding that the application for execution was barred by limitation.
First, it is urged that section 7 of the Limitation Act does not apply at all to a partition decree.
The second contention is that in any case Jawala Prasad could not give a valid discharge of the liability under the decree in view of the provisions of O. 32 of the Code of Civil Procedure.
On the first contention the argument is that the word " discharge " is appropriate only in respect of a monetary claim and is wholly inappropriate in respect of any decree for possession whether on partition or otherwise.
There is, in our opinion no substance in this argument.
The mere fact that the two illustrations to section 7 are in respect of debts is no ground for thinking that the provisions of section 7 are limited to suits or decrees on monetary claims only.
Nor can we see any reason to think that the word " discharge " can refer only to debts.
Discharge means, to free from liability.
The liability may be in respect of monetary claims, like the debts; it may be in respect of possession of property; it may be in respect of taking some order as regards property it may be in respect of many other matters.
Except in the case of declaratory decrees or 878 decrees of a similar nature, the decree in favour of one person against another requires the person against whom the decree is made liable to do something or to refrain from doing something.
This liability is in a sense a debt which the party is in law bound to discharge.
The ordinary use of the word " judgment debtor " to denote a person against whom a decree has been made makes a clear recognition of this.
It is worth mentioning in this connection that the Code of Civil Procedure itself defines " judgment debtor " to mean " any person against whom a decree is passed or an order capable of execution has been made.
" It is helpful to notice in this connection the provisions of section 8 of the Limitation Act that " nothing in section 6 or section 7 applies to suits to enforce rights of preemption.
" If section 7 had been applicable merely to litigation for monetary claims it would have been unnecessary and indeed meaningless to take the special step of exempting suits to enforce rights of pre emption from the operation of section 7.
This is a further reason in support of the conclusion that the word " discharge" in section 7 is not limited to discharge of monetary claims only but also to discharge or satisfaction of all other liabilities as well.
We therefore hold that the first argument raised on behalf of the appellants has no substance.
Equally untenable is the second argument that the provisions of 0. 32 of the Code of Civil Procedure debar the manager of a Hindu joint family from giving discharge in respect of a liability to deliver properties.
Under the Hindu Law the Karta of a Hindu joint family represents all the members of the family and has the power and duty to take action which binds the family in connection with all matters of management of the family property.
Clearly, therefore, when in respect of a transaction of property possession has to be received by the several members of the family, it is the Karta 's duty and power to take possession on behalf of the entire family, including himself, the members of the family who are sui juris as well as those who are not.
879 When any minor member of a joint family is a party to a proceeding in a court he has however to be represented by a next friend appointed by the court and where somebody other than the managing member, of the family has been appointed a guardian ad litem there might be difficulty in the way of the managing member giving a discharge on behalf of the minor.
Where however the managing member himself is the guardian ad litem the only difficulty in the way of action being taken by him on behalf of a minor is to the extent as mentioned in 0.
32, rr. 6 and 7.
In Ganesha Row vs Tuljaram Row (1) the Judicial Committee pointed out that: " No doubt a father or managing member of a joint Hindu family may, under certain circum stances and subject to certain conditions, enter into agreements which may be binding on the minor members of the family.
But where a minor is party to a suit and a next friend or guardian has been appointed to look after the rights and interests of the infant in and concerning the suit, the acts of such next friend or guardian are subject to the control of the Court.
" In that case their Lordships held that in view of the provisions of section 462 of the then Code of Civil Procedure (which corresponds to 0.
32, r. 7 of the present Civil Procedure Code) the managing member who had been appointed a guardian in the suit had no authority to enter into any compromise or agreement purporting to bind the minor.
This principle has been applied also to cases where the provisions of 0. 32, r. 6 would apply and so it has been held in numerous cases in India that the Karta of a Hindu joint family though guardian in the suit cannot give a valid discharge in respect of a claim or a decree for is money or other movable property." (Parmeshwari Singh vs Banjit Singh (2) and Letchmana Chetty vs Subbiah Chetty (3)) In the present case however there is no scope for the application of either the provisions of 0. 32, r. 6 or O.32, r. 7 of the Code of Civil Procedure.
Neither is (1) (1913) L.R. 40 I.A. 132,138, (2) A.I.R. 1939 Pat.
(3) Mad.
920. 880 this a case of a receipt of any money or movable properties nor is there any question of entering into an agreement or compromise on behalf of the minor.
For, clearly acceptance of delivery of possession of property in terms of the decree in a partition suit can by no stretch of imagination be considered entering into any " agreement or compromise" We are therefore of the opinion that Jawala Prasad, the managing member of the family could have given a discharge of the liability under the partition decree by accepting delivery of possession on behalf of his minor sons without their consent and so time ran against them also under section 7 of the Limitation Act from the date of the decree.
The High Court was therefore right in its conclusion that the application for execution was barred by limitation.
The appeal is accordingly dismissed with costs.
Appeal dismissed.
| The rule of blending in Hindu Law as evolved by judicial decisions can have no application to a property held by a Hindu female as a limited owner.
That rule postulates a coparcener deliberately and intentionally throwing his independently acquired property into the joint family stock so as to form a part of it.
Although it is unnecessary now to investigate whether there is any other text on which that rule could be founded, it is quite clear that the text of Yagnavalkya in a different context and the commentary thereupon by Vijnyaneshwara, relied on by the Privy Council in this connection, can have no relation to the said rule.
Shiba Prasad Singh vs Rani Prayag Kumari Debi (1932) L.R. 59 I.A. 331, disapproved.
Rajanikanta Pal vs Jaga Mohan Pal (1923) L.R. 50 I.A. 173, relied on.
Consequently, where in a partition suit certain immovable properties acquired by a Hindu female from her father as a limited owner were claimed to form part of the joint family property of her husband by virtue of the said rule: Held, that the claim must fail.
Held, further, that a Hindu female owning a limited estate cannot circumvent the rules of surrender and allow the members of her husband 's family to treat her limited estate as part of the joint family property of her husband.
Before the said rule can be invoked, it must be shown that the owner wanted to extinguish his title to the property in question and impress upon it the character of joint family property.
|
s Nos. 98, 99, 100 and 101 of 1950.
139 Appeals from the orders of the High Court of Judicature at Patna (Manohar Lall and Imam JJ.) in Miscellaneous Ap peals Nos.
108 to 111 of 1948.
Shambhu Barmeswar Prasad and Ramanugrah Prasad for the appellants.
H.J. Umrigar for the respondents.
January 12.
The Judgment of the Court was delivered by CHANDRASEKHARA AIYAR J.
The decision of these four ap peals, which are connected with each other and which have arisen out of orders made by the High Court of Patna in four Miscellaneous Appeals, depends on the interpretation of section 7 of the Bihar Moneylenders (Regulation of Transac tions) Act, 1939.
The facts which have led to the appeals are found brief ly stated in the petition filed by the present appellants in the 3rd Court of Sub Judge, Patna, and may be re stated here for convenient reference : "The father of the petitioners borrowed Rs. 40,000 from the guru (ancestor) of the decree holder under mortgage bond, dated 11 1 1893.
Out of Rs. 40,370 7 6 interest and compound interest up to 4 1 1910, Rs. 32,370 7 6 was paid in cash and for the balance Rs. 8,000 interest and Rs. 40,000 principal, i,e., for Rs, 48,000 a Mortgage Suit No. 14 of 1910 was filed in1st Court of the Sub Judge, Patna, and in lieu of the claim and cost of the said suit two fresh mortgage bonds were executed on 11 7 1910, viz., one for Rs. 40,000 and the other for Rs. 9,488 and the latter bond was satisfied by payment of Rs. 15,835 in cash.
With respect to the above bond of Rs. 40,000, dated 11 7 1910 the petitioners paid Rs. 38,530 13 6.
Mort , gage Suit No. 110 of 1927 was brought in the 3rd Court of the Sub Judge, Patna, and a decree for Rs. 58,012 2.0 was passed on 9 7 1929.
Out of this Rs. 5,000 was paid in cash and for the balance of Rs. 53,012 12 0 one mortgage bond dated 6 10 1931 was executed for Rs. 42,000 and on the same date two 140 hand notes were executed, viz., one for Rs. 5,000 and one for Rs. 6012 2 0.
One Suit No. 14 of 1933 for both the hand notes was brought in 3rd Court of the Sub Judge and a decree for Rs. 15,008 2 0 was passed on 28 2 1935.
This decree is under execution.
" When the decree holder sought to execute the money decree by attachment and sale of the judgmentdebtors ' properties stating that they were subject to a mortgage lien of Rs. 62,272 13 0 under the mortgage bond dated 6 10 1931, the two judgment debtors, who are brothers, filed objec tions under sections 11 and 16 of the earlier Bihar Money lenders Act III of 1938 and section 47 of the Civil Procedure Code.
The petitions (two by each of them) were filed separately by the brothers.
They urged that on a proper calculation under section 11 no lien was subsisting on the properties owing to payments made towards the mort gage debt amounting to Rs. 92,394 2 0.
The Subordinate Judge held that this plea of the judgment debtors could not be entertained in the Miscellaneous case before him relating to the execution and all that could be done was to notify the mortgage encumbrance without deciding anything as to the correctness of the amount claimed to be due under it; and this conclusion was partly based on the fact that section 16 of the Act had been declared by the High Court void.
Ap peals taken to the High Court were dismissed.
The judgment debtors thereupon preferred an appeal to the Feder al Court, contending that sections 7 and 13 of the new Act (corresponding to sections 7 and 11 of the old Act)were applicable and that it was the duty of the court to estimate the value of the property after making the necessary calcu lations under section 7 with reference to the lien.
The decision of the Federal Court is reported in Ramnandan Prasad Narain Singh and Another vs Kulpati Shri Mahanth Goshwarni Madhwanand Ramji(1).
The case was remitted back to the High (1) 141 Court, giving liberty to the appellants to file an applica tion under section 13.
In answer to a fresh application for execution dated 2 7 1042, the two brothers filed the same objections as before.
Miscellaneous Cases Nos. 45 and 46 of 1942 related to sections 7 and 13 of the Bihar Money lenders Act and Miscellaneous Cases Nos. 50 and 52 of 1042 related to the objections under section 47 of the Code of Civil Procedure.
The Subordinate Judge held that the amount of the loan should be taken as the amount mentioned in the mortgage deed of 1931 and not the amount advanced in 1893 and that a sum of Rs. 70,840 was still due on the bond.
He determined the market value of the several properties given as security, adopting 16 times the net income as the basis.
Appeals to the High Court were numbered as M.A. 108 to 111 of 1943 and they were heard by Manohar Lall and Imam JJ.
They modified the order of the lower Court in certain re spects.
Even according to them the amount of the loan was what was mentioned in the mortgage bond of 6 10 1931, but as a sum of Rs. 11,855 3 0 had been repaid expressly towards the principal amount after the date of the bond, that amount became reduced to Rs. 28,150.
Adding an equal sum by way of interest which according to them was the maximum amount, permitted to be allowed under section 7 of the Act, the total liability was stated to be Rs. 56,300 and a charge was declared on the property for this amount.
They also directed that the valuation of the property should be fixed at twenty times the net income and not sixteen times.
It is from this order that the present appeals have been preferred.
Two points were urged on behalf of the appellants, namely (a) that the decree holder was barred by construc tive res judicata from contending that the construction placed upon section 7 by the judgmentdebtors was wrong; and (b) that in applying section 7, we must consider the origi nal amount of loan of Rs. 40,000 given in the year 1893 and allow the claim 142 of interest only for that maximum sum, after taking into account all sums paid by the appellants and their predeces sors towards interest since 1893.
The first point is entirely without substance.
When the decree holder contended that section 11 of the Bihar Money lenders Act, 1938, was declared void and ultra vires and that therefore section 7 of the new Act which corresponded to section 11 was also inapplicable, the judgment debtors pleaded that they were entitled to the benefit of section 7 of the new Act.
The Federal Court held in Ramnandan Prasad Narain Singh and Another vs Kulpati Shri Mahanth Goshwami Madhwanand Ramji(1) that the judgment debtors (present appellants) were entitled to claim the benefit of the provi sions of the new Act when the executing court proceeded under section 13 to determine the value of the properties to be sold.
The correct interpretation of section 7 was not in question between the parties.
To say that the appellants were entitled to take advantage of the provisions of section 7 is entirely different from the contention that the inter pretation sought to be put by them on section 7 was the right one.
The Federal Court was not dealing with any question of interpretation at all.
It is impossible to see where the doctrine of constructive res judicata comes in, so as to be of help to the appellants.
The second question raised on their behalf relates to the true meaning of section 7 of the Bihar Moneylenders (Regulation of Transactions) Act VII of 1939, which is in these terms: "7.
Notwithstanding anything to the contrary con tained in any other law or in anything having the force of law or in any agreement, no Court shall, in any suit brought by a money lender before or after the commencement of this Act in respect of a loan advanced before or after the com mencement of this Act or in any appeal or proceedings in revision arising out of such suit, pass a decree for an amount of interest for the period preceding the institution of the suit, (1) 143 which together with any amount already realised as interest through the court or otherwise, is greater than the amount of loan advanced, or, if the loan is based on a document, the amount of loan mentioned in, or evidenced by, such document.
" In the present case, the original loan of Rs. 40,000 was advanced as early as 11 1 1893.
The appellants j contend that for the purposes of calculating the interest to be decreed prior to the date of the suit the loan advanced must be taken to be the original sum and that if an account is taken of all the sums received by the creditor as interest from that date up to the date of the suit, there would be nothing due for interest.
On the other hand, the decree holder urges that having regard to the latter part of the section, the loan must be taken to be the amount mentioned in the mortgage bond dated 8 10 1931, namely Rs. 42,000.
Whichever method of calculation is adopted, it must be remembered that it has to be made not for the purposes of passing any decree on the mortgage loan, but for estimating under section 13 of the Act the value of the properties to be brought to sale in execution of the money decree against the appellants.
As pointed out by Sir Maurice Gwyer C.J. in Surendra Prasad Narain Singh vs Sri Gajadhar Prasad Sahu Trust Estate and Otherse), "Section 7 of the Act of 1937 is no doubt extremely obscure and illdrawn.
" The true intention of the framers of the Act is somewhat difficult to gather.
But the Patna High Court has been consistently placing upon the section an interpretation which is opposed to the contention of the appellant in these proceedings.
The point came up expressly for decision in Singhesh war Singh and Others vs Madni Prasad Singh Others(2) where a mortgage bond was executed on 31 8 1922 for a sum of Rs. 2,000 which was the balance of the principal and inter est due under a mortgage bond of the 11th of October, 1912, for (1) (2)A.T.R. 1940 Pat.
65. 19 144 Rs. 1,391.
The judgment debtors raised the plea that the court should go back to the earlier bond of 1912 and that as a sum of Rs. 1,512 had been paid as and by way of interest towards that bond, no decree could be passed against them for more than the principal sum of Rs. 1,391.
The learned Judges rejected this contention and took the amount stated in the document of 1922, namely Rs. 2,000, as the loan and they held that the plaintiffs were entitled to get a decree for interest for a sum not larger than Rs. 2,000 as no payment had been proved to have been made after the execution of the bond.
The same view was taken in Lal Singh vs Ramnarain Ram and Others(1) and the plain tiffs were awarded a decree on the basis that the loan was to be taken as Rs. 2,909 8 0 which was the amount for which the hand note sued upon was executed and not Rs. 1,000 which was the original amount advanced upon an earlier hand note of the year 1924.
The case reported in Madho Prasad Singh vs Mukutdhari Singh and Others(2) lays down the same position.
The Full Bench decision in Deo Nandan Prasad vs Ram Prasad (3) rei terates the same view, pointing out the distinction between sections 7 and 8 of the Act and stating that while under section 8 we can go to the original loan in spite of a later document, under section 7, the loan must relate to the document on which the suit is based, that is, the final document and not the original one.
In each one of these cases, the question of the true meaning of section 7 was pointedly considered.
This construction no doubt enables a creditor to circumvent the beneficent provisions of the Act by taking a document for the interest due and adding it to the principal amount.
Gwyer C.J. points out this difficulty at page 59 in the case Surendra Prasad Narain Singh vs Sri Gajadhar Prasad Sahu Trust Estate and Others(4).
If the interpretation does not carry out the intentions of the framers of the Act by reason of unhappy or ambiguous phrasing, it is for the Legis lature to intervene.
But far from doing so, it has (1) , Patna 618.
(2) (1941) 193 I.C.661.
(4) [1940] F.C.R.39.
145 acquiesced, during all these years in the construction which the Patna High Court has been placing upon the section from the very next year after the enactment of the statute.
Having regard to the great obscurity in the language em ployed in the relevant provisions and the inaction of the Legislature, it is, in our opinion, legitimate to infer that the view expressed by the Patna High Court is in accord with the intention of the Legislature.
The appeals fail and are dismissed with costs, only one set in all of them together.
Appeals dismissed.
Agent for the respondent ': R.C. Prasad.
| A preliminary decree was passed in the appellant 's suit for redemption of a mortgage.
The decree specified the amounts due as principal and interest, provided for payment of future interest at 3 % from the date of decree till date of realisation, and payment of the amount due by a certain date.
It also provided that, if payment was made by that date, a final decree would be passed in favour of the appellant, but that, if the payment was not so made, the respondent would be entitled to apply for a final decree for foreclosure.
The appellant appealed against the preliminary decree to the High Court and applied for stay of the order requiring him to deposit the decretal amount within the date fixed by the trial court, and the High Court granted stay on his undertaking to pay 9 % interest instead of 3 %, during the period of stay.
Subsequently, the High Court dismissled the appeal and confirmed the preliminary decree, but, the additional amount due for the period of stay on account of the undertaking, was not included by the High Court in the preliminary decree.
The appellant then applied for a final decree in his favour, after depositing a sum which was more than the amount to be deposited when calculated according to the preliminary decree, but was less than the amount when circulated according to the condition imposed by the High Court in its stay order.
The trial Court however directed that a final decree for foreclosure in favour of the respondent be drawn up.
On appeal, the lower appellate court ordered that a final decree be drawn up in favour of the appellant.
In second appeal, the High Court took the view that the appellant had to deposit the entire amount due on the date of the deposit, as per its direction in the stay order, and as there, was a shortage on the date of deposit though the shortage was made up after the judgment of the lower appellate court only a final decree for foreclosure could be passed in the respondent 's favour.
In appeal to this Court, HELD:The appellant was entitled to a final decree.
In order that a final decree may be passed in favour of the appellant, he had to carry out before a final decree is passed, the terms of the preliminary decree and to pay "the amount adjudged due in respect of the subsequent costs, charges, expenses and interests" under O.XXXIV, r. 7(1) (e) (i) and (ii) of the Civil Procedure Code.
The appellant had carried out the terms of that decree by the deposit made by him and he had nothing to pay on account of Subsequent charges, costs, expenses and interest, because, the extra interest of 6% was not made a part of the decree, and it could not come within the words "in respect of subsequent costs, charges, expenses and interests.
" as it arose out of an independent order of the High Court 110 and was only payable on account of the undertaking for purposes of stay.
Further, such subsequent costs.
charges, expenses and interest have to be adjudged before the mortgagor is asked to deposit the amount.
As regards the appellant 's undertaking in the stay matter the court could insist on his honouring it before the final decree is passed.
[112 F 113 C].
|
Civil Appeal No. 1637 of 1987.
From the Judgement and order dated 3.3.1986 of the High Court of Punjab and Haryana in Civil Writ Petition No. 1055 of 1986.
S.K. Bagga and Mrs. S.K. Bagga for the Appellant.
R.S. Suri for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This appeal by special leave is directed against the judgment and order of the High Court of Punjab & Haryana dated the 3rd March, 1986 dismissing the Writ Petition in limine under Articles 226 and 227 of the Constitution of India filed by the appellant before the High Court.
The appellant states that he is the owner of certain premises in Punjab.
It must, however, be mentioned that the petition is lacking in particulars as to what premises the appellant owned and in respect of which premises the appellant is making the grievances.
On this ground it is not possible to decide the question of vires canvassed before the High Court and repeated before us.
A petition challenging the constitutional validity of certain provisions must be in the context of certain facts and not in abstract or vacuum.
The essential facts necessary to examine the validity of the Act are lacking in this appeal.
On this ground the petition was rightly rejected and we are not inclined to interfere with the order of the High Court on this ground alone.
Be that as it may as the question of vires of Section 4 of the East Punjab Urban Rent Restriction Act, 1949, hereinafter called 'the Act ', was challenged before the High Court and canvassed before us.
It is just as well that we did with that connection.
Shri S.K. Bagga, learned counsel for the appellant submitted that Section 4 of the said Act is ultra vires the Constitution and unreasonable inasmuch as the section provides that rent prevalent in 1938 the basis for the determination of fair rent if unreasonable and unjust.
He urged that pegging the rent prevalent in 1938 the basic rent was inequitable and unjust in the background of the tremendous rise in prices.
But it has to be borne in mind that certain increases have been provided for in section 4 from the rent prevalent in 1938.
In must, however, be remembered that the Act was passed as the preamble of the said Act which states, inter alia, "to restrict the 110 increase of rent".
One of the objects of the Act was to restrict the increase in rent.
With that object the Act has provided certain provisions as to fixation of the fair rent.
Section 4 of the Act which is under challenge may be conveniently set out as under: "Section 4 "Determination of fair rent: (1) The Controller shall on application by the tenant or landlord of a building or rented land fix the fair rent for such building or rented land after holding such enquiry as the Controller thinks fit.
(2) In determining the fair rent under this section, the Controller shall first fix a basic rent taking into consideration: (a) The prevailing rates of rent in the locality for the same or similar accommodation in similar circumstances during the twelve months prior to 1st January, 1939; and (b) the rental value of such building or rented land if entered in property tax assessment register of the municipal, town or notified area committee, cantonment board, as the case may be relating to the period mentioned in clause (a); Provided that, not with standing anything contained in sub sections (3), (4) and (5) the fair rent for any building in the Urban area of Simla shall not exceed the basic rent.
(3) In fixing the fair rent of a residential building the Controller may allow, if the basic rent: i) in the case of a building in existence before the Ist January, 1939 (a) does not exceed Rs.25 per mensem an increase not exceeding 81 xab per cent on basic rent; (b) exceed Rs.25 per mensem, an increase but does not exceed RS.50 per mensem, an increase not exceeding 12 1/2 per cent on such basic rent; (c) exceeds RS.50 per mensem an increase not exceeding 25 per cent on such basic rent; 111 (ii) in the case of building, constructed on or after the Ist January, 1939 (a) does not exceed Rs.25 per mensem, an increase not exceeding 25 per cent on such basic rent; (b) exceeds Rs.25 but does not exceed Rs.50 per mensem, an increase not exceeding 37 1/2 per cent on such basic rent; (c) exceed Rs.50 per mensem, an increase not exceeding 50 per cent on such basic rent; (4) in fixing the fair rent of a scheduled building the controller may allow, if the basic rent (i) in the case of a building in existence before the Ist January, 1939 (ii) does not exceed Rs.25 per mensem, an increase not exceeding 13 1/2 per cent on such basic rent; (b) exceeds Rs.25 but does not exceed Rs.50 per mensem, an increase not exceeding 17 xab per cent on such basic rent; (c) exceed Rs.50 per mensem, an increase not exceeding 303 percent on such basic rent; (ii) in the case of a building constructing on or after the Ist January, 1939 (a) does not exceed Rs.25 per mensem an increase not exceeding 30 percent on such basic rent; (b) exceeds Rs.25 but does not exceed Rs.50 per mensem, an increase not exceeding 42 xab per cent on such basic rent; (c)exceeds Rs.50 per mensem, an increase not exceeding 55 per cent on such basic rent; 112 (5) In fixing fair rent of a non residential building or rented land the controller may allow, if the basic rent, (i) in the case of building in existence before the Ist January, 1939 or in the case of rented land; (a) does not exceed Rs.50 per mensem, an increase not exceeding 371/2 per cent on such basic rent; (b) exceeds Rs.50 per mensem, an increase not exceeding SO per cent on such basic rent; (ii) in case of building constructed after the Ist January 1939: (a) does not exceed Rs.50 per mensem, an increase not exceeding 50 per cent on such basic rent; (b) exceeds Rs. 50 per mensem, an increase not exceeding 100 per cent on such basic rent; (6) Nothing in this section shall be deemed to entitle the Controller to fix the rent of a building or rented land at an amount less than the rent payable for such building or rented land under a subsisting lease entered into before the first day of the January 1939.
" It was contended that Section 4 of the Act provides the manner for determining the fair rent.
But while laying down the procedure for determining the fair rent it has laid down that the Rent Controller, while determining the fair rent under this section shall take into consideration the prevalent rates of rent in the locality for the same or similar accommodation in similar circumstances during 12 months prior to Ist January, 1939.
In other words, he has first to determine the rent prevalent in the locality in the year 1938 and then fix the rent accordingly.
This it is submitted, was unreasonable and as such arbitrary and violative of Article 14 and would be an interference with the fundamental right guaranteed under Article 19(1)(g) of the Constitution.
There has been according to the appellant, a tremendous rise in prices and as such in pegging the rent at the rate of Act of 1938 in an Act of 1949 was unreasonable.
He drew our attention to the relevant provisions of the Rent Act in Assam, Tripura and Haryana where the provisions of fixation of rent 113 according to him were different and were more fair and just and reasonable in comparison and submitted that this provision of the Act in question was unfair and unjust.
We are unable to accept this contention because each legislature in the several States has provided the method of determination of fair rent on the basis of legal conditions, as judged to be, by each such legislature.
It is well settled that the legislative wisdom of such legislation is not a ground for which the validity of the Act can be challenged .
Article 14 does not authorise the striking down of a law of one State on the ground that in contrast with a law of another State on the same subject its provisions are discriminatory or different.
Nor does it contemplate a law of the Centre or of the State dealing with similar subjects being held to be unconstitutional by a process of comparative study of the provisions of two enactments.
The source of authority for the two statutes being different, Article 14 can have no application.
See in this connection the decision of this Court in Prabhakaran Nair and others vs State of Tamil Nadu and others; , Shri S.K. Bagga, learned counsel drew our attention, we must have hasten to add to the different statutes in different States on this aspect.
We cannot say that there was any better provision in those statutes, there were undoubtedly different provisions and those different provisions were judged by the legislatures of those State to be suited to the needs of those States.
It is not necessary for us to examine in details those very provisions.
Shri S.K. Bagga, learned counsel also drew out attention to the observations of this Court in the case of M/s Raval & Co. vs K.G. Ramachandran and others, A.I.R. 1974 S.C. 818 1197412 S.C.R. 629.
He drew out attention how fair rent should be fixed by relying on the certain observations of Bhagwati, J. as the Chief Justice then was at Page No. 825 of the A.I.R.
In the facts and in the context of this case it is not necessary to refer to these observations.
These were made entirely in a different context.
It must be the function of the legislature of each State to follow the methods considered to be suited for that State, that would be no ground for judging the arbitrariness or unreasonableness of a particular legislation in question by compari 114 son.
What may be the problem in Madras may not be the problem inPunjab.
It must however, be borne in mind that the Act in question was passed in 1949 and it pegged the rent prevalent in the similar houses in 1938 and as such is not unreasonable per se.
The rises stated tremendously after the end of the Second World War after the partition of the country.
In that view of the matter, we can not say that per se there is unreasonableness in fixing the prices in 1938 level.
Having regard to the specific preamble of the Act we find nothing unreasonable in the Scheme contemplated under Section 4 of the present Act.
In the aforesaid view of the matter, the challenge to Section 4 on the grounds advanced before us must fail and it is accordingly rejected.
The appeal, therefore, fails and is dismissed.
There will be no order as to costs.
N.P.V. Appeal dismissed.
| % The appellant filed a writ petition in the High Court questioning the vires of section 4 of the East Punjab Urban Rent Restriction Act, 1949.
He did not, however, mention the particulars of the premises of which he claimed to be the owner, and in respect of which he was making a grievance.
The High Court dismissed the writ petition in limine.
Hence the appeal.
It was submitted on behalf of the appellant that section 4 of the Act was ultra vires the Constitution and violative of article 14, and would be an interference with the fundamental right guaranteed under article 19(1)(g) and was unreasonable, and unjust inasmuch as it provided that rent prevalent in 1938 should be taken as the basis for the determination of higher rent and that pegging the rent prevalent in 1938 as the basic rent, was inequitable and unjust in the background of the tremendous rise in prices, and that the provisions of fixation of rent in other States were different and were more fair and just and reasonable in comparison.
Dismissing the appeal, this Court, ^ HELD: 1.1 A petition challenging the constitutional validity of certain provisions must be in the context of certain facts and not in abstract or vacuum.
[109E]i 108 In the instant case, the essential facts necessary to examine the validity of the Act are lacking.
On this ground the petition was rightly rejected and this Court is not inclined to interfere with the order of the High Court on this ground alone.
[109E F] 2.1 Article 14 does not authorise the striking down of a law of one State on the ground that in contrast with a law of another State on the same subject its provisions are discriminatory or different.
Nor does it contemplate a law of the Centre or of the State dealing with similar subjects being held to be unconstitutional by a process of comparative study of the provisions of two enactments.
The source of authority for the two statutes being different, article 14 can have no application.
[113C D] 2.2 Each legislature in the several States has provided the method of determination of fair rent on the basis of legal conditions, as judged to be, by each such legislature.
The legislative wisdom of such legislation is not a ground on which the validity of the Act can be challenged.
[113B] 2.3 It must be the function of the legislature of each State to follow the methods considered to be suited for that State, that would be no ground for judging the arbitrariness or unreasonableness of a particular legislation in question by comparison.
What may be The problem in Madras may not be the problem in Punjab.
[113H; 114A] The Act in question was passed in 1949 and it pegged the rent prevalent in the similar houses in 1938 and as such is not unreasonable per se.
The rises started tremendously after the end of the Second World War after the partition of the country.
It cannot, therefore, be said that per se there is unreasonableness in fixing the prices in 1938 level.
[114A B] One of the objects of the Act was to restrict the increase in rent.
With that object, the Act as provided certain provisions as to fixation of the fair rent.
Therefore, having regard to the specific preamble of the Act there is nothing unreasonable in the Scheme contemplated under section 4 of the Act.
[114B C] Prabhakara Nair and others vs State of Tamil Nadu and others; , and M/s. Raval & Co. vs K.C. Ramachandran and others; , 2 S.C.R. 629, referred to. 109
|
Civil Appeal No. 897 of 1987 From the Judgment and order dated 5.8.1986 of the Central Administrative Tribunal, New Delhi in Regn.
No. T 853 of 1985 (CWP No. 2709 of 1985).
G. Ramaswamy, Additional Solicitor General, P. Parmeshwaran and B. Parthasarthy for the Appellant.
Harish N. Salve, Pramod Dayal and Badri Dass Sharma for the Respondents.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
The short question involved in this case is whether the members of the All India Services who had retired prior to 1.1.1973 are entitled to payment of gratuity as a part of retirement benefits at the rates specified in the Notification No. 33/12/73 AIS (ii) dated 24.1.
This appeal by special leave is filed against the decision of the Central Administrative Tribunal dated August 5, 1986 declaring that rule 28(6) of the All India Services (Death cum Retirement Benefits) Rules, 1958 insofar as it tended to restrict pensioners to retirement benefits to which they were entitled on the date of their retirement and sought to deny them the benefits of the liberalised pension and 700 gratuity in the amended notification No. 33/12/73 AIS (ii) dated 24.1.1975 was violative of Article 16 of the Constitution of India and further directing that all the members of the All India Services would be entitled to liberalised pensionary benefits including gratuity as per the said notification irrespective of whether they had retired prior to 1.1.1973 or thereafter.
The above decision was given by the Central Administrative Tribunal, New Delhi in REGN No. T 853/85 (C.W. No. 2709185) which was a petition filed by the All India Services Pensioners Association (Rajasthan) and one R.D. Mathur, an IAS officer who had retired from service prior to 1.1.1973.
The Union of India, the appellant herein, has not questioned the order of the Central Administrative Tribunal insofar as its liability to pay the pension in accordance with the judgment of the Tribunal is concerned.
This appeal by special leave is confined only to that part of the order of the Tribunal by which the Union of India is directed to pay gratuity in accordance with the aforesaid notification even to those members of the All India Services who had retired prior to 1.1.1973.
The crucial point for consideration in this appeal is whether the members of a service who had retired prior to the date on which there is an upward revision of the gratuity on retirement to the members of such service would also be entitled to claim the difference between the gratuity payable to members of such service on such upward revision and the gratuity which had been actually paid to them on their retirement, even though the Government order revising the gratuity does not either expressly or by necessary implication state that the members of the service who had retired earlier should also be paid gratuity at the revised rates because of the decision of this Court in D.S. Nakara vs Union of lndia; , A similar question came up for consideration before this Court in the State Government Pensioners Association & others vs State of Andhra Pradesh., [1986] 3 S.C.C. 501.
The facts of that case are these The Government of Andhra Pradesh by its order G.O.Ms.
No. 88 dated 26.3.1980 directed that retirement gratuity was payable to the officers to whom the said Government order was applicable as follows: "Retirement gratuity may be 1/3rd of pay drawn at the time of retirement for every six monthly service subject to maximum of 20 months ' pay limited to Rs.30,000. " The said order was made effective from April 1, 1978.
The question which arose for consideration in some writ petitions filed in the High Court of Andhra Pradesh was whether the pensioners who had 701 retired prior to 1.4.1978 would also be entitled to the payment of gratuity in accordance with the provision made in the aforesaid notification.
The High Court of Andhra Pradesh held that the decision of this Court in D.S. Nakara 's case (supra) was not applicable to the payment of gratuity and that pensioners who had retired prior to April 1, 1978 would not be entitled to claim the difference between the gratuity payable under the Government order and the gratuity which they had actually received at the time of their retirement.
In the Special Leave Petitions filed before this Court against the said decision two of the learned Judges of this Court Thakkar and Ray, JJ.
affirmed the view taken by the High Court of Andhra Pradesh and dismissed the petitions.
In the course of their order the learned Judges observed as follows: "We fully concur with the view of the High Court.
The upward revision of gratuity takes effect from the specified date (April 1, 1978) with prospective effect.
The High Court has rightly understood and correctly applied the principle propounded by this Court in Nakara 's case . . . .
An illustration will make it clear.
Improvements in pay scales by the very nature of things can be made prospectively so as to apply to only those who are in the employment on the date of the upward revision.
Those who were in employment say in 1950, 1960 or 1970, lived, spent, and saved, on the basis of the then prevailing cost of living structure and pay scale structure, cannot invoke article 14 in order to claim the higher pay scale brought into force say, in 1980.
If upward pay revision cannot be made prospectively on account of Article 14, perhaps no such revision would ever be made.
Similar is the case with regard to gratuity which has already been paid to the petitioners on the then prevailing basis as it obtained at the time of their respective dates of retirement.
The amount got crystalized on the date of retirement on the basis of the salary drawn by them on the date of retirement.
And it was already paid to them on that footing.
The transaction is completed and closed.
There is no scope for upward or downward revision in the context of upward or downward revision of the formula evolved later on in future unless the provision in this behalf expressly so provides retrospectively (downward revision may not be legally permissible even).
It would be futile to contend that no upward revision of gratuity amount can be made in har 702 mony with Article 14 unless it also provides for payment on the revised basis to all those who have already retired between the date of commencement of the Constitution in 1950, and the date of upward revision.
There is therefor no escape from the conclusion that the High Court was perfectly right in repelling the petitioners ' plea in this behalf.
" When the above decision was brought to the notice of the Tribunal in the case out of which the present appeal arises the Tribunal declined to follow it and gave the following reasons for doing so: "We must, however, observe that the Supreme Court in that case was dismissing Special Leave Petition (Civil) Nos. 14179 and 14180 of 1985 and was not disposing of an appeal.
Further, the Supreme Court, in that case was considering the Andhra Pradesh Pension Rules and not rule 28(6) of the All India Services (Death cum Retirement Benefit) Rules, 1958 and the liberalisation pension scheme of Andhra Pradesh notified on 24.1.1985 and not the notification dated 24.1.1975 amending the All India Services (Death cum Retirement Benefit) Rules, 1958 with which we are now concerned in this application.
Moreover, the Special Leave Petition against the Andhra Pradesh High Court 's judgment was rejected by a Bench of two Judges while the judgment in V.P. Gautam 's case which expressly dealt with Rule 28(6) and the liberalised pension scheme notified on 24.1.1975 in respect of Members of All India Services was the subject matter of an appeal before a bench of three judges of the Supreme Court.
The relevant portion of the judgment of the High Court of Punjab and Haryana which must be deemed to have been affirmed by the three member Bench of the Supreme Court when it dismissed Civil Appeal Nos 2738 and 2739 of 1985 on 12.2.1985 reads as follows: In other words, the provisions of rule 28(6) of the retirement benefits rules, 1958 in so far as they were entitled on the date of their retirement and seeks to deny them liberalised pension under the amended rules referred to above which came into effect subsequent to that date are unconstitutional and are also accordingly struck down.
It follows that the liberalised pensionary benefits including death 703 cum retirement gratuity granted to pensioners by the amendment made in 1975 and 1979 shall be payable to all persons entitled to pensionary benefits under the Retirement benefits rules, 1958 irrespective of the date of the retirement from service.
It has been repeatedly laid down by the Supreme Court that the decision of the larger Bench prevails over the decision of the smaller benches vide Ganapati Sitaram Balvalkar vs Waman Shripad Mage, A.I.R. 1981 S.C. 1956; Mattulala vs
Radhe Lal, A.I R. ; Union of India vs K.S. Subramanian, A.I.R. 1976 S.C. 433.
Even assuming that some aspects have not been taken into account by the Supreme Court, no Court or Tribunal of India can take a view different from that taken by the Supreme Court.
As held by the Supreme Court in T. Govindaraja Mudaliar vs State of Tamilnadu, ; "merely because the aspect presented in the present appeal was not expressly considered or a decision given, that will not take away the binding effect of those decisions of the Supreme Court.
" Vide Somavanti vs State of Punjab; , It may be pertinent to note that even in the Andhra Pradesh State Government Pensions Association case the judgment in V.P. Gautam 's was specifically referred to but the Supreme Court did not state that it was not correctly decided.
Further, in all the above cases special leave applications were rejected following the principle laid down in Nakara 's case.
In Gautam 's case the appeal filed by the Union of India was dismissed applying Nakara 's case.
In dealing with the claim of the other members of the All India Services who like V.P. Gautam had retired prior to 1.1.1973, we cannot hold otherwise in construing rule 28(6 ' in the context of the liberalised pension scheme of 1975, The conflict if any must be resolved by the Supreme Court.
We must follow the decision in V.P. Gautam 's case which is directly in point.
" With great respect to the Tribunal it should be stated that the way in which it has tried to ignore the decision of this Court in the Andhra Pradesh State Government Pensioners Association case 704 (supra) is not correct.
In the above decision the two learned Judges, who decided that case have given reasons for not applying the rule in D.S. Nakara 's case (supra) insofar as the liability of the Government to pay gratuity on retirement is concerned.
The first ground relied on by the Tribunal not to follow the said decision is that it had been rendered by this Court while dismissing some special leave petitions.
This is a wholly untenable ground.
The special leave petitions were not dismissed without reasons.
This Court had given reasons for dismissing the special leave petitions.
When such reasons are given the decision becomes one which attracts Article 141 of the Constitution which provides that the law declared by the Supreme Court shall be binding on all the courts within the territory of India.
The second ground given by the Tribunal is that the decision was one rendered in a case involving a notification issued by the Andhra Pradesh Government but not one touching the notification dated 24.1.1975 involved in this case.
This is also not tenable.
The Supreme Court was considering the question of applicability of the principle enunciated in D.S. Nakara 's, case to the case of gratuity.
The views expressed by this Court should, therefore, apply to all cases of gratuity where similar features exist and it should apply to the present case too.
If what the Tribunal has held is correct then D. section Nakaras case will not be applicable to any order of pension passed by any State Government.
That would indeed be a startling proposition with which we do not agree.
As regards the third ground it is no doubt true that the High Court of Punjab & Haryana in its decision in V. P. Gautama vs Union of India and Ors., [1984] Labour and Industrial Cases 154 had observed that "it follows that the liberalised pensionary benefits including death cum retirement gratuity granted to pensioners by the amendment made in 1975 and 1979 shall be payable to all persons entitled to pensionary benefits under the Retirement Benefits Rules, 1958 irrespective of the date of the retirement from service".
But at the end of its decision the High Court passed the following order: "In the result, a writ of mandamus is issued to the Union of India and the other respondents directing them to compute and pay pensionary benefits to the petitioner along with interest on the amounts becoming payable to him in terms of this order.
The petitioner shall also be entitled to the costs of this petition.
" When the Special Leave Petition was filed against the said decision this Court passed the following order: 705 "Special leave to appeal was confined only to two questions (1) whether the enhanced pension under the liberalised pension scheme was payable with effect from 1st October, 1974 and (2) whether the High Court had any jurisdiction to award interest at 12% per annum.
So far as the first question is concerned, it is fully covered by D.S. Nakara & Ors.
vs Union of India.
We are not inclined to go into the second question in the present appeals.
The appeals are therefore, dismissed.
No costs.
" The above decision was rendered by a bench of three Judges of which one of us was a member.
It is seen from the above order that there is no reference to the liability of the Union of India and the State of Haryana to pay the gratuity to the pensioner who was involved in that case.
The first question considered related to the payment of enhanced pension.
It is not known whether the question relating to gratuity was pressed before this Court or not.
There is no reference to the liability to pay gratuity in the said order.
The only point considered by this Court by the above order was the point involved in question No. 1, referred to therein, namely, whether the enhanced pension under the liberalised pension scheme was payable with effect from 1st October, 1974 and insofar as that question was concerned, the view taken by the High Court of Punjab & Haryana was affirmed.
It may be that the decision of the High Court of Punjab and Haryana may be binding on the parties to that petition as res judicata.
But the above order of this Court cannot be considered as a precedent under Article 141 of the Constitution to hold that the liability to pay gratuity was also governed by the decision in D.S. Nakara 's case.
It may be pointed out that in M.L. Abhyankar and others etc.
vs Union of India, (Writ Petition (Civil) Nos.
3531 34 of 1983 and connected cases decided on April 24, 1984) a bench of three Judges of this Court, which consisted of two of the Judges who dismissed the appeal filed against the judgment of the High Court of Punjab & Haryana referred to above, has observed thus: "In view of our decision in D.S. Nakara vs Union of India; , and for the reasons mentioned by the Allahabad High Court in Writ Petition No. 3201 of 1979 dated 21311983 in the case of Bidhubhushan Malik and others vs Union of India which we have accepted as correct in Special Leave Petition No. 9616 of 1983 just now dismissed by us we allow the writ petitions.
The judges of the High Court and of the Supreme Court will be entitled to the pensionary benefits under the amended Act of 1973 706 irrespective of the dates of their retirement.
They will be so entitled with effect from 1.10.1974.
Arrears of pension calculated under the provision of the new Act will be paid to those to whom it is due within four months from today.
In the case of Judges who have died after 1.10.1974 the amounts due will be paid to the legal heirs of the Judges within four months from today.
The family pension due to the widows will be calculated under the provisions of the 1976 Amending Act and paid to them.
Ad hoc payments made, if any, will be adjusted while making such payments.
The writ petitions are disposed of accordingly.
What we have said about pensionary benefits does not apply to payment of gratuity. " (underlining by us) From the foregoing it is clear that this Court has made a distinction between the pension payable on retirement and the gratuity payable on retirement.
While pension is payable periodically as long as the pensioner is alive, gratuity is ordinarily paid only once on retirement.
No other decision of this Court which has taken a view contrary to the decision of Thakkar and Ray, JJ.
in the Andhra Pradesh State Government Pensioners Association 's case (supra) and to the decision in M. L. Abhyankar 's case (supra) has been brought to our notice.
The observations made in these two cases are binding on us insofaras the applicability of the rule in D.S. Nakara 's case (supras to the liability of the Government to pay gratuity on retirement.
We respectfully agree with the views expressed in those decisions.
It is also not shown that the Government notification in question either expressly or by necessary implication directs that those who had retired prior to 1.1.1973 would be entitled to any additional amount by way of gratuity.
The Tribunal was, therefore, in error in upholding that gratuity was payable in accordance with the Government Notification No. 33/12/73 AIS(ii) dated 24.1.1975 to all those members of the All India Services who had retired prior to 1.1.1973.
The Judgment of the Tribunal is set aside to the extent indicated above.
We make a declaration that the members of the All India services who had retired prior to 1.1.1973 are not entitled to claim gratuity on the basis of the Notification referred to above.
The appeal is allowed to the above extent.
There will be no order as to costs.
N.V.K. Appeal allowed.
| The appellants were suspected of exporting potatoes at concessional rates on false declarations and Madan Lal, a Railway Officer, was deputed to assist the Police in the investigation.
In course of that investigation the appellants offered a bribe to Madan Lal for hushing up the case but he refused to accept it.
As they persisted in their offer a trap was laid in Madan Lal 's house and it succeeded.
Two Police Officers and a Magistrate heard the conversation from the adjoining room and saw the payment of the bribe through a hole.
The appellants were charged under section 120 B of the Indian Penal Code for criminal conspiracy to cause the offence of criminal misconduct punishable under section 5(2) of Prevention of Corruption Act of 1947 to be committed by Madan Lal as also under that section read with section 116 of the Indian Penal Code.
They were convicted by the Special Judge on both the counts and their convictions were upheld by the High Court.
The contentions on their behalf were that section 5(2) of the Prevention of Corruption Act had no application to the facts of the case, that Madan Lal was not a public servant within the meaning of the Act and, lastly, that the laying of the trap was an invitation to commit the crime and afforded a good reason for reduction of the sentences.
Held, that the contentions were untenable and must be rejected.
That the word "obtains" occurring in clause (d) to sub section (1) of section 5 of the Prevention of Corruption Act does not exclude the idea of acceptance of a bribe on offer, and a public servant, whether he simply accepts a bribe, or solicits or extorts it, thereby obtains a pecuniary advantage by abusing his position as a public servant and commits an offence under that section, any consideration as to motive or reward for showing favour or disfavour being altogether irrelevant.
That as a result of the amendment of section 137 of the Indian Railways Act by the Amendment Act of 1955 all railway servants have become public servants not only for the limited purposes of Ch.
IX 183 of the Indian Penal Code but generally under the Prevention of Corruption Act.
That it cannot be laid down as an absolute rule that the laying of traps, especially in cases of this nature, should be deprecated as constituting an invitation to commit an offence and an offence thus detected does not lose its gravity thereby so as to call for a lenient sentence.
Where, however, proper limits are exceeded and the money to be given as bribe is supplied by the Police, it must be severely condemned.
Brennan vs Peek ([1947] 2 All E.R. 572), considered.
Rao Shiv Bahadur Singh and another vs The State of Vindhya Pradesh ([1954] S.C.R. 1098) and Bamjanam Singh vs The State of Bihar, (Cr.
Appeal No. 81 of 1953), referred to.
|
minal Appeal No. 105 of 1969.
Appeal by special leave from the judgment and order dated March 27, 1969 of the Bombay High Court in Criminal Appeals Nos. 53 and 45 of 1968.
V.S. Kotwal, A. G. Ratnaparkhi and Rajiv Shah, for the appellant.
R. M. Mehta and B. D. Sharma, for the respondent.
The Judgment of the Court was delivered by Khanna, J.
This is an appeal by special leave by Khandu Sonu Dhobi and Bhikanrao Rambhau Khairnar against the judgment of the Bombay High Court affirming on appeal the conviction of the appellants under section 218 read with section 34, section 477A read with section 34 and section 409 read with section 34 of Indian Penal Code as well as under section 5 (2) read with section 5 ( 1 ) (d) of the Prevention of Corruption Act.
Sentence of rigorous imprisonment for a period of one year and a fine of Rs. 200 or in default further rigorous imprisonment for a period of two months has been awarded on each count to, the appellants.
The substantive sentences have ben ordered to run concurrently.
Dhobi appellant No. 1 was an agricultural assistant and was working under Khairnar appellant No. 2 who was agricultural 512 supervisor in the soil conservation section of the Government of Maharashtra.
Dhobi was incharge of the work relating to a Bundh in block No. 13 of village Asane in Taluka Mandurbar.
The above block comprises agricultural lands bearing survey Nos. 8, 17, 18, 19 and 32 measuring 90 acres.
The Bundhs were being constructed since the year 1962.
Rectification work in respect of those Bundhs at a cost of Rs. 369.07 had to be got done by Dhobi appellant under the supervision of Khaimar appellant.
The Government sanctioned an amount of Rs. 4779 in connection with the construction of the Bundhs.
An advance amount of Rs. 5000 was received by Khaimar accused on March 2, 1966 in that connection.
Work of the value, of Rs. 4400 was done but that relating to rectification work was not done.
According to the rules of the soil conservation section, the Government spent the money in the first instance and after the report of the completion of work was received, the expenses were recovered from the landowners for whose benefit the work was done.
On March 11, 1966 Khaimar made entries in measurement book exhibit 27 showing that he had checked 28 payments and certified the, same.
Khaimar accused also stated in the entry that he had passed the measurements and paid Rs. 369.07.
Paysheets exhibit 64 were prepared by Dhobi accused and he obtained the thumb impressions and signatures of the laborers on the paysheets.
Khaimar made his initials below the thumb impressions in the paysheets.
On the last page of the paysheets, Khaimar signed a certificate according to which he had paid Rs. 369.07 to PW 10 Jagan Trinibak who used to do the labour work.
Final bill exhibit 28 was also prepared on that day by the accused and the signature of Jagan Trimbak was obtained on the same.
The bill was got signed from PW 7 Ziparu Tukaram and another person as attesting witnesses.
The bill was signed thereafter by Khaimar.
Debit entry exhibit 32 of Rs. 369.07 was made by Khaimar accused in the cash book.
He also prepared work abstract exhibit 29 on April 16, 1966 and sent it to the sub divisional soil conservation officer Nandurbar showing an expenditure of Rs. 369 07.
The case of the prosecution was that the measurement book exhibit 27, paysheets exhibit 64, final bill exhibit 28 and cash book entry exhibit 32 were false documents and were fabricated by the accused without doing any reification work on the Bundh.
The accused thus committed criminal breach of trust in respect of the amount of Rs. 369.07 in furtherance of their common intention to misappropriate government property.
According further to the prosecution case, the landowners in block No. 13 came to know of the, above, acts of the accused and they complained about it to Sarpanch Tanku Bhagwan (PW 12).
Tanku sent a telegram on April 12, 1966 to the superintending agricultural officer, Bombay division, Nasik in this connection.
A copy of the telegram was 513 thereafter sent by the superintending agricultural officer to divisional soil conservation officer D.S.D. Ghate (PW 1) for necessary action as well as for enquiry and report.
Chate PW went to village Asane on May 2, 1966 and inspected block No. 13.
He found that entries had been made about the payment of Rs. 369.07 in the measurement book and cash book even though no rectification work had been done.
Chate submitted his report on May 6, 1966 for proceeding departmentally against the accused.
On receipt of the above report, the superintending agricultural officer directed P. R. Inamdar (PW 1 1 ), deputy director of agricultural engineering, to go to Asane village and submit his report after personally verifying the facts.
Inamdar went with Ghate to block No. 13 in Asane village on May 11, 1966.
Both Inamdar and Ghate found that no rectification work had been done.
They did not find even a single pit in the lands in that block although, according to measurement book, 83 pits had been recently dug.
Inamdar and Ghate also met the Sarpanch and other landowners of Asane village.
Report dated May 18, 1966 was thereafter submitted by Inamdar affirming those facts.
Sarpanch Tanku sent complaint exhibit 84, in the meanwhile, on April 30, 1966 to the director of anti corruption branch Maharashtra State stating that the accused had prepared false bill for Rs. 369.07 without doing any work and that they had misappropriated that amount.
It was also stated that attempts were being made to shield the accused.
The director of anti corruption sent a copy of that application to Sub Inspector K. G. Patil (PW 13) who was then attached to Dhulia officse of the anticorruption branch.
Sub Inspector Patil made local enquiry and took into possession the measurement book, paysheets and cash book.
The director of anti corruption branch directed Patil to register a case and investigate into the, matter.
Patil went to Nasik and recorded statement exhibit 79 of Inamdar PW on November 7, 1966.
The statement was then sent to Nandurbar Taluka police station.
A case was registered on the basis of that statement at the police station on November 8, 1966.
On November 12, 1966 sub Inspector Patil applied for permission under section 5A of the Prevention of Corruption Act of judicial magistrate 1st class to investigate the offence.
The permission was granted by the judicial magistrate 1st class Nandurbar on the same day.
Patil thereafter recorded statements of a number of persons.
Patil was subsequently transferred and the case was investigated by his successors Mahamuni and Kulkarni who also obtained the requisite permission.
Sanction exhibit 97 for the prosecution of the two accused was granted under section 6 of the Prevention of Corruption Act by the superintending agricultural officer Bombay division, Nasik on May 18, 1967.
514 The two accused in their statements admitted that the work of the value of Rs. 369.07 wasnot done till March 11, 1966 although it was so stated in the various documents by them.
The accused also admitted that no amounts were paid to any of the labourers mentioned in the paysheets although signatures and thumb impressions of the labourers had been obtained on the paysheets on March 11, 1966.
According to the accused, they had prepared the various documents in accordance with the instructions of Ghate PW who was insisting in March 1966, and even earlier, that a completion report relating to block No. 13 be sent as the entire amount spent on that block since 1962 could not be recovered for want of a. completion report.
Khaimar accused added that rectification work had been done between May 13, 1966 and May 16, 1966 and the amount of Rs. 369.07 was thereafter disbursed on May 16, 1966.
The learned special judge held that the amount of Rs. 369.07 had not been paid by the two accused to the labourers.
No work, it was found, had been done and the different documents prepared by the accused in this connection were false even on their own admissions.
The explanation furnished by the accused that they prepared false documents at the instance of Ghate and got work done thereafter was not accepted.
Objection was raised on behalf of the accused that the investigation of the case was illegal and that prosecution was barred by time under the pro visions of section 23 of the Land Improvement Schemes Act, 1942.
These objections were repelled.
The accused were accordingly convicted and sentenced as above.
On appeal the High Court affirmed the, findings of the learned special judge.
We have heard Mr. Kotwal on behalf of the, appellants and are of the opinion that there is no merit in the appeal.
It has not been disrupted before us that the accused made various entries and prepared documents on March 11, 1966 about their having got the rectification work done as well as about the payment of Rs. 369.07 on that account.
It has also not been disputed before us that the amount of Rs. 369 07 was not paid to any one by the accused in March or April 1966.
According to Ghate (PW 1) and Inamdar (PW 11), no work relating to the rectification of the Bundh was found to have been done till May 11, 1966 when they visited the site in question.
Inamdar 's evidence also shows that according to the measurement book prepared by the accused, 83 pits had been recently dug although the witness could not find a single pit on the spot.
In view of the above, we find no cogent ground to disagree with the trial court and the High Court that the accused had prepared false documents and had also committed criminal breach of trust in respect 515 of the amount of Rs. 369.07.
We also agree with the trial court and the High Court that the accused were in the discharge of their duties guilty of criminal misconduct as defined in section 5 of the Prevention of Corruption Act.
Mr. Kotwal has argued that the accused completed the recti fication work after May 11, 1966,.
There is, however, no direct evidence as may show that the, rectification work was completed ' after May 11, 1966.
Even if it may be assumed that the accused completed the rectification work in May 1966, that fact, in our opinion, would not absolve the accused of their criminal liability.
The charge, against the accused relates to preparation of false documents because even though no work had been done till March 11, 1966 and no amount had been disbursed, they prepared docu ments showing the doing of that work and the payment of that amount.
It is no answer to, that charge that after the matter had been reported to the higher authorities, the accused in the month of May 1966 got the rectification work done.
It is also no answer to a charge of criminal misappropriation that the money was subsequently, after the matter had been reported to the high authorities, disbursed for the purpose for which it had been entrusted.
According to explanation 1 to section 403 Indian Penal Code, a dishonest misappropriation for a time only is " misappropriation " within the meaning of that section.
Mr. Kotwal has also submitted that the accused expressed willingness to complete the work after the matter had been reported to the higher authorities.
This submission, 'even if accepted, would not exonerate the accused because the willingness after the matter had been reported to the higher authorities could not efface or undo the offence earlier committed by the accused.
Argument has then been advanced on behalf of the appellants that Sub Inspector Patil did not make investigation in the case in accordance with law.
It is urged that permission to make investigation was granted to Sub Inspector Patil on November 12, 1966 and, as such, he was not authorized to make before that date the enquiry which led to the registration of the case as that enquiry partook of the character of investigation.
Nothing has been brought to our notice as to how an enquiry before the registration of a case can be held to be investigation.
The matter, however, need not be dilated upon and it is not necessary to express any final opinion in the matter because we find that there is no material on the record as may show that the accused were prejudiced because of the alleged non compliance with the provisions of section 5A of the Prevention of Corruption Act.
It is well established that where cxognizance of a case has, in fact, been taken by the court on a police report following investigation 516 conducted in breach of provisions of section 5A of the Prevention of Corruption Act, the result of the trial cannot be set aside unless the illegality in the investigation can be shown to have brought about a miscarriage of justice.
The underlying reason for the above dictum is that an illegality committed in the course of investigation does not affect the competence and jurisdiction of the court to try the accused.
Where, therefore, the trial of the case has proceeded to termination, the invalidity of the proceeding investigation would not vitiate the conviction of the accused as a result of the trial unless the illegality in the investigation has caused prejudice to the accused (see H. N. Rishbud and Inder Singh vs The State of DelHi(1)].
Since there has been no miscarriage of justice in the present case because of the alleged non compliance with section 5A, the conviction of the accused appellants cannot be set aside on that score.
For the same reason, we are unable to accede to the contention of Mr. Kotwal that the conviction of the accused should be set aside because permission under section 5A of the Prevention of Corruption Act to SI Patil for investigation of the offence was granted in a ,casual manner and without the existence of sufficient reasons.
Lastly, it has been argued by Mr. Kotwal that the prosecution of the accused was barred by time under section 23 of the Bombay Land Improvement Schemes, Act, 1942.
The section reads as under "(1) No suit, prosecution or other legal proceeding shall be instituted against any public servant or person duly authorized under this Act in respect of anything in good faith done or intended to be done under this Act or the rules made thereunder.
(2)No suit or prosecution shall be instituted against any public servant or person duly authorized under this Act in respect of anything done or intended to be done, under this Act, unless the, suit or prosecution has been instituted within six months from the date of the act complained of.
" Sub section (1) of the section has plainly no application as it relates to anything done in good faith.
According to Bombay General Clauses Act, a thing shall be deemed to be done in good faith where it is in fact done honestly, whether it is done negligently or not.
The appellants admittedly were not acting honestly when they prepared the false documents in question and showed disbursement of Rs. 369.07 on March 11, 1966.
Mr. Kotwal, however, relies on sub section (2) of section 23 and (1) ; 517 submits that the prosecution could be instituted against the appellants only within six months from March 11, 1966.
As the charge sheet was submitted long after the expire of six months, the case against the accused appellants, according to the counsel, was barred by time.
This contention, in our opinion, is devoid of force.
Sub section (2) refers to suit or prosecution against a public servant or person duly authorized under the Act in respect of anything done or intended to be done under the Bombay Land Improvement Schemes Act.
It cannot be said that the acts of the accused appellants in preparing false documents and in committing criminal breach of trust in respect of the amount of Rs. 369 07 as also their act of criminal misconduct were done under the Bombay Land Improvement Schemes Act.
Sub section (2) of section 23 deals with anything done or intended to be done under the above mentioned Act by a public servant or a person duly authorized under the Act.
It has no application where something is done not under the Act even though it has been done by a public servant who has been entrusted with duties of carrying out improvement schemes under the above mentioned Act.
The impugned acts of the appellants in the present case were not in discharge of their duties under the above mentioned Act but in obvious breach and flagrant disregard of their duties.
Not only they did no rectification work for the Bundh which was a part of the improvement scheme, they also misappropriated the amount which had been entrusted to them for the purpose of rectification.
Prayer has also been made for the reduction of the sentence, but we see no cogent ground to interfere with the same.
The appeal consequently fails and is dismissed.
K.B.N. Appeal dismissed.
| The lessee of a plot of land from Government sub leased it and the sub lessee built a building on it consisting of Rats, shops and offices.
The sub lessee assigned the rights of occupation of those flats etc.
under various .agreements.
Thereafter, the appellant company was incorporated and the sub lessee purported to assign all his rights in the building to the appellant company.
In the preamble to the deed it was recited that the company had been formed for the better administration of the building and for the protection of the interests of the persons occupying the flats etc., and that ;the sub lessee had agreed to assign to the appellant company all his interests in the, land and the building.
The consideration, mentioned in the document was nil and the document bore a stamp% of 12 annas.
When it was presented for registration, the authority impounded the deed, held that the appellant company was formed of and for the persons who had purchased the flats etc., that the real consideration for the assignment was .made up partly of what was paid by the occupiers of the flats etc., and determined the stamp duty and penalty under section 40 of the Stamp Act, 1899.
On a reference to the High Court it was held, that the article in the ,Schedule to the St amp Act applicable is article 23.
On the question of consideration, 'however, while one Judge held that the consideration was ,nil ' as mentioned in the deed, the majority held that the Revenue was not bound to accept the quantum of consideration mentioned in the deed, that the deed incorporated into itself the various agreements entered into between the sub lessee and the persons to whom rights were assigned in the flats etc., and that the consideration was the total amount payable to the sub lessee by those assignees.
Allowing the appeal to this Court, HELD: (1) Before the terms and conditions of an agreement can be said to have been incorporated into another document, it must be shown that the parties intended to do so.
In the present case, the mere reference to the earlier transactions in the deed did not amount to an incorporation in it of the terms and conditions of those transactions.
[338 F H] (2) In view of section 27 of the Stamp Act the parties to a document are required to set forth in the document fully and truly, the consideration (if any) and all other facts and circumstances affecting the chargeability of that document with duty.
But a failure to do so is merely punishable under section 64 of the Stamp Act.
There is no provision empowering the Revenue authorities to make an independent inquiry of the value of the property conveyed for determining the duty, even assuming that the charging words in article 23 do not mean that the Revenue must have regard 333 only to what the parties to the instrument have elected to state the consideration to be, but can assess the duty upon the value of the consideration as disclosed upon an examination of the terms of the instrument as a whole.
[339 A D] (3) There is a long line of decisions of the High Courts holding that the Legislature had not empowered the Revenue to make an independent inquiry as regards the valuation of the right sought to be assigned.
That view is correct and the question must also be held to be settled by state decision.
[340 D F] Ramen Chetty vs Mohomed Ghouse, I.L.R. , Sakharam Shankar vs Ramchandra Babu Mohire, I.L.R. , Muhammad Muzaffar Ali, In re.
I.L.R. 44 All.
339, Sri Sitaram Ramalla & Anr.
vs State of Bihar, I.L.R. 39 Pat.
228 and Bharpet Mohammad Hussain Sahib & Anr.
vs District Registrar, Kurnool, I.L.R. , approved.
(4) In any event, there was no basis for holding that the consideration for the deed was the amount received by the sub lessee from the persons to whom he assigned rights in the flats etc.
Those persons acquired an independent right and title whether perfect or not en before the impounded deed was executed, and their rights did not flow from the impounded deed.
[340 F G]
|
(Civil) No. 3 of 1983.
(Under Article 32 of the Constitution of India).
WITH W.P. Nos.
4OO 402, 425, 492, 2493 2495, 2526 2528 of 1983 and 1256 of 1987.
Soli J. Sorabjee, Ravinder Narain, DA.
Dave and P.H. Parekh, for the Petitioners.
A.K. Ganguli, T.V.S.N. Chari Ms. Radha Rangaswamy and P. Parmeshwaran for the Respondents.
The Judgment of the Court was delivered by YOGESHWAR DAYAL J.
This order will dispose of the aforesaid writ petitions under Article 32 of the Constitution of India.
All these cases come under Item 18.1 and/or 18 III and/or 18E of the Tariff contained in the schedule attached to the Central Excise and Salt Act 1944 (hereinafter referred to as 'the Act ').
For facility of reference we are giving the facts of the case of Civil Writ Petition No. 3 of 1983.
144 This Writ Petition is stated to be covered by the decision of this Court in J.K Cotton Spinning and Weaving Mills Ltd. & another vs Union of India and others; , and the surviving prayer in the writ petition is to declare that the duty of excise in respect of Tariff Item Nos. 18 (A) (a), 18 (III) (ii) and 18E is to be levied and collected on the weight of the unsized yarn and not on the basis of the weight of the sized yarn".
Before we deal with the objections of the learned counsel for the respondents, it would be useful to examine the points which were involved in the aforesaid case of J.K Cotton Mills.
The appellants in the said case had a composite mill wherein it manufactured fabrics of different types.
In order to manufacture the said fabrics, yarn was obtained at an intermediate stage.
The yarn so obtained was further processed in an integrated process in the said composite mill for weaving the same into fabrics.
The appellants did not dispute that the different kinds of fabrics which were manufactured in the miff were liable to payment of excise duty on their removal from the factory.
They also did not dispute their liability in respect of yarn which was also removed from the factory.
It was the contention of the appellants therein that no duty of excise could be levied and collected in respect of yam which was obtained at an intermediate stage and, thereafter subjected to an integrated process for the manufacture of different fabrics.
On a writ petition, by those appellants, the Delhi High Court by its judgment dated 16th October, 1980 held that yarn obtained and further processed within the factory for the manufacture of fabrics could not be subjected to duty of excise.
It was the case of the appellants that in spite of the said decision of the Delhi High Court, the Central Board of Excise had wrongly issued a circular dated 24th September, 1980 purporting to interpret Rules 9 and 49 of the Central Excise Rules, 1944 (hereinafter referred to as the Rules ') and directing the subordinate excise authorities to levy and collect duty of excise in accordance therewith.
In the said circular, the Board had directed the subordinate excise authorities that use of goods in manufacture of another commodity even within the place/premises that have been specified in this behalf by the Central Excise Officers in terms of the powers conferred under Rule 9 of the Rules, will attract duty".
As the said circular was being implemented to the prejudice of the appellants, they filed the writ petition before the Delhi High Court, inter alia, challenging the validity of the said circular.
During the pendency of the writ petition in the Delhi High Court, the 145 Central Government by Notification No. 20/82 C.E. dated 20th February, 1982 amended Rules 9 and 49 of the Rules.
Section 51 of the Finance Act provides that the amendments in Rules 9 and 49 of the Rules shall be deemed to have, and to have always had the effect on and from the date on which the Rules came into force i.e. 28th February, 1944.
After the said amendments of the Rules with retrospective effect, the appellants amended the Writ petition and challenged the constitutional validity of Section 51 of the Finance Act, 1982 and of the amendments to Rules 9 and 49 of the Rules.
The High Court came to the conclusion that section 51 of the Finance Act, 1982 and Rules 9 and 49 of the Rules, as amended, were valid.
It was further held that the retrospective effect given by Section 51 of the Finance Act, 1982 will be subject to the provisions of Sections 11A and 11B of the Act.
It was further held that the yam which is produced at an intermediate stage in the mill of the appellants therein and subjected to the integrated process of weaving the same into fabrics, will be liable to payment of excise duty in view of the amended provisions of Rules 9 and 49 of the Rules.
But the sized yam which is actually put into the integrated process will not again be subjected to payment of excise duty for, the unsized yarn, which is sized for the purpose, does not change the nature of the commodity as yarn.
The Writ Petition was accordingly allowed in part, as stated aforesaid, and it was this decision which came up in appeal before this Court.
This Court agreed with the Delhi High Court and upheld the vires of Rules 9 and 49 of the Rules as well as Section 51 of the Finance Act, 1982.
This Court also agreed with the High Court that the retrospective effect given by section 51 of the Finance Act, 1982 will be subject to the Provisions of Sections 11A and 11B of the Act.
This Court also agreed with the view of the High Court that the yarn which is produced at an intermediate stage in the mill of the appellants and subjected to integrated process of weaving the same into fabrics, would be liable to payment of excise duty in view of the amended provisions of the Rules, But, this Court further agreed with the High Court, the sized yarn which is actually put into the integrated process will not again be subjected to payment of excise duty for, the unsized yarn, which is sized for the purpose does not change the nature of the commodity as yarn.
This Court observed at pages 720 and 721 of the report as under: "In the instant case, the appellants are liable to pay excise duty on the yarn which is obtained at an intermediate stage and, thereafter, further processed in an integrated process for weav 146 ing the same into fabrics.
Although it has been alleged that the yam is obtained at an intermediate stage of an integrated process of manufacture of fabrics, it appears to be not so.
After the yarn is produced it is sized and, thereafter, subjected to a process of weaving the same into fabrics.
Be that as it may, as we have held that the commodity which is obtained at an intermediate stage of an integrated process of manufacture of another commodity, is liable to the payment of excise duty, the yarn that is produced by the appellants is also liable to payment of excise duty.
In our view, the High Court by the impugned judgment has rightly held that the appellants are not liable to pay any excise duty on the yarn after it is sized for the purpose of weaving the same into fabrics.
No distinction can be made between unsized yarn and sized yarn, for the unsized yarn when converted into sized yarn does not lose its character as yarn.
" The petitioner herein on the other hand approached the Gujarat High Court and the Gujarat High Court by its judgment dated 30th July, 1981 had, before the issuance of the impugned circular dated 24th May, 1982, taken the view that no duty can be levied on the weight of sizing material contained in yarn, falling under Tariff Item No. 18 111 or 18 E and directed that the duty levied should be refunded because the duty has been levied not on the basis of yam at the spindle stage, but on the weight of the sized yarn.
After the decision of the Gujarat High Court the Central Government had amended Rules 9 and 49 of the Rules and Section 51 of the Finance Act, 1982, had made them effective retrospectively.
The present writ petition filled in this Court had inter alia pleaded that the retrospective amendment of Rules 9 and 49 of the Rules as well as Section 51 of the Finance Act, 1982 be declared as ultra vires of the Constitution.
This Court upheld the validity of the Section as well as the retrospective applicability of the Rules but took the view that this would be subjected to the provisions of Sections 11A and 11B of the Act and at the same time declared that the appellants were not liable to pay excise duty on the yarn after it is sized for a purpose of weaving the same into fabrics.
It will be noticed that under items 18.1, 18.III and 18E the measure is "per kilogram".
At this stage items 18.1, 18.111 and 18E of the Tariff may be noticed 147 "18.
I. Man made fibres, other than mineral fibres : (i) Non cellulosic Eighty five rupees per kilogram (ii) Cellulosic Ten rupees per kilogram '18.III.
Cellulosic spun yarn: Yam, in which man made fibre of cellulosic origin predomi nates in weight and, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power (i) not containing, any manmade fibres of non cellulosic origin.
six paise per count per kilogram (ii) containing man made fibres of non cellulosic origin.
Eighteen Rupees per kilogram.
Explanation 1: "Count" means the size of grey yarn (excluding any sizing material) expressed in English Count.
Eighteen Rupees per kilogram "18E.
Non cellulosic Spun Yam: Spun (discontinuous) yarn, in which man made fibres of noncellulosic origin, other than acrylic fibre, predominate in weight and, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power.
Twenty four rupees per kilogram.
148 Explanation : Explanation III under sub item III of item No. 18 shall, so far as may be, apply in relation to this item as it applies in relation to that item.
" It will be noticed from the aforesaid items that the measure for imposition of excise duty is by weight "per kilogram" in all the three items, namely 18.1, 18.111 and 18E. Therefore, the aforesaid decision in J.K. Couon Mills will be applicable to all types of cases under Items 18.1, 18.111 and 18E. After the decision of the Gujarat High Court, instead of granting the refund, the Superintendent of Central Excise, Range IV, Division V, Ahmedabad, issued impugned notices, collectively annexed as Annexures 'B ' and 'C ' to the present writ petition in pursuance of the directives dated 24th May, 1982 which are subject matter of challenge in the present writ petition.
On behalf of the respondents Mr. Ganguly learned counsel submitted that this Hon 'ble Court ought not to entertain the present writ petition under Article 32 of the Constitution.
He, however, could not dispute that the matter is directly covered by the decision of this Court in the aforesaid case of J.K Cotton Mills.
These petitions were admitted to hearing in view of the pendency of the aforesaid appeal in the case of J.K Cotton Mills and in view of the decision of the Delhi High Court which was appealed against in the aforesaid case of J.K Couon Mills.
Practically nine years have gone by now and the impugned show cause notices have been issued by virtue of the same directives which were subject matter of the aforesaid case of J.K.cotton Mills.
In view of this peculiar fact it would not be in the interest of justice if the parties are directed to contest the individual show cause notices issued by the respondents in view of the aforesaid directives.
In order to avoid multiplicity of proceedings involving time and expense, we quash the impugned notices in all the cases.
The result is that all the aforesaid writ petitions are accepted and the impugned show cause notices are quashed.
There will be no order as to costs.
G.N. Petitions allowed.
| IDCO and JOPL entered Into an agreement whereunder IDCO agreed to supply to JOPL 5000 tens of MS rounds for export on terms and conditions mentioned therein.
The goods were not supplied.
By a letter dated September 12, 1969, IDCO cancelled the agreement and intimated to JOPL that its offer which had culminated in the agreement, should be treated as withdrawn.
Some correspondence followed.
Thereafter JOPL 's claim for damages against IDCO for breach of contract was referred to the Chief Secretary, who was named in the agreement, for arbitration.
He declined to act as arbitrator.
An arbitrator was thereafter appointed by the Subordinate Judge, Bhubaneswar under S.20 of the .
He gave his award on September 24, 1985.
In the award the arbitrator briefly stated the facts, the issues settled for adjudication and that the parties had produced a large number of documents, examined witnesses and advanced elaborate arguments.
Having carefully considered them, he set out the conclusions and awarded JOPL Rs. 11,00,344 with pendente lite interest @ 6%.
IDCO challenged the award before the Subordinate Judge, Bhubaneswar who dismissed the petition and made the award a rule of the Court In appeal before the Orissa High Court, the learned Judge rejected all contentions of IDCO except one namely that In answering three issues the arbitrator had arrived at Inconsistent conclusions apparent on the face of the award, which had a bearing on the question of awarding of damages.
He therefore directed that the records be sent back to the 229 230 arbitrator for making a fresh award.
Cross appeals were filed in the Supreme Court.
JOPL contended that there was no inconsistency on the face ' of the award which vitiated it.
For IDCO, it was contended that the award was bad in law, and in any event the High Court was in error in sending the matter back to the arbitrator for making a fresh award.
Dismissing the appeal of IODC, this Court, HELD: 1.
A speaking or reasoned award is one which discusses or sets out the reasons which led the arbitrator to make the award.
Setting out the conclusions upon the questions or issues that arise in arbitration proceedings without discussing the reasons for coming to these con clusions does not make an award a reasoned or speaking award.
The arbitrator has in the award only answered the issues that were framed.
He had not discussed or set out the reasons for the answers.
The award is, therefore, not a speaking or reasoned award.
[234E F] 2.
That the arbitrator merely referred to the pleadings does not mean that the pleadings are incorporated in the award.
[234F] Allen Berry and Co. vs Union of India, AIR 1971 SC 6% and Ciacomo Costa Fu Andrea vs British Italian Trading Co. Ltd, , followed.
In answering issue no.2, the arbitrator construed only such clause of the agreement as was relevant to decide the issue.
Such clause alone would be incorporated in the award and could be looked at by the court to determine if the arbitrator had misconstrued it.
(pp.9 10) [236B] 4.
Even assuming the incorporation of the agreement, an error apparent on the face of the award had to be shown.
(p.10) [236D] Bungo Steel Furniture Pvt. Ltd. vs Union of India, ; , relied on.
In the circumstances of the case, merely because the arbitrator had not mentioned the pleadings and order of reference does not mean that the issues framed did not reflect the referred disputes.
(pp.11 and 12) [237B] 231 6.
That the original foreign sale contracts had not been sent to IDCO does not ipso facto lead to the conclusion that the arbitrator had no material before him upon which he could find in monetary terms the damages suffered by JOPL.
[237E] 7.
In the facts of the case, there are no inconsistencies upon the face of the award as can be characterised as errors that vitiate the award.
An award has to be read as a whole and harmoniously.
The grounds upon which an award can be set aside are limited.
The court should be very circumspect about setting aside an award reached by an arbitrator for parties have agreed that the disputes that may arise or have arisen between them should be resolved not by a court of law but by arbitration.
[239H, 240A] 8.
Evidence of a "malady of the racket of arbitration ' should make the court scrutinies the award carefully in each case, but would not make the court declare all high amounts of awards would be bad per se.
(p.17) [240B C] State of Orissa vs Gangaram Chhapolia, and State of Orissa vs Dandasi Sahu, ;
|
Civil Appeal No.1779 of 1991.
From the Judgment and Order dated 10 4 1990 of the Bombay High Court in W.P.No.1944 of 1987.
M.C.Bhandare, CPU Nair, Ms.
Kamini Lao and M.N.Shroff for the Appellants.
V.N.Ganpule, S.K.Agnihotri, A.S.Bhasme and Ms.
H.Wahi for the Respondents.
The Judgment of the Court was delivered by Sawant,J.
Leave granted.
Appellant No.1 is a Trust which runs and manages an Ayurveda College in Bombay.
Appellant No.2, is the Principal of the College.
There was a vacancy in the post of a lecturer in Sanskrit for the academic year 1983 84 which was admittedly reserved for a candidate from the backward classes.
The Ist respondent had applied for the said post on 19th September, 1983 even before the appellant Trust had invited applications by advertising the vacancy as it was required 286 to do.
Subsequently, on October 13, 1983, the appellant Trust issued an advertisement inviting applications for the post without mentioning for which academic year the appointment was to be made.
The parties before us agree that it was for the academic year 1983 84.
In the advertisement, it was specifically mentioned that the post was reserved for a backward class candidate and if no suitable candidate from the backward classes was available, a candidate from the non backward classes may be appointed for an year.
It appears that within a month thereafter on the 12th November, 1983, a second advertisement was issued repeating the earlier advertisement.
No application was received from any candidate from the backward classes in response even to this advertisement, and hence, the Ist respondent who had already applied as stated earlier, was appointed to the said post for the period from March 19, 1984 till April 30, 1984.
The total period of service put in by the Ist respondent for the said academic year was 41 days.
On April 28, 1984, the appellant Trust issued an advertisement for the same post repeating the contents of the earlier advertisement, but for the academic year 1984 85.
The applications were invited by 30th April, 1984.
No candidate from the backward classes applied in response to the said advertisement.
The interview was held on June 30, 1984 and the Ist respondent was appointed for the period from 21st August, 1984 to 19th April, 1985.
In the third academic year 1985 86, admittedly no advertisement was issued and no applications from the candidates including candidates from the backward classes were invited.
However, the Ist respondent was appointed to the post from July 10, 1985 to April 30, 1986.
Thereafter the Ist respondent 's services were terminated w.e.f.
30th April, 1986 by a notice dated March 12, 1986.
No appointment was made to the said post for the academic year 1986 87.
On May 1,1987, the Trust issued advertisement inviting applications to the said post from candidates belonging to all classes since, according to the Trust, the post was dereserved during the said period.
Three candidates belonging to the non backward classes including the Ist respondent and the 5th respondent applied for the post and the 5th respondent was selected and appointed to the same.
It appears that the Ist respondent was not paid salary for the summer vacations following the academic years 1984 85 and 1985 86.
She was also not paid salary from November 1985 to April 1986.
She approached the College Tribunal praying for salary for (i) November 1985 to April 1986, and (ii) for the summer vacations following 287 academic years 1984 85 and 1985 86, i.e., for the months of May and part of June 1985, and May and part of June 1986, and (iii) for setting aside her termination of service and for reinstatement.
The Tribunal allowed her claim for the salary for the relevant periods, but dismissed her claim for reinstatement holding that her appointment was purely temporary and her claim that she should be deemed to have been confirmed because she had served for two academic years was not established in the circumstances of the case.
This decision was delivered by the Tribunal on December 9, 1986.
As stated earlier, during the academic year 1986 87, no appointment was made to the said post and it was subsequent to this decision that an advertisement was issued calling for applications from candidates belonging to all classes and 5th respondent was appointment to the said post.
Against the decision of the Tribunal the Ist respondent approached the High Court under Article 226 of the Constitution, and the High Court held that notwithstanding the break in her actual appointment, she was continuously in employment from March 19, 1984 to April 30, 1986.
She was, therefore, entitled to the benefit of the resolutions of the State Government and the University of Bombay dated September 29, 1986 and February 27, 1987 respectively which, according to the High Court, laid down that an employee who was appointed for two consecutive academic years must be deemed to have been on probation right from the time of the first appointment and, therefore, confirmed in the post.
The High Court, therefore, allowed her petition and directed the appellants to reinstate her forthwith in the post and also to treat her as if she had been in continuous employment from March 19, 1984 with the benefit of full back wages, seniority etc.
The High Court also directed the University, the Director of Ayurveda, Maharashtra and the State of Maharashtra who were respondents 3,4 and 5 respectively to the petition, and who are respondents 2,3 and 4 to the present appeal respectively, to make appropriate sanctions including grant of money, if necessary.
The High Court further granted cost and directed compliance with the orders by the appellants within six weeks from the date of its order, which is April 10, 1990.
Although various contentions have been raised we find that it is not necessary to go into them.
According to us the appellant Trust has violated the directions of the Government as well as of the University in the appointments in question in two major respects, as a result of which neither the appointment of the Ist respondent nor that of the 5th respondent can be said to have been validly made.
Unfortunately, these aspects of the matter which are evident from the record 288 were lost sight of both by the Tribunal and the High Court.
The result has been that the illegalities which are patent on the face of the record have been perpetuated.
The Government of Maharashtra had issued a Govt.
resolution No.
1177/129387/XXXII (CELL) on October 25, 1977 prescribing conditions of service as shown in Appendix III to the resolution.
By a further resolution of April 3, 1978, Government made it clear that the revised scales of pay which were sanctioned by the resolution of October 25, 1977 could be implemented only after statutes had been duly made by the University.
Since the making of the statutes was to take some time and the revised scales of pay recommended of the University Grants Commission were to be effective from January 1, 1973 as laid down in the GR of October 25, 1977, the Vice Chancellor exercised his powers conferred upon him under Section 11(6)(b) of the Bombay University Act 1974 (hereinafter referred to as the "Act") and issued his direction No.192 of 1978 on 7th June, 1978.
This direction, among other things, laid down the mode of recruitment of the teachers and principals, as follows: "Futuer recruitment to posts of Teachers and Principals of colleges shall be made through a Selection Committee, the composition of which is specified in the terms and conditions (Appendix II)." Appendix II states as follows: " Terms and conditions attached to the revised scales of pay.
(i) x x x x x x x x (ii) All appointments of teachers in colleges shall be made on merit and on the basis of all India advertisement.
The qualifications prescribed for the posts should essentially be related to the academic attainment in the subject concerned and should not be linked with language or other regional consideration.
Appointment should not be made on communal or caste consideration.
The constitution of Selection Committee for recruitment to the posts of lectures in a college should be as follows: (a) Chairman, Governing Body of the College or his nominee; 289 (b) a nominee of the Vice Chancellor.
(c) one expert to be nominated by the University.
(d) one nominee of the Director of Education (Higher Education).
(e) Principal of the college; and (f) Head of the Department concerned of the college.
No selection shall be considered valid unless at least one expert is present.
The recommendations of the Selections Committee shall be subject to the approval of the Vice Chancellor.
* * * * * * * * (Emphasis Supplied) 8.
The effect of the aforesaid government resolutions and the University directions is (a) that all appointment of teachers in colleges have to be made on merit and on the basis of all India advertisement;(b) that the appointments have to be made by a Selection Committee which consists, among others, of nominee of the Vice Chancellor, an expert to be nominated by the University and a nominee of the Director of Education (Higher Education).
No selection will be considered valid unless at least one expert is present for the selection.
Admittedly, the selection of the 5th respondent was made by a committee where neither the nominee of the Vice Chancellor nor the expert nominated by the University nor the nominee of the Director of Education (Higher Education), i.e., in the present case of the Director of Ayurveda was present.
The selection so made was, therefore, not valid.
Shri Bhandare, the learned counsel for the appellant Trust Pointed out to us the letter of June 6, 1989 sent by the University of Bombay according approval to the appointment of the 5th respondent as a lecturer in Sanskrit on probation from 2nd July, 1987 and contended that in view of the said approval the invalidity of the appointment, if any, on account of the absence of the expert in the Selection Committee, should be deemed to have been condoned.
We are not impressed by this contention.
In the first instance, there is nothing on record to show whether when the appellant Trust forwarded its report on appointment of the 5th respondent, the Trust had apprised the 290 University of the absence of the expert at the time of his selection.
Secondly, the University has not reserved the power to relax the rule and permit selection without the presence of the expert.
There is nothing in the University 's letter to show why the University had condoned the absence of the expert.
It is, therefore, obvious that the approval given by the University being in ignorance of the true state of affairs and in breach of the rule is legally ineffective and cannot validate the appointment.
There is further a common illegality in the appointment of both the 1st and the 5th respondent which arises on account of the failure to follow the Government Resolutions and University directions in the matter of reservation of the seats for the backward classes, which are binding on the College.
On 30th March 1981, the Government of Maharashtra passed a resolution in exercise of the powers conferred on it under sub Section (2) of Section 77 C of the Act issuing instruction to all the non agricultural Universities in regard to the reservation of posts to be made in favour of Scheduled Castes and Scheduled Tribes while making appointments to teaching and non teaching posts in the University affiliated colleges and recognized institutions.
The reservation prescribed was as follows: (1) Scheduled Castes 13 p.c.
(2) Scheduled Tribes 7 p.c.
(3) Nomadic Tribes & Vimukta Jatis 4 p.c.
Total 24 p.c.
That resolution further says that the various orders contained in the booklet "Reservation and other concessions in Government service for backward classes" will be applicable for recruitment to the teaching and non teaching posts reserved for backward classes in the University and the affiliated colleges and recognized institutions subject to the following modifications in regard to recruitment to the teaching posts.
The modifications, among other things, were as follows: "Similarly, at any given time of recruitment to the teaching posts, only the total number of reserved vacancies and the sections from which they are to be filled in should be 291 determined.
It would be enough if the require percentage is fulfilled as a whole and not with reference to any particular post.
If the reserved vacancies cannot be filled, then so many posts as cannot be filled in may be kept vacant for six months and should be again advertised thrice.
Even after readvertising the posts 3 times if suitable candidates belonging to backward classes do not become available, they may be filled in by candidate belonging to the open category." "For giving effect to the aforesaid instructions, it will be necessary for the Universities to make statutes under Section 77C(1) under their respective Universities Acts of 1974.
For ensuring immediate implementation, the Vice Chancellors of the Universities, under clause (b) of Section 11(6) of the respective Universities Act of 1974.
" (Emphasis supplied) 12.
By its subsequent resolution of October 20, 1983, the Government of Maharashtra clarified its earlier resolution of March 30, 1981 and stated as follows: "1. x x x x x x x x 2.
After reconsideration of the above decision, it is now directed that if suitable candidates cannot be found to fill posts reserved for backward classes in Universities, affiliated colleges and recognized institutions, those posts should be temporarily filled with candidates belonging to non backward classes for one academic year.
But as mentioned in the resolution the appointment of a non backward class candidate to a reserved vacancy should be made only in the event of failure to find a backward class candidate even after the post has been advertised thrice.
x x x x x x x x" (Emphasis supplied) 13.
Thereafter a further resolution was issued by the Government on September 29,1986 on the subject stating therein that it had come to the notice of the Government that some institutions had not 292 implemented the instructions contained in the earlier resolutions of March 30, 1981 and of October 30, 1983.
The Government therefore directed that the said directions should be implemented strictly.
This resolution further directed that the non backward class candidates who were being repented for the second and third academic years when backward class candidates were not found for appointment for the first academic year, should not be called for interview every year and that the candidates belonging to the non backward classes should be appointed for the second and third academic year also, without calling them for interview.
It is further stated in the said resolution that, similarly, as soon as the reserved post is dereserved, the appointed candidate should be confirmed in that post from the date of dereservation subject to all other terms and conditions.
It was also directed that necessary statutes should be made by the University in accordance with the provisions of the Act and for ensuring immediate implementation, the vice Chancellor should issue directions under clause (b) of Section 11(6) of the Act.
Pursuant to the said resolution of the Government, the Vice Chancellor of the University issued direction on March 11, 1987 as follows: "x x x x x x x (1) That the reserved teaching post which is filled in by appointment of a suitable non backward class candidate in the first year by following the prescribed procedure of selection shall be advertised again for the second and third years for inviting applications only from persons belonging to Scheduled Castes, Scheduled Tribes, Denotified Tribes and Nomadic Tribes.
However, applications may also be invited from persons belonging to non backward class if the suitable non backward class candidate already appointed in the first year is not available for reappointment in the second or third year and or his services are required to be terminated on account of unsatisfactory performance of work in the first year; (2) That if in the second year, in response to the advertisement, a backward class candidate is not available, then the suitable non backward class candidate already appointed in the reserved post shall not be required to appear for interview before the Selection Committee again for the second 293 and: or third year (s) but that he shall be reappointed in the reserved post, if he is available for reappointment; (3) That if in response to the third advertisement in the third year, no application is received for the reserved post from candidates belonging to SC, ST, DT, or NT, the college authorities shall start the process of dereservation of the reserved post.
After the process of dereservation of the post is completed, the appointment of non backward class teacher shall be deemed to be on probation with retrospective effect from the date of his initial appointment if he has held continuous appointment for two years in the college or in any other college under the same management, and that his appointment shall be confirmed from the dates of completion of two years of continuous appointment.
The aforesaid direction shall come into force with retrospective effective from the date of the Maharashtras Government Resolution, that is, of 29 9 1986, which means that non backward class teacher who is eligible to get the benefit of the above direction shall be confirmed in his post with effect from 29 9 1986 or from any later date on which he may become eligible for confirmation in accordance with the aforesaid directions.
x x x x x x x x x" (Emphasis supplied) 14.
According to these Government resolutions and University directions (a) whenever a post is reserved to be filled in by the candidates from the backward classes, the post is to be advertise thrice within 6 months in each academic year.
The post is to be kept vacant for the said months 6 months if no suitable candidate from the backward classes is available; (b) the post is to be filled in temporarily for one academic year by a non backward class candidate only after the three advertisements have been given as above; (c) the aforesaid process is to be repeated for two more academic years; (c) the candidate from the non backward classes appointed temporarily in the first academic, year for want of a backward class candidate, is to be continued as a temporary appointee for the next two academic years without being interviewed afresh for the next two years; (d) if in spite of the third advertisement in the third academic year, no application is received from a backward class candidate, the College authorities are free to 294 start the process of dereservation of the reserved post; (e) after the process of dereservation of the post is completed, the appointment of non backward class teacher will be deemed to be on probation with retrospective effect from the date of his initial appointment and he shall be confirmed in the post on his completing two years of his continuous service.
Admittedly, as pointed out earlier, the post was reserved for the academic year 1983 84.
The Trust had not given three advertisements within six months for any of the academic years 1983 84, 1984 85 and 1985 86.
On the other hand for the academic year 1983 84, it issued only two advertisements, viz., on October 30, 1983 and November 12, 1983.
It is not known as to why even two advertisements were not issued at the beginning of the said academic year.
The academic year admittedly begins from June.
May that be, as it is.
As regards the second academic year 1984 85, it issued only one advertisement and that was on April 28, 1984.
It did not issue any advertisement for the academic year 1985 86.
The initial appointment of the 1st respondent for the academic year 1983 84 and her continuation for the subsequent academic years, viz., 1984 85 and 1985 86 was thus in breach of the Government resolutions and the University directions and, therefore, illegal.
Similarly, since the appointment of the 5th respondent was made without fallowing the procedure prior to dereservation, viz., three advertisements repeated every year for all the three academic years for which the post was to be reserved, his appointment to the post, as if the post stood legally dereserved was also illegal since in the facts and circumstances of the case, it is obvious that the post could not have been dereserved to make it available for non backward class candidate.
Shri Bhandare, however, contended that in the meanwhile the appellant Trust had taken steps to shift the reservation from the post of a lecturer in Sanskrit to the post of lecturer in Sanhita.
The Trust had written a letter on July 2, 1986 for the purpose to the Directorate had by its letter of July 11, 1986 accorded the sanction.
It may, however, be pointed out the representation made by the lecturer in Sanskrit to the post of lecturer in Sanhita had proceeded on the basis that the Trust had made efforts to fill in the said post from the candidates of the backward classes as required by the Government resolutions and the University directions.
As pointed out above, the Trust had not made the efforts as required by the said resolutions and directions.
It had not issued the advertisements 295 as it was required to do.
The sanction was obtained and granted obviously on the basis of inadequate information.
The sanction was, therefore, defective in law.
The High Court unfortunately did not notice these infirmities in the appointment of either of the respondents.
Shri Ganpule, the learned counsel appearing for the 1st respondent contended that since the 1st respondent was appointed in the first academic year, viz., 1983 84 and continued for the next two academic years, viz., 1984 85 and 1985 86 she was entitled to the benefit of the directions of the University contained in Circular No. 98 of 1987 dated March 11,1987 which had stated that if the non backward class teacher is on probation continuously for two years he would be deemed to be on probation with retrospective effect from the date of ;his initial appointment.
Although the services of the 1st respondent were terminated w.e.f.
April 30, 1986, since she was entitled to the benefit of the vacation salary following the academic year 1985 86 she would be deemed to be in service after the completion of the vacation and, therefore, she may be said to be in service on September 29, 1986 from which date the said University direction was to be effective.
The contention proceeds on the footing that her initial appointment and the continuation of service for the next two academic years was valid.
We have already pointed out above that they cannot be considered to be valid.
However, assuming that her initial appointment and subsequent continuation of service was valid, she would not be entitled to the b benefit of the University Direction of March 11, 1987 because her entitlement to the vacation salary does not extend her period of employment up to the end of the vacation.
That is a perquisite which is conferred on every teacher who has served during the academic year.
It has no connection with the continuation of the employment since even those teachers whose services are validly terminated before the beginning of the vacation period are given the benefit of the salary of the vacation period.
Statute 424 of the University which is reproduced as Annexure 'C ' to the petition makes this position clear.
The argument, therefore, has no merit.
In the view we have taken the appointments of both 1st and the 5th respondents were not valid.
The post was reserved for the academic year 1983 84.
We are now at the end of the academic year 1990 91 A fresh appointment, therefore, will have to be made for the academic year 1991 92.
In the meanwhile, several events have occurred.
The appointment of the 1st 296 respondent has already been terminated w.e.f. April 30, 1986.
The 5th respondent has been in service from July 2, 1987.
We are informed across the bar that today he has become overaged.
The 1st respondent was overaged even at the time of her initial appointment.
Although the advertisemently had stated that the candidate should not be above 32 years, at the time of her initial appointment itself, she was about 40 years old.
The advertisement had also not l;mentioned anywhere that the age was relaxable.
But that is a matter of history.
In the meanwhile.
as pointed out above, on incomplete information, the Directorate of Ayurveda has allowed the appellant Trust to shift the reservation from the post to the post of a lecturer in Sanhita.
Taking into account all the facts and circumstances, we are of the view that an opportunity should be given to the appellant Trust to cure the illegalities.
While, therefore, we maintain the order of Tribunal and set aside the order of the High Court, we direct the appellant Trust to advertise the post three times sufficient in advance and in any case within six months from the close of the present academic year, viz.
,1990 91 as a post reserved for the backward class candidate, and if no application is received from a suitable backward class candidate, the post will be deemed to have been dereserved.
The Trust will then proceed to fill in the same by a candidate belonging to non backward classes.
This fact may be made clear in all the three advertisements.
The 5th respondent will be entitled to apply for the post notwithstanding the fact that he has by this time become overaged.
If he is selected on the basis of his other qualifications, the Selection Committee shall relax in his favour the condition with regard to the maximum age.
If he is appointed to the post, his appointment will be a fresh one and his past service will not count for the probation period.
The Trust shall for the purpose constitute a proper Selection Committee according to the rules.
The appeal is allowed accordingly.
The parties will bear their own costs.
Before parting with this appeal, we must observe that our decision has proceeded on the basis of the Government resolutions and University directions placed before us.
The resolutions and directions as pointed out above require that the posts reserved for backward class candidates should be kept vacant for six months and it is only after the third advertisement during the said six months in each academic year that they should be filled in by candidates belonging to 297 the non backward classes if suitable candidate from backward classes are not available.
Literally interpreted, it would mean that in each academic year, there will be no teacher for the first six months, if the process of advertisement is to begin at the commencement of the academic year.
This is bound to cause hardship to the students.
It is, therefore, incumbent upon the institutions concerned to advertise the posts thrice within six months well before each academic year begins.
Since in the present case the academic year begins in June, the process of advertisement must begin in December of the preceding year.
This should be the normal practice.
An exception has to be made in the present case because the decision is being given today.
To overcome the hardship to the decision is being given today.
To overcome the hardship to the students, we would recommend that the 5th respondent may be permitted to teach as a purely temporary teacher during the period that the process is not completed for the academic year 1991 92.
However, the appellant Trust will take steps within two weeks from the receipt of this order to start the process of advertisement as directed above.
G.N. Appeal allowed.
| The appellant was tried for rape and murder of a girl aged five years.
The entire evidence against him was circumstantial: (a) the accused and the deceased were last seen together; (b) false explanation given by the accused regarding the whereabouts of the deceased; (c) alleged recovery of the dead body of the deceased at the instance of the accused and (d) presence of abrasions on the genital of the accused as well as blood stains on his wearing apparels and nail clippings.
Relying on the circumstantial evidence the Trial Court convicted him under Sections 302 and 376 and sentenced him to death for the offence of murder and seven years rigorous imprisonment for the offence of rape.
The High Court confirmed the conviction and the sentence awarded by the Trial Court.
In appeal to this court it was contended on behalf of the appellant that the circumstantial evidence is wholly insufficient to bring home the guilt of the accused.
Allowing the appeal, this Court, HELD: 1.
The circumstantial evidence in order to sustain the conviction must satisfy three conditions; (1) the circumstances from which an inference of guilt is sought to be drawn, must be cogently and firmly established; (ii) those circumstances should be of a definite tendency nerringly pointing towards the guilt of the accused; (iii) the circumstances, taken cumulatively, should form a chain so complete that there is no escape from the conclusion that within all human probability the crime was committed by the accused and none else, and it should also be incapable of explanation on any other hypothesis than that of the guilt of the accused [303E F].
299 Hanumant and Anr.v.
The State of Madhya Pradesh, ; Reg vs Hodfe, [1838] 2 Lew.227; Dharam Das Wadhwani vs State of Uttar Pradesh, and Jagta vs State of Haryana, ; , referred to.
2.In cases depending largely upon circumstantial evidence there is always a danger that the conjecture or suspicion may take the place of legal proof and such suspicion however so strong cannot be allowed to take the place of proof.
The Court has to be watchful and ensure that conjectures and suspicions do not take the place of legal proof for sometimes unconsciously it may happen to be a short step between moral certainty and the legal proof.
At times it can be case of 'may be true.
But there is a long mental distance between 'may be true ' and 'must be true ' and the same divides conjectures from sure conclusions.
The Court must satisfy itself that the various circumstances in the chain of evidence should be established clearly and that the completed chain must be such as to rule out a reasonable likelihood of the innocence of the accused.
[304 G, 309E F] 3.In the instant case the circumstance that the deceased was last seen in the company of the accused is not established beyond reasonable doubt.
This circumstance was not mentioned in the Inquest Report prepared by the Investigating Officer.
Further the statement of the parents of the deceased that the accused took the deceased girl by itself is not enough to conclude that the deceased was last seen in the company of accused because even according to them on being inquired the accused told them that he had sent the girl back in a truck.
[308C, 305F] 3.1 The prosecution has not conclusively proved the crucial circumstance of the recovery of the dead body of the deceased girl at the instance of the accused.
No Panchnama was prepared for such a discovery under Section 27 of the Evidence Act and there is no mention in the Inquest Report as to how the body was discovered.
On the other hand there is any amount of doubt and suspicion about the accused having shown the place of occurrence.
Once it is held that the crucial circumstances namely the discovery of the body at the instance of the accused is not established, than the other circumstance are hardly sufficient to establish the guilt of the accused.
[308B C D, 306B, 307C] 3.2 The explanation given by the accused that he sent the girl back to the village in a truck cannot be held to be not plausible and therefore false because it is not uncommon in villages for children to go about the fields and walk short distance while coming back to the village.
[308E] 300 3.3 The prosecution has also not established that the accused had an intercourse on the day of the occurrence.
When the doctor who examined the accused stated that he could not find any sign of sexual intercourse atleast within one hour of his examination then it is only a matter of conjectures as to when the accused had any intercourse.
The presence of blood in the nail clippings and on the underpant does not also incriminate and do not connect the accused in any manner with the alleged offences.
The accused also had given an explanation namely that his gums were bleeding and in wiping out the same he got these blood stains.
Even otherwise this circumstance coupled with the circumstance of last seen in the company of the accused would ;not amount to legal proof of the guilt particularly when the crucial circumstance namely that the accused showed the dead body is held to be not established.
When such a main link goes, the chain gets snapped and the other circumstances cannot in any manner establish the guilt of the accused beyond all reasonable doubts.
Therefore there is a reasonable doubt about the guilt of the accused and the benefit of the same should go to him.
Accordingly the conviction and sentence of the accused is set aside.
[309B C, F G]
|
Appeals Nos. 228 to 230 of 1960.
Appeals from the judgment and decree dated February ' 4, 1957, of the Madhya Pradesh High Court (Indore Bench) at Indore in Civil Reference No.15 of 1952.
B. Se??,, B. K. B. Yaidu and 1.
N. Shroff, for the appellants.
A. V. Viswanatha Sastri, K. A. Chitale, J. B. adachanji, section N. Andley, Rameshwar Nath and P. L. Vohra for the respondents.
April 3.
AYYANGAR, J. Rule 4 (1)(b) of Sch. 1 headed ((Rules for the computation of profits for the purposes of War Profits Tax" of the Gwalior War Profits Tax Ordinance, Samvat 2001 (hereinafter referred to as the Ordinance), provided: "4.
In computing the profits of a business carried on by a company, no deduction shall be made in respect of (1) remuneration paid to directors if during any part of the accounting period concerned they had controlling interest in the company; 207 Provided that this sub rule shall not apply (a). . . . . . . . (b) to the remuneration of any managing agent where such remuneration is included in the profits of The managing agents ' business for the purposes of the War Profits Tax".
The respondent Binod Mills Co. Ltd. which had its business at Ujjain in the State of Gwalior was a company whose profits were liable to War Profits Tax under the Ordinance.
The company was managed by a managing agency firm M/s.
Binodiram Balchand which had, by reason of its shareholding exceeding 50% of the issued sharecapital, a controlling interest in the company.
The respondent company was assessed to War Profits Tax for three chargeable accounting, periods July 1, 1944, to December 31, 1944 , January 1, 1945, to December 31, 1945, and January 1, 1946, to June 30, 1946.
During each of these accounting periods the respondent company had paid remuneration to its managing agents and claimed to deduct the remuneration so paid in the computation of its business profits during these three periods.
The assessingofficer disallowed the claim on the ground that the remuneration received by the managing agency firm had not been factually assessed in the hands of the managing agent and that consequently the matter was covered by the opening words of r. 4 and not saved by proviso (b) to the rule.
An appeal against this order of assessment was dismissed by the appellate authority and thereafter by the Commissioner of War Profits Tax in revision.
But at the request of the respondent the Commissioner submitted a reference under section 46 (1) of the Ordinance to the 208 High Court of Madhya Pradesh of the following question for its decision: "Whether in computing the profits of a business carried on by a company deduction shall be made in respect of any remuneration to any managing agent where such remuneration is included in the profits of the managing agent 's business for the purposes of the War Profits Tax ?" There was a consolidated reference in respect of the three chargeable accounting periods.
The learned Judges of the High Court answered the question in favour of the respondent and held that the remuneration, even though paid to a managingagent who had a controlling interest in the company, was a permissible deduction for the purpose of computing the profits of the company for the purposes of the War Profits Tax.
The High Court was thereafter moved by the appellant for the grant of certificates of fitness for appeals to this Court under section 47 of the Ordinance and the certificates having been granted these three appeals, which relate to the three chargeable accounting periods have been preferred to this Court.
Before proceeding further it might be convenient to set out certain facts to appreciate the form of the question which might provoke some enquiry.
There was not much dispute, and even if there was, it was abandoned fairly early, that M/s. Binodiram Balchand were "directors" of the company within the meaning of the Ordinance and bad a controlling interest in the company.
In this connection we might advert to the definition of ,director ' in section 2(10) of the Ordinance: "2.
'director ' includes any person occupying the position of a director by what ever name called and also includes any person who (i) is a manager of the company or 209 concerned in the management of the business; and (ii) is remunerated out of the funds of the business; and (iii) is the beneficial owner of not less than 20 per cent of the ordinary share capital of the company".
The controlling interest being established, it was common ground that the remuneration paid to the managing agent could not be deducted in computing the profits of the company unless it fell within proviso (b) of r. 4(1).
Before the departmental authorities it was suggested on behalf of the company that the expression 'included ' in proviso (b) meant ",disclosed in the return of the director" and on this basis it was contended that as M/s Binodiram Balchand had.
, in the statement of their own Profit & Loss account for Samvat 2000, 2001 and 2002, disclosed the managing agency commission received by them the remuneration had been "included" in their profits for the purposes of the War Profits Tax, though for reasons which are unnecessary to discuss they claimed that the sum was not liable to be brought to tax and this claim was accepted.
This argument which was rejected by the departmental authorities is however responsible for the form of the question referred to the High Court.
This contention however was not apparently repeated before the High Court and does not figure in the judgment as part of the reasoning of the learned Judges in the judgment now under appeal and has not been relied upon before us.
We shall therefore say no more about it, but proceed to deal with the substantial question raised.
The facts being as above stated the entire question in the appeals turns on the mean of the 210 expression "is included in the profits of the managing Agency business" in r.4(1) proviso (b) of Sch. 1 of the Ordinance.
Before however entering on a discussion of the words underlined and of proviso (b) in particular, it would be necessary to set out broadly the scheme underlying the levy of the tax under the Ordinance.
Section 4(1) of the Ordinance is the charging section and it enacts : "4.
(1) Subject to the provisions of this Ordinance, there shall, in respect of any business to which this Ordinance applies, be charged, levied and paid on the amount by which the profits during any chargeable period exceed the standard profits, an excess profit tax (in this Ordinance referred to as the 'War Profits Tax ') which shall be equal to 60 per cent.
of the aforesaid amount.
" The "business" to which the Ordinance applies has to be gathered from the terms of section 2 (5) which defines the term 'business '.
That clause reads : " business ' includes any trade, commerce or manufacture or any adventure in the nature of trade, commerce or manufacture or any profession or vocation ' but does not include a profession carried on by an individual or by individuals in partnership, if the profits of the profession depend wholly or mainly on his or their personal qualifications, unless such profession consists wholly or mainly in the making of contracts on behalf of other persons or the giving to other persons of advice of a commercial nature in connection with the making of contracts : Provided that where the functions of a company or of a society incorporated by or under any enactment consist wholly or mainly in the holding of investments or other property or both, the holding thereof shall be 211 deemed for the purpose of this definition to be a business carried on by such company or society; Provided further that all businesses to which this Ordinance applies carried on by the same person shall be treated as one business for the purposes of this Ordinance".
The second proviso uses the term 'person ' which is defined by section 2 (13) to include "any company or body of individuals or any other association of persons whether incorporated or not and also includes a Hindu undivided family".
The 'Profits ' which is referred to in the charging section is, by reason of the definition of the term in section 2 (16), to mean ,profits as determined in accordance with the provi sions of this Ordinance and its First Schedule".
The provisions of the Ordinance relating to the computation of profits do not bear upon the point now in controversy, but what is of relevance are certain of the Rules for the computation of the profits in Sch.1.
From the terms of the charging section read with the other provisions of the Ordinance to which we have adverted it would be seen that it is the profits accruing from business that is brought to charge and that each person whether he be an individual or comprehended within the inclusive definition of the term ',person" is an independent unit of assessment whose profits are computed by aggregation of all of its sources of income from every business which that unit may carry on.
How the profits of each unit is to be computed for the purposes of tax has to be gathered, apart from the provisions of the Ordinance which, as stated earlier, are not relevant to the present case, from Sch. 1 headed "Rules for the computation of profits for the purposes of War Profits Tax".
Rule 1 of these Rules which generally follows the pattern of the Indian Income Tax Act in setting out the list of 212 permissible deductions, provides as one of such deductions in r. I. (1) '(xi) ,,any expenditure (not being in the nature of capital expenditure or personal expense of the person to whose business this Ordinance applies) laid out or expanded wholly and exclusively for the purposes of such business".
If this provision were applied for computing the profits of a company as an unit of assessment, there, could be no dispute that generally speaking the remuneration paid to a managing agent would be an admissible deduction.
It hardly needs to be mentioned that the remuneration received by a managing agent would be profits from business on which he would be, liable to tax under the Ordinance, being a profit from business as defined in section 2(5) subject only to the condition that the amount of the profit brought it within the taxable limit.
To this prima facie rule as regards the manner in which the profits derived by a company are to be computed r. 4 enacts an exception, in the case of those companies in which the Directors have a controlling interest.
But the application of this special rule as regards companies under the management of Directors with controlling interest is, however, subject, among others, to proviso (b) not applying to the case.
In other words, if proviso (b) saved the case, the special rule as to controlled companies would cease to be applicable and the remuneration paid would be deductible in the computation of the companies ' profits.
This turns on whether the remuneration paid to the managing agent "is included in the profits of the managing agent 's business".
The words used being "is included" there is no doubt that an actual inclusion is posited.
But this, however, does not solve the problem, for the , 'inclusion in the profits" might refer to three distinct "inclusions" : (1) the inclusion by the managing agents as an assessee for the purposes of his individual assessment, i.e., in his return, (2) the inclusion by the assessing authority in the order of 213 assessment made against the managing agent, (3) the inclusion under the terms of the Ordinance of the remuneration as an amount chargeable to the tax as part of the profits of the managing agent.
In passing we might observe that r. 7 (2) (b) of Sch. 1 to the Excess Profits Tax Act, 1940, on which the Ordinance is modeled is in the same terms as the proviso (b) to r.4(1) of the Ordinance but the proper interpretation of the rule in the Excess Profits Tax Act has never come up before the Courts for decision.
The contention urged on behalf of the appellant, before the learned Judges of the High Court was that the inclusion referred to an inclusion by the "essment officer of the remuneration in the assessment of the managing agent and that unless the remuneration sought to be excluded in the computation of the profits of the company was actually assessed in the hands of the managing, the company could not claim the benefit of proviso (b).
The learned Judges repelled this submission by holding that the proviso could not be construed as to vest in the assessing authority an absolute discretion to assess either the company or the managing agent.
They read the words ",is included" as equivalent to "is liable to be included" and that as it was not contested before them that if the assessment officer had been so minded he could have included this sum in the profits of the managing agent 's business, the terms of proviso (b) were satisfied.
Mr. Sen learned Counsel for the appellant did not pursue the same line of argument as in the Court below.
We should add that we consider that Mr. Sen was right in not attempting to support the argument which was rejected by the learned Judges of the High Court.
Though tax laws occasionally make provision for the assessing authority to proceed against a particular unit of assessment on one or 214 more alternative bases, it would require 'very explicit and unambiguous language to permit an assessing authority to choose one of two units for assessment, particularly in, the context of there being no provision for the inter se adjustment of the rights and liabilities in the event of one unit benefiting at the expense of the other by reason of the exercise of the option and when admittedly the unit does not receive the income as agent for the other unit.
Besides, if the company had been first assessed to tax because let us say its return had been filed earlier, or the enquiry as regards the correctness of the return was completed earlier, there is no provision /in the Ordinance or in the Rules for excluding the sum in the personal assessment of the managing agent, so that it could not be urged that the assessing authority had any option in the matter to tax either the company or the managing agent.
If the managing agent is ex roncessis liable to have his remuneration included in his assessment for the tax, unless the income or the business is not within the Ordinance, it would be most anomalous to suggest that in order that the benefit of proviso (b) should be available to a company, the assessment of the managing agent should have been completed first a matter not always within the control of a company.
We do not think it necessary to dilate further on this construction since Mr. Sen did not commend it for our acceptance.
His submission, on the other hand, was that this was a special provision designed to meet the cases of companies in which the directors had a controlling interest.
In such cases it was these directors who had to submit and submitted the return on behalf of the company and who, of course, had to submit their own returns in their individual capacity as persons in receipt of taxable profits.
In these circumstances 215 he urged that the proviso should be read as conferring an option upon the directors either to include their remuneration in their own returns, get them taxed and pay the tax themselves or to include it in the company 's return and have the amount taxed in the company 's assessment.
His further submission was that having regard to the manner in which the proviso was worded, where the managing agent failed to include his remuneration in his own return and have it assessed as part of his profits, the effect was the same as if he had opted to have the sum taxed in the company 's assessment.
The option, it was urged, was that of the managing agent who controlled the affairs of a company and therefore in effect represented it and who in one capacity acted for himself and in another acted for the company.
In effect the submission of learned Counsel was that the provision was designed to obviate double taxation of the same income and for this purpose vested the controlling Director with a discretion to render the company immune from tax where the sum was included in his own return and was assessed in his hands.
The theory propounded regarding the provision being one for avoidance of double taxation in the manner above indicated by vesting a discretion in the controlling Director breaks even on a cursory examination.
Let us assume that the managingagent opts to have the company taxed and submits a return on behalf of the company in which no deduction is claimed in respect of this item and an assessment is made accepting that return.
On the terms of the Ordinance this would not afford any relief to the managing agent in his personal assessment, for admittedly there is, as pointed out earlier, no provision in the Ordinance or in the Schedule exempting the managing agent from the inclusion of this remuneration in his taxable profits, and this 216 must obviously be so, because for the purposes of the charging section he would be an independent unit of assessment.
He would have to include in the computation of his personal income for the purpose of the War Profits Tax the remuneration received by him.
This might be expressed in a slightly different form by stating that proviso (b) to r. 4(1) does not operate in the reverse direction, that is by exempting the managing agent from tax on the remuneration derived by him, merely because the deduction of that item has been denied to the company.
Obviously therefore r. 4(1)(b) is not a rule designed for the avoidance of double taxation in the sense in which learned Counsel for the appellant suggests that it is.
There are also other reasons why we find it unable to accept the submission of Mr. Sen that by the words is "included" is meant the inclusion in the return by the managing agent with the result that in cases where he does not so include, the company would not be entitled to the deduction.
The option suggested by Mr. Sen to the managing agent was that he might either elect to pay the tax himself or get the company to pay it.
Obviously it would always be in the interest of the managing agent to have the tax paid by the company if by that means, as is suggested by Mr. Sen, he could obtain absolution from the obligation of paying the tax himself, for if the tax is paid by the company the loss involved in the payment of the tax would fall on him only to the extent of his shareholding, being for the rest shared by the other share holders of the company.
It is really difficult to understand the principle by which one could construe a rule of this nature as enabling a managing agent who holds, say 51% of the share capital of the company to visit 49% of the burden of tax which normally one would expect to be paid by him, to be paid by the other shareholders of the company merely because 217 he happens to be the managing agent holding a controlling interest by the extent of his share holding.
We consider that the construction suggested by Mr. Son which leads to such an unreasonable result and inflicts an unjust injury on the other shareholders is not any proper interpretation of the provision.
Besides, there are other grounds why the meaning attributed to the words "is included" as referring to "included ' by the managing agent" cannot be accepted.
Suppose the managing agent includes it in his return but the assessing authority does not include it in the computation of his return but prefers to disallow the deduction in the case of a company.
Would that be "inclusion in his pro fits?" Again, suppose the managing agent does not include it in his return but the assessing authority does, and tax is paid by the managing agent, would there be no exclusion? These illustrations serve to bring out the anomalies that would arise if it were held that the words ",is included" meant "is included in his return by the managing agent".
This leaves for consideration the meaning that "is included" refers to the inclusion under the provisions of the Ordinance.
If this meaning were accepted it would not matter whether the managing agent has or has not included the sum in his return or whether the assessing authorities have or have not done their duty by having the remuneration included in the taxable profits of the managingagent.
If the managing agent has not done so being under an obligation imposed by the law to include it, the return would be liable to be revised by the assessing officer and if the failure to include the sum was due to any suppression, the managing agent would, besides having the sum included in his assessable profits, be liable to appropriate penalties for filing a wailfully incorrect return.
Similarly, the assessing officer being under a statutory duty to include the sum in the assessment of the managingagent would, if he failed to do so, render the order 218 liable to be revised.
The remedy for the failure either of the managing agent or of the assessing authorities to conform to the requirements of the law certainly cannot be the disallowance of the sum in the computation of the profits of the company.
The entirety of this reasoning, it would be noted, proceeds on the basis that the managing agent was liable to include his remuneration in his assessable profits.
In such a contingency it stands (to reason that neither the default of the managing agent as an assessee or of the assessing authority to include the sum in the profits of the managing agent could prejudice the rights of the company in the matter of the computation of its income.
Where the remuneration of the managingagent was not under the Ordinance liable to be brought to tax the position would be different and that is just what is indicated as that which would render the proviso inapplicable.
For instance, section 5(1) of the Ordinance enacts; ".
Provided further that this Ordinance shall not apply to (a). . . . . . . . . (b) profit from a business carried on wholly on behalf of a religious or charitable institution and the profits of which are applied solely to the purpose of the institution and enure for the benefit of the public, and (i) the business is carried on in the course of the carrying out of a primary purpose of the institution, and (ii) the work in, connection with the busi ness is carried on by the beneficiaries of the institution".
If for instance, the business of the managing agency was being carried on for or on behalf of a trust of 219 the character indicated by the provision just now read, the remuneration of the managing agent would not be liable to tax for the reason that it is outside the ambit of the Ordinance and to such a case the terms of proviso (b) to r. 4(1) would not be attracted, with the result that the managingagent not being liable to tax under the Ordinance on the remuneration derived by him, the company, if it were a controlled company.
would not be entitled to the deduction of that remuneration in the computation of its profits.
Except in case where the remuneration received by a managing agent is not liable to tax under the Ordinance, it is the managing agent that would be liable to pay tax on his remuneration and notwithstanding that the company is a controlled company the remuneration paid by it to the managing agent would be a permissible deduction by reason of the exception to the opening words of r. 4(1) contained in proviso (b).
It is unnecessary for our present purpose to consider whether besides section 5(1)(b), already referred to, there are other contingencies in which remuneration received by a Director could be held not to be ,included ' in the latter 's profits under the Ordinance, since in the case before us it is admitted that the remuneration received by the managing agent was liable to be include in the computation of his profits for the purposes of the War Profits Tax and therefore neither the fact that the managing agent did not "include" the sum in his return, nor the default of the assessing authority to correct this error by " 'including" the sum in his assessment, is any reason for depriving the respondent company of the benefit of proviso (b) to r. 4(1).
We therefore consider that the learned Judges of the High Court answered the question referred to them correctly.
The appeals fail and are dismissed with costs.
Appeals dismissed.
| Appellant landlord applied to the Rent Controller for eviction of the Respondent tenant on 1.12.56 under section 13(3) of the Punjab Urban Rent Restriction Act for remedying certain defects in the based building.
The Municipal Commi ttee on 11.4.57 issued an amended notice requiring only that the cracked pillar be reinforced so as to make it a solid block.
Respondent carried out the repairs.
On June 8, 1957, the Executive Engineer inspected again in compliance with tile order of the Rent Controller And was satisfied that the pillar had been repaired satisfactorily.
The Rent Controller held that the case fell within section 13 (3) (a) of the Act and ordered eviction of the Respondent.
On appeal the District judge taking note of the state of repairs allowed the appeal.
In revision under section 15(5) of the Act the High Court judge held that the powers of the High Court in revision were similar to those under section 115 of the Civil Procedure Code and that there was no question of jurisdiction involved in the case.
He, however, affirmed the decision after considering the evidence.
Held, that the powers of the High Court under section 15 (5) of the Act were manifestly wider than those under section 115 of the Civil Procedure Code and were not confined to questions of jurisdiction.
That under section 13(3z(a) the requirement of vacant possession.
by the landlord could only be for the purpose of carrying out such fundamental and extensive repairs as could not be carried out without evicting the tenant and not for minor repairs and that it Was open to the District Judge to consider the subsequent events upto the time when eviction was ordered by the controller in view of the scheme and purpose of the legislation.
|
ivil Appeal Nos.
3741 42 of 1982.
From the Judgment and Order dated the 22nd October, 1982 of the Delhi High Court in C.W. Nos. 3577 and 3575 of 1982.
V.M. Tarkunde, K.K. Venugopal, F.S. Nariman, Rajiv Datta and A.N. Bhanot for the Appellants.
M.K. Banerjee, Additional Solicitor General and Miss A, Subhashini for the Respondent.
3 M.C. Bhandare and section Bhandare for the Respondent.
The Order of the Court was delivered by CHINNAPPA REDDY, J. It transpires from the facts which we shall presently set out that the National Agricultural Cooperative Marketing Federation of India, NAFED for short, is a law unto itself and its officers are not unduly concerned either about carrying out the Export Trade Instructions issued by the Government of India or about filing truthful affidavits in the Supreme Court of India.
On June 23, 1982, the Chief Controller of Imports and Exports, Ministry of Commerce, Government of India, issued Export Instruction No. 59 of 1982 on the subject of Export Policy of Niger Seeds during 1982 83.
Paragraphs 2 and 3 of the Instruction are important and may be fully set out.
They are as follows: "On a review of the position it has been decided to allow export of Niger Seeds within an overall ceiling of 10,000 (Ten thousand) tonnes through the canalising agency, viz.
The National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) subject to minimum export price of Rs.8,500/ (Rupees eight thousand five hundred) per metric tonne.
While the NAFED can continue to undertake exports themselves, private parties will also be allowed to export Niger Seeds as Associates of NAFED against firm commitments backed by irrevocable Letter of Credit subject to availability of ceiling.
Export by private parties will be allowed on first come, first served basis.
For this purpose, the exporters should register their contracts with the NAFED.
The NAFED will stop registration of contracts as soon as the ceiling is exhausted.
The NAFED will be responsible to monitor the ceiling and ensure that export of Niger Seeds not exceeding the overall quantity of 10,000 M.T. during 1982 83.
In other words, the export will be allowed only against the balance quantity left unutilised out of the ceiling of 10,000 tonnes released vide Export Instruction No. 15/82 dated 7.4.1982.
" 3 Pursuant to the Trade Instruction, a Trade Notice was published by the Joint Chief Controller of Imports and Exports on the same lines.
We may mention here that out of the 10,000 tonnes, export of which was to be allowed, the NAFED reserved to itself the right to export 5,000 tonnes and decided to allow its associates to export the remaining 5,000 tonnes.
On the faith of the Trade Notice, the petitioner in Special Leave Petition No. 10230 of 1982 entered into a contract with M/s Curtis (Confirmers) Limited of London on 7.7.82 for the sale and export of 1,000 metric tonnes of Indian Niger Seeds at the price of Rs. 8,560 per metric tonne, f.o.b.
at any Indian Port.
Shipment of 200 metric tonne was to be by October, 1982, 300 metric tonnes by February, 1983 and 500 metric tonnes by March, 1983 at buyer 's option with one month 's clear notice.
The payment was to be by 'firm, irrevocable credit, to be opened through first class bank for 10% value now and for balance 90% to be opened 15 days prior to shipment '.
The petitioner forwarded the contract to NAFED on 22.7.82 with a request that the contract may be registered and promising to send the letter of credit in two or three days.
An Irrevocable Documentary Letter of Credit was duly opened by the Banque Nationale de Paris on behalf of the foreign buyer in favour of the petitioner for the amount of Rs.8,56,000 being 10% of the total value of the goods.
The letter of credit also stipulated that within 15 days before each shipment, 'the credit value was to be increased to cover the amount of each shipment and that would be advised as an amendment to the credit '.
Letter of Credit was forwarded to the NAFED by the petitioner on 26.7.82 with a request that the quantity of one thousand metric tonnes might be reserved for him for export.
The NAFED sent a reply on 6.8.82.
"We will revert in the matter shortly".
On 3.9.82 the petitioner reminded the NAFED both by letter and telegram about his request for allotment of quota.
The petitioner also sent a telegram to the Government of India that matters were unduly delayed though he had completed all the formalities.
It appears that meanwhile, the NAFED wrote to the Ministry of Commerce, Government of India, on 17.9.82 informing the Government of India that it was for the NAFED and its Board of Directors to formulate guidelines regarding release and modalities of export.
A copy of the guidelines formulated by the NAFED on 16.9.82 was enclosed.
Two statements containing the names of the applicants for quotas 5 and other particulars were also enclosed.
The first statement showed the names of 22 applicants whose requests for allotment of quotas were said to be backed by Letters of Credit.
The appellants in the appeals before us are included in this list though this was denied in the counter affidavit filed on behalf of the NAFED.
More about it later.
The second statement contained a list of 34 names of applicants whose contracts were not backed by any Letters of Credit.
On receipt of this letter the Government of India by their letter dated 30.9.82 objected to the guidelines said to have been approved by the NAFED as they were contrary to the guidelines issued by the Government of India.
It was pointed out that according to the instructions of the Government of India the allotment had to be made on first come first served basis whereas according to the guidelines prepared by the NAFED the quotas were to be allotted by a committee consisting of the Chairman and officials of the NAFED, the Government and the trade, after considering all the applications received within a certain specified period.
In fact the guidelines issued by the Government of India required that registration of applications should be stopped as soon as the ceiling limit was reached on a first come first served basis.
Further, the guidelines prepared by the NAFED provided that Letters of Credit would have to be submitted within three weeks after allotment and this was again contrary to the guidelines issued by the Government of India which required that the Letters of Credit should be made available for registration of the requests for allotment of quotas.
The letter of the Government again and again emphasised that quotas should be allotted on first come first served basis to exporters against firm commitments, backed by irrevocable Letters of Credit, subject to availability of ceiling.
The Government asked the NAFED to refer to the fact that the letter of the NAFED itself showed that there were 22 parties who had registered their contracts for export, whose requests for allotment were backed by Letters of Credit and that the total of their requests came to 4,859 tonnes.
On the other hand, it was pointed out, the requests of the other 34 parties for quotas were not backed by Letters of Credit.
The Government of India finally instructed the NAFED to ensure that exports of Niger Seeds were undertaken in conformity with the instructions issued by the Government of India in E.I.No. 59/82 dated 23.6.82.
The NAFED was reminded that while the NAFED 6 was only a canalising agency for export of Niger Seeds, the export would have to be undertaken by them only within the policy as laid.
down by the Government.
The NAFED was further told that a Trade Notice had already been issued by the Joint Controller of Imports and Exports and that it was not for the NAFED to issue another Trade Notice as proposed by it.
The instructions of the Government of India reiterated by their letter dated 30.9.82 fell on deaf ears.
The NAFED ignored the instructions of the Government of India and persisted in the error of its ways.
At a meeting held on 16.10.82 the NAFED purported to select applicants for export quotas neither on a first come first served basis as originally announced in the Trade Notice nor only from among applicants whose contracts were backed by Letters of Credit.
They proposed to give time to the selected applicants to produce Letters of Credit.
The petitioners moved the Delhi High Court under Article 226 of the Constitution for redress but their Writ Petitions were dismissed in limine.
They have come to this Court under Article 136 of the Constitution.
As we were told that the applicants who had been selected for allotment of quotas had been able to secure a higher price from their buyers and, therefore, allotment of quotas to the petitioners would result in considerable loss of foreign exchange, we were anxious to know the present attitude of the Government of India in the matter.
The Government of India has now appeared before us through the learned Additional Solicitor General and a counter affidavit has been filed on their behalf by a Deputy Secretary in the Ministry of Commerce.
The NAFED has no clear or definite answer to the petitioners ' claim.
First, it was said that the letter of Credit furnished by the petitioner did not conform to the requirement of the Trade Notice, but the argument was not pursued as it was seen from the file produced by the Government of India that the Letters of Credit furnished by such of the selected applicants for quotas as did furnish Letters of Credit were all similar to those produced by the petitioners.
In fact, some of the chosen ones furnished no Letters of Credit and it was proposed to give them time for the production of Letters of Credit.
This, of course, was not in accordance with the terms stipulated by the Trade Notice.
It is also clear from the letters which the NAFED addressed to the Govern 7 ment of India that it was never for a moment doubted by anyone that the Letters of Credit produced by the petitioners conformed to the requirements of the Trade Notice.
The present stand is a clear after thought and a pretence.
In the counter affidavit filed on behalf of the NAFED it was stated that 22 applicants for allotment claimed that they had firm contracts backed by Letters of Credit for full value.
The total quantity covered by these applications was 4,859 tonnes.
It was asserted that the petitioners did not fall in this category.
It was stated that the petitioners came in the category of those who had secured a price of Rs. 8,600 per tonne but whose contracts were not backed by Letters of contract.
The Learned Counsel who appeared for the NAFED also submitted before us, on instructions, that the petitioners were not among the 22 applicants whose contracts were considered by the NAFED as backed by Letters of Credit.
But a perusal of the file produced by the Government of India exposed the statement made in the affidavit filed on behalf of the NAFED as false.
The NAFED had itself prepared a statement showing "Enquiries received from private parties backed by Letters of Credit for export of Niger Seeds".
This statement was sent to the Government of India along with its letter dated 17.9.82 and it contains a list of twenty two names.
Both the appellants in the appeals figure in it.
It is clear to us that the statement in the counter affidavit is false.
It is also clear to us that the Learned Counsel was misled and wrongly instructed to argue before us that the appellants were not included in the list of twenty two.
It appeared to us that a copy of the letter dated 17.9.82 of the NAFED to the Government of India was not made available even to the Learned Counsel.
We repeatedly asked for it and we could ultimately get it from the file produced by the Government of India, One of the submissions made to us was that the selected applicants had secured a higher price per tonne and that would help to earn more foreign exchange.
In the first place their contracts are not backed by Letters of Credit as stipulated by the Trade Notice and they were not eligible for registration.
In the second place the ceiling had already been reached and for that reason also they could not be registered.
The counter affidavit filed by the Government of India fully substantiates the claim of the appellants that the NAFED had 8 disregarded the trade instructions issued by the Government of India as well as the Trade Notice issued pursuant to the trade instructions.
In paragraph 27 of the counter affidavit, it is expressly stated "I submit that the answering respondents have no objection if relief is granted to the petitioners provided they fulfil the requirements of the export instructions issued by respondents 1,2 and 4".
In the circumstances we have no option but to allow these appeals.
Necessary directions have already been issued by us on 29.11.82.
The appellants are entitled to get their costs in each of these appeals from the 6th respondent, the National Agricultural Co operative Marketing Federation Ltd. We fix the costs at Rs. 5.000/ in each appeal.
| The respondents were two groups of shareholders of a private limited company which had a thousand persons under its employment.
A group of shareholders filed a petition for winding up the company under cls.
(e) and (f) of section 433 of the Indian along with applications for an interim injunction and for appointment of a provisional liquidator.
The Company Judge passed an order of injunction restraining the company from borrowing any moneys from banks, financial institutions or others without the prior permission of the court.
Three trade unions representing the employees of the company filed applications for being impleaded as respondents/interveners in the winding up petition claiming that the interests of the employees had been adversely affected by the interim order.
The Company Judge rejected these applications.
A Division Bench of the High Court turned down the appeal preferred by one of the unions and that union sought special leave to appeal against the order of the Division Bench while the other two unions sought special leave to appeal against the order of the Company Judge.
The Court granted special leave to all the three unions and permitted the Company Judge to pass orders on the application pending before him for appointment of a provisional liquidator with the direction that the liquidator shall not take any steps which would prejudicially affect the employees.
It was contended on behalf of the appellants that since an order winding up a company amounts to notice of termination of services of its employees under section 445(3) and since even an interim order freezing the resources of the company might affect the interest of the employees by making it difficult for the company to pay their wages, etc., it would be contrary to fair judicial procedure and violative of the rule audi alteram partem to deny the employees the right to be heard before any order prejudicially affecting their interests is made.
The 923 employees who contribute materially to the working of a company and enable it to effectively play its socio economic role are equal, if not more important, partners in the running of the company and they must be heard in a proceeding for winding up of the company.
It was further urged that under r.34 of the Companies (Court) Rules, 1959 the employees have a right to appear at the hearing of a winding up petition either to support or to oppose it.
On behalf of the respondents it was contended that the employees of a company have no locus standi in a winding up petition as the Act does not contain any provision conferring such a right on them; that since the Act is a self contained Code exhaustive in regard to all matters relating to a company, no such right could be spelt out in their favour outside the provisions of the Act that r. 34 of the Companies (Court) Rules, 1959 does not confer such a right on them and that, under the various provisions of the Act including sections 439 and 440, it is only the creditors and contributories and in certain specified contingencies, the Registrar and the Central Government, who are entitled to participate in the proceedings for winding up of a company.
It was further contended that in this case it was not even the employees, but the three trade unions, who had applied for being heard, and since the trade unions had no right to be heard, their applications had been rightly rejected.
Allowing the appeals, ^ HELD : By Majority : Per Bhagwati, Chinnappa Reddy and Baharul Islam, JJ.
(Venkataramiah and Amarendra Nath Sen, JJ.
dissenting): The workers of a company are entitled to appear at the hearing of the winding up petition whether to support or to oppose it.
They have a locus standi to appear and be heard both before the petition is admitted and an order for advertisement is made as also after the admission and advertisement of the petition until an order is made for winding up the company.
The workers also have a right of appeal against a winding up order.
But when a winding up order has become final, the workers ordinarily would not have any right to participate in any proceeding in the course of winding up, the company though there may be rare cases where in a proceeding in the course of winding up, the interests of the workers may be involved and in such a case it may be possible to contend that the workers must be heard before an order is made by the court.
Even in an application for appointment of a provisional liquidator the workers have a right to be heard if they so wish but neither the petitioner in the winding up petition nor the court is under any obligation to give notice of such application to the workers.
[956 A E] In the instant case the circumstance that the workers were not heard by the Company Judge before he passed the order appointing the provisional liquidator would not have the effect of vitiating the order but it would be open to the workers to apply to the court for vacating that order.
[956 F G] (i) The making of a winding up order on a petition for winding up would have an adverse consequence on the workers inasmuch as the continuance of their service would be seriously jeopardised and their right to work and earn 924 their livelihood would be disastrously imperilled.
It is an elementary principle of law that no order involving adverse civil consequences can be passed against any person without giving him an opportunity to be heard against the passing of such order.
If the audi alteram partem rule has been held to be applicable in a quasi judicial or even in an administrative proceeding, it would a fortiori apply in a judicial proceeding such as a petition for winding up of a company.
No system of law which is designed to promote justice through fair play in action can permit the court to make a winding up order which has the effect of bringing about termination of the services of the workers without giving them an opportunity of being heard against the making of such order.
Unless there is express provision in the Act which forbids the workers from appearing at the hearing, the workers must be held entitled to appear and be heard in the winding up petition.
[950 A E] State of Orissa vs Dr. Bina Pani, ; ; A.K. Kraipak vs Union of India, and Maneka Gandhi vs Union of India, [1978] 2 S.C.R. 621 referred to.
(ii) There is no provision in the Act which excludes the workers from appearing at the hearing of a winding up petition.
Merely because the right to apply for winding up a company is not given to them it does not follow as a necessary consequence that the workers have no right to appear and be heard in a winding up petition filed by one or more of the persons specified in section 439.
In fact, there would be no point in conferring that right on the workers since they cannot have any interest in demolishing the enterprise which is the source of their livelihood.
So also, the circumstance that the right to make applications or be consulted in the course of the winding up of a company is conferred under section 440 and other provisions of the Act only on the creditors and contributories does not in any way militate against the right of the workers to appear and be heard in the winding up petition.
Once the winding up order is made, the assets of the company have to be realised, the creditors to be paid and if there is any surplus it has to be distributed among the contributories and, therefore, at that stage, it is only the creditors and contributories who have an interest and that is why in the course of the winding up it is the creditors and contributories who have been given a voice.
Sections 440, 464, 466, 478, 517, 542, 543, 549, 556, 557 and 560 deal with a stage after the winding up has commenced.
These sections have nothing to do with the question whether the company should be wound up or not.
D F; 951 B; 951 C E; 949 A H] (iii) After the amendment of sections 397 and 398 of the Act by sections 10 and 11 of the Companies (Amendment) Act, 1963, the court, while deciding whether a company should be bound up, has to take into consideration not only the interest of the shareholders and editors but also public interest in the shape of the need of the community and the interest of employees.
It is therefore axiomatic that the workers must have an opportunity of being heard for projecting and safeguarding their interest before a winding up order in made.
[951 G: 952 E F] In the instant case, the Division Bench of the High Court, after conceding that the court had to take into consideration the interest of the workers, went wrong in holding that the workers had no locus standi to file an application for being heard in the winding up petition.
[952 G H; 953 A B] 925 Fertilizer Corporation Kamgar Union and Ors.
vs Union of India and Ors.
, ; , referred to.
Bhalchandra Dharmajee Makaji and Ors.
vs Alcock Ashdown and Co. Ltd. and Ors.
, , approved.
(iv) It is true that according to the statement of law contained in the leading text books on Company Law, it is only the Company, the creditors and the contributories who are entitled to appear in a winding up petition and no other persons have a right to be heard.
This statement of the law is based on a decision rendered by the English Courts over a hundred years ago when a company was regarded merely as a legal device brought into being as a result of a contractual arrangement between the shareholders for the purpose of carrying on trade or business and the workers were looked upon as no more than employees of the company working under a master and servant relationship and the interest of the public as consumers or otherwise was a totally irrelevant consideration.
It can have no validity in the present times when the entire concept of a company has changed.
[953 F H] In re.
Bradford Navigation Company [1870] 5 Ch.
A.C. 600, held inapplicable.
In re.
Edward Textiles Limited, , overruled.
(v) Our Constitution has shown profound concern for the workers and given them a pride of place in the new socio economic order envisaged in the Preamble and the Directive Principles of State Policy.
Article 43A states that the State shall take steps by suitable legislation or in any other way to secure the participation of workers in the management of undertakings, establishments or other organisations engaged in any industry.
The constitutional mandate is therefore clear and undoubted that the management of the enterprise should not be left entirely in the hands of the suppliers of capital but the workers should also be entitled to participate in it.
In a socialist pattern of society the enterprise which is a centre of economic power should be controlled not only by capital but also by labour.
It cannot therefore be contended that the workers should have no voice in the determination of the question whether the enterprise should continue to run or be shut down under an order of the court.
The workers who have contributed to the building of the enterprise have every right to be heard when it is sought to demolish that centre of economic power.
[946 C; 947 D F] People 's Union for Democratic Rights vs Union of India and Ors.
(W.P. No. 8143 of 1981 decided on September 18, 1982) referred to.
(vi) It is not only the shareholders who have supplied capital who are interested in the enterprise which is being run by a company but the workers who supply labour are also equally, interested because what is produced by the enterprise is the result of labour as well as capital.
The owners of capital bear only limited financial risk and otherwise contribute nothing to production while labour contributes a major share of the product.
While the former invest only a part of their moneys the latter invest their sweat and toil; in fact, their life itself.
926 The workers therefore have a special place in a socialistic pattern of society.
They are no more vendors of toil; they are not a marketable commodity to be purchased by the owners of capital.
They are producers of wealth as much as capital; they supply labour without which capital would be impotent.
[945 G H: 946 A B] (vii) The concept of a company has undergone radical transformation in the last few decades.
The old nineteenth century view which regarded a company merely as a legal device adopted by shareholders for carrying on trade or business as proprietors has been discarded and a company is now looked upon as a socioeconomic institution wielding economic power and influencing the life of the people.
The view that a company is the property of the shareholders can no longer be regarded as valid.
Apart from capital and labour there are other factors which contribute to the production of national wealth; the financial institutions and depositors who provide the additional finance required for production and the consumers and the rest of the members of the community who are vitally interested in the product manufactured.
A company, according to the new socio economic thinking, is a social institution having duties and responsibilities towards the community in which it functions and one of its paramount objectives is to bring about maximisation of social welfare and common good.
This necessarily involves reorientation of thinking in regard to the duties and obligations of the company not only vis a vis the shareholders but also vis a vis the rest of the community affected by its operations such as workers, consumers and the Government representing the society.
[942 B; 943 A G; 944 C D] Chiranjit Lal Chowdhri vs Union of India, [1950] S C.R. 869, referred to.
Panchmahal Steel Ltd. vs Universal Steel Traders, approved.
per Chinnappa Reddy, J. (concurring) (i) Quite apart from section 445(3), it is plain that the future of the workers is at stake and their right to work is in jeopardy as a result of the presentation of the winding up petition.
The workers are so intimately tied up that their interest in the survival and the well being of the company is much more than the interest of any shareholder.
They cannot be denied a hearing when their very existence is under threat of extinction.
[957 D G] (ii) It is not correct to say that natural justice is exclusively a principle of administrative law.
It is first a universal principle and, therefore, a rule of administrative law.
Courts, even more than administrators, must observe natural justice.
[959 A C] (iii) The Act does not prohibit a hearing to the workers.
It does not provide for all situations.
The law "falls to be applied to a growing and changing subject matter".
The Company Judge must acknowledge the transformation which corporations are presently undergoing from capitalist contrivances into socialist instruments and recognize the reality of the workers interest.
The 927 working classes, all the world over, are demanding "workers ' control" and "industrial democracy".
They want the right to work to be secured.
Our Constitution has accepted the workers ' entitlement to control and it is one of the Directive Principles of State Policy.
It is in this context of changing norms and waxing values that the workers ' demand to be heard has to be judged.
[957 G H; 958 B C E F G] (iv) The duty to hear those asking to be heard is not dependent on the vesting of any right under the very statute in respect of which jurisdiction is being exercised by the Court but on any right whatever which may come under threat.
It is not the law that rights other than those created by a particular statute may be taken away in proceedings under that statute without affording a hearing to those desiring to be heard.
[959 D E] (v) It is not correct to say that once the workers are allowed to enter the company court, the flood gates will be opened, all and sundry will join in the fray and utter confusion will prevail.
The court is the master of the proceedings and the ultimate control is with the court.
Parties may not be impleaded for the mere asking.
The court may ask the reason why, if someone asks to be heard.
[960 B C] (vi) The contention that since workers are not allowed to intervene in a partition or dissolution of partnership they should also not be allowed to intervene in a winding up petition cannot be accepted.
There is no reason why workers may not be allowed, in appropriate cases to intervene in such actions to avert disaster and to promote welfare.
[960 D] (vii) There is good reason for holding that In re.
Bradford Navigation Company is not valid in the present times.
It was decided in the heydays of laissez faire at a time when individualism dominated every field and the public interest was but a slow runner.
Now the position is reversed.
In Britain itself Corporate law and labour law have changed considerably.
After nationalisation of certain important and crucial industries a considerable measure of workers ' control of management of industry has been achieved in that country.
One should rather look to the Constitution for guidance and inspiration while interpreting the laws.
After the 42nd Amendment, the Constitution is openly Socialist.
The Directive Principles of State Policy emphasize the role and interest of the workers.
article 43A contemplates workers ' participation in the management of the industry.
There are several provisions in the Act itself which take notice of the element of public interest.
There are other enactments like the Monopolies and Restrictive Trade Practices Act and the Industries Regulation and Development Act under whose provisions the activities of a company may be scrutinized in public interest.
There are legislations involving employment and welfare of labour to which the managements of the companies are subject.
The problem before the court must be considered in this context of ferment and development.
G H; 962 A B; 960 G H; 961 D F] In re.
Bradford Navigation Company, [1870] 5 Ch.
A.C. 600, held inapplicable.
Panchmahal Steel Ltd. vs Universal Steel Traders, approved.
928 per Baharul Islam, J. (concurring) The statement of law contained in the English authorities cited by counsel for respondents may be good law for England with altogether a different system of economy but it is not applicable in our country, particularly after the Constitution (42nd Amendment) Act, 1976, by which the "Socialist" and "Secular" concepts have been incorporated in the Preamble to our Constitution.
The workers ' right to be heard in a winding up proceeding has to be spelt out from the Preamble and articles 38 and 43 A of the Constitution and from the general principles of natural justice.
[990 D F] per Venkataramiah and Amarendra Nath Sen, JJ.
(dissenting) Under the existing law the workers or their unions may make any suggestions to the Court at any stage but they cannot claim to be impleaded as parties to the winding up petition as of right.
The privilege of making suggestions to the court in public interest is different from the right to be impleaded as a party with the concomitant right to enter into contest with the other parties and of making an order in appeal before higher courts.
The latter right has to be conferred expressly by the statute in any person who wishes to exercise it.
[979 D] (i) The principles of administrative law have not much relevance to the administration of the affairs of a company, the primary purpose of administrative law being the imposition of checks on the powers of government or its officers so that they may not either abuse their powers or go out of their legal bounds.
In particular, the proceedings relating to winding up by court are subject to the orders of higher courts in appeal and are not amenable to interference by superior courts as in the case of actions of government or its officers.
[967 H, 968 A B] (ii) The law on the question as to who can be heard as of right in a winding up proceeding is clear and is based on the decision of the English Court in In re.
Bradford Navigation Company.
The decision may be of the last century but there is hardly any justification to depart from it even now unless compelled by the statute to do so.[970 B D; 971 E] In re.
Bradford Navigation Company, [1870] 5 Ch.
A.C. 600, referred to.
Halsbury 's Laws of England (4th Ed.) Vol.
7 Para 1028 referred to.
(iii) That only the company, creditors and contributories (apart from the Central Government or the Registrar when they choose to intervene under the express provisions of the Act) are entitled to participate in the winding up proceedings is clear from sections 439, 447 and 557.
Sections 450(2), 466, 478(3), 517, 518, 542, 543, 546(1), 549(1) and 556 show that only the Company, the official liquidator, liquidator, creditors, contributories or the Registrar have a statutory right to participate as of right in the winding up proceedings.
The workers or their trade unions have not been given any such right.
[969 C D; E H; 973 A F] 929 In re.
Edward Textiles Ltd., approved.
(iv) Under section 433, a company may be wound up by the court on one or more of the following grounds : (a) if the company has, by special resolution, resolved that it may be wound up by court; (b) if default is made in delivering the statutory report to the Registrar or in holding the statutory meeting; (c) if the company does not commence its business within a year from its incorporation, or suspends its business for a whole year; (d) if the number of members is reduced, in the case of a public company, below seven, and in the case of a private company, below two; (e) if the company is unable to pay its debts; and (f) if the court is of opinion that it is just and equitable that the company should be wound up.
As regards the ground mentioned at (a), when a company has passed a special resolution that it may be wound up by the court, the employees and workers can have hardly any ground to object.
The position is the same when any of the defaults mentioned in (b) and (c) are committed by the company.
The officers and employees of the company also cannot get over the deficiency in the required number of members of a company referred to in (d) above.
When a company is unable to pay its debts and a creditor moves a petition for winding up under (e) above, he cannot be compelled to prove his claim not merely against the company but also against the officers and employees.
When there is a deadlock in the management of the company arising out of disputes amongst the directors or when some directors without any justification exclude some other directors from the management of the company and a petition for winding up is filed under (f), above, it would be unreasonable to expect the excluded directors to fight a case both against the directors who are responsible for their exclusion and also against the officers and employees who are neither creditors nor contributories but who may be supporting the contesting directors.
[968 H; 969 A B; 969 F H; 970 A B] In the instant case, it is seen from the grounds of objection filed by the trade unions that they are only interested in supporting the cause of one set of respondents against the other by making certain general submissions.
The petitioners in the Company Petition would be in a more disadvantageous position if they have to face the opposition of the trade unions also in addition to the respondents to that petition.
Such a situation should not be created by extending the area of controversy by a liberal interpretation of the provisions of law when there are no compelling reasons to do so.
[985 E G] (v) There are specific provisions in the Act and the Rules (sections 417 to 420, 530(1)(b) to (f) and 635 B and r. 152 read with Form No. 67) dealing with the rights of employees of a company.
The right to resist a winding up petition is not one such right.
[975 D E] (vi) It is because of some doubts that had been expressed earlier about the continuance of the employment of the employees of a company ordered to be compulsorily wound up that section 445(3) was enacted making it clear that the passing of the order of winding up amounts to a notice of discharge of the employees concerned.
Section 445(3) corresponds to the termination of service brought about by the abolition of a post under a Government or by the closure of a business, neither of which as the law stands today requires compliance with the principles of natural justice.
[975 B C] 930 (vii) It is true that public interest which may include within its scope interests of employees of a company has to be kept in view by the courts in exercising certain powers under the Act.
Sections 388 B, 394, 396, 397 and 408 do refer to the concept of public interest.
These provisions deal with the powers of the Central Government and the Court.
They do not, however, state that trade unions can as of right intervene in the proceedings arising under them.
[975 F H] Bhalchandra Dharmajee Makaji and Ors.
vs Alcock, Ashdown and Co. Ltd. and Ors., referred to.
In the instant case the High Court has passed necessary orders to protect the interests of the employees.
As these orders stand today, the workers can always approach the High Court by way of a company application for appropriate orders whenever they feel that their working conditions are adversely affected during the pendency of the proceedings.
It is not necessary that the workers or the trade unions should be impleaded as parties to the winding up petition enabling them to contest the same; their presence on record is not necessary for a complete and effectual adjudication of the petition.
The trade unions are, therefore, neither necessary nor proper parties to the winding up petition on the facts and in the circumstances of this case including the element of public interest involved in any liquidation proceeding.
[985 H; 986 H; 987 A C] (viii) In Fertilizer Corporation Kamgar Union (Regd) Sindri and Ors.
vs Union of India and Ors.
, [1981] 2 S.C.R. 52 the court was concerned with operations in a public sector company and the activities of the government.
The observations contained therein cannot have any relevance to a case involving the affairs of a company which is governed only by the express provisions of company law and other relevant statutes.
[982 C] (ix) As the law stands today, the workers in a factory owned by a company do not have any hand in the birth of a company, in its workingur ding its existence and also in its death by dissolution.
Workers ' participation in the affairs of a company or the ushering in of an industrial democracy is quite a laudable object.
That is the reason for enacting article 43 A. article 43 A clearly states that the State shall take steps by suitable legislation or in any other way to secure the participation of workers in the management of undertakings etc.
The High powered Expert Committee on Companies and MRTP Act, has made certain recommendations in this behalf in paragraphs 11.27 and 18.137 of its report and it is for the Parliament to take steps to implement them.
The legislature has not taken concrete steps in this regard.
The suggestions made by the committee emphasize that at present workers have no right to contest winding up proceedings.
It is significant that there is no recommendation made even in this report about the right of trade unions to contest winding up petitions.
The court cannot step in and introduce drastic amendments into the company law.
Many of the Directive Principles are still to be implemented by passing appropriate legislation.
This Court cannot compel the executive by issuing writs to implement the policy underlying them.
There are well recognized limitations on the power of the court making inroads into the legitimate domain of the legislature.
If the legislature exceeds its power, this Court steps in.
If the executive exceeds its power, 931 then also this court steps in.
If this court exceeds its power what can people do ? Should they be driven to seek an amendment of the law on every occasion ? The only proper solution is the observance of restraint by this court in its pronouncements so that they do not go beyond its own legitimate sphere.
It may be that the workers who are likely to be affected by the winding up need a larger protection.
That can be done only by legislative action.
This Court cannot make any order which will conflict with the existing law.
[982 G H; 983 A; 977 E F; 983 G; 983 B D; 989 C] (x) The proposition that law should not be static but should grow cannot be disputed.
But it should be the result of the exercise of legislative judgment, particularly when a departure from express provisions of a statute or an established practice is to be made.
A discussion involving a comprehensive view of all interests which are likely to be affected by any decision in such a matter is not possible before a court where only the parties to a case or their lawyers are heard.
[987 D F] (xi) It is not correct to say that there is no other remedy at all for workmen who are likely to be affected by the winding up order made by the court.
It is open to the workers or their trade unions to move the Central Government to take appropriate steps under the Industrial (Development and Regulation) Act, 1951 the provisions of which provide that where a company owning an industrial undertaking is being wound up by or under the supervision of the High Court and the business of such company is not being continued, the Central Government may investigate into the possibility of running or restarting the industrial undertaking, provide relief to it or take steps to ensure that the undertaking is sold as a running concern, or prepare a scheme of reconstruction of the company and send it to the trade unions of employees concerned inviting their suggestions and objections.
[976 A H; 977 A C] (xii) When once the right to contest a winding up petition is extended to workers either on the principle of equity or of administrative law, on the same principle it would logically follow that all others who may have dealings with the company such as commission agents, selling agents.
whose contracts with the company are going to be terminated by reason of its liquidation also have to be allowed to contest the proceedings.
Such a claim is not permissible.
[974 B] Ex parte Maclure, , referred to.
(xiii) It is no doubt true that the view of the High Court is also in conformity with the view prevailing in England.
That does not mean that the High Court has surrendered its judgment to a foreign practice because that is the very view which is being followed till now in the Indian Courts.
A foreign decision is either worthy of acceptance or not depending upon the reasons contained in it and not its origin or age.
There is no reason why we should not follow a well reasoned foreign decision unless it is opposed to our ethics, tradition and jurisprudence or otherwise unsuited to our conditions.
Moreover, it is difficult, even though it may not be impossible, to administer the company law as it is now in force in India without the aid of the principles laid down by some of the leading English cases.
[987 H: 988 A F] 932 Needle Industries (India) Ltd. and Ors.
vs Needle Industries Neway (India) Holding Ltd. and Ors., ; , referred to.
per Amarendra Nath Sen, J. (agreeing with Venkataramiah, J.) (i) If the right to participate in a winding up proceeding is to be judged from the view point of the interest of any party who may be prejudicially affected as a result of an order of winding up being made, it must logically follow that not only every employee of the company but also various other parties and persons who have trade relations or dealings with the company must necessarily be held to have the same right to be heard in such a proceeding; further, no suit for dissolution of a partnership can also be decided without impleading the employees of the firm and other parties having trade relations with the firm.
[992 A E; 991 H] (ii) A company can only be wound up in accordance with the provisions of the Act.
The right to have a company wound up is a right created by the statute.
The entire proceeding in relation to the winding up is governed by the provisions of the Act and the Rules.
The Act recognises that a company may go into liquidation without any intervention by the Court and also under the supervision of the court.
Where the company goes into liquidation without reference to court, the employees of the company who have to meet the same fate of losing their employment cannot have any voice or say in the procedure to be adopted for liquidation of the company.
[992 F G; 993 B C] (iii) The right of appearance and of being heard in a winding up proceeding has been conferred on persons whom the legislature considered to be necessary or proper parties for effective adjudication of the proceeding before the court.
If a company is commercially insolvent and is unable to pay its debts, it has necessarily to be wound up and the employees can have hardly anything to say in such a case for assisting the court in deciding the matter.
[993 E G] (iv) Although an employee cannot claim to appear and be heard in a winding up petition as a matter of right, the court may, in any appropriate case, require or permit any employee to appear at any stage of a winding up proceeding and hear him, if it is of the opinion that it is necessary in the interest of administration of justice and for proper disposal of any matter.
[998 H; 999 A] (v) The legislature has made suitable provisions in the Act for safeguarding what is considered to be in the interest of employees or in public interest.
The introduction of article 43A in the Constitution does not affect the position in any way.
Participation in the management does not by itself create any right to appear and be heard in a winding up petition.
Unless otherwise named personally as a party to such a petition, no person, merely on the ground that he happens to be in the management of the company, is entitled to appear and be heard in a winding up proceeding.
Persons in management may, if so authorised, appear and participate in such a proceeding on behalf of the company.
[995 D; 995 E H] 933 (vi) The Indian and the English Companies Acts contain similar provisions.
As early as in 1870 the English court held that no person had a right to be heard against a petition for winding up of a company except creditors and contributories.
That decision still holds good and is considered good law.
The English Act has undergone changes from time to time with the passing of various legislations for the benefit and welfare of employees.
An order winding up a company affects the employees in England in the same way as it does in India.
It cannot be said that workers in England are not conscious of the important role they play in the functioning of a company.
Despite all these, the right of an employee or any trade union representing the workers to participate and be heard in a winding up petition is not recognised in England.
Even in our country, though the provisions of the Act have undergone changes and various enactments for the welfare of the workers have been passed from time to time, the legislature has not considered it proper or necessary to amend the Act to confer any such right on the workers.
[996 A D; 996 H; 997 A B; 998 F] In re Bradford Navigation Company, [1870] 5 Ch.
A.C. 600, referred to.
Halsbury 's Laws of England (4th Ed.) Vol.
p. 614; Palmer 's Company Precedents (7th Ed.) Part II, p. 77 and Buckley on the , (14th Ed.) Vol.
I, p. 546 referred to.
Hind Overseas Private Ltd. vs Raghunath Prasad Jhunjhunwala and Ors.
, ; , distinguished.
By majority: Per Bhagwati, Chinnappa Reddy and Baharul Islam, JJ.
(Venkataramiah and Amarendra Nath Sen, JJ.
dissenting): Trade unions are competent to make applications before the Company Judge hearing a winding up petition on behalf of the workers represented by them.
[956 H] In this case the applications were made by the unions on behalf of the workmen represented by them and though made in the name of the Unions the applications were in reality and substance applications of the workmen who were members of each respective Union.
The controversy therefore really is not whether the unions of workmen are entitled to be heard in a winding up petition but whether the workmen have such right when a winding up petition is filed against a company.
[939 G H] per Venkataramiah and Amarendra Nath Sen, JJ.
(dissenting): In none of the English text books on Company Law there is any statement to the effect that trade unions of officers and employees of a company for whose winding up a petition is filed would be entitled as of right to be impleaded as parties and to contest the petition.
It is not also shown that any such right of a trade union is recognised by the Indian Law which more or less corresponds to English Law in this regard.
The decision of the Bombay High Court in In re Edward Textiles Ltd. is a clear authority for the proposition that at any rate trade unions have no locus standi to oppose a winding up petition.
We shall proceed to decide this case on the assumption that the application for impleading was made in fact on behalf of the workers and not by the trade unions.
[968 C F] 934 In re Edward Textiles Ltd., , referred to.
By the Full Court: Rule 34 of the Companies (Court) Rules, 1959 does not confer a right on the workers to appear at the hearing of a winding up petition.
[955 G; 973 G; 994 E F] per Bhagwati, Chinnappa Reddy and Baharul Islam, JJ.: The object and purpose of r. 34 is not to confer a right on anyone to appear at the hearing of the winding up petition but merely to provide for the procedure to be followed before a person who is otherwise entitled to appear in a winding up petition can be heard in support of or in opposition to the winding up petition.
[955 F] per Venkataramiah, J: The words "every person" in r. 34 of the Companies (Court) Rules, 1959 do not entitle a worker who is neither a shareholder nor a contributory to support or oppose a winding up petition under that rule because they refer only to a person who is otherwise entitled to do so under the Act.
An anomalous result that may flow from the acceptance of the case of the workers is that whereas in a winding up by court they may get an opportunity to contest the petition, the voluntary winding up proceedings or winding up under the supervision of the court would go on without any such contest although in all cases ultimately the workers will be discharged from service.
A construction which leads to such a discriminatory result should be avoided.
[973 G H; 974 A] per Amarendra Nath Sen, J.: Rule 34 only lays down the procedure to be followed by any person who intends to be heard at the hearing of a petition; it does not deal with the right of any person to appear at the hearing nor does it create any such right in any person.
Rule 9B in part III of the Rules makes specific provision in that behalf.
[994 E F]
|
Appeals Nos. 907 909/74.
Appeals by Special Leave from the Judgment and Order dated 27 3 73 of the Kerala High Court in O.P. Nos.
375 377/73 respectively.
CIVIL APPEAL No. 1354/75 Appeal by Special Leave from the Judgment and Order dated 9 7 75 of the Kerala High Court in C.R.P. No. 949/74.
CIVIL APPEAL No. 1355/75 Appeal by Special Leave from the Judgment and Order dated 19 6 75 of the Kerala High Court in C.R.P '.
No. 611/74.
M.M. Abdul, Advocate Genera1 for the State of Kerala, and K.M. K. Nair for the Appellants in CAs.
907 909/74 for rr.
in CAs.
18541855/ '75.
T.S. Krishnamoorthy lyer and P.K. Pillai; for the Appel lants in.
1354 1355/75.
Miss Lily Thomas for the Respondents in CAs.
908 909/74.
The Judgment of the Court was delivered by SHINGHAL, J.
Civil Appeals Nos. 907, 908 and 909 of 1974 are by the State of Kerala and the Land Board, Trivan drum.
They are directed against a common judgment of the Kerala High Court dated July 27, 1973.
Civil Appeals Nos.
1354 and 1355 of 1975 are by petitioners who had.
applied for revision of the orders of the Taluk Land Board, Ala thur, dated June 11, 1974 and April 27, 1974.
High Court dismissed the revision petitions by two separate judgments dated July 9, 1975 and June 18, 1975.
All the appeals are by special leave.
We have heard them together at the instance.
of the learned counsel for the parties, and will examine them in a common judgment.
The controversy in all the cases relates to the.
appli cation of certain provisions of the KeraIa Land Reforms Act, 1963, hereinafter referred to as the Act, to the impugned voluntary transfers of Kayal lands.
The State of Kerala feels aggrieved because the High Court has taken the view that the transfers made between September 15, 1963 and January 1, 1970 had to be "recognised and Kayal lands comprised therein excluded in reckoning the ceiling area and the excess lands to be surrendered after January 1;, 1970.
" The grievance of the other two appellants is that their revision petitions were dismissed even though the gift deeds in their favour were valid and did not fall within the mischief of section 84(11) of the Act.
We shall examine these.
points of controversy but, before doing.
so, it may be mentioned that the validity of certain provisions.
of the Act was also challenged ' in the High Court, in the three petitions which were disposed of by the common judgment dated July 27, 1973, but the High Court upheld them.
There is no such controversy before us as the Act, and the Acts which have amended it, have: been specified in the Ninth Schedule to the Constitution.
It may also be men tioned that we have ' not had the advantage; of hearing any one on behalf of the respondents 275 in Civil Appeals Nos.
907 to.
909 of 1974 as Miss Lily Thomas,, who represented the respondents in Civil Appeals Nos. 908 and 909, informed the Court, at the commencement of the arguments, that they were not interested in the contro versy.
While examining the petitions which are the subject matter of appeals Nos.
907 to 909 of 1974, the High Court thought it sufficient to refer only to the facts of original petition No. 283 of 1973.
That case is not before us, but that would not matter as the appeals can be disposed of without reference to the details of that case.
It will be sufficient to say that the petitioner in that case was M.T.J. Joseph, and the controversy centered round a settle ment deed (exhibit P 8 made by him in favour of his children on June 15, 1957.
The appellants in the three appeals (Nos. 90.7 909) are M.T.J. Joseph 's children.
As has been stated, the High Court examined the consti tutional validity of the provisions of the Act and upheld them.
It next examined the question whether lands in excess of the ceiling area were in the lawful or permissive occupation of the petitioners (in the petition before the High Court), with reference to the argument that in view of the terms of exhibit RI, by which some of the excess lands were assigned to the holder, the occupation commenced with an implied permission on payment of the state dues.
The High Court did not however think it proper to.
express its final views on that aspect of the matter as it found that certain proceedings were pending before the authorities concerned.
It therefore left the matter after giving the direction that the Land Board will no.t pursue the pro ceedings in respect of those lands until the matter was finally decided in the pending proceedings.
So also, the High Court left the question regarding the ownership of the lands which had been conveyed by the settlement deed of 1957, for investigation and decision by the Land Board.
The High Court however proceeded to examine the valid ity of certain transfers of lands between September 15, 1963 and January 1, 1970 with reference to the relevant provisions of the Act and held as follows : "Broadly stated;, the effect of section 84, is to invalidate transfers effected by a person owning or holding land in excess of the ceiling area, after the date of publication of the Land Reforms Bill (15 9 1963).
That being the object of the section, in order to determine whether the transfer was in excess of the ceiling area, what is material is the law relating to ceiling area on the date of the transfer, and not the law regarding celling area on the date of the acquisition or any date subsequent to the transfer.
" It therefore held that there was no justification for treating the alienations effected after Septem ber 15, 1963 and before January 1, 1970 as having been invalidated by reason of the subsequent amend ments in the law, when they were lawful and valid under the "law relating to ceiling area at the time when they were made.
" The High Court also examined the questions relating to the grant of compensa tion and improvements, but they do not arise for consideration before us.
276 The only question which has been pressed for our consid eration by the Advocate General, on behalf of the appel lants, is that relating to the validity of the transfers of Kayal lands between September 15, 1963 and January 1, 1970.
The writ petitioners in the High Court urged that they were exempt under section 81 (1 )(1) of the Act and could not be held to be invalid with effect from January 1, 1970 because of the subsequent amendment to the Act, and included in their ceiling area.
The term "ceiling area" has been defined in section 2(3) of the Act to mean "the extent of land specified in section 82 as the ceiling area", and there is no controversy about its extent or content.
Section 83 of the Act prohibits the holding of lands in excess of the ceiling area with effect from January 1, 1970.
which had been notified by the govern ment in the gazette as the date from which the prohibition was to be effective.
Section 84 declares certain voluntary transfers to be null and void.
The section as it stood before the amendments road as follows.
Section 84.
Certain voluntary transfers to be null and void.
"Notwithstanding anything con tained in any law for the time being in force, all voluntary transfers effected after the date of publication of the Kerala Land Reforms Bill, 1963, in the Gazette, otherwise than (i) by way of partition; or (ii) on account of natural love and affection; or (iii) in favour of a person who was a tenant of the holding before the 27th July, 1960, and contin ued to be so till the date of transfer: or (iv) in favour of a religious, charitable or educational institution of a public nature solely for the purposes of the institution, by a family or any member thereof or by an adult unmarried person owning or holding land in excess of the ceiling area, shall be deemed to be trans fers calculated to defeat the provisions of this Act and shall be invalid :" There is a proviso to the section with which we are not concerned.
The validity of the transfers had therefore to be examined with reference to September 15, 1963 which was the date of publication of the Kerala Land Reforms Bill, 1963, in the gazette.
The section was amended by Act 35 of 1969 by which the existing section was renumbered as sub section (1) and a sub section was added as subsection (2) which dealt with voluntary transfers effected by any person "other than" a family or any member thereof or by an adult unmar ried person owning or holding land in excess of the ceiling area.
The amendment could not therefore be said to have any bearing on the present controversy.
The section was however again amended by section 15 of Act 17 of 1972.
It, inter alia, omitted clause (ii) of 277 sub section (1) and provided that the omission shah be deemed to have been made with effect from the 16th day of August, 1968.
This had the effect of taking away the excep tion in favour of voluntary transfers on account of natural love and affection.
But it is not the case of any one before us that there was any such transfer in respect of Civil Appeals Nos.
907 to 909, so that amendment also could not be said to have any material bearing on the controversy relating to these appeals.
The fact therefore remains that by virtue of section 84 of the Act, all voluntary transfers of land effected after September 15, 1963 (date of publication of the Kerala Land Reforms Bill, 1963 in the gazette) were invalid as they were to be deemed to be transfers calculated to defeat the provi sions of the Act.
So even if a transfer was found to have been made after September 15, 1963 but before January 1, 1970 (date notified under section 83 prohibiting the owning or holding or to possessing under a mortgage lands in the aggregate in excess of the ceiling area) the ceiling area for purposes 'of section 83 and bringing about the surrender of the excess land under section 85 had to be determined with reference to the position as on January 1, 1970 as that was the date notified under section 83.
The reason is ,that the prohibition of section 83 applied with reference, to that date and that, in turn, required a surrender of the excess land as on that date.
Section 85 is therefore an important section.
It was amended by Act 35 of of 1971 and Act 17 of 1972, but there was no change in its basic provision that when a person owned or held land in excess of the ceiling area "on the date notified under section 83" namely, January 1, 1970, he had to surrender it in ,accordance with the other provisions of the section.
The crucial date for determining and surrendering the surplus land was therefore January 1, 1970, and not any earlier date, but the validity of any voluntary transfer effected after September 15, 1963 which was the date of publication of the Kerala Land Reforms Bill, 1963, had still to be examined with reference to September 15, 1963 in view of the clear requirement of section 84.
This was the scheme of the Act.
We have made a reference to section 84 which clearly pro vides that all voluntary transfers of land effected after September 15, 1963 shall be deemed to be transfers calculat ed to defeat the provisions of the Act and "shah be void".
It has not been urged that the impugned transfers fell under any of the exceptions provided by section 84.
There can be no doubt that any transfer made after September 15, 1963 and before January 1, 1970 would be invalid unless it could be shown to have been saved by any other provision of the Act.
In this connection section 81 of the Act is important for it prescribes the exemptions to the provisions of Chapter III.
Clause (1) of subsection (1) of section 81 specifically provides that the provisions of the Chapter shall not apply to, "(1) kayal padasakharams of Kuttanad area specified "in Schedule IV, so long as such padasak haramas are used for the cultivation of paddy or such other crops as the Government may, by notifi cation in the Gazette, specify.
" 278 It is not in controversy that the Kayal lands which are the subject matter of these appeals are of the category mentioned in clause (1) of sub section (1) of section 81.
They were therefore exempt from the restriction on ownership pre scribed by the various sections of Chapter III referred to above.
So even though by virtue of section 84 of the Act all voluntary transfers effected after September 15, 1963 (date of publica tion of the Kerala Land Reforms Bill, 1963 in the Gazette) were invalid, the transfers made in re spect of Kayal padasakharams in appeals Nos.
907 909 could not be held to be invalid for the simple reason that they were exempt from the provisions of Chapter III.
That exemption was no doubt withdrawn by section 65 of Act 35 of 1969 which amended the Act, but it is not disputed before us that the section was not brought into force until January 1, 1970.
The voluntary transfers made between Septem ber 15, 1963 and January 1, 1970 were therefore valid, and there is no force in the argument of the Advocate General that the amendment brought about by section 65 of Act 35 of 1969 should be given retrospective effect from April 1, 1964 as sections 82 and 84 of the Act were brought into force from that date.
There is also no force in the other argument of the Advocate General that section 84 had the effect of invalidating the transfers effected after September 15, 1963 for that was the date of publication of the Kerala Land Reforms Bill in the gazette.
The argument overlooks the fact that, as has been mentioned, Kayal lands were exempt from the provisions of Chapter III until as late as January 1, 1970.
In this view of the matter Pritam Singh Chahil vs State of Punjab and others(1) cannot avail the appellants.
The amend ment cannot also be said to be curative or merely declaratory of the previous law.
The facts of Chanan Singh and another vs Jai Kaur,(2) cited by the Advocate General, were quite different inasmuch as in the appeals before us the amendment which was made by section 65 of Act 35 of 1969 was nei ther curative nor merely declaratory.
As has been stated, it, inter alia, omitted, clause (1) of section 81 of the Act which exempted the Kayal padasakharams which are the subject matter of the present controversy from the application of the provisions 'of Chapter III of the Act.
It is well settled that a statute is not to be read retrospec tively except of necessity.
There is no such necessity in the cases before us, for the Legisla ture decided to exempt the .aforesaid Kayal lands from the operation of the restrictions and even though amending Act 35 of 1969 was promulgated 'on December 17, 1969, section 65 thereof, which withdrew the exemption, was not brought into force until January 1, 1970.
Thus there is no force in Appeals Nos. 907, 908 and 909 and they are dismissed.
This leaves Civil Appeals Nos. 1354 and 1355 for consid eration.
The transfers of lands in these cases were admit tedly made during the period January 1, 1970 to November 2, 1972.
As such they were not exempt from the restrictions of the provisions of Chapter (1) ; (2) ; 279 III of the Act.
Section 84 of the Act would be attracted to these transfers, and it is futile to contend that this would not be so because the transfers were affected "on account of natural love and affection" within the meaning of clause (ii) of the exceptions provided by section 84 because the exemption to that effect was taken away by Act 17 of 1972.
Section 15 of that Act specifically stated that clause "shall be, and shall be deemed to have been omitted with effect from the 16th day of August, 1968." Moreover, as the High Court has pointed out, the impugned transfers were in favour of the donor 's grand children by his daughter who was alive, and could not be said to fall within the exempted category because of the other amendment made in section 84 of the Act by section 15 of Act 17 of 1972 with effect from the 16th day of August, 1968 which restricted the exemp tion to gifts made in favour of the donor 's son or daughter or the son of daughter of his predeceased son or daughter.
There is thus no 'force in these two appeals also, and they are dismissed.
In view of the facts and circumstances of the cases, we leave the parties to pay and bear their own costs.
P.B.R. Appeal dismissed.
| Section 84 of Kerala Land Reforms Act, 1963 declares that all voluntary transfers of land effected after the publication of the Kerala Land Reforms Bill on September 15, 1963, shall be null and void.
Clause (ii) of this section while provided an exemption in respect of transfers made on account of "natural love and affection" was omitted in 1972 with retrospective effect from August 16, 19 '68.
Section 81(1)(1) exempts kayal padasakharams of Kuttanad area from the restrictions on ownership prescribed.by Chapter III of the Act.
By an amendment of 1969, this exemption was with drawn; but the amending section was not brought into force until January 1, 1970.
There were two sets of petitions before the High Court.
In one set the High Court held that (1) voluntary transfers of kayal lands effected between September 15, 1963 and January 1, 1970, were lawful and valid, and in the other (2) that certain transfers by way of gift were invalid.
In the first set of appeals to this Court the State contended that the 1969 amendment should be given retrospec tive effect from April 1, 1964 i.e., the date on which section 84 was brought into force and in the second set the donees contended that the transfers were saved because they were effected on account of natural love and affection.
Dismissing all the appeals, HELD: (1)(a) Even though by virtue of section 84 all volun tary transfers effected after September 15, 1963 were invalid, transfers made in respect of kayal lands could not be held to be invalid because they were exempt from the provisions of Chapter Iii.
Though that exemption was with drawn in 1969, that amendment was not brought into force until January 1, 1970, Voluntary transfers made between September 15, 1963 and January 1, 1970 were therefore valid.
[278 B C] (b) The 1969 amendment was neither curative nor declara tory of the previous law.
It merely omitted cl.
(1) from section 81.
A statute is not to be read retrospectively except of necessity.
There; is no such necessity in the instant cases, for the legislature decided to exempt kayal lands from the operation of the restrictions, and the 1969 amend ment withdrawing the exemption was not brought into force until January 1, 1970. [278 E F] Pritam Singh Chahil vs State of Punjab and others; , and Channan Singh and another vs Jai Kaur ; held inapplicable.
(2) In the other set of cases the impugned transfers were in favour of the donor 's grand children by his daugh ter, who was alive and were effected between January 1, 1970 and November 2, 1972.
It was held that it was futile to contend that section 84 would not be attracted to the transfers on the ground that they were effected on account of natural love and affection within the meaning of the exemption provided by section 84, because the exemption was taken away by Act 17 of 1972 which specifically stated that, that clause shall be, and shall be deemed to have been omitted with effect from the 16th August, 1968" and they could not be said to fall within the exempted category because of the amendment made in section 84 in 1972 restricting the exemption to gifts made in favour of a donor 's son or daughter or the son of a daughter of his predeceased son or daughter.
[279 A C] 274
|
Civil Appeal Nos. 814 and 815 of 1974 From the Judgment and Order dated 13.
8. 1970 of the High Court of Allahabad in Special Appeal No. 34 of 1969 D section N. Kackar, Gopal Subramaniam and Mrs. Shobha Dikshit for the Appellant in CA.
No. 814 and respondent in CA No. 815.
U. R. Lalit and B. section Chauhan for the Respondent in CA.
No. 814 and Appellant in CA.
No. 815.
E The Judgment of the Court was delivered by VENKATARAMIAH, J.
These two appeals by special leave are filed against the judgment dated August 13, 1970 of the High Court of Allahabad in Special Appeal No. 34 of 1964 (City Board, Mussoorie v State Electricity Board & Ors.)(1) by the Uttar Pradesh Electricity Board (hereinafter referred to as the Electricity Board ') Constituted under the (hereinafter referred to as 'the Act ') and the City Board, Mussoorie, a local authority (hereinafter referred to as 'the City Board ') respectively.
The City Board as a licensee under the used to get bulk supply of electric energy from the Electricity Board from the Ganga Sarda Grid and in its turn was distributing it to the consumers within its jurisdiction.
In the year 1962, under a (1) A.l.R. 1971 Allahabad 219. 818 notification dated April 24, 1962 issued under section 46 of the Act, the tariff payable by the City Board and other licensees in the Ganga Sarda Grid was fixed by the Electricity Board.
The relevant portion of the Tariff was as follows: "1.
Applicability This rate schedule is applicable to all licensees situated in Ganga Sarda Grid area and taking supply in bulk from the Board.
Character of service A. C., 3, Phase, 50 cycles, 11,000 volts, Alternatively, the supply can be given at a voltage lower than 11 KV in which case an additional charge at 7. 1/2 per cent on the total amount of the bill will be levied.
If the consumer takes supply at a standard voltage above 11 KV, a rebate of 5% will be allowed to him by the Board on the total amount of the bill calculated at the rates prescribed for supply at KV.
Rate; (a) Demand Charges First 500 KVA of Chargeable demand during the month at the rate of. . . .
Rs. 12.75 per KVA Neat 1500 KVA of the charge demand during the month at the rate of . . . .
Rs. 10.00 per KVa All above 2000 KVA of the chargeable demand during the month at the rate of. .
Rs. 8.50 per KVA PLUS (b) Energy Charges First 170 Kwh, per KVA of Chargeable demand consumed during the month at the rate of. ". . 5P. per Kwh 819 Next 170 Kwh.
per KVA of chargeable demand consumed during the month at the rate of. . . 4P. per Kwh.
Remaining Kwh.
per KVA of the chargeable demand consumed during the month at the rate of. . . 3P. per KWh 4.
(i)Chargeable Demand The chargeable demand for the month shall be defined as the actual demand during the month or 60 per cent of the contracted demand or 75 per cent of the highest demand which occurred during the preceding 11 months, whichever is the highest.
(ii) Coal Clause The above rates shall be subject to a coal price adjustment at the rate of 0.001 per Kwh.
increase or decrease for every one P. Of variation above or below Rs. 40 per tonne of coal delivered at the bunkers in the Harduaganj Generating Station 5.
Determination of Demand: Demand measurement shall be made by suitable instruments at the point of deli very.
The demand for any month shall be defined at the highest average load measured in Kilovolt amperes during any 30 consecutive minutes period of the month.
" The tariff so fixed was enhanced by another notification dated September 30, 1967 by twenty per cent and the enhanced rate come into force on December 1, 1967.
Under section 58 of the Act, the Electricity Board or where no such Board was constituted, the State Government had the power to direct the amortisation and tariffs policies of any licensee, being a local authority, with respect to its licensed undertaking in such manner as the Electricity Board or the State Government, as the case may be, after giving the local authority a reasonable opportunity of being heard, considered expedient for the purposes of the Act.
The licensee, being a local authority, the provisions of any other law or of any rules made or directions given thereunder notwithstanding, was bound to give effect to any such directions of the Electricity Board, or the State Government, as the case may be.
The Electricity Board however, could not issue any directions under section 58 of the Act except after obtaining the prior approval of the State Government.
The City Board had H 820 moved the State Government on September 13, 1966 for permission to enhance the rates for supply of electric energy to Consumers.
No such sanction was given till March 23, 1968.
The City Board, therefore, filed a petition under Article 226 of the Constitution questioning the validity of the tariff fixed under the notification dated April 24, 1962 and the enhancement made under the notification dated September 30, 1967 It may, however, be stated here that subsequently on April 20, 1968, the City Board was permitted to raise the charges for light and fan by two paise per unit which came to 6% or 7% of the original rates and by 10% for electric energy supplied for other purposes.
The City Board challenged the notification issued on April 24, 1962 on the ground that it was not in conformity with section 46 of the Act.
It questioned the enhancement made on September 30, 1967 on the ground that it had not been permitted to enhance correspondingly the rates chargeable by it to the consumers even though in its vicinity the Electricity Board itself was supplying electric energy to consumers at a much higher rate.
The petition was contested by the Electricity Board.
The Writ Petition was heard by a Single Judge of the High Court.
He dismissed the petition.
The City Board, thereafter filed an appeal before the Division Bench of the High Court.
The Division Bench allowed the appeal in part.
Aggrieved by the judgment of the Division Bench, the City Board and the Electricity Board have filed the above appeals by special leave.
The material part of section 46 of the Act reads thus: "46.
(1) A tariff to be known as the Grid Tariff shall in accordance with any regulations made in this behalf, be fixed from time to time by the Board in respect of each area for which a scheme is in force, and tariffs fixed under this section may, if the Board thinks fit, differ for different areas.
(2) Without prejudice to the provisions of section 47, the Grid Tariff shall apply to sales of electricity by the Board to licensees where so required under any of the First, Second and Third Schedules, and shall, subject as herein 821 after provided, also be applicable to sales of electricity by the Board to licensees in other cases: Provided that if in any such other case it appears to the Board that, having regard to the extent of the supply required, the transmission expenses involved in affording the supply are higher than those allowed in fixing the Grid Tariff, the Board may make such additional charges as it considers appropriate,. . . " The first contention urged before us by the City Board is that in the absence of any regulations framed by the Electricity Board under section 79 of the Act regarding the principles governing the fixing of Grid Tariffs, it was not open to the Electricity Board to issue the impugned notifications.
This contention is based on subsection (1) of section 46 of the Act which provides that a tariff to be known as the Grid Tariff shall in accordance with any regulations made in this behalf, be fixed from time to time by the Electricity Board.
It is urged that in the absence of any regulations laying down the principles for fixing the tariff, the impugned notifications were void as they had been issued without any guidelines and were,.
therefore, arbitrary.
It is admitted that no such regulations had been made by the Electricity Board by the time the impugned notifications were issued.
The Division Bench has negatived the above plea and according to us, rightly.
It is true that section 79 (h) of the Act authorises the Electricity Board to make regulations laying down the principles governing the fixing of Grid Tariffs.
But section 46 (1) of the Act does not say that no Grid Tariff can be fixed until such regulations are made.
It only provides that the Grid Tariff shall be in accordance with any regulations, made in this behalf.
That means that if there were any regulations the Grid Tariff should be fixed in accordance with such regulations and nothing more.
We are of the view that the framing of regulations under section 79 (h) of the Act cannot be a condition precedent for fixing the Grid Tariff.
A similar contention was rejected by this Court in Mysore State Road Transport Corporation vs Gopinath Gundachar Char(l) which was a case arising under the Road Transport Corporation Act, 1950.
Under section 14 of that Act a Road Transport Corporation was entitled to appoint officers and servants as it considered necessary for the efficient performance of its sanctions.
Under section 34 (1) of the Road Transport Corporation Act, 1950 (1) [19681 1 S.C.R. 767, 822 the State Government had been empowered inter alia to issue directions to the Road Transport Corporation regarding recruitment, conditions of service and training of its employees.
Under section 45 (2) (c) of that Act, the Road Transport Corporation was empowered to make regulations regarding the conditions of appointment and service and the scales of pay of officers and servants of the Corporation other than the Chief Executive Officer, General manager and the Chief Accounts Officer.
Admittedly no regulations had been framed under section 45 (2) (c) of that Act.
It was contended that the Corporation could not appoint officers and servants referred to therein or make any provision regarding their conditions of service until such regulations were made.
This Court rejected the said plea with the following observation at page 770: "The conjoint effect.
Of sections 14 (3) (b), 34 and 45 (2) (c) is that the appointment of officers and servants and their conditions of service must conform to the directions, if any given by the State Government under section 34 and the regulations, if any, framed under section 45 (2) (c).
But until such regulations are framed or directions are given, the Corporation may appoint such officers or servants as may be necessary for the efficient performance of its duties on such terms and conditions as it thinks fit.
" We do not also find any merit in the submission that the Grid Tariff fixed in this case suffered from the vice of arbitrariness.
As observed by the Division Bench of the High Court, there is ample guidance available in the various provisions of the Act and that the rates fixed are subject to the control of the State Government.
We do not find it necessary to repeat what is stated by the Division Bench except observing that we respectfully agree with the reasons given by it for rejecting the said plea.
In Maharashtra State Electricity Board vs Kalyan Borough Municipality & Anr.
,(l) this Court has discussed the relevant provisions of the Act while dealing with section 49 thereof which show that the Act furnishes ample guidance generally regarding the determination of tariffs by an Electricity Board functioning under the Act.
There is also no merit in the submission that there cannot be a common tariff for all licensees in an area served by a Grid and that there should be a separate rate (1) ; 823 of charge for each licensee.
While it may not be objectionable to have a reasonable tariff fixed in the case of a particular licensee without offending the rule of non discrimination, fixation of a common Grid Tariff is in consonance with the spirit of the Act.
The preamble to the Act says that it had been enacted to provide for the rationalisation of the production and supply of electricity and generally for taking measures conducive to electrical development.
Looked at against this background, it is permissible for the ElectriCity Board to fix a common Grid Tariff for an area so that there may be a reasonably uniform development of the area by the supply of electric energy to all licensees or consumers in the area at a uniform rate with such reasonable variations as may be permissible in law subject to the condition that no undue preference is shown to any of them.
The Division Bench, however, held that the levy of an additional 7.1/2% as an additional charge made by the Electricity Board under the first para of clause (2) of the impugned notifications dated April 24, 1962 and September 30, ]967 was illegal and therefore liable to be quashed because according to it the additional charge of 7.1/2% could be imposed under the proviso to section 46 (2) of the Act to cover extra expenses only and not for supplying electric ENERGY at a lower voltage of 6600 volts when the Grid Tariff had fixed rates for supplying electric energy at 11000 volts.
It however, held that it was open to the Electricity Board to make an additional charge only to the extent of the actual expenditure incurred by supplying electric energy at 6600 volts.
It also quashed the Government order dated April 20, 1968 by which the City Board was permitted to increase the charges payable by the consumers in some respects and the subsequent action taken on the above basis.
The Division Bench directed the respondents to consider afresh the question of the rates at which electric energy could be supplied.
We do not propose to go into the correctness of this part of the decision of the Division Bench because we are of the view that this case can be dispensed of in a different way.
The contention relating to the validity of the levy of additional charges could not be raised by the City Board under Article 226 of the Constitution in respect of the period prior to the filing of the writ petition.
The above additional charge of 7.1/2% was levied in 1962 and the City Board did not question it before the Court till March 23, 1968 when it filed the writ petition.
It is further seen that it has not stated that it had not collected charges from the consumers of electric energy supplied by it at the 824 rates which would cover the additional 7.112%.
The learned counsel for the City Board was not able to state that the City Board had not recouped itself by collecting the charges from the consumers.
In this situation we have to presume that the City Board had not suffered any loss by the levy of 7.1/2 % by way of additional charges.
We are of the view that in cases of this nature where there is little or no possibility of refunding the excess amount collected from the ultimate consumer to him and the granting of the relief to the petitioner would result in his unjust enrichment, the Court should not ordinarily direct any refund in exercise of its discretion under Article 226 of the Constitution Moreover in this case the City Board woke up nearly 6 years after the issue of the first notification and that too only after an enhancement by 20% was made under the second notification.
In the case of the City Board, which is a local authority, there is an additional reason.
Under section 58 of the Act which is already referred to above a local authority is bound to implement the directions issued by the Electricity Board or the Government, as the case may be, with regard to the amortisation and tariffs policies.
The City Board has been given directions from time to time by the Government regarding the charges it may collect from the consumers in the light of the charges it has to pay to the Electricity Board and its own investment and expenditure on the undertaking.
The City Board cannot question the Grid Tariff only without at the same time questioning the directions pursuant to which it has been collecting charges from its consumers.
No satisfactory material is placed before the Court showing that the charges which were being collected by the City Board from the consumers were uneconomical and did not satisfy the reasonable standards which should govern the directions issued by the Electricity Board or the Government from time to time regarding the tariffs policies of the City Board.
In this situation, we feel that it would not be proper to reopen the claims of the City Board in regard to the period prior to the filing of the writ petition arising on the basis of the alleged invalidity of the notification dated April 24, 1962.
Hence we refuse to grant any relief in this regard to the City Board for the period up to the date of the writ petition, that is, till March 23, 1968.
The Grid Tariff was revised in this case on July 1, 1968.
The decision of the High Court on the above point is, however, allowed to re[remain only for the period between March 23, 1968 and July 1, 1968 without expressing any opinion on its correctness because the period is a small one and the Electricity Board does not insist upon a decision on this question in this case.
The question is left open by 825 us.
Similarly, the relief granted by the High Court with regard to A the levy of additional charge of 2 % with effect from December 1, 1967 till July 1, 1968 is not disturbed by us for the same reason without expressing any opinion on its correctness.
This judgment shall not be construed as affirming the decision of the High Court in so far as the above points are concerned.
The matter may be reconsidered by the Electricity Board as directed by the Division Bench of the High Court but with regard to the periods specified above.
The appeals are accordingly disposed of.
There shall be no order as to costs.
| The appellant Corporation levied licence fee for use of premises and land for soaking coconut husks under Schedule IV of the Calicut City Municipal Act 1961, Subsequently restyled as the Kerala Municipal Corporation Act 1961.
The respondents were carrying on the trade of soaking coconut husks, and as they had not taken out the requisite licence, the Commissioner of the Corporation issued notices to show cause why they should not be prosecuted.
The respondents challenged the validity and legality of the notices in Writ Petitions to the High Court, contending that if the licence fee is levied as a fee, no service is rendered or special advantage or favour is conferred by the Corporation for collecting such fee and that there is DO quid pro quo and that the relevant provisions of the Act do not enable the Corporation to levy such a fee.
It was further contended that if the levy is treated is a tax, it is beyond the taxing powers of the Corporation.
The Corporation contested the Writ Petitions justifying the fee as licence fee and that it had the power to levy a tax of the nature levied by it.
A Single Judge of the High Court allowed the Writ Petitions, and quashed the impugned licence fee as not legal in the absence of conferment of special benefits in respect of persons who soak coconut husks.
It was further held that the power to levy the various taxes conferred on the Corporation under Chapter V of the 1961 Act did not comprehend the impugned levy and consequently the tax was not valid and legal.
The writ appeals of the Corporation were dismissed.
1009 Allowing the Appeals, this Court ^ HELD: By numerous recent decisions of this Court it is well settled that the traditional concept in a fee of quid pro quo is undergoing a transformation and that though the fee must have relation to the services rendered or the advantages conferred, such relation need not be direct, a mere casual relation may be enough.
It is not necessary to establish that those who pay the fee must receive direct benefit of the services tendered for which the fee is being paid.
If one who is liable to pay receives general benefit from the authority levying the fee the element of service required for collecting fee is satisfied.
It is not necessary that the persons liable to pay must receive some special benefit or advantage for payment of the fee.
[1012E F] In the instant case, it is incontrovertible that the appellant Corporation is rendering numerous services to the persons within its areas of operation and that therefore the levy of the licence fee as fee is fully justified.
Soaking coconut husks emit foul odour and contaminates environment.
The Corporation by rendering scavanging services, carrying on operations for cleanliness of the city, to make habitation tolerable is rendering general service of which amongst others respondents are beneficiaries.
a The decisions of the Single Judge and of the Division Bench are set aside and the Writ Petitions of the respondents are dismissed.
[1012 G H] Municipal Corporation of Delhi & Ors.
vs Mohd. Yasin Others vs State of Andhra Pradesh and Others ; & M/s Amarnath Om Prakash and Others vs State of Punjab & Ors.
(1985) I SCC 345 referred to.
|
Appeals Nos. 209 and 210 of 1953.
Appeals by special leave against the Judgment and Orders dated 4th April, 1953, of the High Court of Judicature of Mysore at Bangalore (Medapa C. J. and Vasudevamurthy J.) in Civil Petitions Nos, 20 and 21 of 1953, 538 M.Ramaswamy, Senior Advorate, (B. Neelakanta, with him) for the appellant.
M. C. Setalvad, Attorney General for India, (Porus A. Mehta, with him) for the respondent.
1953 .
December 16.
The Judgment of the Court was delivered by PATANJALI SASTRI C. J.
These two connected appeals arise out of applications made to the High Court of Judicature at Bangalore under article 226 of the Constitution challenging the jurisdiction of the Income tax Officer, Special Survey Circle, Bangalore, to assess the appellant to income tax and super tax on his income accruing prior to April 1, 1950, in the State of Mysore and praying for the issue of appropriate writs in that behalf.
The applications were dismissed by the court and leave to appeal having been refused, the appellant has brought these appeals by special leave of this court.
It is a matter of admission that the officer making the assessments was an officer Appointed under the Indian Income tax Act,, 1922, and that in making such assessments he was applying the income tax law in force in the State of Mysore down to the end of the year of account 1948 49.
The officer was exercising jurisdiction in the State by virtue of the proviso to section 13 of the Indian Finance Act, 1950, which reads as follows: Repeals and Savings. (1) If immediately before the 1st day of April, 1950, there is in force in any Part B State other than Jammu and Kashmir or in Manipur, Tripura or Vindhya Pradesh or in the merged territory of Cooch Behar any law relating to income tax or super tax or tax on profits of business, that law shall cease to have effect except for the purposes of.
the levy, assessment and collection of income tax and super tax in respect of any period not included in the previous year for the purposes of assessment under the Indian Income tax Act, 1922, for the year ending on the 31st day of March, 1951, or for any subsequent year or, as the case may be, the levy, assessment and 539 collection of the tax on profits of business for any chargeable accounting period ending on or before the 31st day of March, 1949: Provided that any reference in any such law to an officer, authority, tribunal or court shall be construed as a reference to the corresponding officer, authority, tribunal or court appointed or constituted under the said Act, and if any question arises as to who such corresponding officer, authority, tribunal or court is, the decision of the Central Government thereon shall be final.
It is contended that the proviso is ultra vires and void as the Union Parliament had no power to make a law authorising any officer or authority or Tribunal or Court appointed or constituted under the Indian Inconm tax Act, 1922, to levy, assess and collect incometax and super tax payable under the Mysore law prior to the commencement of the Constitution of India.
The contention is based on two grounds: namely, firstly, on general constitutional principles the Union Parliament had no power to make a law, having retrospective operation with reference to the pre Constitution period; and secondly, the Union Parliament is prohibited by article 277 of the Constitution by necessary implication from making a law grafting on the Mysore income tax law the machinery for assessment and collection provided under the Indian Income tax Act, 1922, for purposes of assessment thereunder.
So far as the first ground is concerned, the case is governed by the judgment just delivered in the Rajasthan case [Union of India vs Madan Gopal Kabra (1) ].
It remains only to deal with the second ground based on article 277.
That article reads thus : "Any taxes, duties,.cesses or fees which, immediately before the commencement of this Constitution, were being lawfully levied by the Government of any State or by any municipality or other local authority or body for the purposes of the State, municipality, district or other local area may, notwithstanding that (1) Infra p. 541.
71 540 those taxes, duties, cesses, or fees are mentioned in the Union List, continue to be levied and to be applied to the same purposes until provision to the contrary is made by Parliament by law.
" It was urged that, inasmuch as the article authorises, among others, the income tax and super tax, which was being lawfully levied by the Government of Mysore prior to the commencement of the Constitution to be levied and to be applied to the same purposes even after the commencement of the Constitution until provision to the contrary is made by Parliament by law, and no such law was made by Parliament till April 1, 1950, when the Indian Finance Act, 1950, was enacted, it followed by necessary implication, the Mysore law of income tax must be applied for the levy, assessment and collection of such taxes and, as the legislative power conferred on Parliament by article 245 is subject to the provisions of the Constitution including article 277, Parliament had no power to legislate, grafting officers and authorities.
appointed under the Indian Income tax Act, on the Mysore State, for the levy, assessment and collection of the tax under the State law.
We see no force in this argu ment.
While article 277 undoubtedly authorises the continued levy of taxes lawfully levied by the Government of the State before the commencement of the Constitution and their application to the same purposes as before, even after the Constitution came into force, there is nothing in the article to warrant any implication that such taxes should continue to be levied, assessed and collected by the same State authorities as before the Constitution.
As the High Court rightly pointed out, it would obviously have been inconvenient and unnecessary to have officers appointed under the Mysore Income tax Act continuing to function only in respect of the earlier assessment years side by side with officers appointed under the Indian Income tax Act also functioning in the State for assessments subsequent to April 1, 1950.
Both as a measure.
of economy and with a view to smooth and efficient management, it 541 was obviously necessary and desirable that the changeover from the Mysore income tax law to the Indian Income tax Act should be in the way provided by section 13 of the Indian Finance Act, 1950.
We find nothing in article 277 of the Constitution to preclude Parliament making a law providing for the levy and collection of income tax and super tax under the Mysore Act through authorities appointed under the Indian Income tax Act.
Accordingly, we hold that the Income tax Officer, Special Survey Circle, Bangalore, had jurisdiction to assess the appellant to income tax and super tax in respect of the income of the period prior to the commencement of the Constitution.
The appeals fail and are dismissed with costs.
Appeals dismissed.
| The assessee challenged the jurisdiction of the Income tax Officer, Special Survey Circle, Bangalore, to assess income tax and super tax on his income accruing prior to April 1, 1950, in the State of Mysore, on the ground that the proviso to section 13 of the Indian Finance Act, 1950, by virtue of which he was exercising his power was ultra vires and void as the Parliament had no pow or to make a law authorising any officer appointed under the Indian Income tax Act to levy tax under the Mysore law prior to the Constitution.
It was contended (i) that on general constitutional principles the Union Parliament had no power to make a law having retrospective effect with reference to pre Constitution period, (ii) that the Parliament was also prohibited by article 277 from making a law authorising such officers as in the present case to mot in the State of Mysore: Held, (repelling the contentions) (i) that the Parliament had such power vide the judgment delivered in Case No. 296 of 1951, (ii) that while article 277 authorises the continued levy of taxes lawfully levied by the Government of the State before the commencement of the Constitution and their application to the same purposes as before, even after the Constitution came into force, there is nothing in the article to warrant any implication that such taxes should continue to be levied, assessed and collected by the same State authorities as before the Constitution and there is nothing in article 277 to preclude Parliament making a law providing for the levy and collection of income tax and super tax under the Mysore Act 'through authorities appointed under the Indian Income tax Act.
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Appeal No. 1533 of 1971.
Appeal by special leave from the judgment dated September 18, 1971 of the S.D.O./Arbitrator, Muzaffarnagar in Election Petition No. 140 of 1970.
AND Civil Appeals Nos.
1797 and 1798 of 1971.
, Appeals by spe cial leave from the judgments dated September 18, 1971 of the District Magistrate/Registrar, Co operative Societies, Saharanpur in Appeals Nos. 6 and 8 of 1971 under section 98 (i) (h) U.P. Co Societies Act.
AND Special Leave Petition (Civil) No. 3254 of 1971 From the judgment dated September 16, 1971 of the Registrar, Co operative Societies/District Magistrate Saharanpur in Appeal 'No. 5 of 1971 under section 98 (i) (h) Co operative Societies Act.) J. P. Goyal and V. C. Parashar, for the appellants (in C.As.
1533 and 1797 of 1971) and the petitioners (in S.L.P. No. 3268 of 1971) R. K. Garg, S.C. Agrawal and R. K. Jain, for the appellants ,(in C.A. No. 1798 of 1971) and the Petitioners (in S.L.P. No. 3254 of 1971) C. B. Agarwal and P. P. Juneja, for respondents Nos. 7, 8 and 1 to 13 (in C.A. 1533 of 1971) 151 O. P. Rana, for respondents Nos. 7 and 12 (in C.A. No. 1797 of 1972) and respondent No. 7 (in C.A. No. 1798 of 1971).
M. C. Setalvad, R. K. Garg, section C. Agarwal and R. K. Jain, for the intervener.
The Judgment of the Court was delivered by Ray, J.
These three appeals are by special leave.
Civil Appeal No. 1533(N) of 1971 is by special leave against the judgment dated 18 September, 1971 of the Arbitrator setting aside the election of the Management Committee of the Co operative Cane Development Union, Shamli in an election petition filed under rule 229(2) of the Co operative Societies Rules, 1967 framed under the Uttar Pradesh Co operative Societies Act, 1965.
Civil Appeal No. 1797 of 1971 is by special leave against the order of the District Magistrate and Registrar, Co operative Societies Sharanpur dismissing an appeal filed under section 98(i)(h) of the U.P. Cooperative Societies Act, 1965 against an order of the Arbitrator under section 70 and 71 of the U.P. Co operative Societies Act.
1965 setting aside the election of the Sahkari Ganna Vikas Samiti Ltd., Iqbalpur, District Saharanpur.
Civil Appeal No. 1798 of 1971 is against the order and judgment dated 16 September, 1971 of the District Magistrate, Saharanpur dismissing an appeal under section 98(i)(h) of the U.P. Co operative Societies Act, 1965 against the order of the Arbitrator under sections 70 and 71 of the U.P. Co operative Societies Act, 1965 setting aside the election of ,the Sahkari Ganna Vikas Samiti Ltd., Lhaksar, District Saharanpur.
Special Leave Petition (Civil) No. 3254 of 1971 is for leave to appeal against the order of the Registrar, Co operative Societies in appeal under section 98(i)(h) against the order of the Arbitrator under sections 70 and 71 of the U.P. Co operative Societies Act, 1965 setting aside the election of Sahkari Ganna Vikas Samiti, Sarsawa.
Special Leave Petition (Civil) No. 3268 of 1971 is for leave to appeal against the order of the District Authority, Bulandsbahr setting aside the election of the Committee of Management of the Co operative Cane Development Union Ltd. on an application under rule 229 of the U.P. Co operative Societies Rules, 1968.
These matters raise a common question.
These Co operative 'Societies held their annual general meeting under the provisions of section 32 of the Uttar Pradesh Co operative Societies Act, 1965 (hereinafter called the Act).
At the general meetings the members of the Committee of Management of the Society were elected by members of the Society.
The, Registrar of the U.P. Co operative Societies issued a circular dated 5 November, 1969 interpreting rule 409 of the U.P. Co operative Societies Rules, 1968 (hereinafter called the Rules) and laid down the principle that all the members of the general body "of the Co operative 152 Society would" exercise their right of vote in filling all the seats of elected Directors.
" The question in the present appeals is whether the Registrar had power to issue the circular interpreting rule 409 and secondly whether that interpretation is correct in terms of the Act and the Rules.
The Act deals with Co operative Societies and inter alia their members and their Committee of Management.
The relevant sections for the purpose of present appeals and special leave petitions are sections 20, 29 and 32 of the Act.
Section 20 of the Act speaks of vote of members.
Under that section, a member of a Co operative Society shall notwithstanding the quantum of his interest in the capital of the Society have one vote in the affairs or the Society.
There are four provisos to section 20.
Proviso (a) deals with nominal or associate members who have no right of vote.
Proviso (b) deals with a co operative society, the State Warehousing Corporation or a body corporate being a member of such society in which case each delegate of such co operative society, State Warehousing Corporation or body corporate shall have one vote.
Proviso (c) deals with the State Government or the Central Government being a member of such society in which case a nominee of the State Government or the Central Government shall have one vote.
Proviso (d) deals with a group of members or any class of members partaking in the affairs of the society through a delegate or delegates each delegate having one vote.
Section 29 of the Act deals with the Committee of Manage ment.
The management of every co operative society shall vest in a committee of management.
The term of the election members of the committee of management shall be such as may be provided in the rules and the bye laws of the society.
After the expiry of the term the co operative society shall at the annual general meeting elect members for the committee of management as provided in section 32(i)(b) of the Act.
If a society fails to elect members for the committee of management the Registrar shall call upon the society by order in writing to elect such members within three months from the date of the communication of the order.
If the society still fails to elect the members for the committee of management, the Registrar may himself nominate such persons as under the rules and the bye laws are qualified for being elected as members of the committee of management.
Within six months from the date of nomination made by the Registrar, the Registrar shall call a general meeting for electing members of the committee of management.
Section 32 of the Act speaks of annual general meeting which shall be held once in 'a co operative year.
A co operative year means the year commencing the first day of July and ending on the 30th June of next following.
One of the purposes of the annual 153 general meeting is election of the members of the committee of management in accordance with the provisions of the rules and of the bye laws of the society.
Rule 409 is as follows "For the purposes of election to the membership of the committee of management a co operative society may, with the previous sanction of the Registrar (a) divide its membership into different groups on territorial or any other rational basis, and (b) also specify the number or proportion of the member of the committee of management in such a manner that different areas or interests, as the case may be, in the society may, as far as may be, get suitable representation on the committee or management." In order to appreciate as to how rule 409 comes up for consideration in the present case it is necessary to refer to facts in Civil Appeal No. 1533 (N) of 1971 as a typical case.
The Shamli Cane Development Union Ltd., Shammli, U.P. was registered under the .
It was deemed to be registered under the Act.
The society had its bye laws with regard to the formation of the committee of management and its election including the election of the Chairman and the Vice Chairman.
The bye laws provided for a committee of management consisting of 14 members.
The committee of management elects a Chairman and a Vice Chairman.
The delegates constituting the general body of the society are divided into 14 constituencies.
Each constituency elects one Director.
The delegates of the members of the society in a constituency elect a member of each single member constituency.
The 14 members of the committee are elected on that basis whereby each delegate of each constituency exercises one vote for electing a member of that constituency.
The Secretary of the society fixed 13 October, 1970 as the date for filing the nomination for the office of the committee of management.
17 October, 1970 was the date for scrutiny of nomination papers.
19 October, 1970 was the date for withdrawal of nomination papers.
28 October, 1970 was the date of poll.
By a letter dated 14 October, 1970 the Registrar, Cooperative Societies directed that "the election of the members of the managing committee shall be done by all the representatives of the area of the society and not by the representatives of the related constituencies alone.
This means that every representative L864Sup.
CT/72 154 shall have as many votes as the members are to be elected".
In short, the Registrar 's interpretation of rule 409 as well as the letter stated that each delegate would vote for 14 members of the committee of management and thus each delegate would exercise 14 votes.
The rival contentions which fall for determination are whether the right of vote for election of a member of the committee of management is confined to the delegates of the members of that particular constituency or whether a delegate would have the right to vote for all the constituencies constituting the committee of management.
As to the power of the Registrar to interpret rule 409 it win appear that the rule does not confer any power on the Registrar to interpret or to express views to guide the rights of members to vote at the annual general meeting for the purposes of election of the committee of management.
On the contrary, under rule 409 the Co operative Society may with the previous sanction of the Registrar (i) divide its membership into different groups on territorial or any other rational basis and (ii) also specify the number or proportion of the members of the committee of management in such a manner that different areas or interests, as the case may be, in the society may, as far as may be, get suitable representation on the committee of management.
Therefore, under rule 409 a co operative society can divide its membership into different groups on territorial or any other rational basis for the purposes of election of the members of the committee.
The rule also empowers the society to apportion the membership of the committee of management amongst different groups into which the membership is divided.
The number or proportion of members of the com mittee of management will have to be apportioned in such a manner that the different areas or interests into which the membership of the society are divided may obtain suitable representation on the committee of management.
The entire purpose of division of membership into different groups and specifying suitable representation of such group on the committee of management is to emphasise the, right of the particular group to send its representative to the committee.
To illustrate if a society is divided into 14 separate groups on a territorial.
basis and one member of the committee of management is allotted to each group and if delegates of one group have the right to cast 14 votes two consequences will follow.
First, the right of choosing a representative of the constituency will be not confined to that constituency but will be enlarged to outsiders in other constituencies.
Secondly, a member of the committee from one constituency may be elected by a majority of votes from delegates of other constituencies.
If delegates residing outside a territorial constituency 155 take part at the election for member of a committee from territorial constituency within which he is not a resident it will not only amount to enlarging the right of representation beyond ones territorial basis but also deny the delegates within the constituency the right of electing their own representative.
It was said on behalf of the appellants that section 20 of the Act speaks of a member of the co operative society having one vote in the affairs of the society with the result that each member is entitled to exercise as many votes as the members of the committee of management.
Accent was placed on the words 'affairs of the society ' and it was said that the constitution of the committee of management was one of the principal affairs of the society and therefore each member would entitled to cast as many votes as the strength of the committee of management.
The fallacy lies in overlooking the significant words in section 20 of the Act that a member shall have one vote.
It may also be noticed that if each member exercises by way of illustration 14 votes in regard to 14 members of the committee each member shall be "exercising 14 votes in the affairs of the society.
Under rule 409 the principal matters to be kept in the fore front are these.
First, the society will divide the constituencies on territorial basis or any other rational basis.
By territorial basis is meant territory where the member will reside.
Residence is therefore the relative requirement of territorial basis.
If any other rational basis like occupation or vocation is determined to be the basis of a constituency the persons falling within the cons tituency will satisfy that test.
Secondly, the society will specify the proportion of members of the committee in such a manner that different areas or interests may get suitable representation.
The inherent idea is that such areas or interests will obtain representation.
If membership is on territorial basis, the different areas will get representation according to the interest of such territories.
Again, if occupational or vocational or professional tests are created for dividing groups such interests will have to be given suitable representation Representation is therefore with reference to areas or interests.
Judged by these principles the impeached circular of the Registrar suffers from the vice of giving the members the right of 'casting vote in constituencies to which they do not belong.
This strikes at the basic root of right of representation.
This also reads as under the principle of one member one vote which is made into a rule of law in the Act.
[155 E G] The words 'affairs of the society ' cannot be equated with the Constituencies to give each member a right to vote for each constituency.
That would defeat the purpose of section 20 and rule 409.
The basic idea of a representative for each constituency 156 depends on the mandate of the respective constituency and not of other constituencies.
That is why section 20 of the Act speaks of, one member having one vote irrespective of shareholding.
It means equality of votes, of members.
The constitution of the committee of management is indisput ably one of the affairs of the society.
If each member exercises franchise with respect to the representation from his constituency he is not in any manner prevented from having a right to partake in the affairs of the society through a member elected from the constituency.
Some reliance was placed by counsel for the appellants on rule 105 in support of the contention that every member would have one vote for each member of the committee of management.
Rule 105 occurs in Chapter VII relating to meetings and speaks of matters before a committee being decided by a majority of votes of the members present.
That rule obviously has no reference to election but only to passing of resolution by majority at meetings.
It is obvious that members of the committee of management will have the right to vote at all matters at the meeting and matters will be decided by a majority of votes.
The impeached circular of the Registrar is illegal and unwarranted Registrar has no power to interpret rule 409.
The Registrar has equally no power to express view with regard to conduct of the election and regulate the voting rights by giving the members more than one vote.
The society is to frame rules for elections.
Rules require the sanction of the Registrar.
The rules and the bye laws cannot be in derogation of the statute and statutory rules.
At an election of members of the committee of management one member will have only One vote for the constituency to which he belongs.
The result is that the elections which were held following the circular of the Registrar are bad.
For these reasons the three appeals fail and are dismissed.
The two special leave petitions are also dismissed.
Parties will pay and bear their own costs.
G.C. Appeals dismissed.
| After negotiations in 1953 with the concerned Department of the Government of India and the Reserve Bank, a Company, incorporated in U.K. advanced large sums by way of loans to its subsidiary in India, namely the assessee, for subscribing for shares in some Indian Companies.
The correspondence showed that the U.K. Company had the right to acquire at any time the shares at par, in satisfaction of the loans.
In 1961, the assessee transferred the shares when called upon by the U.K. Company to do so.
The Income tax Officer applied section 52 of the Income tax Act, 1961, and assessed the assessee to capital gains tax, which was not in existence in 1953 but was Reintroduced in the Finance Bill of 1959.
The Income tax Officer held that the object of the transfer was to avoid or reduce the assessee 's liability to capital gains tax.
The Appellate Assistant Commissioner however, held that the assessee was not liable to capital gains tax, and the Appellate Tribunal, after an elaborate discussion of the correspondence, confirmed the order, holding that the transfer was not effected with that object.
The Department applied to the Tribunal to refer the questions, (i) whether certain documents were not properly construed, (ii) whether the Tribunal ignored evidence on essential matters, (iii) whether the finding of the Tribunal was perverse, and (iv) whether section 52 was not applicable, as arising out the Tribunal 's order.
The Tribunal rejected the application.
The Department then moved the High Court and the High Court directed the Tribunal to state a case in relation to the four questions, but the High Court did not give any reasons for doing so.
Allowing the appeal to this Court, HELD : The High Court can exercise its jurisdiction in the matter of reference, (a) when the point for determination is a pure question of law, such as, the construction of a statute or a document of title; (b) when the point for determination is a mixed question of law and fact (While the findings of the Tribunal on the facts are final, its decision as to the legal effect of the findings is a question of law.
Where, however, the finding is one of fact, the fact that it is an inference from other basic facts will not alter its character as one of fact); and (c) when a finding on a question of fact is perverse.
[147C E] The necessary ingredients of section 52 are : (i) there should be a direct or indirect connection between the person who acquires a capital asset and the assesee; (ii) the income tax officer should have reason to believe that the transfer was effected with the object of avoidance or reduction of the liability of the assessee to capital gains; and (iii) if the first two conditions 139 are satisfied then the full value of consideration for the transfer may be taken to be the fair market value of the capital asset on the date of the transfer.
The intention with which a particular transfer is made and the object which is to be achieved by such transfer are essentially questions of fact, the conclusion relating to which, are to be arrived at on a consideration of relevant material; that is, before the income tax officer can have any reason to believe that a transfer was effected with the object mentioned in the section facts, must exist showing that the object was to avoid or reduce the liability to capital gains.
[141 H; 142 A D] In the present ease, the orders of the Tribunal show that there was no dispute as to the construction of any expression in any letter or document, that no relevant evidence was overlooked, that the inference was drawn from other facts and, that no question was raised on the construction of section 52.
When the Tribunal found, as a fact, that before there was any proposal to reimpose the capital gains tax which had remained abolished for some time, the scheme between the assessee and the U.K. Company bad been fully evolved, the applicability of section 52 could not be attracted.
The findings of the Tribunal that the object mentioned in the section could not be held to be established from the mere absence of a formal agreement between the assessee and the U.K. Company, is not perverse, but is supported by evidence and is eminently reasonable.
in view of the clear, cogent and precise findings and conclusions of the Tribunal, the High Court, should at least have recorded a speaking order showing how the questions of law of the nature sought to be referred arose from the order of the Tribunal.
[146 B D; 141 A C, F; 148 C.D] Shree Meenakshi Mills Ltd. vs C.I.T., Madras, , followed.
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Subsets and Splits